Bed Bath & Beyond considers bankruptcy, shares tumble
By Michele Maatouk
Date: Thursday 05 Jan 2023
(Sharecast News) - Shares in Bed Bath & Beyond tanked on Thursday after the retailer said it was considering bankruptcy.
The company said that while it continues to pursue actions to improve its cash position and mitigate any potential liquidity shortfall, there is "substantial doubt" about its ability to continue as a going concern.
For the third quarter of 2022, the retailer expects to report net sales of about $1.26bn, down from $1.88bn in the same period a year earlier. This reflects lower customer traffic and reduced levels of inventory availability, among other things.
Bed Bath & Beyond expects a Q3 net loss of approximately $385.8m, including impairment charges of about $100m, compared to a net loss of $276.4m a year earlier.
President and chief executive Sue Gove said: "Despite more productive merchandise plans and improved execution, our financial performance was negatively impacted by inventory constraints as we partnered with our suppliers to navigate both micro- and macroeconomic challenges.
"Reduced credit limits resulted in lower levels of in-stock presentation within the assortments that our customers expect. Consequently, we have already leveraged the liquidity gained from the holiday season to immediately pursue higher in-stock levels with support from our key vendors. We have seen trends improve when in-stock levels have increased."
The retailer said it continues to consider all strategic alternatives. This includes restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including bankruptcy.
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10 Lower Thames St,
London EC3R 6EN