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Bond Market News

Bed Bath & Beyond Reports 25% Sales Dip; Bonds Drop Over 4 Points

June 30, 2022

Bed Bath and Beyond reported another quarterly decline in sales revenues, making $1.46bn in Q1 2022, 25% lower YoY than its revenue of $1.95bn last year. They also reported a net loss of $358mn during the quarter vs. a $50mn net loss in Q1 2021. Cash and cash equivalents stood at $107mn, down from $439mn in the previous last quarter and $990mn lower than cash holdings a year before. While their long term debt stands at $1.38bn, they have total liabilities of $5.2bn, which exceeds their total assets by $220mn. In their quarterly report, the weak sales performance is said to be a result of rapidly changing customer sentiment and declining demand in the home sector. CFO Gustavo Arnal said that “the bed, bath and kitchen categories, which account for about half of the company’s revenue, have been declining in double digits for the past 3 months.” In light of the negative earnings performance, the American retailer’s stock price dropped by more than 20% and prompted the firing of its CEO, Mark Triton. Despite this, the company seems upbeat about their outlook, expecting their inventory optimization plans to drive recovery in comparable sales in H2 2022. According to FT, it also anticipates a reduction in its capital expenditures by $100mn by “pausing remodels and store openings for the rest of the year”. Sue Gove, who was appointed as interim CEO said, “Our first quarter’s results are not up to our expectations, nor are they reflective of the company’s true potential.”

Bed Bath & Beyond’s 3.749% 2024s are trading lower at 67.5, down 4 points.

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