Market Overview

PreMarket Prep Stock Of The Day: Bed Bath & Beyond

Share:
PreMarket Prep Stock Of The Day: Bed Bath & Beyond

While some companies will report second-quarter earnings soon, others with a different fiscal year will be reporting first-quarter earnings, such as Bed, Bath & Beyond Inc. (NASDAQ: BBBY). Let’s hope last night's report is not a harbinger of things to come for other companies.

Its disastrous report and the corresponding price action makes it the PreMarket Prep Stock Of The Day.

Long-Term Trend: One would be hard-pressed to find a bigger underperforming stock since January 2014. That month it peaked at $80.82, traded down to $54.96 mid-year but rebounded to end the year at $76.14.

In early 2015, it made another run at the $80 level but came up and shy and cratered to end the year at $48.25. From 2016 forward it withered away, with a few occasional rallies on activist chatter, and traded down to $3.43 in April before having a dead cat bounce to $11.45 on Monday.

Q1 Miss And Store Closures: After the close on Wednesday, the company announced an adjusted miss of 74 cents along with a sales miss of $80 million. Also, the company announced plans to close 200 stores over the next two years.

Price Action During Show: When the issue was being discussed on the show, it was already in the red by nearly a dollar from Wednesday’s close ($10.41), trading at the $9.50 area. Co-host Dennis Dick did not mince words with his feelings on the issue. He could not look to own a company “that lost so much money” and noted how it was struggling even before the COVID-19 crisis.

Straight Down: After a lower open than it was at when being discussed on the show, it managed only a penny bounce to $9.31 and resumed its move lower. It has continued to make new lows for the session as the current one stands at $7.82 and is attempting to remain in the $8 handle. The current low coincides with its June 15 low ($7.64).

Moving Forward: With its staggering loss, store closures and consumers less likely to venture out into its gargantuan stores, the chances of the company's restructuring efforts succeeding are slim.

As Dick said, “there are plenty of other issues that I would want to put my money in.”

The full discussion on the issue from today’s show can be found here:

 

Related Articles (BBBY)

View Comments and Join the Discussion!

Posted-In: Earnings Long Ideas News Short Ideas Technicals Trading Ideas Best of Benzinga