Bed Bath & Beyond (BBBY  ) has embarked on an impressive turnaround. This was confirmed by its fiscal second-quarter earnings report in which the company had its first same-store increase in sales since 2016 with online sales increasing by 80%.

A few months ago, there were concerns about the company's ability to survive given the closure of its physical retail outlets and an inability to grow its e-commerce sales.

However, its recent results and stock price performance demonstrate that it has been able to pivot. Additionally, the strong housing market and the coronavirus have resulted in an increase in spending on home goods which has also benefitted the retailer.

Inside the Numbers

Bed Bath & Beyond posted earnings per share of $0.50 which was a significant improvement over analysts' expectations of a $0.23 per share loss. Revenue came in at $2.7 billion which was better than expectations of $2.6 billion.

In 2019's second quarter, the company posted a net income of -$139 million and a revenue of $2.72 billion. This year, net income was $218 million with revenue slightly less at $2.7 billion. The company attributes this turnaround to demand higher-priced items and fewer promotions.

The biggest surprise in the report was an 80% increase in online sales which resulted in same-store sales increasing by 6%. Analysts were expecting a decline of 2.1%. The company didn't give any guidance but said that these positive trends were continuing in September. It also reported that it had 2 million new customers in the quarter.

Bed Bath & Beyond hired a new CEO from Target (TGT  ) and is mimicking that company's e-commerce strategy. And, it's clearly working. This quarter, the retailer is launching same-day delivery in addition to its earlier measures of contactless curbside pickup. Like Target, it's using its stores as fulfillment centers.

Stock Price Outlook

There were concerns that Bed Bath & Beyond might have to follow other home goods stores into bankruptcy if its turnaround plan wasn't successful. Its stock had steadily trended lower from a high of $70 in 2014 to a low of $3.6 in March.

However, there is increasing enthusiasm and confidence that Bed Bath & Beyond's turnaround plan is working. The stock has gained nearly 500% from its March low and is now 30% higher for the year.

Its plan involves heavily investing and promoting its e-commerce sales channel, while shutting down many locations. This is why same-store sales increased although revenue was flat.

A few months ago, it seemed that Bed Bath & Beyond may follow Pier1 into bankruptcy, but now it seems more likely to follow Best Buy (BBY  ) into thriving during this new normal by using eCommerce and its retail outlets in a complementary way.