One of Bed Bath & Beyond’s most vocal critics on Wall Street is predicting the retailer may have seen its last Christmas season this year, and will liquidate sometime next year.
Anthony Chukumba, a Loop Capital analyst, said in a recent interview with Yahoo Finance, “All you need to know is that they’re just simply not relevant anymore. And this really was Custer’s Last Stand. It’s going to pretty much end up the same way that it did for Custer. We will not be having this same conversation a year from now about Bed Bath & Beyond. Bed Bath & Beyond will be gone.”
Bed Bath & Beyond had no official comment on the interview.
Analysts on Wall Street would be unsurprised if the company were to fold in the new year.
For all of 2022, the retailer has struggled with collapsing sales, weak traffic through stores, low cash on hand, and inventory not aligned with customer’s tastes.
Appointed as a turnaround CEO, Mark Tritton ended up replaced by the board himself earlier this year for lack of performance, as other executives fled, amid a frantic effort to cut costs and save cash. Over the summer the company even ordered the air conditioning in its stores turned off to reduce costs.
New CEO Sue Gove appears to have been unable to immediately revive the company, which is now discounting its products heavily in an effort to move out merchandise and raise desperately needed cash.
In the fiscal second quarter, poor inventory quality combined with the economic slowdown to drag down store traffic, causing comparable store sales to plunge 26% from one year prior. As a result of the challenged top line, and the massive discounting, the company posted a $168 million operating loss for the quarter.
Now, looking at an even harsher environment this holiday season, analysts are expecting that execution issues will combine with shoppers made more cautious by inflation to potentially produce an even uglier quarter.
Even on its online operations, analysts note that, according to new research from Jefferies analyst Jonathan Matuszewski, starting in November, the retailer’s web traffic fell a shocking 19%. That trend continued to worsen between Thanksgiving and Cyber Monday, when traffic was off roughly 25% compared to the prior year.
Investors have taken note of the company’s dire straits, with the stock falling 83% in 2022, grossly underperforming the 20% drop in the broader S&P 500.
