Merchandise retailer Bed Bath & Beyond Inc. (BBBY) recently posted lower-than-estimated third-quarter numbers amid supply chain constraints. Net sales dropped 28% year-over-year to $1.88 billion. Net loss per share widened to $0.25 from $0.08 a year ago. Furthermore, comparable sales declined 7% as compared to the year-ago period.
While the company has undertaken pricing actions to counter supply chain challenges, management also highlighted that its customer acquisition strategy is yielding results, with about half a million subscriber additions during the quarter.
With these developments in mind, let us take a look at the changes in BBBY’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Bed Bath & Beyond’s top risk category is Ability to Sell, contributing 26% (compared to a sector average of 17%) to the total 23 risks identified. In its recent quarterly report, the company has changed two key risk factors.
Under the Finance & Corporate risk category, BBBY highlighted the potential challenges in the execution of its omnichannel strategy and expanding its eCommerce operations. If the company’s assumptions about the future economic environment and its ability to achieve goals and targets prove to be inaccurate, then the company may not be able to achieve the intended benefits of its strategy. If the company is not able to meet customer expectations, or if the changes to its brand assortment fail to get customer acceptance, then the company’s financials may suffer.
Meanwhile, under the Macro & Political risk category, BBBY noted that general economic factors such as COVID-19 and the economic environment could continue to have a negative impact on the company’s performance and liquidity.
Hedge Fund Activity
BBBY shares have slid 54.1% over the past six months. According to TipRanks data, the Wall Street’s top hedge funds have increased their holdings in Bed Bath & Beyond by 339 thousand shares in the last quarter. This indicates a very positive hedge fund confidence signal in the stock based on activities of five hedge funds in the recent quarter.
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