Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Goodwill

The goodwill value showed an increase from 697,085 thousand US dollars in February 2017 to 716,283 thousand US dollars in March 2018. Subsequently, there was a significant decline to 391,052 thousand US dollars by March 2019. Data for the years 2020, 2021, and 2022 are missing, preventing further trend analysis for these periods.

Indefinite Lived Tradenames and Trademarks

There is a steady decrease in the value of indefinite lived tradenames and trademarks from 305,300 thousand US dollars in February 2017 to 163,00 thousand US dollars in February 2022. Notably, between March 2019 and February 2020, the value dropped from 143,800 thousand US dollars to 91,200 thousand US dollars, followed by further reductions down to 16,300 thousand US dollars by 2022, indicating a consistent amortization or impairment pattern.

Goodwill and Other Indefinite Lived Intangible Assets

This aggregated item follows a similar downward trend as the individual goodwill and tradenames components. The figure decreased sharply from 1,002,385 thousand US dollars in February 2017 to 534,852 thousand US dollars in March 2019. From 2020 to 2022, values continued to decline markedly from 91,200 thousand US dollars to 16,300 thousand US dollars. This points to a significant reduction in the carrying value of intangible assets during the period, which may reflect write-downs or disposals.

The analysis of the financial data reveals several key trends over the examined periods.

Total Assets

Reported total assets exhibited a fluctuating trend, starting at approximately 6.85 billion USD in early 2017 and increasing moderately to about 7.04 billion USD in 2018. This was followed by a decline in 2019 to around 6.57 billion USD, then a notable increase to roughly 7.79 billion USD in 2020 before a steep reduction to approximately 6.46 billion USD in 2021 and further down to about 5.13 billion USD in 2022.

The adjusted total assets closely mirror the reported values, except from 2017 to 2019 where they are lower, reflecting the removal of goodwill. From 2020 onwards, both reported and adjusted total assets align precisely, indicating no goodwill impact in these later years.

Shareholders’ Equity

Reported shareholders’ equity shows a declining trend throughout the period, beginning at about 2.72 billion USD in 2017 and slightly increasing to nearly 2.89 billion USD in 2018. Afterward, it consistently decreased, experiencing a significant drop to approximately 1.76 billion USD in 2020, then framing a downward path to about 1.28 billion USD in 2021 and sharply falling to around 174 million USD in 2022.

Adjusted shareholders’ equity follows a similar decreasing pattern, albeit starting at a lower base due to goodwill adjustments, from roughly 2.02 billion USD in 2017, gradually declining to around 174 million USD by 2022. The convergence of reported and adjusted equity in later years indicates diminishing goodwill or its impairment.

Net Earnings (Loss)

Reported net earnings demonstrate a marked deterioration over the period. Initially, the company recorded positive net earnings of about 685 million USD in 2017 and 425 million USD in 2018. However, in 2019, the company experienced a net loss of approximately 137 million USD. This loss deepened considerably in 2020 with a reported net loss of around 614 million USD, followed by continued losses of roughly 151 million USD in 2021 and 560 million USD in 2022.

Adjusted net earnings, which presumably account for goodwill impairment effects, show a more positive figure in 2019—approximately 188 million USD—compared to the reported net loss. This suggests that goodwill impairments significantly impacted the reported losses for that year. The adjusted figures still show losses starting in 2020, which increase over time, indicating operational or other financial challenges beyond goodwill considerations.

Overall, the data depicts a company facing considerable asset reductions and deteriorating equity over the six-year span. The shift from profitable operations in the early years to sustained losses beginning in 2019 reflects escalating financial distress. The alignment of reported and adjusted figures in later years also points to the decline or complete write-down of goodwill assets. These trends may signify underlying operational challenges and the need for strategic financial restructuring.

Net Profit Margin

The reported net profit margin shows a persistent decline from 5.61% in 2017 to -7.11% in 2022, indicating growing unprofitability. Adjusted figures reveal a somewhat less severe deterioration, with a slight recovery to 1.56% in 2019 before turning negative again in subsequent years. Overall, profitability has worsened significantly over the period.

Total Asset Turnover

The reported total asset turnover remains relatively stable, fluctuating mildly between 1.43 and 1.83, with a slight dip in 2020 and stabilization thereafter. Adjusted total asset turnover values are consistently higher than reported ones until 2019, reflecting potential asset base adjustments, and then align with reported values from 2020 onward. The decline and later recovery suggest reduced operational efficiency during the pandemic year, followed by partial improvement.

Financial Leverage

Financial leverage demonstrates a notable increase from approximately 2.5 in 2017 to an extreme 29.46 in 2022. Adjusted leverage follows a similar trajectory. This sharp rise in leverage in the last year reflects a substantial increase in the use of debt, which may contribute to higher financial risk and volatility in returns.

Return on Equity (ROE)

Reported ROE trends downward drastically, from a healthy 25.19% in 2017 to a deeply negative -321.35% in 2022. Adjusted ROE, which accounts for goodwill adjustments, shows a less negative position until 2020 but similarly plummets by 2022. This sharp decline corresponds with increased leverage and negative profit margins, highlighting significant erosion in shareholder value.

Return on Assets (ROA)

ROA follows a downward trend, starting from roughly 10% reported in 2017 and reaching -10.91% in 2022. Adjusted ROA indicates a positive value in 2019 (3.04%) but turns negative afterwards. The consistent negative ROA in recent years signals ineffective use of company assets to generate profit.

The financial data reveals a notable deterioration in profitability over the analyzed period. Reported net earnings started positively in the earliest years, with a peak in the fiscal year ending February 25, 2017, at approximately $685 million and a corresponding net profit margin of 5.61%. This positive trend continued into the following year, albeit with a reduced net earnings figure of about $425 million and a margin of 3.44%.

A significant shift is observed beginning in the fiscal year ending March 2, 2019, where reported net earnings turned negative, amounting to a loss of approximately $137 million, and the net profit margin dropped to -1.14%. The adjusted net earnings in the same year, however, show a positive figure of approximately $188 million and a margin of 1.56%, indicating that some non-recurring or special items significantly impacted reported results.

From the fiscal year ending February 29, 2020, onward, both reported and adjusted net earnings consistently reflect losses, with reported losses deepening each year: approximately $614 million, $151 million, and $560 million, respectively. Correspondingly, the reported net profit margin declined markedly, reaching -7.11% by the fiscal year ending February 26, 2022. The adjusted profit margins followed a similar trend but were slightly better than reported figures only in 2019 and 2020; from 2021 onwards, adjusted margins equaled reported margins.

This pattern indicates increasing challenges to profitability, with the company moving from profitability into significant losses over the period. The divergence between reported and adjusted metrics in 2019 suggests one-time impacts or accounting adjustments influenced the reported results, but beginning in 2021, adjusted figures did not provide a more favorable view, implying persistent operational or structural issues. The sustained negative margins from 2020 through 2022 underscore ongoing difficulties in restoring profit levels.

Profit Trends

Initial profitability declined steadily, culminating in sustained net losses from 2019 onward with worsening margins.

Adjustment Impact

Adjustments improved net earnings appearance slightly in 2019 and 2020, but had no mitigating effect in later years.

Magnitude of Losses

Losses intensified significantly in 2020 and beyond, with reported losses exceeding half a billion USD in recent years.

Profit Margins

The net profit margin deteriorated from a healthy positive level above 5% to a negative seven percent, signaling deeper profitability challenges.

The analysis of the financial data over the six-year period reveals several notable trends in the company's asset base and efficiency of asset utilization.

Total Assets

Reported total assets displayed a general decline from approximately 6.85 billion US dollars in early 2017 to around 5.13 billion US dollars by early 2022. This represents a reduction of roughly 25% over the span. The adjusted total assets, which exclude goodwill, follow a similar downward pattern, decreasing from about 6.15 billion to 5.13 billion US dollars over the same timeframe. The adjusted figures are consistently lower than the reported totals, reflecting the exclusion of intangible assets such as goodwill. Both metrics peaked in the fiscal year ending February 29, 2020, before declining sharply in subsequent years.

Total Asset Turnover

Reported total asset turnover ratios exhibit a slight decrease from 1.78 in 2017 to a low of 1.43 in 2020 and 2021, followed by a marginal improvement to 1.53 by 2022. The adjusted total asset turnover shows a higher starting point at 1.99 in 2017 and remains relatively stable at approximately 1.95 until 2019. It then declines sharply to 1.43 in 2020 and 2021, mirroring the reported ratio trend, and improves slightly to 1.53 in 2022. The asset turnover ratios demonstrate that the company's efficiency in generating revenue from its assets declined notably starting in 2020 but showed some recovery in the final year analyzed.

Key Insights

The overall decline in total assets could suggest asset disposals, writedowns, or a strategic shift to a leaner asset base. The pronounced drop in asset turnover ratios beginning in 2020 aligns with the peak and subsequent fall in asset levels, indicating that the company faced challenges in maintaining revenue generation efficiency against its asset stock during this period. The partial rebound in turnover ratios in 2022 implies some operational improvement or asset reallocation efforts. The consistent difference between reported and adjusted totals highlights the significance of goodwill on the balance sheet, which was maintained until 2020 but then removed or substantially reduced.

The data indicates notable shifts in the company's financial position over the six-year period under review.

Total Assets

Reported total assets show a fluctuating trend, initially increasing slightly from 6,846,029 thousand US dollars in 2017 to a peak of 7,790,515 thousand in 2020, followed by a significant decline to 5,130,572 thousand by 2022. The adjusted total assets, which exclude goodwill, generally mirror this pattern, declining more gradually until 2020 and then similarly dropping sharply in the last two years assessed.

Shareholders’ Equity

Both reported and adjusted shareholders’ equity display a consistent downward trajectory throughout the period. Reported equity decreases from approximately 2,719,277 thousand US dollars in 2017 to a notably low 174,145 thousand in 2022. Adjusted equity follows the same pattern, beginning at 2,022,192 thousand and diminishing to the identical 174,145 thousand by 2022. This pronounced reduction suggests significant erosion of net asset value over time.

Financial Leverage

Financial leverage ratios, both reported and adjusted, remain relatively stable between 2017 and 2019, hovering around values between 2.44 and 3.04. From 2020 onward, however, there is a sharp increase in leverage, rising to 4.41 in 2020 and reaching an exceptional 29.46 by 2022. This surge suggests a considerable increase in the company's dependency on debt financing relative to equity, potentially indicating increased financial risk during the latter years.

Overall, the data reflects a period of deteriorating financial health characterized by declining asset bases and shareholders’ equity alongside escalating leverage. The dramatic increase in leverage coupled with the erosion of equity signals heightened financial risk and possible challenges in maintaining long-term solvency or operational stability.

Net Earnings

Reported net earnings displayed a significant decline over the periods analyzed, starting from a positive $685.1 million in 2017 and turning negative by 2019. The loss deepened sharply in 2020 to approximately $613.8 million and remained negative through 2022, with a slight improvement in 2021 before worsening again in 2022. Adjusted net earnings, which exclude certain impacts, follow a similar declining pattern but reflect a positive value in 2019, contrasting with the reported loss. This suggests that adjustments had a substantial positive impact only in that year, while in subsequent years the adjusted losses closely mirror the reported losses.

Shareholders’ Equity

Reported shareholders’ equity decreased consistently across the entire span, starting from $2.72 billion in 2017 and dropping markedly to $174 million by 2022. Adjusted shareholders’ equity follows this downward trend as well but starts at a lower base, indicating that goodwill or other adjustments contributed to higher reported equity values initially. By 2020, the adjusted and reported equity figures converge, highlighting reduced intangible asset values or impairments influencing the equity base in later years.

Return on Equity (ROE)

Reported ROE shows a steep decline over the years, dropping from a robust 25.19% in 2017 to a deeply negative -321.35% in 2022, indicating severe erosion of profitability relative to shareholders’ equity. Adjusted ROE values are generally higher than reported ROE in the earlier years, reflecting the effect of excluding certain charges. Notably, adjusted ROE remains positive in 2019 at 8.67%, contrasting with the negative reported figure, but turns negative from 2020 onwards and deteriorates sharply by 2022 in line with reported ROE. This trend signifies worsening operational results and capital base deterioration affecting shareholder returns.

Overall Analysis

The data indicate a declining financial performance trend characterized by increasing losses, shrinking equity, and deteriorating profitability ratios over the six-year period. The adjustments related to goodwill or other factors provided temporary relief to net earnings and ROE in 2019 but did not alter the fundamentally negative trajectory in subsequent years. The significant drop in equity by 2022 and the extreme negative ROE values suggest considerable financial distress, possibly driven by operational challenges, impairments, or structural issues within the business.

The analysis covers a six-year period, examining both reported and goodwill-adjusted financial data.

Net Earnings (Loss)

Reported net earnings substantially declined from a positive 685.1 million US dollars in 2017 to a loss of approximately 559.6 million US dollars by 2022. Notably, 2019 marked a turning point where net earnings became negative and continued to deteriorate through to 2022. Adjusted net earnings, which exclude goodwill impairment effects, show a slightly more favorable performance in 2019 with a positive 188.0 million US dollars, but they still followed the downward trajectory in subsequent years, ending in a loss similar in magnitude to reported figures in 2022.

Total Assets

The reported total assets exhibited fluctuations but generally trended downward from around 6.85 billion US dollars in 2017 to approximately 5.13 billion US dollars in 2022. The adjusted total assets, which remove goodwill effects, were consistently lower than reported assets but followed a similar downward trend. Assets peaked again in 2020 before declining sharply in the last two years under review.

Return on Assets (ROA)

The reported ROA decreased significantly over the period, from a strong 10.01% in 2017 to a negative 10.91% in 2022, indicating declining profitability relative to the asset base. The adjusted ROA trend similarly declined but was somewhat more resilient in earlier years, with a positive return of 3.04% in 2019 before turning negative thereafter. Both reported and adjusted ROA converged in their negative levels by 2021 and 2022, reflecting ongoing challenges in generating profits from assets.

Overall, the data indicates a sustained deterioration in profitability, asset base, and returns over the six years. Goodwill adjustments moderately mitigate losses and improve profitability measures in some years, particularly 2019, but do not reverse the overall downward trend. The fiscal profile suggests increasing financial stress and a need for strategic reassessment.