Earnings Miss, Margin Pressure, CEO Exit: Bed Bath & Beyond's Q1 Highlights

Bed Bath & Beyond Inc BBBY reported a first-quarter FY22 sales decline of 25% year-on-year to $1.46 billion, missing the consensus of $1.54 billion. Comparable sales declined 23%.
Adjusted gross margin contracted 1,110 basis points to 23.8%. Adjusted EBITDA loss was $(224) million, with the adjusted EBITDA margin at (15.3)% versus 4.4% last year.
The operating loss for the quarter expanded to $(339.2) million versus a loss of $(71.8) million last year.
Adjusted EPS loss was $(2.83), missing the consensus of $(1.39).
Net cash used in operating activities during the quarter was $(383.5) million. It ended the quarter with cash and equivalents of $138.9 million.
Executive Changes: The company has named Sue Gove as its Interim CEO, replacing Mark Tritton, who has left his role as President and CEO and as a member of the Board.
The company has named Mara Sirhal as EVP and Chief Merchandising Officer.
"In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated. This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory that we will be working to actively resolve," said Interim CEO Sue Gove.
Bed Bath & Beyond said it is in the midst of further refining its supply chain infrastructure and adjusting cost structure to reflect lower sales levels. The company is pausing its new store and remodel programs for the remainder of FY22.
Guidance: Bed Bath & Beyond foresees sequential comparable sales recovery in the second half of FY22 versus the first half driven by inventory optimization plans.
Price Action: BBBY shares are trading lower by 14.24% at $5.60 in premarket on the last check Wednesday.
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Earnings Miss, Margin Pressure, CEO Exit: Bed Bath & Beyond's Q1 Highlights

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