The one-two punch of lingering inflation and more cautious consumer spending in 2022 has two household retailers — Halloween outfit destination Party City (PRTY) and home goods retailer Bed Bath & Beyond (BBBY) — on the brink of extinction and irrelevancy in the age of digital shopping.
With bankruptcy potentially looming for each, share prices have seen outsized swings amid speculative bets by traders on their respective futures.
Bed Bath & Beyond stock popped more than 25% pre-market on Wednesday after a 20% post-earnings rally on Tuesday. The stock is down 17% so far in 2023.
Party City stock surged more than 30% in pre-market trading on Wednesday after the stock boomed 117% on Tuesday, making it one of the hottest tickers on the Yahoo Finance platform.
Here’s each company’s current state of play.
Bed Bath & Beyond
Bed Bath & Beyond continues to struggle mightily: The ailing retailer released its long-awaited holiday quarter results on Tuesday, and the picture was not pretty.
Here are seven numbers that stood out to Yahoo Finance:
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Net sales crashed 33% from the prior year.
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Comparable digital sales fell a whopping 33%.
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Bed Bath & Beyond banner comparable sales plunged 34%.
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BuyBuyBaby banner comparable sales tanked in the “low 20” percentage area.
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Adjusted operating loss of $225 million.
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Only $153.1 million in cash on the balance sheet.
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150 stores still expected to be closed.
In an approximate 10-minute earnings call with no analyst questions, Bed Bath & Beyond CEO Sue Gove outlined $80 million to $100 million more in cost cuts. Aside from store closures, the company plans to lay off even more corporate workers.
Bed Bath & Beyond recently said bankruptcy was on the table as it works to shore up its tattered balance sheet after the disastrous holiday shopping season.
Gove reiterated on Tuesday that all options remain on the table to save the retailer.
Party City
The retailer’s slow-motion train wreck of a 2022 sped up for the all-important Halloween selling season.
In early November, Party City said total third-quarter sales fell 1% from the prior year while gross profit margins dropped 420 basis points. Party City posted an adjusted net loss of $157.2 million for the quarter. Sales for the month of October only rose 3.9%.
“We are focused on $30 million of savings, with work already underway to deliver this target in 2023, including a corporate workforce reduction of 19% through a combination of position eliminations and not backfilling a significant number of open positions,” CEO Brad Weston said at the time.
The Wall Street Journal reported on Jan. 6 that the retailer was preparing to file for bankruptcy in an effort to cut more than $1.3 billion in debt, sending the shares spiraling lower.
On Jan. 11, Bloomberg reported the company was seeking debtor-in-possession (DIP) funding to keep its business afloat during the bankruptcy process. The company could enter bankruptcy within weeks, the report said.
Party City operates 825 stores. The stock has lost about 97% in the past five years.
Party City didn’t return Yahoo Finance’s request for comment on a potential bankruptcy filing.
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Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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