Why Bed Bath & Beyond is the ‘class clown’ of this earnings season

Yahoo Finance’s Josh Schafer breaks down Bed Bath & Beyond’s earnings and why it was one of the key “lowlights” of the season.

Video Transcript

That’s it. Josh Schafer continues to use superlatives. Here’s one of my favourites, the class clown. It is who?

JOSH SHCHAFER: Okay. This one is going to be a lot of fun. The class clown is Bed Bath & Beyond. And there was a time this quarter where I think some people probably thought that Bed Bath & Beyond was going to file for bankruptcy, maybe even in this release on January 10. This did not happen. It was a terrible quarter. These quarters were often ugly. Here are some numbers. They lost $393 Million in the quarter. The net sales fell 33%. They also plan to close 150 additional stores.

And so when you take a look at Bed Bath & Beyond stock, guys, you can see that that fell– let’s get a three month here so we can get back to January. They reported very early. This is the news that it fell. The stock then had a meme-like vibe and has risen again. However, the stock has fallen below 1.34. That funding deal is what has really been the story of Bed Bath since earnings. That deal also includes the possibility that the billion dollars they are receiving in funding over the next 12 months could be stopped if the stock drops below 1.50.

That’s it. It is currently below 1.50. If the stock falls below 1.50, funding could be stopped when they go to fund next month. So that’s the number to watch with Bed Bath & Beyond. You can see that it has been a rough ride for Bed Bath by looking at the longer-term chart. They are our class clown for the quarter.

It makes sense. It’s amazing to me that investors still see this opportunity and continue to bet on it despite all the headlines and reasons we have given for naming it class clown.

Josh, I believe those are the same people who are going to wager on the WWE. You mean the same people who will bet on a scripted event. In this case, we already know the script, how it ends with Bed Bath & Beyond.

JOSH SHCHAFER: Yeah. Perhaps the class clown could have been someone who is raising this price a little, right?

They are contributing to it. It’s all about the whole family.

JOSH SHCHAFER: Bankruptcy. Potentially.

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