A man is seen at a Bed Bath & Beyond store in New York, on Jan. 5, 2023.
Ziyu Julian Zhu | Xinhua News Agency | Getty Images
Bed Bath & Beyond on Tuesday posted wider quarterly losses than expected as its chief executive acknowledged that the struggling retailer’s turnaround plan had not achieved its goals.
Days after the company warned of potential bankruptcy, it reported a negative operating cash flow of $307.6 million for the third quarter and ballooning net losses.
Bed Bath lost $393 million during the period, it said Tuesday, worse even than the $385.8 million quarterly loss it projected just last week and 42% larger than the loss it reported in the year-ago quarter.
The quarterly losses include an approximately $100 million impairment charge, which the company said Tuesday was related to “certain store-level assets.”
CEO Sue Gove said Tuesday the company was working to address its cascading financial problems in a “timely manner.” She echoed the company’s news release in remarks on a approximately 10 minute earnings call and declined to take analyst questions.
Here’s how the retailer did in the three-month period that ended Nov. 26 compared with what analysts were anticipating, based on Refinitiv data:
- Loss per share: $3.65 adjusted vs. $2.23 expected
- Revenue: $1.26 billion vs. $1.34 billion expected
The company’s net loss grew to $393 million, or $4.33 per share, from a loss of $276 million, or $2.78 per share a year ago.
Comparable sales dropped by 32%. Namesake banner Bed Bath & Beyond’s comparable sales dropped by 34% and Buybuy Baby’s comparable sales declines were in the low-20% range.
Last week, the company previewed its net sales for the fiscal third quarter and said they were expected to be about $1.26 billion — a decline from $1.88 billion in the year-ago period.
That pre-announcement from the home goods retailer, which is fighting to stay in business, came alongside a “going concern” warning. In the filing, it said it is at risk of running out of money to cover expenses and may have to file for bankruptcy. It said that it is struggling to attract customers to stores and turn around declining sales.
Plus, the company said, it has gotten harder to keep shelves stocked as suppliers adjust payment terms or stop sending goods because of Bed Bath’s financial troubles. The company’s market value has fallen to a meager $142.8 million. Still, its shares were up about 12% in premarket trading Tuesday.
“Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained and we did not achieve our goals,” Gove said in Tuesday’s release.
Still, she said, the retailer has aggressively cut costs and is on track to close the 150 stores that it had previously announced. Its operating expenses have dropped to $583.6 million, compared with $698 million last year.
“Our organization is more streamlined and we have adopted a more focused infrastructure that reflects our current business,” Gove said.
The retailer includes three banners: its namesake, its baby supplies chain, Buybuy Baby; and its health and beauty banner, Harmon.
This story is developing. Please check back for updates.
