Given the changes to our revenues and RPS forecast, we have revised Bed Bath & Beyond’s Valuation to $8 per share, based on a $73.25 expected RPS and a 0.1 P/S multiple for the fiscal year 2022. Looking at the bottom line, we now forecast revenue per share (RPS) estimate to come in at $73.25. We forecast Bed Bath & Beyond’s Revenues to be $7.27 billion for the fiscal year 2022, down 8% y-o-y. Inflation, supply chain disruptions, and increasing gasoline prices have significantly impacted BBBY’s business, by materially increasing the expenses, and, therefore, reducing the margins. Additionally, the company’s bottom line suffered, as it went from a year-ago profit of $47 million to an $82 million loss (-$0.92 per share). In Q4 2021, Bed Bath & Beyond’s net sales were down a steep 22% y-o-y to $2 billion, on the back of a 12% decline in comparable sales. The refinancing of that debt will be quite difficult if profitability does not significantly improve going forward. By the end of FY’21, the total cash of the company was approximately $440 million (down from $1.4 billion a year earlier) with debt totaling more than $3 billion. Considering that the FY21 ended on February 26th, it is important to mention that most of the impacts of the political tension in Eastern Europe have yet to be reflected in these results. To add to this, the ongoing tension in the Eastern European region is likely to further worsen the situation in the next quarters. In fact, BBBY’s revenue has been continuously declining in the last five years, margins steadily contracting in the last ten years, and its profitability has stayed in the negative for the last four years.Ī lack of inventory is a problem at Bed Bath & Beyond at present because of supply chain bottlenecks and difficulties with purchasing. The retailer saw its sales decline 15% year-over-year (y-o-y) in fiscal 2021. This stock decline can be attributed to the current macroeconomic environment and the company’s poor financial performance. BBBY stock has declined from around $18 to $8.50 since the beginning of 2022, much steeper than the 11% decline in the S&P index. After a massive 54% decline in the last six months, at the current price of around $8.50 per share, we believe Bed Bath & Beyond stock (NASDAQ: BBBY), the home goods retailer, could still go down.
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