Bed Bath & Beyond Stock Plunges As Retailer Explores Bankruptcy, Restructuring Options

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Updated at 9:08 am EST

Bed Bath & Beyond  (BBBY) – Get Free Report shares plunged lower Thursday after the home retailer said it would miss the filing deadline for its third quarter earnings and may need to consider bankruptcy protection as it struggles with its multi-billion turnaround. 

Bed Bath & Beyond said in a Securities and Exchange Commission filing that it expects a loss of around $386 million for the three months ending on November 6, its fiscal third quarter, with overall revenues of around $1.26 billion, but said calculating impairment charges would require “significant resources from the Company’s financial, accounting and administrative personnel.”

The group, which unveiled a new $500 million loan agreement, as well as plans to close around 150 stores and slash overall expenses to around $250 million as part of its closely-tracked turnaround plans under CEO Sue Gove in the early autumn, also said it’s exploring a host of strategic alternatives, including a Chapter 11 bankruptcy filing.

“While the Company continues to pursue actions and steps to improve its cash position and mitigate any potential liquidity shortfall, based on recurring losses and negative cash flow from operations for the nine months ended November 26, 2022 as well as current cash and liquidity projections, the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern,” Bed Bath & Beyond said in a statement to the SEC

“The Company continues to consider all strategic alternatives including restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying the Company’s business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code,” the statement added. 

Bed Bath & Beyond shares were marked 17.8% lower in heavy volume during pre-market trading to indicate an opening bell price of $1.98 each, a move that would extend the stock’s one-year decline to around 82%.

Last September, Bed Bath & Beyond’s former recently-appointed CFO, Gustavo Arnal, fell to his death from a high floor of a Manhattan skyscraper known as the Jenga Tower in what the New York City Medical Examiner’s office ultimately deemed a suicide.

Arnal, 52, joined Bed, Bath & Beyond in 2020, following stints with Procter & Gamble PG and Avon, and was named in a lawsuit filed in the U.S. District Court for the District of Columbia that alleged he had regulated the sale of Bed, Bath & Beyond stock for company executives, and conspired to keep prices inflated.

Just days earlier, Bed Bath & Beyond said it planed to raise an undisclosed amount of capital from the sale of common stock as it moves to capitalize on a 140% surge in the company’s share price over the month of August while adding to its thinning overall liquidity.

Securities & Exchange Commission filings suggest Arnal sold around 55,000 shares between August 16 and August 17, just one day before activist investor Ryan Cohen’s first sale of 5 million shares was made public on August 18. The stock then fell 40.5% on August 19.