Restructuring and Transformation Initiative Expenses

6 Months Ended

Aug. 28, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Transformation Initiative Expenses

RESTRUCTURING AND TRANSFORMATION INITIATIVE EXPENSES

Fiscal 2021 Restructuring and Transformation Initiative Expenses

The Company recorded $98.2 million and $179.2 million in its consolidated statements of operations for the three and six months ended August 28, 2021 for costs associated with restructuring and other transformation initiatives, of which approximately $73.7 million and $121.0 million is included in cost of sales and approximately $24.5 million and $58.2 million is included in Restructuring and transformation initiative expenses in the consolidated statements of operations. These charges were comprised of, and classified in the Company’s consolidated statement of operations, as follows:

Cost of Sales

•$73.7 million and $121.0 million for the three and six months ended August 28, 2021, respectively, related to the Company’s initiatives to introduce certain new proprietary Owned Brand merchandise and, to a lesser extent, to redefine certain existing proprietary Owned Brands and to rationalize product assortment across the Bed Bath banner store base. The costs incurred in connection with these activities included higher markdowns on inventory sold in the three and six month periods of fiscal 2021, as well as an adjustment to reduce to its estimated realizable value inventory on hand as of August 28, 2021 that will be removed from the product assortment as part of these initiatives.

Restructuring and Transformation Initiative Expenses

•Store Closures. During the three and six months ended August 28, 2021, the Company had store closing activities for 5 and 21 Bed Bath & Beyond stores, respectively, as part of its store network optimization program which commenced in fiscal 2020 and includes the planned closure of approximately 200 mostly Bed Bath & Beyond stores by the end of

fiscal 2021. As of August 28, 2021, the Company had closed a total of 165 stores under this program, including the 21 store closures in the first six months of 2021. For the three and six months ended August 28, 2021, the Company recorded costs associated with planned store closures for which the store closing process has commenced of approximately $2.6 million and $21.4 million, respectively, consisting of lease-related and other costs. At this point, the Company is unable to estimate the amount or range of amounts expected to be incurred in connection with future store closures.

•Other transformation initiatives. During the three and six months ended August 28, 2021, the Company recorded costs of $21.9 million and $36.8 million, respectively, related to other transformation initiatives, including technology transformation and business strategy and operating model transformation programs across core functions including merchandising, supply chain and finance.

Fiscal 2020 & 2019 Restructuring Expenses

Additionally, in fiscal 2020 and fiscal 2019, the Company recorded $149.3 million and $102.5 million, respectively, primarily for severance and related costs in conjunction with its transformation initiatives and extensive leadership changes, in selling, general and administrative expenses in its consolidated statement of operations.

As of August 28, 2021, the remaining accrual for severance and related costs related to these various initiatives was $15.5 million.