Bed Bath & Bankruptcy

Bed Bath & Beyond Inc. (BBBY) shares lost a quarter of their value, dropping to a three-decade low, after the company said it's got "substantial doubt" about whether it can remain solvent and may file for bankruptcy.

The household goods retailer said recurring losses and negative cash flow from operations over the past three quarters led it to question its "ability to continue as a going concern." Besides the possibility of seeking bankruptcy relief, the firm is considering restructuring or refinancing debt, seeking additional capital, selling assets, and similar measures.

Bed Bath & Beyond also disclosed that it expects to post a widening net loss of $386 million for the most recent quarter on sales of $1.26 billion, down by a third year-over-year (YOY). The company said reduced credit limits had limited the amount of inventory in its stores and lower customer traffic hurt its ancial performance.

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Retailers like Bed Bath & Beyond have reported tepid sales figures as accelerating inflation weakened consumer demand over the past year. Retail sales fell in November, traditionally a strong month for retail during the holiday gift-giving season.

Supply chain issues have also led to inventory imbalances for many stores. Bed Bath & Beyond said it was forced to lower levels of in-stock presentation in recent months, although it has worked to remedy that with additional liquidity gained from end-of-year shopping.