Bed Bath & Beyond Inc. (NASDAQ:BBBY)

The analysis of the financial data over the six-year period reveals several notable trends in the company's profitability and expense management.

Gross Profit Margin

The gross profit margin, expressed as a percentage of net sales, shows a declining trend from 37.46% in 2017 to 31.57% in 2022. The margin deteriorated consistently, with the lowest point observed in 2020 at 31.74%. This indicates increasing costs relative to net sales or pricing pressures affecting gross profitability.

Cost of Sales

The cost of sales increased as a percentage of net sales from -62.54% in 2017 to approximately -68.43% in 2022. This upward movement in cost of sales further supports the observed decrease in gross profit margin, pointing to either increased product costs or a shift in sales mix toward lower-margin items.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses also rose steadily from -28.17% of net sales in 2017 to a peak of -34.92% in 2021, slightly improving to -34.22% in 2022. The increasing SG&A expenses as a percentage of net sales contribute adversely to the overall profitability, indicating sustained or elevated operating costs irrespective of sales performance.

Impairments and Restructuring Costs

Impairment expenses appeared from 2019, reaching a high of -4.56% in 2020 but then decreased to -0.46% by 2022. Restructuring and transformation initiative expenses were reported starting in 2021 and increased to -1.83% in 2022, reflecting ongoing efforts to realign the business. Losses on sale of businesses also appeared in 2021 and 2022, albeit at a minor scale.

Operating Profit (Loss)

Operating profit showed a marked decline from a positive 9.29% in 2017 to negative territory starting in 2019 (-0.72%) and further deepening losses through 2020 to 2022, with the lowest point at -6.27% in 2020. This downward trend suggests deteriorating core operating performance driven by higher costs and impairments.

Interest Expense and Debt Extinguishment Gains

Net interest expense remained relatively stable, hovering around -0.5% to -0.8% of net sales throughout the period. A notable gain from extinguishment of debt was recorded in 2021 at 0.83%, which provided some offset to losses but was not sustained in 2022.

Earnings Before Taxes and Tax Provision

Earnings before income tax mirrored operating profit trends, moving from positive to negative starting in 2019 and deteriorating further through 2022. The tax provision fluctuated, showing a benefit in some years (2020 and 2021) but becoming a provision in 2022, coinciding with the increased losses.

Net Earnings (Loss)

Net earnings followed a similar pattern, declining from 5.61% of net sales in 2017 to negative figures from 2019 onward. The net loss deepened to -7.11% in 2022, the worst outcome in the observed period, reflecting sustained challenges in generating profits.

In summary, the data indicates ongoing financial challenges characterized by increasing costs both in production and administration, recurring impairments, and restructuring charges which collectively eroded profitability from 2019 through 2022. Despite some financial maneuvers like debt extinguishment gains in 2021, the company has faced persistent operating losses and net losses, signaling a need for continued strategic and operational adjustments.