Bed Bath Beyond sees signs of progress despite loss in 2q

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Bed Bath Beyond sees signs of progress despite loss in 2q

Bed Bath Beyond touted progress in several areas of its turnaround plan on Thursday despite reporting a widened loss in its second quarter.

In the first quarter, we experienced a significant dislocation between sales and inventory that we began to address immediately during the second quarter, according to Interim CEO Sue Gove. Double-digit improvement in the gap was due to aggressive inventory optimization actions, including accelerated markdowns and strategic promotions. We are seeing signs of progress as inventory adjustments begin, even though we are very early in the day. Net sales fell to $1.437 million a year ago, down 28% compared to $1.984 million a year ago, and comparable sales fell 26%.

The shares fell by 57% and are down 57% year to date.

In August, the home goods retailer announced plans to cut 20% of its workforce across the corporate and supply chain, and close to 150 underperforming stores. It also said it would discontinue its Haven, Wild Sage and Studio 3 B labels, and reduce the inventory of its remaining Owned Brands.

In order to drive sales, Gove said the company would leverage its Welcome Rewards loyalty program to bring back national brands such as Calphalon, Ugg, Cuisinart, Dyson and Oxo.

Gove told investors that the company has been focused on working with suppliers and that its debts and liabilities are considerably healthier than in the previous quarter. During the quarter, Bed Bath Beyond secured $500 million in new financing, including an expanded $1.13 billion asset-backed revolving credit facility and $375 million first-in- last-out facility. It previously disclosed plans to launch an at-the- market offering of up to 12 million shares. Roughly 3 million shares have been sold for proceeds of approximately $30 million.

Gove said that we are confident that our current liquidity will enable the very strategic plans we have implemented to drive further improvement and increase organic cash generation over the coming quarters.

Bed Bath Beyond plans to relaunch its Baby Registry business, launch an upgraded mobile app and release new Owned Brands in adjacent white space categories in the second half of 2022, according to a plan by Bed Bath Beyond in the second half of 2022.

By the end of the fiscal year 2022, it is projected to open 14 buybuy BABY stores and close a minimum of 100 Bed Bath Beyond stores. The company has already released a list of 56 Bed Bath Beyond stores that will close.

Bed Bath Beyond has a full year outlook of similar sales decline in the 20% range, capital expenditures of approximately $250 million and adjusted selling, general and administrative expenses of around $250 million less than last year, as well as a comparable sales decline in the 20% range.

The Company anticipates that there will be a breakeven operating cash flow by the end of fiscal 2022 due to the guidance parameters, as well as ongoing working capital management and timing of SG&A savings, planned reductions in capital expenditures and future store closures.

Earlier this month, the company's former CFO Gustavo Arnal fell from the iconic Jenga Tower skyscraper in downtown Manhattan. A spokesman for the New York City Medical Examiner's Office confirmed to FOX Business that Arnal died by suicide and suffered multiple blunt trauma injuries.