Is This Popular Retailer a Good Buy?

NASDAQ: BBBY | Bed Bath & Beyond Inc. News, Ratings, and Charts

BBBY – Shares of leading retailer Bed Bath & Beyond (BBBY) are down more than 67% in price year-to-date. The company reported disappointing first-quarter 2022 results affected by persistently high inflation, fluctuations in consumer spending patterns, and other macroeconomic headwinds. However, considering the management’s efforts to address the ongoing challenges and boost margins, is BBBY a good buy now? Read more to find out….

With a $376.60 million market cap., Bed Bath & Beyond Inc. (BBBY) operates a chain of retail stores. The company sells a range of domestic merchandise, home furnishings, and other juvenile products. The company owns more than 953 stores and offers its products through various websites and applications comprising bedbathandbeyond.com, bedbathandbeyond.ca, facevalues.com, buybuybaby.ca, and decorist.com.

Investors have been bearish about BBBY due to its deteriorating financials and declining growth. The company’s fiscal 2022 first-quarter results were adversely affected by the ongoing macroeconomic headwinds, the shift in consumer preference, surging inflation, supply-chain disruptions, and dislocation in sales and inventory.

BBBY’s Interim Chief Executive Officer, Sue Gove stated, ” In the quarter, there was an acute shift in customer sentiment, and since then, pressures have materially escalated. This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory.”

“I look forward to working with the Board, the management team, and our Associates to immediately address our supply chain challenges, market share recapture, inventory and cash optimization, and cost structure alignment,” she added.

The stock has plummeted 67.7% in price year-to-date and 85.6% over the past year to close the last trading session at $4.71. BBBY is currently trading 85.1% below its 52-week high of $31.70, which it hit on July 13, 2021.

Here is what I think could influence BBBY’s performance in the upcoming months:

Poor Financials

For its fiscal first quarter ended May 28, 2022, BBBY’s net sales decreased 25.1% year-over-year to $1.46 billion, and its gross profit declined 44.9% from the year-ago value to $349.31 million. Its operating loss widened 371.9% year-over-year to $339.16 million.

BBBY’s adjusted EBITDA loss amounted to $223.54 million, compared to an $86.07 million gain reported in the prior-year period. In addition, the company’s net loss and net loss per share came in at $357.67 million and $4.49, respectively, widening 603% and 835.4% year-over-year.

Weak Growth Prospects

Analysts expect revenues to decline 13% year-over-year to 1.63 billion in its fiscal 2022 third quarter (ending November 2022). However, the $1.13 consensus loss per share estimate for the next quarter reflects a 352.4% increase from the same period in 2021.

Also, the company’s revenue and EPS for the current year (ending February 2023) are expected to decline 17.6% and 467.1%, respectively, year-over-year. The company has missed the consensus revenue estimates in each of the trailing four quarters.

Low Profitability

In terms of trailing-12-months gross profit margin, BBBY’s 31.04% is 15% lower than the 36.51% industry average. Likewise, its trailing-12-months EBIT margin is negative 5.24%, and its trailing-12-months net income margin is negative 11.74%. Furthermore, the company’s trailing-12-months ROCE and ROTA are negative 195.5% and negative 17.51%, respectively.

Consensus Rating and Price Target Indicate Downside

Of the 12 Wall Street analysts that rated BBBY, eight rated it Sell, while four rated it Hold. The 12-month median price target of $4.16 indicates an 11.7% downside. The price targets range from a low of $1.00 to a high of $14.00.

POWR Ratings Reflect Bleak Prospects

BBBY has an overall rating of D, which translates to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

BBBY has an F grade for Stability and Sentiment. The stock’s relatively high beta of 1.60 justifies the Stability grade. In addition, BBBY’s F grade of Sentiment is consistent with its bleak revenue and earnings growth estimates.

The stock has a D grade for Quality, in sync with its lower-than-industry profit margins.

BBBY is ranked #61 out of 63 stocks in the Home Improvement & Goods industry.

Beyond what I have stated above, we have also given BBBY grades for Value, Growth, and Momentum. Get all the BBBY ratings here.

Bottom Line

The company’s near-term prospects look uncertain due to the supply chain disruptions, macroeconomic headwinds, and shifts in consumer spending patterns amid an economic slowdown. Moreover, the stock is currently trading below its 50-day and 200-day moving averages of $9.50 and $15.87, respectively, indicating a downtrend.

So, given its disappointing financials, bleak growth prospects, and low profitability, we think it could be wise to avoid the stock now.

How Does Bed Bath & Beyond Inc. (BBBY) Stack Up Against its Peers?

BBBY has an overall POWR Rating of D. One could also check out these other stocks within the Home Improvement & Goods industry with a B (Buy) rating: Bassett Furniture Industries, Incorporated (BSET), Acuity Brands, Inc. (AYI), and The Tile Shop Holdings, Inc. (TTSH).


BBBY shares were trading at $4.66 per share on Tuesday afternoon, down $0.05 (-1.06%). Year-to-date, BBBY has declined -68.04%, versus a -19.80% rise in the benchmark S&P 500 index during the same period.


About the Author: Mangeet Kaur Bouns


Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BBBYGet RatingGet RatingGet Rating
BSETGet RatingGet RatingGet Rating
AYIGet RatingGet RatingGet Rating
TTSHGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

What Data Should Investors Focus on Now?

The S&P 500 (SPY) is up nearly 50% from the bear market lows. That is a sign the easy money has been made. The next likely catalyst for stocks will probably be the first Fed rate cut...but maybe that is really the final push before a long overdue sell off? Tune in to discover what investment veteran Steve Reitmeister has to say about the market outlook along with his trading plan and top picks to stay ahead of the pack. Read on below for more...

Read More Stories

More Bed Bath & Beyond Inc. (BBBY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BBBY News