A man walks through a Bed Bath & Beyond store in New York on January 5, 2023.
Ziyu Julian Zhu | Xinhua News Agency | Getty Images
Bed Bath and more reported a bigger-than-expected quarterly loss on Tuesday as its chief executive acknowledged that the struggling retailer’s restructuring plan fell short of its targets.
Days after the company warned of possible bankruptcy, it painted an even bleaker picture of its financial situation. On Tuesday, Bed Bath lost $393 million in its fiscal third quarter, more than the $385.8 million quarterly loss it forecast just last week and up 42% from last year.
Bed Bath’s net losses for the first nine months of the financial year exceeded $1.12 billion.
CEO Sue Gove said the company has already cut costs and will cut an additional $80 million to $100 million, including an unspecified number of layoffs, and that it is on track to close the previously announced 150 stores. Bed Bath’s operating expenses fell to $583.6 million from $698 million last year.
Here’s how the retailer did it three month period ended Nov. 26 compared to what analysts expected based on Refinitiv data:
- Loss per share: $3.65 adjusted vs. $2.23 expected.
- Revenue: $1.26 billion vs. $1.34 billion expected
As the home improvement retailer struggles to stay in business, its mounting losses undermine its recovery strategy. He wants to bring back more national brands and popular products as he phases out some of his private labels. However, suppliers, frightened by Bed Bath’s finances, changed payment terms or stopped deliveries, leaving store shelves empty than usual.
Gove said Tuesday that the company is working on a “timely” solution to its cascading financial problems.
“While we quickly and effectively changed product range and other merchandising and marketing strategies, inventory was limited and we missed our targets,” Gove said in a press release on Tuesday.
She repeated company press release in comments about a roughly 10-minute P&L talk and declined to answer analyst questions.
Bed Bath did not report sales trends for the holiday season, which falls into the company’s fourth fiscal quarter. Gove said the Bed Bath company used the money it made in December to increase inventory.
The retailer includes three banners: its namesake; children’s goods chain Buybuy Baby; and its Harmon health and beauty banner.
Like-for-like sales of the Bed Bath & Beyond division fell 32%. Like-for-like sales of the banner of the same name fell 34%. Buybuy Baby’s like-for-like sales were down about 20%. The company did not provide comparable sales trends for its Harmon health and beauty chain.
Net sales of $1.26 billion represent a decline of approximately 33% from $1.88 billion last year.
Last week, the company previewed its net sales and net loss for its fiscal third quarter in a “going concern” warning. The statement said the company is at risk of running out of cash to cover costs as it struggles to attract customers to stores and offset declining sales.
The market value of the company fell to $182 million. However, its shares rose more than 27% on Tuesday.