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Stay Away From Bed Bath And Beyond Stock

At least 200 store closures over the next two years.

A 49% fall in sales due to store closures because of the coronavirus.

Falling gross margins.

A loss of $2.44 per share.

These are the lowlights of Bed Bath & Beyond’s latest earnings that came out on July 8th, 2020.

The earnings report was brutal for the retailer that’s been flailing for years now.

This latest news sent shares down 8% on that day and another 25% the next day to $7.77 per share as of this writing.

Bed Bath & Beyond used to be one of the best run retail companies in the world. At its height at the beginning of 2013 it had a market cap of $17 billion. Today its only $980 million.

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This is a total loss of 94.2% in 7 years.

This rapid fall is due to more people shopping online as the 2010’s progressed. And then also in recent years when people were able to buy something and then get it delivered to their house.

All without leaving your home, dealing with traffic, dealing with rude employees, dealing with other rude customers, and all the other negatives that come with shopping in stores.

In time its stock is likely to go to $0 if it’s not bought out or taken private before its inevitable bankruptcy.

This trend has been building for years and is known as the “Retail Apocalypse.”

The Retail Apocalypse is former great retailers like Sears, JC Penney, Macy’s, Bed Bath & Beyond and others losing out to people shopping online and collapsing.

Its impossible to give you exact stats on the following due to the slow decline of individual companies in the retail industry.

But millions of jobs have been lost to this trend already. And thousands if not tens of thousands of stores have closed nationwide.

And its only going to continue with the rise of people shopping and then getting things delivered directly to their houses.

This has been going on for years… But retail store closures due to the coronavirus is accelerating this.

Since the start of the coronavirus pandemic in March the following retailers declared bankruptcy.

• JC Penney

• Brooks Brothers

• Lucky Brands

• GNC

• J. Crew

• Neiman Marcus

And according to reports many other retailers are preparing to file for bankruptcy.

A few like Bed Bath & Beyond are hanging on as best they can by laying off employees and closing stores to conserve on costs.

But it won’t work.

Normally in these articles I show you profitability metrics, valuations, and more.

But frankly none of those matter in this case.

Bed Bath & Beyond’s continued decline into bankruptcy is inevitable.

Stay away from owning its stock.

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Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.

 

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