Bed Bath & Beyond Likely To Face Heat Due To Changing Consumer Spending, Says Analyst

Bed Bath & Beyond Likely To Face Heat Due To Changing Consumer Spending, Says Analyst
  • Raymond James analyst Bobby Griffin has reiterated an Underperform rating on the shares of Bed Bath & Beyond Inc BBBY.
  • The analyst said the company’s Q2 sales were relatively in-line with its August 31 business update, while adjusted EBIT came in below his and consensus expectations, primarily driven by higher-than-anticipated SG&A.
  • He added that the management reaffirmed its FY22 guidance elements given during its business update as its recent initiatives (national brand inventory build, SG&A cuts, etc.) have not yet materially impacted results.
  • Griffin specified while Bed Bath & Beyond’s improved liquidity position gives new management some additional time, it likely only ‘kicks the can down the road’ as underlying business trends remain very challenging.
  • Also ReadWinning Consumers Back Will Be Challenging For Bed Bath & Beyond, Says This Analyst
  • Even with a move back towards more branded products, Griffin struggles to see a pathway for improved performance, especially with discretionary consumer spending and housing slowing further in the second half of 2023.
  • The ongoing cash burn and need to preserve cash/liquidity, the analyst says, will limit in-store investments, likely only further hindering customer traffic and the brand perception with younger consumers.
  • Price Action: BBBY shares are trading higher by 0.89% at $6.24 on the last check Friday.
  • Photo Via Company

Posted In: BriefsAnalyst ColorNewsReiterationSmall CapAnalyst Ratings