Bed Bath & Beyond plans for more layoffs as sales tank
FILE - A Bed, Bath & Beyond is photographed in Pasadena on Thursday, Jan. 28, 2021 in Los Angeles, CA. (Dania Maxwell / Los Angeles Times via Getty Images)
Bed Bath & Beyond's fiscal third-quarter sales fell by a third as the home goods company struggles to strike the right balance with its shoppers, a sign of its worsening outlook.
The company, which has already been cutting costs, said Tuesday it will slash an additional $80 million to $100 million across the company, including an unspecified number of layoffs.
Last week, Bed Bath & Beyond cautioned that it may need to file for bankruptcy protection as it struggles to attract shoppers. It then said that it’s considering options including selling assets or restructuring its business in bankruptcy court. But the chain acknowledged that even those efforts may not be successful.
Sales slid 33% to $1.26 billion for the three months ended Nov. 26 from $1.88 billion a year earlier. Sales at stores open at least a year, a key gauge of a retailer’s health, dropped 32%.
Analysts polled by Zacks Investment Research expected higher revenue of $1.43 billion.
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The company is also burning through cash. It reported roughly $153 million in cash and cash equivalents in the latest quarter, a steep drop from $509 million in the year-ago period.
While the quarterly performance was not a surprise given Bed Bath & Beyond’s update on its results last week, Neil Saunders, managing director of GlobalData, said in statement that it’s still a bit of a shock and only adds to concerns about Bed Bath & Beyond's survival.
"A third of revenue has vanished, plunging an already beleaguered company into the depths of chaos," he said.
President and CEO Sue Gove said in a prepared statement on Tuesday that the company is working on adjusting its merchandise and strategy, which has moved away from shoppers’ preferences.
"We want our customers to know that we hear them and are charging ahead every day to meet their needs," she said.
The retailer lost $393 million, or $4.33 per share, in the quarter. That compares with a loss of $276.4 million, or $2.78 a year earlier.
Stripping out certain items, its adjusted loss was $3.65 per share. Wall Street was calling for a loss of $2.36 per share.
Bed Bath & Beyond announced in August that it would close stores and lay off workers in a bid to turn around its business. It announced it would close about 150 of its namesakes stores and slashed its workforce by 20%. The company said Tuesday that it was on track to close the stores.
Saunders is not optimistic about the future of the retailer.
"In our view, Bed Bath & Beyond has completely lost control and is in a tailspin; and with the ground fast approaching, survival now looks unlikely," he said.
Shares of the Union, New Jersey-based company jumped 24% to $2.02 in afternoon trading.