Bed Bath & Beyond Stock Crashes Amid ‘Substantial Doubt’ Business Can Continue

Topline

Shares of struggling brick-and-mortar retailer Bed Bath & Beyond plunged to a new multi-decade low on Thursday after the company warned of continued economic challenges plaguing efforts to -also in its business – further increase in severe losses for a stock that more than tripled. amid the chaos of retail-trading during the pandemic.

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Basic Facts

Bed Bath & Beyond stock plunged nearly 20% in pre-market trading Thursday to $1.98—pushing the shares to lows last seen nearly 30 years ago.

Embarking on a sudden downturn, the ailing New Jersey-based retailer announced Thursday morning that it expects sales to collapse 33% to less than $1.3 billion in the latest quarter as a result of lower traffic. to the customer and reducing inventory levels.

In a statement, CEO Sue Gove blamed “inventory constraints” and “economic challenges,” including reduced credit limits that prevented the company from buying more merchandise, for more worse than expected performance.

The company also warned recurring losses in the most recent quarters contributed to “significant doubt about the company’s ability to continue,” adding that it was exploring actions including restructuring, refinancing debt, selling assets and even filing for bankruptcy.

“These measures may not be successful,” warned the company, which expects to post a loss of about $385.8 million in its upcoming earnings report.

Key Background

As customers turn to online shopping, Bed Bath & Beyond, which has struggled to build a strong digital presence, has become one of the worst-hit brick-and-mortar retailers of the past decade. However, the company’s shares began to improve early last year, at one point more than tripling as retail traders plowed into shorted stocks. The frenzy cooled but flared up again when billionaire Ryan Cohen, who led an unsuccessful bid to turn around fellow retailer GameStop, revealed a $120 million investment in the home store. That enthusiasm, too, was short-lived, with Cohen cashing in his stake in August.

Surprising Facts

Shares of Bed Bath & Beyond have collapsed 94% from a closing high of about $35 in January 2021. However, that pales in comparison to losses since the company’s heyday in 2014, when shares soared for more than $80. Fellow meme stock GameStop has tumbled about 80% since its peak nearly two years ago.

Further Reading

After 28% Profit Drop, Bed Bath & Beyond Stock Needs Markdown (Forbes)

Bed Bath & Beyond Stock Skyrockets After Billionaire GameStop Chair Cohen Reveals $120 Million Investment (Forbes)

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