Bed Bath & Beyond has to deal with slowing demand and elevated inventory levels, raising the risk of large price cuts ahead for the holiday shopping season.Īs a result, investors shouldn't view stock price jumps like this past week's rally as evidence that the business is on a stronger footing. Executives said in late June that demand pressures "materially escalated" in the most recent quarter. Things will likely get worse for the retailer before they get better. The company is losing market share even as the home furnishings niche shrinks in the wake of pandemic-related shifts in shopping behavior. In fact, comparable-store sales dove 27% in its fiscal first quarter, ended May 28, as profitability slumped. Meet the new meme stock: AMTD Digital stock, HKD, is up more than 14,000% But Bed Bath & Beyond isn't moving toward that rebound today. Success on this score would help deliver flexibility as the company works to get sales trends back on track.
On the contrary, the company is facing increasing cash flow pressures that have reportedly led it to seek new loans on the private market, according to Bloomberg. However, Bed Bath & Beyond's financial prospects didn't improve this week.
The weekly rally wasn't powered by an improving outlook around sales and earnings, but instead appeared to be driven by speculative short-term bets on the meme stock. The struggling retailer's shares remain lower by nearly 60% so far in 2022. The surge looks less impressive when you zoom out, though. Shares jumped 22% through Thursday trading as the wider market rose 0.5%, according to data provided by S&P Global Market Intelligence. Bed Bath & Beyond (NASDAQ: BBBY) investors trounced the market this week.
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