Also, there is a general sell signal from the relation between the two signals where the long-term average is above the short-term average. stock holds sell signals from both short and long-term moving averages giving a more negative forecast for the stock. Some negative signals were issued as well, and these may have some influence on the near short-term development. BBBY is likely to further cut brick and mortar stores, a trend that has become quite common across North America, as more and more stores shut down.Furthermore, there is a buy signal from the 3 month Moving Average Convergence Divergence (MACD). Online sales increased by over 70% in 2021, and management is aiming to move the majority of their operations online. The biggest factor driving the move away from brick-and-mortar stores is an increasing preference for online shopping, and now that online sales are increasingly overtaking offline sales, the entire business model is also set to change. But the lower store count isn't all bad news and there are a number of factors driving this change. Meanwhile, for many years store count stood at around 1500, but with the pandemic that number fell to 1000, and now the company is set to further reduce store count by another 150, bringing total to around 800 stores, the lowest in decades. A reduction in headcount will likely cut the total number of employees by up to 10-12,000, and the reduction is likely to reduce total costs by anywhere from $350-$400 million, which will then push the company towards positive flow, and profitability once again. The current average cost per employee for Bed Bath and Beyond stands at $28-29,000, and the total employee count stands at around 55,000. What will be the impact of the current restructuring? "While there is much work ahead, our road map is clear and we're confident that the significant changes we've announced today will have a positive impact on our performance," said Sue Gove, a board member who is serving as interim chief executive." Post restructure, Bed Bath and Beyond is likely to see far more stable cash flow, and the CEO stated the following: Regardless, the company isn't insolvent, and the current cash and cash ,equivalents for the company stand at $200 million. Bed Bath and Beyond have been burning through significant levels of cash for a number of quarters, with cash flow in FY22 coming in at -$322 million, and the current cash flow to-this-this month (TTM) coming in at -$722 million. Management is hoping the liquidity will help the company overcome the transition period, as it looks to stem the high levels of cash burn in recent times. The news led to the stock diving by 21 percent, as investors scrambled to reassess, since the cash raise will lead to a 12 million dilution of shares. In addition, many companies, have tended to raise cash when their stocks have rallied, and, Bed Bath and Beyond has also decided it will use the speculative environment to raise $500 million in cash in order to restructure the company. Management recently announced that it will be cutting over 150 stores and up to 20% of its corporate and supply chain employees. The recent past has not been kind to Bed Bath and Beyond, and the pandemic only worsened the company's fortunes. Despite, the recent rally, which can be attributed to speculation, is there any value in the stock? - MarketBeat The stock has rallied from its recent lows of $4.38, to $23, only to fall back down to $9.53 per share. Bed Bath and Beyond (NYSE: BBBY), recently has seen a significant increase in its stock price, mainly owing to speculative sentiment.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |