![]() It's running out of cashīed Bath & Beyond ended the first quarter of 2022 with just $107.5 million in cash and equivalents, compared to $1.1 billion a year earlier. It also recently announced that it would lay off about 20% of its staff, close 150 weaker stores, and eliminate a third of its owned brands to further rein in its spending - but those efforts won't guarantee its survival. Those losses persisted even as it shuttered its weaker stores and divested its non-core banners over the past few years. ![]() It's deeply unprofitableīed Bath & Beyond hasn't generated a full-year GAAP (generally accepted accounting principles) profit since fiscal 2017, and analysts expect it to stay in the red for the foreseeable future. It has shrunk still further to 23.9% in the first quarter of 2022, and that contraction will likely continue as the company grapples with inflationary and supply chain headwinds. Unfortunately, Bed Bath & Beyond has already marked down its merchandise for years without meaningfully boosting its sales.īetween fiscal 2015 (the final year it posted positive comps growth) and fiscal 2021, its gross margin declined from 38.1% to 31.5%. If a retailer's inventories are rising faster than its revenue, it needs to use markdowns to clear out its excess inventories. During that same period, net sales fell 25% year over year to $1.46 billion. The company ended the first quarter of 2022 with $1.76 billion in merchandise inventories, representing 13% growth from a year earlier. Its inventories are risingĪs its sales growth stalls out, its inventory levels are rising. Analysts expect its annual revenue to continue declining for the foreseeable future. As of the first quarter of fiscal 2022, its comps have already fallen for four consecutive quarters. It stopped disclosing its full-year comps in fiscal 20 due to the pandemic, but its net sales still fell sharply in both years. Its sales are decliningīed Bath & Beyond's comparable store sales declined in fiscal 2016, 2017, 2018, and 2019. ( AYI ) and Bassett Furniture Industries, Incorporated ( BSET ), which have an overall A (Strong Buy) rating.Image source: Getty Images. While LOW has an overall POWR Rating of B, one might consider looking at its industry peers, Acuity Brands, Inc. Hence, I think the stock might be a solid buy now. Analysts expect the stock to climb 25.1% to $241.35 in the near term. Moreover, Wall Street analysts are bullish on the stock. The company has an excellent record of stable dividend growth. View all the top stocks in the Home Improvement & Goods industry here. In the 62-stock Home Improvement & Goods industry, it is ranked #14.Ĭlick here to see the additional POWR Ratings for LOW (Growth, Value, Momentum, and Stability). LOW has a Sentiment and Quality grade of B in sync with its favorable analyst expectations and broad profitability margins. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. LOW’s strong fundamentals are reflected in its POWR Ratings. EPS is expected to increase by 9.4% per annum over the next five years. Street EPS estimate for the current year (fiscal 2023) of $13.51 reflects a rise of 12.2% from the prior year. The consensus EPS estimates of $3.08 and $2.21 for the quarters ending October 2022 and January 2023 indicate 12.8% and 24.2% year-over-year increases. ![]()
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