The Bed Bath & Beyond Inc. (NASDAQ: BBBY) stock price rallied 14.2% during premarket trading despite the company missing analysts expectations for its fiscal third quarter.
The company reported its earnings earlier today, with its revenues coming in at $1.88 billion, missing consensus estimates of $1.95 billion, while its net loss increased to $276 million compared to last year’s 475 million loss.
Interestingly, Bed Bath & Beyond’s stock fell over 9% earlier in the premarket session before reversing and heading higher as bullish investors bought the stock.
The price action seems eerily similar to the meme stock frenzy that took the markets by storm last year when stocks that institutional traders had heavily shorted were driven higher by retail investors discussing stocks on social media sites like Reddit.
It appears that some investors stepped in to push BBBY shares higher after the initial dip, which could spell trouble for short-sellers, who are primarily institutional traders from hedge funds and investment firms.
Mark Tritton, Bed Bath & Beyond’s CEO, said that supply chain hiccups due to the impact of the COVID-19 pandemic had cost the firm about $100 million in lost revenues.
He also revealed that some of the lost revenues were from planned store closures since it had closed about 170 stores and was on track to close another 30 stores bringing the total number to 200 closed stores.
The company intends to close the stores as part of efforts to slash its operating costs and focus on its eCommerce business after most of its customers shifted to online purchases due to the COVID-19 induced store closures from 2020.
Bed Bath & Beyond also revealed that its BuyBuy baby brand had witnessed robust growth during the quarter and that it expects the growth to continue into the next quarter.
The retailer lowered its full-year earnings guidance to generate between $8.1 billion to $8.3 billion, with analysts betting on the lower figure, while the firm expects to make a loss per share of 15 cents to break even.
BBBY expects to generate revenues worth $2.1 billion translating to earnings per share of 15 cents or to break even during the last quarter of its financial year.
BBBY stock rallied higher at the open and traded up over 20% at publishing.
*This is not investment advice. Always do your due diligence before making investment decisions.
Bed Bath & Beyond stock price.
Bed Bath & Beyond stock rallied 14.21% premarket to trade at $15.27, rising from Wednesday’s closing price of $13.37.
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