Earnings Outlook: Bed Bath & Beyond’s turnaround plan leaves ‘questions that have really not been answered to any degree’

by | Sep 28, 2022 | Stock Market

When Bed Bath & Beyond Inc. reports fiscal second-quarter earnings on Thursday, analysts will have one big question on their minds: When will turnaround efforts pay off?  The results for the home-goods retailer, which sells items like bedsheets, towels and cookware, will arrive after an epic rise and fall for the “meme stock” amid moves by an activist investor, aggressive cutbacks and the death of an executive that was ruled a suicide. Bed Bath & Beyond’s
turnaround efforts will be the focus of this report, and analysts already have their doubts about executives’ plans coming to fruition anytime soon.

Morningstar analyst Jaime Katz said she would be looking for more specifics on the second half of the company’s fiscal year on Thursday, as well as what executives’ efforts to right the ship mean longer term for operating margins. For now, she said, the plan lacks “newness” — returning to selling national brands that don’t provide the retailer with pricing power, after walking back plans to sell cheaper, private-label fare that had unfocused messaging, is unlikely to be enough. “There’s this duration fatigue,” Katz said in an interview with MarketWatch. “When does it find its footing?” Bed Bath & Beyond has pruned executives, slashed jobs, product offerings and spending, and announced plans to close dozens of stores. The company last month said it secured $500 million in new financing. It ended its fiscal first quarter with cash and equivalents of around $108 million, down from around $1.1 billion in the year-earlier period.  While those cuts seem like a start to the plan, the full course is still in question, Katz said, and the end appears to be nowhere in sight. Executives will attempt to give m …

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