Bed Bath & Beyond Inc. (NASDAQ:BBBY) results for the third quarter of fiscal 2022 are scheduled to be released on January 10. In the fiscal quarter that will soon be reported, it is anticipated that this industry-leading specialty retailer will post lower sales and profitability. After hitting an all-time high of $80.48 in January 2014, BBBY stock has plunged and is now trading under $2.00 a share.
BBBY Stock: Q3 Estimates
The Consensus Estimate for the company’s earnings for the fiscal third quarter is pegged at a loss of $1.96 per share, which indicates a fall of 684% compared to the reported figure for the same quarter a year ago. The thirty-day loss forecast has been revised upward by 1.6%. The consensus estimate for sales in the fiscal third quarter is pegged at $1.43 billion, which indicates a fall of 23.6% from the number that was recorded in the previous year.
I anticipate that the total revenues for the company’s fiscal third quarter will fall by 23.1% year over year, coming in at $1,444.5 million. I expect that BBBY will record a loss of $1.78 per share, which is significantly more than the loss of 25 cents per share that it reported in the same quarter one year ago.
The company exceeded expectations with a quarterly profit of 102.5% in the most recent period that was disclosed. In addition, the company’s average negative earnings surprise for the preceding four quarters came in at 1,638.4%.
Important Factors to Keep in Mind
Bed Bath & Beyond has been having a difficult time recently due to slow sales, an inability to compete with other retail giants, and a shift toward private brands. This drove away many devoted clients who had come hunting for their preferred brands. The company’s continued failure to get in-demand fashions onto its shelves and its efforts to offer additional store-branded products have resulted in the company’s decision to abandon both initiatives.
In the meantime, it worked along with its suppliers on productive merchandise planning and store fleet optimization plans. Nevertheless, the results of these efforts could have been better.
Its problems have been made worse by persistent inflation, which has caused customers to reduce their expenditure on non-essential items. The company continues to experience supply-chain restrictions that were prevalent across the sector. As a result, aggressive clearing activity to right-size its inventory and the negative impact of supply-chain expenses will likely affect margins in the fiscal third quarter. In addition, margins may continue to be dented in subsequent quarters.
In recent events, management provided an advanced look at the outcomes of the company’s fiscal third quarter. The company used the additional liquidity gained during the holiday season to achieve higher in-stock levels. Inventory limitations and decreased credit restrictions hurt the company during the third quarter of the fiscal year, which resulted in a lower level of in-stock presentation across the assortments.
Bed Bath & Beyond estimates net sales of $1.26 billion, which is significantly lower than the $1.88 billion it reported during the same period the previous year due to decreased consumer traffic and levels of inventory availability. The business forecasts a net loss of $385.8 million, accounting for impairment charges totaling $100 million; this compares to a loss of $276.4 million reported during the same period a year ago.
Despite this, it has been making progress with its objectives to turn the company around by placing a greater emphasis on merchandising and inventory, expanding its digital and omnichannel capabilities, and fortifying its financial situation. It has been working on enhancing its cash position and reducing the risk of a potential liquidity deficit. As another component of its turnaround strategy, the company has reintroduced several of the well-known national brands it owned, such as Oxo, Ninja, and SodaStream.
BBBY stock jumped over 30% on Monday as Reddit users speculated about a possible merger and acquisition deal.
The rally follows last week’s steep losses when the retailer warned that quarterly sales were poor and that bankruptcy was an option. Inventory issues and credit limits have hampered the company’s performance.
Featured Image: Megapixl @ Georgesheldon
