Bed Bath & Beyond Reports Quarterly Loss, Bankruptcy Threat Looms

Bed Bath & Beyond Reports Quarterly Loss, Bankruptcy Threat Looms

(Reuters) -Bed Bath & Beyond Inc on Tuesday reported a quarterly loss of about $393 million after a tough holiday season that it hoped would provide a financial cushion to its months-long cash burn.

The company did not say if it would file for bankruptcy after saying last week it was working with outside advisers to look at various options after years of weakening sales.

Bed Bath & Beyond also said it started cost reductions of about $80 million to $100 million across the business, including overhead expenses and headcount.

Net sales fell 33% to $1.26 billion in its third quarter as inflation strained consumers’ pockets and shoppers focused on products other than home goods, furniture and decor – merchandise that are core to Bed Bath & Beyond’s inventory mix.

Bed Bath & Beyond’s inventory fell to $1.44 billion in its holiday quarter, down 24.9% year on year, after shedding some of its owned brands and offering steep Black Friday discounts to clear excess merchandise.

“Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained and we did not achieve our goals,” CEO Sue Gove said in a statement.

The big-box retailer is considering skipping its debt payments due on Feb. 1 in an effort to conserve cash ahead of a possible bankruptcy filing, Reuters reported earlier.

Bed Bath & Beyond said last week it was exploring options, including bankruptcy, after taking on $375 million in financing in August and failing to convince bondholders to swap out their investments for new debt earlier this month.

Bed Bath & Beyond reported a $3.65 non-GAAP loss per share, missing Wall Street’s estimates for a loss per share of $2.23.

Shares of the New Jersey-based company rose 13% in premarket trading.

(Reporting by Arriana McLymore in New York City and Deborah Sophia in Bengaluru; Editing by Shounak Dasgupta and Bernadette Baum)