Summary:
- BBBY share price tanks.
- The company is due to make many cuts.
BBBY
The price of Bed Bath & Beyond (BBBY) shares is soaring early on Wednesday as investors learn more details about the situation the struggling store is in. In an effort to stop the bleeding from a drop in sales, the retailer announced plans to liquidate 150 shops, issue more shares, and lay off 20% of its workforce on Wednesday morning in an SEC filing and a press release before a presentation to investors. As of 9:38 AM ET, shares of the company were down more than 24% in early trade.
Bed Bath & Beyond said in a release that it had pledges for an additional $500 million in funding, raising its existing liquidity to almost $1 billion as the firm fights for survival. Additionally, the company submitted an SEC filing for the sale of up to 12 million additional shares of common stock.
Bed Bath & Beyond has stated that it will lean out the business and remove 20% of its corporate and supply chain workers in order to reduce expenses by $250 million in its fiscal year 2022.
The business recently announced its intention to shut down 150 underperforming locations, adding that it "continues to examine its portfolio and leases, as well as employees, to ensure alignment with client demand and go-forward strategy."
Bed Bath & Beyond anticipates comparable sales will drop 26% from the prior year in the current quarter and 20% from the prior year in its fiscal 2022, with improvements in the decline throughout the second half of the year. Currently, Bed Bath & Beyond is in the second quarter of its fiscal year.
The company's presentation on Wednesday comes in the wake of recent rumors that Bed Bath & Beyond had recruited Kirkland & Ellis, a firm best known for its bankruptcy and restructuring work, to assist in managing its debt load. According to Bloomberg, some suppliers stopped shipping when the business fell behind on payments.
Despite Wednesday's early morning drop, shares of Bed Bath & Beyond are still on track to increase by more than 80% so far this month, despite the fact that the company is currently down more than 70% from recent highs.
BBBY Price Chart
Sources: finance.yahoo.com
