Bed Bath records disappointing third-quarter results on Thursday. Shares in the start descended more than 9% but rebounded itself quickly. The main cause behind the quarter was due to supply chain bottlenecks. It accounted for the company with a loss of $100 million.
The company faced severe drawbacks from the meme-stock rallies. The retail investors poured into the shares of GameStop and AMC Entertainment. It is also the cause for dipping share prices.
Bed Bath is the most heavily shorted stock. 22% of the stock is available for trading. Short sellers include hedge funds, which borrow from a company’s shares. It is to buy back the share at lower prices in the future.
Currently, the company’s average daily volume for shares is 5.5 million. The retailers are in big trouble. To deal with the problem, CEO Mark Tritton lays out the plan. He recommends adding private label products and shutting down the underperforming location.
He also advised the launch of an online marketplace. It will help the company to compete with third-party sellers (like Amazon and Walmart).
Bed Bath will cut back all unnecessary promotional mailers to reduce costs. It hurt the sales as flyers were no longer distributed. It happened due to the disrupted supply chain relationships with the paper vendor.
Refinitv survey records the total loss of the company. Bed Bath records a loss of $276 million. It lost almost 25 cents a share. The sale was down to 28%.
The company holds planned and ongoing store closure for the loss. To state the figure, it closed 170 Bed Bath locations.
Analysts from StreetAccount forecast a drop of 0.9% for the systemwide same-store sales.
The CEO informs that baby categories did well. The doomed sales of Bed and Bath are mainly responsible for the loss.
Tritton better explains the situation by stating, “We think about the ecosystem of life moments … when they’re planning their first child or having their first child to when they send them to college.”
Bed Bath announces the stock buyback plan. It is expecting $1 billion. The repurchase plan is set to put the company again on the right track.