Bed Bath & Beyond Stock Crashes Amid 'Substantial Doubt' That Business Can Continue
by BoroPark24 Staff
Shares of New Jersey-based Bed Bath & Beyond crashed nearly 20% to a new low today after the company warned of persistent economic challenges holding back efforts to turn around its business.
The drop in stock price came after the home goods retailer announced on Thursday morning that it expects sales to drop 33% to less than $1.3 billion in the latest quarter. The drop in sales is a result of declining customer traffic, supply-chain disruptions causing reductions in inventory, labor shortages, inflation, and the COVID-19 pandemic, which changed the way people shop.
Additionally, the company warned that the recurring downward spiral reflected in the last few quarters has created "substantial doubt about the company's ability to continue."
In the meantime, Bed Bath & Beyond is exploring taking other actions to hold its ground, including restructuring, debt refinancing, selling assets, and the possibility of filing for bankruptcy relief.
Even those measures might not save the company, which expects to record a loss of about $385.8 million in its upcoming earnings report.
In a statement given by Bed Bath & Beyond's CEO, Sue Gove, she speaks of the company's turnaround plan announced last year. "Our plan has two anchors: the first enables us to refocus merchandising and inventory, operate more efficiently, and grow our digital and Omni-capabilities, and the second focuses on strengthening our financial position."
"Bed Bath & Beyond is too far gone to be saved in its present form," Neil Saunders, managing director of GlobalData Retail, tweeted his take on Thursday, "and its future options are few and far between."
photo credit: Flickr