Bed Bath & Beyond Inc. is trying to turn around its business while the COVID-19 pandemic and supply chain constraints continue to rage. This Zacks Rank #5 (Strong Sell) is expecting revenue to decline this fiscal year.
Bed Bath & Beyond is a omnichannel retailer with a focus on Home, Baby, Beauty and Wellness. It operates websites and 953 stores including 771 Bed Bath & Beyond stores in all 50 states, DC, Puerto Rico and Canada, 130 buybuy BABY stores in 37 stores and Canada and 52 stores under the names Harmon, Harmon Face Values or Face Values in 6 states.
It also is a partner in a joint venture that operates 11 Bed Bath & Beyond stores in Mexico.
A Big Miss in Fiscal Q4 2021
On Apr 13, Bed Bath & Beyond reported its fiscal fourth quarter 2021 results, the holiday quarter, and missed the Zacks Consensus Estimate by $0.94. Earnings were a loss of $0.92 versus the Zacks Consensus of $0.02.
It was the fourth miss in a row.
Net sales fell 22% to $2.05 billion from $2.62 billion a year ago.
Comparable sales fell 12% on supply chain and inventory availability challenges. The inventory challenges had an estimated impact of $175 million, or high-single digit, impact to net sales under the Bed Bath & Beyond banner.
One bright spot was buybuy Baby comparables which were a positive low-single digits due to mid-teens growth in stores.
"Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business," said Mark Tritton, CEO.
Analysts Are Bearish Again
With all this bad news, it's not a surprise that the analysts have cut fiscal 2022 earnings estimates.
8 estimates were cut in the last week, pushing the Zacks Consensus down to a loss of $1.92 from $0.63 in that time.
Bed Bath & Beyond lost $0.98 last year so this would be an earnings decline of 95.9%. That's a real disappointment as the company seemed to be making progress in its transformation.
Meme Stock or Not?
Bed Bath & Beyond was one of the January 2021 "meme" stocks along with GameStop and AMC. You can see the big spike in the shares in the chart below.
Image Source: Zacks Investment Research
And while the shares continue to be volatile, over the last month they've fallen 26%.
Are the memesters abandoning Bed Bath & Beyond?
For investors who are actually looking for a retail investment, they might want to focus on those retailers who are winning in this tough environment, instead of those who are attempting a complete rebuild.
Image: Bigstock
Bear of the Day: Bed Bath & Beyond
Bed Bath & Beyond Inc. is trying to turn around its business while the COVID-19 pandemic and supply chain constraints continue to rage. This Zacks Rank #5 (Strong Sell) is expecting revenue to decline this fiscal year.
Bed Bath & Beyond is a omnichannel retailer with a focus on Home, Baby, Beauty and Wellness. It operates websites and 953 stores including 771 Bed Bath & Beyond stores in all 50 states, DC, Puerto Rico and Canada, 130 buybuy BABY stores in 37 stores and Canada and 52 stores under the names Harmon, Harmon Face Values or Face Values in 6 states.
It also is a partner in a joint venture that operates 11 Bed Bath & Beyond stores in Mexico.
A Big Miss in Fiscal Q4 2021
On Apr 13, Bed Bath & Beyond reported its fiscal fourth quarter 2021 results, the holiday quarter, and missed the Zacks Consensus Estimate by $0.94. Earnings were a loss of $0.92 versus the Zacks Consensus of $0.02.
It was the fourth miss in a row.
Net sales fell 22% to $2.05 billion from $2.62 billion a year ago.
Comparable sales fell 12% on supply chain and inventory availability challenges. The inventory challenges had an estimated impact of $175 million, or high-single digit, impact to net sales under the Bed Bath & Beyond banner.
One bright spot was buybuy Baby comparables which were a positive low-single digits due to mid-teens growth in stores.
"Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business," said Mark Tritton, CEO.
Analysts Are Bearish Again
With all this bad news, it's not a surprise that the analysts have cut fiscal 2022 earnings estimates.
8 estimates were cut in the last week, pushing the Zacks Consensus down to a loss of $1.92 from $0.63 in that time.
Bed Bath & Beyond lost $0.98 last year so this would be an earnings decline of 95.9%. That's a real disappointment as the company seemed to be making progress in its transformation.
Meme Stock or Not?
Bed Bath & Beyond was one of the January 2021 "meme" stocks along with GameStop and AMC. You can see the big spike in the shares in the chart below.
Image Source: Zacks Investment Research
And while the shares continue to be volatile, over the last month they've fallen 26%.
Are the memesters abandoning Bed Bath & Beyond?
For investors who are actually looking for a retail investment, they might want to focus on those retailers who are winning in this tough environment, instead of those who are attempting a complete rebuild.