Bed Bath & Beyond (BBBY) stock: Is the Meme stock Bed Bath & Beyond in Trouble?

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Bed Bath & Beyond share price

Bed Bath & Beyond has been in the news a lot recently, mostly for the wrong reasons. For investors who are not aware of the business of the company - the company is an American chain of domestic merchandise retail stores. 

Last week Bed Bath & Beyond shares fell more than 25%. In the last six months, Bed Bath & Beyond share price fell by more than 60%. However, last month, Bed Bath shares went from $6 to $30 (by mid-August), but before the month ended, the shares were below $10 per share. Let us look at everything that is happening with the company.

Bed Bath & Beyond stock: Long Lasting problems

The company has a history of problems. If you leave 2020, the company has always been in the news for the wrong reasons. Let us look at its problem in brief:

  • BBB's board was overhauled in the spring of 2019. It included the exit of its co-founders Leonard Feinstein and Warren Eisenberg. 
  • In May, of the same year, then CEO Steven Temares exited his role.
  • At that time (2018-19), the company was in a bad financial situation. BBB moved from being a low-default risk to a medium-default risk.
  • Mark Tritton took the CEO role in late 2019 and worked hard to change the company's fortune through new initiatives - expanding buy online, pick up store, and curbside pickup. However, his strategies did not work as expected. Many core customers were alienated and the company attracted few new customers only.
  • Poor decisions: As per experts, the company made some decisions which are hard to explain. For example, BBB had a total debt of $1.4 billion as of 28 May 2022. Instead of working on lowering the debt, the company announced its buyback program in November last year. It decided to repurchase $1 billion worth of shares. Experts believe it wasn't the right thing to do.
  • Things were so bad for BBB that CEO, Mark Tritton, had to leave the company in June this year.

Bed Bath & Beyond share price fall - poor quarterly results

One of the main reasons for the falling share price of Bed Bath & Beyond is its poor quarterly numbers. Let us look at the details of its quarterly results for the period ending May 28:

  • Net loss widened to $358 million from $51 million in the year-ago period.
  • Sales fell to $1.46 billion, a drop of 16% from the year-ago period.
  • Same-store sales declined 23% in the quarter compared with a year ago.
  • Online sales fell by 21% year over year.

Bed Bath & Beyond share price fall - Investors' exit

  • As per the reports, activist investor Ryan Cohen plans to sell his shares in BBB.
  • He bought nearly 9.5 million shares of the company between mid-January and early March this year.
  • However, now Cohen's investment firm, RC Ventures, said in a securities filing that they plan to sell the entire stake - about 11.8% - in Bed Bath & Beyond.
  • Also, its CFO Gustavo Arnal, sold 55,013 shares in the company last month.

Bed Bath & Beyond: Layoffs and store closures

  • Last week, the New Jersey-based company said that it would slash its workforce by 20% and close about 150 stores. 
  • As per experts, it is because the company is facing sales decline and excess inventory that the workforce needs to be laid off.
  • In the same announcement, the company said that to strengthen its balance sheet, it secured more than $500 million in new financing, including a loan.

Bed Bath & Beyond CFO's death

  • The company is again in the news this week as its Chief Financial Officer (CFO) fell to death from the 18th floor of New York's Tribeca skyscraper known as the Jenga.
  • Gustavo Arnal joined Bed Bath & Beyond in 2020 as a CFO. He had previously worked as CFO for cosmetics brand Avon in London and with Procter & Gamble for 20 years.
  • According to the New York City Medical Examiner’s Office, Arnal’s death has been ruled a suicide.

Bed Bath & Beyond stock: Analysts' call

Brokerage Wedbush: The firm has downgraded the company to UNDERPERFORM and given the target price of $5 per share, citing that the company looks disconnected from fundamentals at its current valuation.

Jefferies: Analysts' at Jefferies raised the target price of Bed Bath from $5 to $9 stating confidence in the company's cost-cutting measures that include store closures and job cuts.

  • What is the share target price of Bed Bath & Beyond?

  • Did Ryan Cohen sell?

  • Why did Bed Bath and Beyond stock drop?

  • What is BBBY PE ratio?

  • Is Bed Bath and Beyond publicly traded?