Bed Bath & Beyond’s Q3 loss widens, comp sales plunge as bankruptcy looms
Bed Bath & Beyond reported a wider-than-expected third-quarter loss and said it is exploring all exploring strategic alternatives.
The company’s loss was bigger than it projected last week, when it also gave a “going concern” warning and said it may have to file for bankruptcy. In a statement, CEO Sue Gove said that Bed Bath & Beyond’s turnaround plan did not meet its goals and that “multiple paths are being explored.”
“We are determining our next steps thoroughly, and in a timely manner,” stated Gove, who did not take analysts’ questions on the company’s third-quarter earnings call. Gove was named CEO in October after serving as interim chief executive since June 2022 after former CEO Mark Tritton was pushed out.
Bed Bath & Beyond’s loss totaled $393 million, or $4.33 per share, for the quarter ended Nov. 26, compared to a loss of $276 million, or $2.78 per share, in the year-ago period. (Last week, the retailer projected a loss of $385.8 million.) The quarterly loss included an impairment charge of approximately $100 million. The adjusted loss came to $3.65 per share compared to analysts’ estimates of $2.23 per share.
The company also reported a negative operating cash flow of $307.6 million
Revenue totaled $1.259 billion, down from $1.878 billion last year and missing expectations for $1.314 billion. Total comparable sales fell 32%.
By banner, comparable sales at Bed Bath & Beyond were down 34% and in the low-twenties percent range at Buybuy Baby. By channel, comparable sales in stores declined 31% and fell 33% online.
In the earnings release, Gove noted that the retailer has aggressively cut costs and is on track to close the 150 stores that it had previously outlined in August as part of its turnaround strategy. 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,” she said. We believe our concrete advantages in defining categories, offering broad and curated selections, and delivering for customers are compelling reasons why we will continue to command a formidable presence in the home and baby categories into the future."
Gove said the company will continue to rebalance its assortment toward national brands, a key part of its new strategy. With regards to the third quarter, she said that “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.”
As of November 26, 2022, the company had a total of 949 stores, including 762 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 137 Buybuy Baby stores, and 50 stores under the names Harmon, Harmon Face Values or Face Values.
During the third quarter, the company closed six Bed Bath & Beyond stores. The joint venture to which the company is a partner operates 12 stores in Mexico under the name Bed Bath & Beyond.