Bed Bath Beyond stock rally ahead of conference call

Shares of Bed Bath Beyond rallied Friday after the domestic goods retailer said it would provide a business and strategic update to investors during a conference call on August 31.

Bed Bath Beyond interim CEO Sue Gove said in a statement that they recognize the strong interest in our company and plans to better serve customers, recapture market share, drive growth and profitability, and strengthen our balance sheet. We look forward to providing an update on our business next week, including a preview of strategies and changes being implemented across the enterprise to deliver results for all stakeholders. The call will take place at 8: 15 a.m. Eastern Time, with a press release and related materials to be issued approximately 45 minutes prior to the call.

The company is nearing the final terms for a loan from Sixth Street Partners in order to strengthen its liquidity, according to a report from The Wall Street Journal. A source told the Journal on Wednesday that negotiations to finalize the loan documents are ongoing.

After Chewy.com co-founder and GameStop chairman Ryan Cohen left the company last week, shares took a hit, as Bed Bath Beyond stock remains popular among retail investors. Cohen said at the time that Bed Bath Beyond was struggling to reverse sustained market share losses, stem years-long share price declines and navigate supply chain volatility. He said that the company should narrow its focus to fortify operations and maintain the right inventory mix to meet demand while exploring strategic alternatives that include separating buybuy Baby, Inc. and the full sale of the company. He expressed concern about the compensation of Bed Bath Beyond's leadership, including former CEO Mark Tritton, about performance and its strategy for reigniting meaningful growth. Some Bed Bath Beyond suppliers stopped shipments due to unpaid bills, and several firms that provide short-term financing and credit insurance have revoked coverage of the retailer, according to Bloomberg. Some analysts have accused Bed Bath Beyond of turning down air conditioning in its stores to save money.

Bed Bath Beyond has committed to exploring strategic alternatives for the company's buybuy Baby business since March. It has also been appointed by Gove, new chief merchandising and accounting officers and a head of treasury, and removed Wild Sage, a private brand of bedding, decor and furniture, launched in June 2021.

Over the past several weeks, Bed Bath Beyond said it has been working with external financial advisers and lenders to bolster its balance sheet. In June Bed Bath Beyond said it had retained Berkeley Research Group BRG, a leading retail advisory firm, to focus on cash, inventory and balance sheet optimization. In the first quarter of 2022, Bed Bath Beyond saw its net sales fall 25% and comparable sales drop 23% compared to the same period last year, due to soaring inflation, a rapid shift in consumer spending patterns and declining demand in its Home sector.

Cash, cash equivalents, restricted cash and investments totaled approximately $0.2 billion at the end of the quarter, while Bed Bath Beyond's total liquidity was approximately $0.9 billion. The company burned more than $500 million in cash during the quarter.