Bed Bath & Beyond anticipated that it will report a nearly $400 million shortfall in the third quarter of 2022, and raised the specter of bankruptcy proceedings in a Thursday morning press release.
Although Bed Bath and Beyond enjoyed brief favor last fall among retail investors as a “meme stock,” the company has struggled to survive amid significant losses as it rushed to cut costs and reduce focus on its own store brand items, according to The Wall Street Journal. The company —which is scheduled to report its full financial situation on Jan. 10 — expects to have generated almost $1.26 billion in revenue in the third quarter last year, compared to nearly $1.88 billion the year prior, leading to a $385.8 million loss compared to the prior years’ loss of $276.4 million, according to its press release. (RELATED: College Student Makes Over $100 Million Betting On Meme Stock)
“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 macro- economic challenges,” said CEO Sue Gove in the company’s press release. “Reduced credit limits resulted in lower levels of in-stock presentation within the assortments that our customers expect.”
FILE PHOTO: A shopping cart is seen at a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo
The company intends to take advantage of revenue generated during the holiday season to work with vendors to improve inventory levels, Gove said. She noted that the company typically saw improved performance when inventory levels increased.
Bed Bath and Beyond’s stock, which is down roughly 86% in the past 12 months, plunged an additional 20% Thursday morning, according to Google Finance.
Gove stressed that the company had a “clear vision” moving forward, and stressed that the company would continue to “build on [its] progress” to operate more efficiently and improve its finances, according to the press release. Despite this, the release concludes by notifying investors that the company was considering “all strategic alternatives” going forward, including refinancing debt, making cuts and bankruptcy.
“The Company continues to consider all strategic alternatives … including obtaining relief under the U.S. Bankruptcy Code,” Bed Bath & Beyond wrote in their press release. “These measures may not be successful.”
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