Analyst Note
| Jaime M. Katz, CFA |No-moat Bed Bath & Beyond's second-quarter results were in line with the guidance offered Aug. 31. Sales of $1.4 billion fell 28% year over year on a 26% same-store sales decline, and an adjusted loss per share of $3.22 was significantly worse than the $0.04 per share profit last year. The only time Bed Bath has had a worse operating margin loss than in the first half (at 19%) was during the first quarter of 2020, when stores were temporarily shuttered in response to COVID-19. With an unchanged outlook for 2022 (same-store sales declining in a 20% range), we don’t plan to materially alter our $8 intrinsic value; we view the shares as fairly valued. In our opinion, the most important metrics ahead will pertain to profitability and liquidity as management attempts to stimulate demand.