Bed Bath & Beyond bankruptcy could happen ‘this month’
Expert: Retailer losing too much money amid weakening economy to stay in business
SlateStone Wealth chief market strategist Kenny Polcari analyzes the stock market's reaction to the strong December jobs report on 'Varney & Co.'
Bed Bath & Beyond is expected to file for bankruptcy as early as this month, says one market expert.
"It appears the end is coming for Bed Bath & Beyond," Edward Moya told FOX Business. The senior market analyst for OANDA in New York added: "Bankruptcy announcements could come as soon this January when they report earnings, but it might take a few more months."
People with knowledge of the matter fold The Wall Street Journal the company is in the initial stages of planning for a bankruptcy and that the process may extend into February.
BED BATH & BEYOND DELIVERS GRIM WARNING
| Ticker | Security | Last | Change | Change % |
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| BBBY | NO DATA AVAILABLE | - | - | - |
Shares of the domestic merchandise retailer tumbled Thursday when the company issued a going concern warning and said it would not be able to timely file it's quarterly earnings report. Bed Bath & Beyond expects to report third quarter earnings on Jan. 10.
Shares have fallen roughly 50% over the last week, increasing its losses to approximately 90% over one year.
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Going concern warning
Bed Bath & Beyond said: "Based on business performance for the three months ended November 26, 2022, the company has determined the need for additional time to complete its quarter-end close procedures."
It also concluded there is substantial doubt about its ability to continue as a going concern. Such warnings are common ahead of bankruptcy filings or restructuring agreements with lenders.
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Financial forecast
Analyst says Bed Bath & Beyond's existing debt, competition, and weakening economy could be too much to turn things around for the retailer. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
On Thursday, the company said it expects net sales of approximately $1.259 billion, down 33% compared to $1.878 billion from the same time last year, reflecting lower customer traffic and reduced levels of inventory availability.
The net loss is forecast to widen to $385.8 million from $276.4 million. The number will include approximately $100.0 million of impairment charges which are subject to further review and potential adjustment.
"The troubled retailer is losing too much money and a quick turnaround seems unlikely given their debt situation, strong competition, and a weakening economy," Moya said.
The company is burning cash.
Net cash from operations was an outflow of $582.4 million in the quarter ended Aug. 27, compared to an inflow of $46 million in the prior year. The company ended with quarter with $135.3 million of cash, down from $440 million year over year.