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Bed Bath & Beyond’s Biggest Problems Going Forward

Experts say Bed Bath & Beyond is a smoldering pile of trash and the struggling retailer’s viable future hinges on the balance.

The big question is, will Bed Bath & Beyond run out of money?

The company announced Wednesday that it will raise cash ($500 million in debt + potential sale of 12 million shares), cut expenses (150 store closures/20% chance of employees), and change sales trajectory ( With new leaders (Bed Bath & Beyond and buybu BABY banners), Wall Street believes the retailer’s outlook remains highly uncertain.

The main concern is that Bed Bath & Beyond is performing very poorly, with same-store sales down 26% in the most recent quarter and a very dire balance sheet, meaning the company won’t be able to close in 2023. will have to raise more cash to Where and when that cash will come (and at what cost) is completely unknown.

A man reading a cookware pamphlet while shopping in bed, bath, and toilet.  Beyond his store in New York on April 13, 2011.  REUTERS/Lucas Jackson (UNITED STATES)

A man reads a cookware brochure while shopping at the Bed Bath & Beyond store in New York on April 13, 2011. REUTERS/Lucas Jackson (UNITED STATES)

Here’s the analyst vibe (via the latest client note) still providing coverage for a lightning rod retailer with a meager $715 million market cap.

Guggenheim

  • Analyst: Stephen Forbes

  • evaluation: neutral

  • Price target: none

Key comments: “The necessary liquidity injection – and plus – but at what cost? Given the conviction, the announced liquidity injection – ($375 million FILO facility, approximately $125) additional asset-backed loan capacity of up to 12 million shares and issuance of up to 12 million shares) is clearly positive, but the interest expense burden is expected to increase (note: this commitment is still subject to customary closing conditions). There is a large amount of debt ($289 million) coming in. In conclusion, we believe we are still in the early stages of Bed Bath & Beyond’s turnaround effort, especially given the unpredictable nature of the moment. .”

Jeffries

Key comments: “The company has historically not benefited from a strong U.S. consumer as seen in the multi-year comp/EBIT% deterioration. It’s becoming a headwind. Change in leadership can be a catalyst in the long run. More likely to be volatile in the short term. “

Brian Sotzi general editor, Yahoo Finance anchorFollow Sozzi on Twitter @BrianSozzi and LinkedIn.

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