If there was ever a business that deserved to hear a bit of good news, home goods retailer Bed Bath & Beyond (NASDAQ: BBBY) would be near the top of that list.
The company said in June that its first-quarter net sales had declined 25% year over year, resulting in a net loss of $358 million. It did not hazard a forecast, but said at the time that it expected sales to recover in the second half of the fiscal year.
Its shares suffered severely two weeks ago after Chewy.com co-founder and GameStop chairman Ryan Cohen's RC Ventures jettisoned its 11.8% stake in the company that it had acquired in March. Cohen’s comment at the time was hardly likely to inspire confidence in BBBY, saying it was “struggling to reverse sustained market share losses, stem years-long share price declines and navigate supply chain volatility." Yet, despite this gloomy analysis, the company continued to be popular with retailer investors.
On Thursday, August 25, the company announced that it would be holding a conference call to provide a business and strategic update on August 31, 2022 at 8:15am EDT. A press release and related materials would be issued approximately 45 minutes prior to the start of the conference call.
Sue Gove, Director and Interim Chief Executive Officer, commented: "We recognize the strong interest in our company and our plans to better serve customers, recapture market share, drive growth and profitability, ensure our vendors are supported, and strengthen our balance sheet. We look forward to providing an update on our business next week, including a preview of strategies and changes being implemented across the enterprise to deliver results for all stakeholders."Shares rose more than 5% in after-hours trading Thursday.
BBBY is said to be seeking a lifeline from lenders. The Wall Street Journal has reported that the company is working on finalizing a $400 million loan to give it cash to pay its bills and regain the confidence of suppliers. The Journal reported that the company is finalizing negotiations with Sixth Street Partners, which has lent money to other troubled retailers, including J.C. Penney.
BBBY has made numerous changes besides ousting its CEO, Mark Tritton, early this summer. Former merchandising chief Joe Hartsig, one of the architects of its private label strategy, left at the same time, and a new Chief Accounting Officer was added. BBBY is currently looking for a new CEO. It also launched a new loyalty program and dropped one of its private brands, Wild Sage.
As of Thursday’s close, shares were down about 31% so far this year. Shares closed on Thursday at $10.10, down about 2.5%. The company’s market value is $807.6 million.
In general, these are not happy times for the home goods sector after a period of unusually strong demand during the pandemic. As a discretionary area of purchasing, it has become increasingly vulnerable as inflation-conscious shoppers are electing to spend more of their shrinking dollars on food and other necessities. This has meant that small appliances like blenders, toaster ovens, and coffee makers are being heavily discounted at big-box as well as specialty stores.
What will emerge from under the blankies on Wednesday? Stay tuned!