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Bed Bath & Beyond (BBBY) Stock Surges on Takeover Interest

BBBY stock - Bed Bath & Beyond (BBBY) Stock Surges Despite Bankruptcy Risk

Shares of Bed Bath & Beyond (NASDAQ:BBBY) stock opened in the green amid speculation of a takeover and the release of third-quarter earnings for fiscal year 2022. Earlier this month, the retailer issued a going concern warning, sending shares of BBBY stock plummeting lower. Bed Bath & Beyond stated that it would explore all available strategies to restore its going concern, such as restructuring debt, reducing business activity, acquiring additional debt or equity capital, selling assets, and other measures.

For Q3, sales tallied in at $1.259 billion, down 33% year-over-year (YOY), while comparable sales fell by 32% YOY. The company attributed the significant decline to lower store traffic and the in-stock position of products. CEO Sue Gove added:

“As we shared last week, we continue to work with advisors as we consider all strategic alternatives to accomplish our near- and long-term goals. We have a team, internally and externally, with proven experience helping companies successfully navigate complex situations and become stronger. Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner.”

BBBY Stock: Bed Bath & Beyond Reports Q3 Earnings

Meanwhile, Bed Bath & Beyond reported a net loss of $393 million, equivalent to adjusted earnings per share (EPS) loss of $3.65. Analysts were expecting an adjusted EPS loss of $2.23. The net loss included non-cash impairment charges of $100.7 million, driven by “certain store-level assets.” The company reported its preliminary earnings last week and forecasted a net loss of $385.8 million. For the first nine months of the fiscal year, Bed Bath & Beyond’s net losses have now totaled over $1.12 billion.

Furthermore, the company is quickly running out of cash. Cash, cash equivalents, restricted cash and investments were $200 million, while total liquidity was about $500 million. Cash flow is nonexistent, as the company reported operating cash flow of -$307.6 million.

In a roughly 10-minute earnings call, Gove explained that the company is working to resolve its issues in a “timely manner.” Gove also declined to take questions from analysts.

In the meantime, Bed Bath will focus on its core brand, the buybuy BABY and Harmon brands, and ways to regain consumer loyalty.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for biedexmarkets.com’s Today’s Market team, which centers on the latest news involving popular stocks.

Written by biedex markets