Is Bed Bath & Beyond Inc. (NASDAQ:BBBY) Stock a Good Buy After The Recent Recovery?

For years home goods retailers, Bed Bath & Beyond (NASDAQ:BBBY) has been on the verge of irrelevancy and as the clock ticks its might be easy to imagine that it won’t be there in five years.

Bed Bath & Beyond could be strong after the pandemic

The company’s business has been impacted greatly by the COVID-19 pandemic as it was forced to shut down most of its revenue avenues. Even before the pandemic, the business was struggling with a lack of cohesion regarding its portrayal to consumers and disorganized disarray of concepts.  However, once the company begins to operate it can generate a lot of cash flow because it still a recognized brand and it will likely avoid the growing list of companies going bankrupt nowadays.

The company’s Q4 earnings were disastrous and not even Christmas holiday shopping could help the home retailer. Bed Bath &Beyond ended the year with $1.39 billion in cash and generated a free cash flow of $314 million which was below the $593 million generated in 2018. 

Changes in leadership and strategy to turn fortunes

Most importantly the company has the right leadership under Target Corp (NYSE:TGT) veteran Mark Tritton as its CEO. This came late in 2019 following the ouster of most of the company’s leadership including founders by activist investors.

Bed Bath & Beyond is now focusing on core business after acquiring a range of adjacent brands in recent years. It is streamlining operations after selling PersonalizationMall.com to 1-800-Flowers.com, divestment of One King’s Lane business and it is also engaging a sale and leaseback of 50% of its real estate. The company raised $250 million from the deals which will help in the reduction of debt and other things.

The company has turned its stores to showrooms by displaying more products as it seeks to drive e-commerce traffic. The concept of show more carry less gives Bed Bath & Beyond a large product selection.

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Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.