Bed Bath & Beyond on Tuesday posted wider quarterly losses than expected as its chief executive acknowledged the struggling retailer’s turnaround plan had not achieved its goals.
Days after the company warned of potential bankruptcy, it painted an even more dire picture of its finances. Bed Bath lost $393 million during the fiscal third quarter, it said Tuesday, worse even than the $385.8 million quarterly loss it projected just last week and a 42% increase from year-ago losses.
Bed Bath’s net losses have now exceeded $1.12 billion for the first nine months of the fiscal year.
CEO Sue Gove said that the company has already cut costs and will slash an additional $80 million to $100 million, including an unspecified number of layoffs, and that it’s on track to close the 150 stores it had previously announced. Bed Bath’s operating expenses have dropped to $583.6 million, compared with $698 million last year.
Here’s how the retailer did in the three-month period ended Nov. 26 compared with what analysts were anticipating, based on Refinitiv data:
- Loss per share: $3.65 adjusted vs. $2.23 expected
- Revenue: $1.26 billion vs. $1.34 billion expected
As the home goods retailer fights to stay in business, its mounting losses have tripped up its turnaround strategy. It wants to bring back more national brands and popular products, as it phases out some of its private labels. Yet suppliers, spooked by Bed Bath’s finances, have changed payment terms or stopped shipping goods — leaving store shelves emptier than usual.
Gove said Tuesday that the company is working to address its cascading financial problems in a “timely manner.”
“Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained and we did not achieve our goals,” Gove said in Tuesday’s release.
She echoed the company’s news release in remarks on an approximately 10-minute earnings call and declined to take analyst questions.
Bed Bath did not share sales trends for the holiday season, which falls in the company’s fiscal fourth quarter. Gove said Bed Bath used money it made in December to get more inventory.
The retailer includes three banners: its namesake; its baby supplies chain, Buybuy Baby; and its health and beauty banner, Harmon.
Comparable sales across Bed Bath & Beyond’s business dropped by 32%. Its namesake banner’s comparable sales fell by 34%. Buybuy Baby’s comparable sales declined in the low 20% range. It did not specify comparable sales trends for its health and beauty chain, Harmon.
Net sales of $1.26 billion mark a roughly 33% decline from $1.88 billion in the year-ago period.
Last week, the company previewed its net sales and net losses for the fiscal third quarter in a “going concern” warning. In the filing, it said it is at risk of running out of money to cover expenses, as it struggles to attract customers to stores and turn around declining sales.
The company’s market value has fallen to a meager $142.8 million. Still, its shares were up more than 15% in morning trading Tuesday.