Bed Bath & Beyond (NASDAQ:BBBY) plummeted 24% in premarket trading after unveiling a plan to reduce a third of its owned brands and cut 20% of jobs across the corporate and supply chain. The company expects its actions to reduce SG&A by approximately $250 million in fiscal 2022.
The retailer also announced it secured financing commitments for more than $500 million of new financing, including its newly expanded $1.13 billion asset-backed revolving credit facility and a new $375 million "first-in-last-out" facility, according to a statement.
The retailer also announced that it plans to retain the buybuy BABY banner after a strategic review. The company has identified and commenced the closure of approximately 150 lower-producing Bed Bath & Beyond banner stores.
"The Board of Directors believes that, at this time, buybuy BABY will deliver greater value for the Company's shareholders as part of the Bed Bath & Beyond Inc. portfolio," the company said in the statement.
Bed Bath (BBBY) also provided interim financial update for Q2 ended Aug. 27 with net sales of approximately $1.45 billion, comparable sales decline of ~26% compared to the Q2 of fiscal 2021 and free cash flow usage of ~$325 million. The retailer also forecast a comparable sales decline in the 20% range, driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022.
As previously announced, the retailer will hold a conference call today (August 31) to provide a business and strategic update.