![]() “The worsening financial position, uncertain economic environment, leadership overhaul, poor execution, and lack of clear strategy keep us cautious on the stock,” writes Telsey Advisory Group’s Cristina Fernández, who halved her price target to $3 while keeping an Underperform rating on Bed Bath. It also put on hold all new store openings and remodeling through the end of the year to preserve cash, and hired retail consultant Berkeley Research Group to help it improve its balance sheet. ![]() The company doesn’t expect that inventory will be a source of cash until the fourth quarter. Indeed, Bed Bath saw inventory rise about 15% in the quarter, even as sales fell. Consumers are dedicating less spending to home furnishings now than they were during the height of the pandemic, and plenty of other companies are discounting the category after over ordering. ![]() The worry here is that Bed Bath is using up cash quickly at a difficult time, when its sales and profits are likely to continue to be under pressure. Of course plenty of retailers have dealt with less than stellar balance sheets. He lowered his price target to $1 from $5 on Wednesday, as he is “becoming increasingly concerned about Bed Bath’s financial health given the fact the company burned through $332 million of cash in the fiscal first quarter of 2022 and drew down $200 million of its revolving credit facility,” as reported in Securities and Exchange Commission filings. Loop Capital’s Anthony Chukumba has been a longtime critic of the stock, with a Sell rating on the shares. Rate the stock a Buy or the equivalent, and bears have been getting more vocal about the precariousness of its financial situation. Bed Bath has very few fans on the Street: Just two of the 20 analysts tracked by That wide a spread suggests that credit markets are increasingly concerned that Bed Bath won’t be able to meet its obligations in full in a little over two years thus they are demanding a higher premium to offset the perceived increase in risk.īed Bath ended the fiscal first quarter with $108 million in cash, down from $440 million in the fourth quarter of 2021. The 2024 debt was yielding easily above 32% yesterday, compared with a yield of just over 3% for the risk-free two-year Treasury. The company’s bonds look “very stressed,” Cliff Noreen, head of global strategy at MassMutual, told Barron’s in an email.
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