Bed Bath & Beyond stock opened 25% down today: what happened?
Shares of Bed Bath & Beyond Inc (NASDAQ: BBBY) opened nearly 25% down this morning after the retailer warned of potential bankruptcy.
Bed Bath & Beyond stock down on Q3 results
The Union-headquartered firm also reported its unaudited preliminary results for the third financial quarter on Thursday that further disappointed investors.
Revenue printed at $1.259 billion down from $1.878 billion in the same quarter last year. According to the press release, Bed Bath & Beyond ended up losing $385.8 million in Q3. Street had anticipated a much narrower $158 million loss on $1.40 billion in revenue.
Executives attributed the weakness primarily to reduced levels of inventory and lower customer traffic this quarter.
Versus its high in mid-August, Bed Bath & Beyond stock is now down more than 90%.
Bed Bath & Beyond Inc is near bankruptcy
Last year, the retail chain of domestic merchandise said it’s closing about 150 of its stores and lowering its headcount by 20% to cut costs. But the business update this morning suggests such measures are proving to be insufficient to avoid bankruptcy.
Bed Bath & Beyond has close to $1.20 billion in unsecured notes that are set to mature in 2024, 2034, and 2044. In a filing with the SEC on Thursday, the Nasdaq-listed firm said:
Based on recurring losses and negative cash flow from operations as well as current cash and liquidity projections, the Company has concluded there’s substantial doubt about the Company’s ability to continue as a going concern.
BBBY’s net loss this quarter included roughly $100 million worth of impairment charges.
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