Bed Bath & Beyond plunges on stock offering, plan to cut jobs, third of owned brands
Bed Bath & Beyond (NASDAQ:BBBY) $Bed Bath & Beyond(BBBY)$plummeted in after unveiling a plan to reduce a third of its owned brands and cut 20% of jobs across the corporate and supply chain. The company expects its actions to reduce SG&A by approximately $250 million in fiscal 2022.
The retailer also announced it secured financing commitments for more than $500 million of new financing, including its newly expanded $1.13 billion asset-backed revolving credit facility and a new $375 million "first-in-last-out" facility, according to a statement.
The retailer also announced that it plans to retain the buybuy BABY banner after a strategic review. The company has identified and commenced the closure of approximately 150 lower-producing Bed Bath & Beyond banner stores.
"The Board of Directors believes that, at this time, buybuy BABY will deliver greater value for the Company's shareholders as part of the Bed Bath & Beyond Inc. portfolio," the company said in the statement.
Bed Bath & Beyond (BBBY) slid further in premarket trading after earlier Wednesday filed for a possible offering of common stock. The company confirmed the offering is for 12 million shares.
Bed Bath (BBBY) also provided interim financial update for Q2 ended Aug. 27 with net sales of approximately $1.45 billion, comparable sales decline of ~26% compared to the Q2 of fiscal 2021 and free cash flow usage of ~$325 million. The retailer also forecast a comparable sales decline in the 20% range, driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022.
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