Bed Bath's turnaround plan called for cost-cutting and improved partnerships with vendors. But its sales have yet to improve.
leaders speak to investors Tuesday morning, they won't simply report sales and earnings results. They will have to address a stark reality: The cash-strapped home goods retailer is running out of time.saying that it could soon be unable to cover costs as sales lag and store traffic dwindles. It also said it's struggling to keep items in stock, as it runs low on cash and works to remedy strained relationships with suppliers.
"When you have a shift in how consumers are allocating their spending, and a recession looming potentially on the horizon, it makes it much more of an uphill battle," said Justin Kleber, senior research analyst at Baird Equity Research. The company's turnaround strategy also involved phasing out some of its private labels and bringing back more well-recognized national brands. It pledged in August to work with those national brands to develop exclusive items and to add items from direct-to-consumer brands — merchandise aimed at setting it apart and giving shoppers a reason to come back to its stores.
But brands and vendors have been hesitant to extend credit to Bed Bath as its mounting debt cast doubt over its ability to pay back bills.The company said Thursday it expects net sales for the third quarter, which ended Nov. 26, to be about $1.26 billion — a nearly 33% drop from $1.88 billion it reported for the year-ago period. Bed Bath anticipates a net loss of about $385.8 million for the quarter, an approximately 40% jump in losses year over year.
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