Bed Bath Beyond is accused of turning off the air conditioning in stores in an effort to cut costs as the retailer struggles with a drop in sales.
Bank of America analysts visited Bed Bath Beyond stores and reported that the air conditioning had been turned down to make up for lost revenue.
The report said that the home goods chain had cut employees hours, reduced store operating hours, canceled remodeling projects and replaced rewards programs.
The Bank of America report said that Bed Bath Beyond is trying to trim costs in order to align costs with sales declines.
Some stores have recently been forced to shut down operations, and the analysts predict that the retailer will announce more closures soon.
Bed Bath Beyond denies it instructed stores to scale back utilities.
The company told the New York Post that no Bed Bath Beyond stores were directed to adjust their air conditioning, and there have been no corporate policy changes in regard to utilities usage.
In April, Bed Bath Beyond reported that sales fell by 22% in the fourth quarter of 2021, which ended in late February. The drop-off to certain products was attributed to supply chain issues, which resulted in about $175 million of lost sales during that period, according to CEO Mark Tritton.
Analysts don't believe there will be improvement when the company releases its first quarter results on Wednesday. Bank of America analysts expect sales to fall by another 20% this quarter.
The Bank of America analysts wrote that the company has not performed well in the industry and we think consensus estimates of an 18% drop in sales may be optimistic.
Other analysts are not optimistic about the company's results this quarter.
According to the Post, it's not surprising that they might look for incremental ways to save money because sales trends are not going in their favor, and it's not surprising that they're not going in their favor, according to M Science analyst John Tomlinson. Our data shows that the company's people are expecting sales to be weak tomorrow, which is why our data is so negative. Two Bed Bath Beyond financial executives - Chief Accounting Officer John Barressi and Senior Vice President of Financial Planning Heather Plutino -- have recently resigned, adding to the firestorm.