Bed Bath & Beyond Q4 Earnings Erase Gains Spurred by Ryan Cohen Stake

  • Bed Bath and Beyond fell 8% on Wednesday after the retailer reported a surprise loss in its fourth quarter. 
  • The company said a lack of available inventory to sell sparked a 12% decline in comparable sales.
  • Wednesday’s decline erased the gains spurred by activist investor Ryan Cohen, who purchased 9.8% of the company last quarter.

Bed Bath and Beyond stock fell as much as 8% on Wednesday after the retailer reported a surprise loss in its fourth quarter that missed analyst estimates.

The decline in earnings was in part due to a lack of available inventory to sell amid ongoing supply chain disruptions. Comparable sales fell 12% during the quarter, missing analyst expectations of only a 8.5% decline in comparable sales.  Meanwhile, digital sales were down 18% year-over-year.

Here were the key numbers:

Revenue: $2.05 billion, versus analyst estimates of $2.08 billion
Adjusted earnings per share: -$0.92, versus analyst estimates of $.03
Adjusted gross margin: 28.8%, versus analyst estimates of 32.9%

Wednesday’s decline in shares of Bed Bath and Beyond erased all of the gains sparked by Ryan Cohen’s activist stake revealed in March. Cohen’s success in founding Chewy.com, combined with his profitable trades in GameStop, has led many investors to follow the investor into subsequent investments he makes.

Cohen purchased 9.8% of Bed Bath and Beyond and urged management to spin-off its Buy Buy Baby brand and modernize its supply chain and technology. Bed Bath and Beyond has since added three independent directors from Cohen’s RC Ventures to its board, and said it would explore strategic alternatives for its Buy Buy Baby brand.

But while those shareholder friendly initiatives are still on the table, it doesn’t outweigh the retailer’s poor financial performance in the fourth quarter.

“Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business,” Bed Bath and Beyond CEO Mark Tritton said.