Market News

Headed for Bankruptcy, BBBY Faces New Challenges

Story Highlights

Bed Bath & Beyond has failed to pay its interest on bonds. The retailer could soon file for bankruptcy protection.

Per a Wall Street Journal report, Bed Bath & Beyond (NASDAQ:BBBY) has missed the $28 million interest payments accrued on its bonds. The beleaguered omnichannel retailer of domestic merchandise is eyeing bankruptcy protection as it has struggled to remain afloat amid dwindling sales and mounting losses.

During the last reported quarter, BBBY’s top line fell 33% year-over-year. Meanwhile, its comparable sales declined by 32%. 

The company delivered an adjusted loss of $3.65 per share, which was higher than the Street’s projection of $2.61 per share.

Besides for the recent coupon miss, BBBY also received a default notice from JPMorgan Chase Bank (NYSE:JPM). To this end, the company said in an SEC filing that it does not have sufficient money to repay the amounts under its credit facilities. Moreover, it is considering options, including restructuring its debt under the U.S. Bankruptcy Code. 

Even though the company is taking measures like cutting costs, reducing store footprints, and lowering capital expenditures, to stabilize its financial position, things still need to be fixed in its favor. 

Highlighting recurring losses and negative cash flows from operations, BBBY said it is doubtful that the company will survive for the next 12 months. 

What is the Future of BBBY?

Unsurprisingly, BBBY stock has six unanimous Sell recommendations, translating into a Strong Sell consensus rating. Meanwhile, analysts’ price target of $1.36 signifies a further downside of 51.77%.  


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