Quick look at Bed Bath Beyond (BBBY)

When selling BBBY early 2021, unfortunately before the big pop, I deleted it from my watch list to not get distracted but set a reminder. Today I got a pop-up that BBBY hit €12…

I sometimes set such a price reminder (arbitrarily of course). In this case I set it at €12. In January 2021 I was not sure if BBBY could really do a suceessful turnaround or, if implied probability was riding too high. I wrote the following:

BBBY plans to grow its comparable sales by FY 2023 in the low to mid single digit range (of course they want to). A growing FCF stream with considerable operational leverage could be very attractive (if successful), especially if share count is reduced upfront at low prices. Competing against more nimble pure online players could end in an up-hill battle for hte company.

Quicky on BBBY (Q3 2020)

I sold my share on Jan 11th. As usual, the stock price popped shorty afterwards. It was the time for various short squeezes.

Turnarounds seldom turn. With Pandora A/S (PNDORA) likely being the exception proving this rule, BBBY so far fits in quite well. The 2021 outlook revision was necessary despite each and everyone of BBBY’s operational ‘key strategic initiatives’ being ‘on track’ and nicely presented on slide #18 of Q2 presentation (end Sept’21).

Not all is bad. buybuy BABY seems to perform very well. Another area of good progress is the share buy backs which I identified as a potentially strong kicker if executed at low prices and a successfull turnaround – oh wait… Many shares were bought back. At avg prices of $25 per share. The current stock price is $14.50.

This might still be an interesting turnaround case at the right price! But gaining a firm understanding of their operating segments and respective performance is not the easiest exercise around …

FYI: the price alarm was set up in Trade Republic. Due to very wide spreads in early trading, €12 was reached.


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