- Bed Bath & Beyond stock fell over 20% Thursday.
- The retailer said there is doubt as to whether it can continue to fund its operations, and that its third quarter sales have tumbled.
Shares of Bed Bath & Beyond crashed more than 20% Thursday as the company said it would explore strategic moves to restructure its debt, which could include filing for bankruptcy.
Shares were trading at around $1.87, down 22% shortly after the opening bell.
The company is struggling to fund operations and its outlook is uncertain. In a statement on Thursday, it said:
"The Company continues to consider all strategic alternatives including restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying the Company's business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code. These measures may not be successful"
Bed Bath & Beyond is slated to report third quarter earnings on January 10, and it is warning that sales may have dropped by roughly a third, and that losses could be as steep as 40%, or $385.8 million. Chief executive Sue Gove said performance has been weighed down by inventory snags exacerbated by lower credit limits.
Through what may have been a make-or-break 2022 holiday season, Bed Bath & Beyond struggled to keep its shelves stocked, and its out-of-stock levels were far higher than competing retailers.
Even after securing additional financing in August, the home-goods store has seen its stock plummet and its bonds trade at distressed levels.
In August, shares rallied to around $23. The brief surge netted one college student a $110 million profit on an initial $25 million investment.