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Category: Bed Bath and Beyond (BBBY)
Date: 2 July 2020 Stock price of Bed Bath and Beyond: $10.64 We take a look at a press announcement released by Bed Bath and Beyond in which they announce a $850 million asset based revolving credit facility as well as providing an update on their store re-opening post Covid-19 related lockdowns and stay at home orders
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The Company sells a wide assortment of domestic merchandise and home furnishings. he Company also provides a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries"
More about Bed Bath and Beyond
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is an omnichannel retailer that makes it easy for our customers to feel at home. The Company sells a wide assortment of domestic merchandise and home furnishings. The Company also provides a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond
Bed Bath and Beyond press release regarding their $850 million asset based revolving credit facility
UNION, New Jersey – June 22, 2020 — Bed Bath & Beyond Inc. (Nasdaq: BBBY) today announced it has further strengthened its liquidity position by executing an $850 million three-year secured asset-based revolving credit facility (ABL Facility) with a syndicate of banks. The ABL Facility expires in June 2023 and replaces the Company’s existing unsecured revolving credit facility allowing for borrowings up to $250 million.
Gustavo Arnal, Chief Financial Officer & Treasurer stated, “An important focus as we transform our Company is to ensure liquidity and to improve cash flow generation. The Company went into the COVID-19 pandemic with a healthy cash position. This new ABL facility, in combination with actions being taken to drive cash flow, are enabling a more robust balance sheet.”
Enhanced Liquidity Position
The unparalleled challenge of the COVID-19 pandemic has significantly impacted the Company’s operations during its fiscal 2020 first quarter, which commenced on March 1, 2020. To reduce the anticipated impact and business disruption, including loss of sales due to store closures and margin pressure from the significant channel shift to digital, the Company has proactively taken steps to strengthen its financial position and liquidity. These actions have involved, among other things, tightly controlling expenses, working capital, and capital expenditures; drawing down the remaining available funds from its existing unsecured revolving credit facility; furloughing the majority of store associates and a portion of corporate associates; extending payment terms for goods and services and rent; suspending plans for share repurchases, dividend payments and debt reduction; and postponing $150 million of planned capital expenditures.
Store Re-Opening Update
Bed Bath & Beyond’s COVID-19 response has also included aggressive and thoughtful steps to safeguard its people and communities while continuing to serve customers. During this time, the Company has rapidly evolved to meet the changing needs of its customers by leveraging its omni-channel network and accelerating the introduction of Buy-Online-Pickup-In Store (BOPIS) and contactless Curbside Pickup services. These new services helped support the significant increase in demand across the Company’s digital channels while the majority of stores remained closed.
In late May 2020, the Company began taking measured steps to re-open stores to the public, including the launch of a Store Safety Plan to help ensure customers can shop in its stores confidently. In recent weeks, the pace of store re-openings has accelerated in line with changing local and state regulations, market data and the wider retail landscape. The Company expects approximately 95% of its total store fleet to re-open by the end of this week and nearly all stores to re-open by July 2020, subject to state and local regulations. Additionally, BOPIS and contactless Curbside Pickup services will be expanded to cover the vast majority of stores.
Mark Tritton, President & CEO said, “We have been delighted to welcome our customers back as we re-opened hundreds of stores in the last few weeks. At the same time, we are pleased with the response from our loyal customers to our new BOPIS and contactless Curbside Pickup shopping experience. These are important, targeted investments that strengthen our service offering and competitive position for the long term.
“While the impact of the COVID-19 situation has been felt across our business, we have taken measured, purposeful steps to maintain our financial flexibility. We ended our fiscal 2020 first quarter with approximately $1.2 billion in cash and investments, and we now have access to additional liquidity through our new ABL facility.”
Gustavo Arnal, Chief Financial Officer & Treasurer stated, “An important focus as we transform our Company is to ensure liquidity and to improve cash flow generation. The Company went into the COVID-19 pandemic with a healthy cash position. This new ABL facility, in combination with actions being taken to drive cash flow, are enabling a more robust balance sheet.”
Enhanced Liquidity Position
The unparalleled challenge of the COVID-19 pandemic has significantly impacted the Company’s operations during its fiscal 2020 first quarter, which commenced on March 1, 2020. To reduce the anticipated impact and business disruption, including loss of sales due to store closures and margin pressure from the significant channel shift to digital, the Company has proactively taken steps to strengthen its financial position and liquidity. These actions have involved, among other things, tightly controlling expenses, working capital, and capital expenditures; drawing down the remaining available funds from its existing unsecured revolving credit facility; furloughing the majority of store associates and a portion of corporate associates; extending payment terms for goods and services and rent; suspending plans for share repurchases, dividend payments and debt reduction; and postponing $150 million of planned capital expenditures.
Store Re-Opening Update
Bed Bath & Beyond’s COVID-19 response has also included aggressive and thoughtful steps to safeguard its people and communities while continuing to serve customers. During this time, the Company has rapidly evolved to meet the changing needs of its customers by leveraging its omni-channel network and accelerating the introduction of Buy-Online-Pickup-In Store (BOPIS) and contactless Curbside Pickup services. These new services helped support the significant increase in demand across the Company’s digital channels while the majority of stores remained closed.
In late May 2020, the Company began taking measured steps to re-open stores to the public, including the launch of a Store Safety Plan to help ensure customers can shop in its stores confidently. In recent weeks, the pace of store re-openings has accelerated in line with changing local and state regulations, market data and the wider retail landscape. The Company expects approximately 95% of its total store fleet to re-open by the end of this week and nearly all stores to re-open by July 2020, subject to state and local regulations. Additionally, BOPIS and contactless Curbside Pickup services will be expanded to cover the vast majority of stores.
Mark Tritton, President & CEO said, “We have been delighted to welcome our customers back as we re-opened hundreds of stores in the last few weeks. At the same time, we are pleased with the response from our loyal customers to our new BOPIS and contactless Curbside Pickup shopping experience. These are important, targeted investments that strengthen our service offering and competitive position for the long term.
“While the impact of the COVID-19 situation has been felt across our business, we have taken measured, purposeful steps to maintain our financial flexibility. We ended our fiscal 2020 first quarter with approximately $1.2 billion in cash and investments, and we now have access to additional liquidity through our new ABL facility.”
Bed Bath and Beyond (BBBY) stock price history
The image below shows the stock price history of Bed Bath and Beyond (BBBY) over the last 3 years. And it's not been a good time for Bed Bath and Beyond (BBBY) stockholders over the last 5 years. Over the last 5 years the stock of Bed Bath and Beyond (BBBY) declined by -83.71%. Its been a volatile yet overwhelmingly negative time for Bed Bath and Beyond (BBBY) stock.
Our latest stock valuation of Bed Bath and Beyond (BBBY)
So what is Bed Bath and Beyond (NASDAQ: BBBY) stock worth based on the release of their latest earnings report? It is always hard to value a loss making company, and we either use cash generated per share as a proxy for earnings or our standard fall back position is using the stockholders equity per share as a base valuation. We therefore value Bed Bath and Beyond at $15.42 a stock. We therefore believe that the stock is undervalued.
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $15.42. So a good entry point into Bed Bath and Beyond's stock would be at $13.90 or below. Since the stock of Bed Bath and Beyond is trading well below our suggested entry point we rate the stock a buy at its current depressed price.
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $15.42. So a good entry point into Bed Bath and Beyond's stock would be at $13.90 or below. Since the stock of Bed Bath and Beyond is trading well below our suggested entry point we rate the stock a buy at its current depressed price.