Bed Bath & Beyond shares fall after SEC requests info

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The share price of Bed Bath & Beyond dipped after the company revealed correspondence with the Securities and Exchange Commision pertaining to its 2021 annual report, Barron’s first reported Friday.

The two letters — one dated Nov. 7 from Bed Bath & Beyond interim CFO Laura Crossen to the SEC and one dated Sept. 27 from the SEC to the company — were released Friday. Following that disclosure, the share price of the domestic merchandise retailer reportedly dropped about 4% at one point on Friday, according to the outlet.

Ticker Security Last Change Change %
BBBY BED BATH & BEYOND INC. 2.51 -0.01 -0.40%

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The SEC made a couple information requests in its September letter about the 2021 annual report Bed Bath & Beyond submitted in February, including inquiries about impacts the company faced in that fiscal year’s latter six months due to supply chain issues. 

In the report, the company said net sales improvements in the first half of 2021 were offset by traffic declines and the supply chain disruptions in the second half of the year.

“Please specify whether these challenges have materially impacted your results of operations or capital resources and quantify, to the extent possible, how your sales, profits, and/or liquidity have been impacted.” the letter requested.

The SEC also inquired about the potential risk mitigation measures employed, as well as asked the company to include certain information in both quarterly earnings releases and regulatory filings.

Bed Bath & Beyond said in its November letter back to the SEC that it had an estimated $275 million unfavorable net sales impact in the back half of 2021 due to inventory availability issues associated with supply chain challenges and delays. Net sales for fiscal 2021 were $7.868 billion, a decrease of approximately 14.8% as compared with fiscal 2020.

Additionally, Bed Bath & Beyond estimated those issues impacted gross margin by 300-400 basis points due to higher freight costs, detention and demurrage. Gross profit margin fell 2.2% in fiscal 2021 to 31.6% from 33.8%.

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Bed Bath & Beyond store in Marlton, N.J., Oct. 29, 2022

The company pointed out in the letter that it does not see any material direct long-term impacts of the fiscal 2021 supply chain disruption because it is rebalancing its Owned Brand direct import strategy to pivot back to obtaining a greater share of product from domestic suppliers and shifting merchandise back to national brands … “thus no significant mitigation efforts have been undertaken,” the response said.

Bed Bath & Beyond indicated it would increase the consistency of certain supplemental financial information across its news releases, quarterly reports and annual filings moving forward. New language about supply chain-related risks has also started being included in its quarterly reports.

Bed Bath & Beyond did not respond to FOX Business’ request for comment on the matter by the time of publication.

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Bed Bath & Beyond

Bed Bath & Beyond store is seen on June 29, 2022 in Miami, Fla. Bed Bath & Beyond Inc. fired its CEO Mark Tritton as shares of the company are down more than 55% this year and nearly 80% over the last 12 months.  ((Photo by Joe Raedle/Getty Images) / Getty Images)

In late September, Bed Bath & Beyond said it generated $1.4 billion in net sales for the second quarter of fiscal 2022, down roughly 28% from the same three-month period last year. Its net loss widened from $73 million to $366 million.

It had unveiled a month earlier a turnaround plan that included laying off some of its workforce and shuttering stores that weren’t performing well, among other measures.

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