MW Outlook for Bed Bath & Beyond is deteriorating and bankruptcy is a risk: Wedbush analysts
The outlook for Bed Bath & Beyond Inc. is deteriorating and it may require a major overhaul of its business, Wedbush analysts wrote on Monday. The stock, which they rate as underperform, was down another 11% in premarket trade and the analysts said a Bloomberg report from last week that the company has hired law firm Kirkland & Ellis bolsters their view that it is seeking advisers with bankruptcy expertise. Bloomberg also reported that certain vendors have halted shipments to the company due to lack of payment, "also echoing our view," wrote the analysts led by Seth Basham in a note to clients. "If the company does not secure adequate financing to appease its vendor base, it might have not appropriate inventory for the key holiday period, leading to a fast downward spiral and creating bankruptcy risk." A current aggressive promotion that is seeing the company make markdowns of as much as 80% off clearance on thousands of mostly owned-brand products is another ominous sign, they wrote. The meme stock is down 24% in the year to date, while the S&P 500 has fallen 11%.
-Ciara Linnane
$(END)$ Dow Jones Newswires
August 22, 2022 07:41 ET (11:41 GMT)
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