Bed Bath & Beyond Sees $385M Loss in Q3; May Seek Bankruptcy Protection

January 5, 2023  by HFBusiness Staff in Business Strategy, Industry   

In a statement announcing preliminary results for the most recent quarter, the troubled retailer said recurring losses, negative cash flow in the first nine months of its fiscal year, and current cash and liquidity projections have led management to conclude “that there is substantial doubt about the company’s ability to continue as a going concern.”

In addition to the possibility of filing for bankruptcy protection, the retailer said it is considering refinancing its debt, seeking additional debt or equity capital, reducing or delaying the company's business activities and strategic initiatives, and selling assets. However, the company warned these measures “may not be successful.”

The retailer estimated sales would be about $1.259 billion for the quarter ended Nov. 26, down from $1.878 billion in the same period the previous year. The projected loss of $385.8 million, which includes an impairment charge of about $100 million, is up from a loss of $276. 4 million in the comparable quarter.

“Despite more productive merchandise plans and improved execution, our financial performance was negatively impacted by inventory constraints as we partnered with our suppliers to navigate both micro- and macro- economic challenges,” said Sue Gove, president and CEO. “Reduced credit limits resulted in lower levels of in-stock presentation within the assortments that our customers expect. Consequently, we have already leveraged the liquidity gained from the holiday season to immediately pursue higher in-stock levels with support from our key vendors. We have seen trends improve when in-stock levels have increased."

The retailer said it plans to release complete results for the quarter on Jan. 10.