BBBY stock is in the green today after its Q2 results beat analysts’ expectations—so has Bed Bath & Beyond (NASDAQ:BBBY) finally turned a corner?
BBBY Stock Floundering in 2019
Bed Bath & Beyond has been floundering throughout 2019 due to a myriad of issues, including poor quarterly results, excessive inventory, an inefficient supply chain, and a clunky brand portfolio. The company has allowed these issues to fester for a number of years, which led to executives formulating a turnaround strategy that was presented to shareholders last month in an effort to pull BBBY back from the brink. BBBY stock popped off the back of that turnaround update and looks to be recovering even further after the company published its Q2 results last week.
While Bed Bath & Beyond did beat analysts’ expectations on EPS, posting $0.34 compared t0 the predicted figure of $0.27, the company fell short on revenue and same-store sales. Revenue of $2.72 billion USD narrowly missed expectations of $2.752 billion USD, while same-store sales were expected to decline by 5.44% but actually shrank by 6.7%. Additionally, the company said it was making progress in appointing a new CEO following Steven Temares’ resignation in May, with an announcement expected in the coming weeks. BBBY stock is currently valued at $10.25 USD.
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Store Closures Boosting BBBY Stock
“Our second-quarter financial results reflect the relentless effort of our teams and our progress in driving the Company’s transformation efforts to delight our customers, enhance our competitive position, improve our financial performance, and drive shareholder value,” said interim CEO Mary Winston. The company has also confirmed that it will close 60 stores by the end of the year, which is an increase from the 40 planned closures announced in August. BBBY shares hit an all-time low of $7.28 in mid-August but have recovered almost 40% since.
More Bad News Ahead?
While there appears to be some hope for Bed Bath & Beyond, the current upward trend is a fragile one and could be offset by any headwinds in the market. For example, the company will face significantly higher tariffs in 2020 than it did this year, and with growing concerns that the US economy could be heading towards recession, perhaps the worst is yet to come for BBBY stock.
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