Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Asset Turnover

Reported total asset turnover remained relatively stable with minor fluctuations, starting at 1.78 in 2017, dipping slightly to 1.75 in 2018, increasing to 1.83 in 2019, then declining to 1.43 in both 2020 and 2021, before a slight recovery to 1.53 in 2022. Adjusted total asset turnover showed a gradual increase from 1.31 in 2017 to 1.53 in 2022, with a dip in 2018 but a general upward trend from 2019 onwards, indicating some improvement in asset utilization when adjusted.

Leverage and Capital Structure

There was a significant upward trend in leverage measures over the period. Reported debt to equity rose moderately from 0.55 in 2017 to 0.93 in 2021, then surged dramatically to 6.99 in 2022. Adjusted debt to equity followed a similar pattern but at higher levels, increasing from 1.66 in 2017 to 2.63 in 2021 and sharply accelerating to 16.23 in 2022. Reported debt to capital gradually increased from 0.36 in 2017 to 0.48 in 2021 before jumping to 0.87 in 2022. Adjusted debt to capital mirrored this trend, growing from 0.62 to 0.72 between 2017 and 2021, then increasing steeply to 0.94 in 2022. Financial leverage ratios escalated notably, with reported leverage rising from 2.52 in 2017 to 5.06 in 2021, then spiking to 29.46 in 2022; adjusted financial leverage followed a comparable trajectory from 3.71 in 2017 to 27.11 in 2022. This evolution signals an increasing reliance on debt financing, particularly pronounced in the final year observed.

Profitability

Profit margins experienced a marked decline over the period. Reported net profit margin dropped from a positive 5.61% in 2017 to negative values beginning in 2019 (-1.14%), with progressively worsening results through 2020 (-5.5%), 2021 (-1.63%), and reaching -7.11% in 2022. Adjusted net profit margin exhibited a similar pattern but with slightly less severe negative figures after 2018. Return on equity (ROE) deteriorated dramatically, moving from a reported 25.19% in 2017 down to -11.81% in 2021 and collapsing further to -321.35% in 2022. Adjusted ROE followed a comparable steep decline from 28.44% in 2017 to -227.56% in 2022. Return on assets (ROA) also turned negative starting in 2019 and worsened over time; reported ROA fell from 10.01% in 2017 to -10.91% in 2022, while adjusted ROA moved from 7.67% in 2017 to -8.4% in 2022. These trends indicate deteriorating profitability and potentially substantial losses, amplified by high leverage.

Net Sales

Net sales showed a downward trend over the six-year period, beginning at approximately $12.2 billion in early 2017 and declining steadily to around $7.9 billion by early 2022. This represents a substantial reduction in revenue, with the most significant decreases occurring between 2020 and 2022.

Total Assets

Total assets fluctuated over the period, initially increasing slightly from about $6.8 billion in 2017 to roughly $7.8 billion by early 2020, before decreasing sharply to approximately $5.1 billion by early 2022. The asset base peaked in 2020, followed by a notable contraction in subsequent years.

Reported Total Asset Turnover

The reported total asset turnover ratio, which measures efficiency in using assets to generate sales, began relatively high at around 1.78 in 2017, remained stable through 2019, but declined to 1.43 in 2020 and 2021. There was a slight recovery to 1.53 in 2022, indicating some improvement in asset utilization despite lower sales and assets.

Adjusted Total Assets

Adjusted total assets showed a contrasting pattern compared to reported total assets. They began at about $9.35 billion in 2017 and increased slightly in 2018, before declining steadily each year to about $5.1 billion in 2022. This consistent decrease suggests a revaluation or adjustment leading to a more conservative asset estimate over time.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio started at a lower level compared to the reported figure, around 1.31 in 2017. However, it increased gradually each year, reaching 1.53 by 2022. This upward trend indicates improving efficiency in generating sales from the adjusted asset base, reflecting better management of assets relative to sales despite overall declining revenues.

The financial data reveals several significant trends in the company’s capital structure over the analyzed periods. There is a general decline in shareholders' equity from 2017 through 2022, with a pronounced drop between 2021 and 2022. Total debt remains relatively stable initially but decreases sharply in 2021 before a slight uptick in 2022.

Total Debt

The total debt level was fairly consistent from 2017 to 2020, hovering around 1.49 to 1.59 billion USD. A notable reduction occurred in 2021, where total debt decreased to approximately 1.19 billion USD, followed by a minor increase to about 1.22 billion USD in 2022.

Shareholders’ Equity

Shareholders' equity started at roughly 2.72 billion USD in 2017, increased briefly to about 2.89 billion USD in 2018, then declined steadily thereafter. The decline intensified after 2019, dropping to 1.77 billion USD in 2020, 1.28 billion USD in 2021, and sharply falling to 174 million USD in 2022, indicating a severe erosion of equity value.

Reported Debt to Equity Ratio

This ratio remained below 1.0 through most years, reflecting a conservative leverage use until 2020. It increased from 0.55 in 2017 to 0.93 in 2021, then surged dramatically to 6.99 in 2022. This spike aligns with the collapse in shareholders’ equity while total debt only slightly increased, signifying a significant deterioration in financial stability.

Adjusted Total Debt and Adjusted Shareholders’ Equity

Adjusted total debt shows a declining trend from 4.2 billion USD in 2017 to around 3.07 billion USD in 2022, with fluctuations but an overall reduction. Adjusted shareholders’ equity also declined substantially, moving from about 2.52 billion USD in 2017 to only 189 million USD in 2022. The substantial reduction in adjusted equity parallels that of reported equity, reinforcing the conclusion of diminished net asset value.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio follows a similar pattern to the reported ratio but with generally higher values. It decreased from 1.66 in 2017 to 1.40 in 2018 but increased thereafter to 2.63 in 2021 and then sharply rose to 16.23 in 2022. This extreme increase reflects a marked leverage amplification driven by the collapse in equity.

Overall, the trends suggest that the company has experienced a significant decline in its equity base, paired with relatively stable or modestly declining debt levels. The rapidly increasing debt to equity ratios in 2021 and 2022 indicate escalating financial risk and potential solvency concerns, due largely to deteriorating equity rather than increased borrowing. This trend warrants close attention and could implicate challenges in maintaining financial flexibility moving forward.

Total Debt

The total debt remained relatively stable from 2017 through 2019, with values just below 1.5 billion USD. A noticeable increase occurred in 2020, reaching approximately 1.59 billion USD. This was followed by a significant decline in 2021 to around 1.19 billion USD, with a slight increase again in 2022 to approximately 1.22 billion USD.

Total Capital

Total capital demonstrated a consistent downward trend over the entire period analyzed. Beginning at over 4.2 billion USD in 2017, it fluctuated slightly before steeply declining to approximately 3.4 billion USD in 2020, further dropping to about 2.5 billion USD in 2021, and reaching just under 1.4 billion USD in 2022.

Reported Debt to Capital Ratio

The reported debt to capital ratio exhibited an increasing trend throughout the six-year period. Starting at 0.36 in 2017, it decreased slightly in 2018 but rose thereafter, reaching 0.47 in 2020 and 0.48 in 2021. The most notable change occurred in 2022, with the ratio sharply increasing to 0.87, indicating a substantially higher proportion of debt relative to capital.

Adjusted Total Debt

Adjusted total debt showed a gradual decline from approximately 4.2 billion USD in 2017 to around 3.8 billion USD in 2019. The figure slightly increased in 2020 but then decreased significantly to about 3.1 billion USD in 2021. It remained relatively stable at roughly 3.1 billion USD in 2022.

Adjusted Total Capital

Adjusted total capital mirrored the declining pattern seen in total capital, starting from over 6.7 billion USD in 2017, peaking briefly in 2018 at nearly 6.9 billion USD, then decreasing steadily to 5.4 billion USD in 2020, 4.2 billion USD in 2021, and ultimately declining sharply to approximately 3.3 billion USD by 2022.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio indicated a continued increase over the years. Beginning at 0.62 in 2017, it experienced a slight decline in 2018 to 0.58 but rose again to 0.61 in 2019. This upward trend intensified from 2020 onward, climbing to 0.71, then 0.72 in 2021, and reaching a peak of 0.94 in 2022. The high ratio in 2022 suggests increasing leverage and/or capital reduction.

Summary Insight

Overall, the data reveals a notable trend of declining capital bases combined with generally stable or moderately fluctuating debt levels, resulting in progressively higher debt-to-capital ratios. This pattern points to increasing financial leverage over time, escalating significantly by 2022. The sharp rise in both reported and adjusted debt to capital ratios in the last year may signal heightened financial risk or constraints in accessing equity or other capital forms.

The analysis of the financial data reveals several notable trends over the six-year period ended February 26, 2022.

Total Assets

Total assets exhibited fluctuations, beginning at approximately $6.85 billion in early 2017 and increasing to a peak near $7.79 billion in early 2020. Subsequently, total assets decreased sharply to $5.13 billion by early 2022, representing a decline of about 34% from the peak. This indicates significant asset reductions or disposals occurred in the latter years.

Shareholders’ Equity

Shareholders’ equity showed a general downward trajectory, starting at nearly $2.72 billion in 2017, decreasing gradually through 2021, and then dropping precipitously to $174 million in early 2022. The steep decline in equity in the most recent period is a critical point, suggesting either substantial losses, equity write-downs, or other equity-reducing events.

Reported Financial Leverage

The reported financial leverage ratio remained relatively stable between 2.44 and 2.57 from 2017 to 2019, then increased sharply from 4.41 in 2020 to an extreme 29.46 by 2022. This sharp increase reflects the significant contraction in shareholders’ equity relative to total assets, indicating a much higher reliance on debt financing or liabilities relative to equity.

Adjusted Total Assets

Adjusted total assets initially rose from $9.35 billion in 2017 to $9.56 billion in 2018, followed by a consistent decline across the subsequent four years, reaching approximately $5.13 billion in 2022. The declining adjusted asset base confirms the contraction observed in total assets, highlighting asset rationalization or impairments after 2018.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity followed a similar declining pattern, starting at $2.52 billion in 2017, dipping gradually through 2021 to $1.16 billion, and then sharply falling to $189 million in 2022. This pattern corroborates the equity erosion seen in the reported figures, raising concerns about the company’s capitalization and financial health.

Adjusted Financial Leverage

The adjusted financial leverage ratio mirrored the trend of the reported leverage, decreasing slightly from 3.71 in 2017 to 3.32 in 2018, then increasing steadily to 4.81 in 2020 and 5.43 in 2021. By early 2022, the ratio surged dramatically to 27.11. This indicates a substantial increase in financial risk, with equity bases eroding faster than assets, leading to a much higher proportion of liabilities.

Overall, the data points to a deteriorating financial position between 2019 and 2022, with significant declines in equity and assets and a corresponding marked rise in financial leverage. These changes suggest increasing risk levels and potential financial distress in the most recent periods analyzed.

Net Earnings (Loss)

The net earnings demonstrated a declining trend over the years. Beginning with a positive $685,108 thousand in 2017, the company experienced a sharp decrease to a loss of $137,224 thousand in 2019. The losses further deepened in the subsequent years, reaching a low of $613,816 thousand in 2020, with continued significant losses thereafter through 2022.

Net Sales

Net sales showed a consistent downward trend from $12,215,757 thousand in 2017 to $7,867,778 thousand in 2022. The sales peaked in 2018 but then steadily declined each year, reflecting a considerable reduction in revenue generation over the period.

Reported Net Profit Margin

The reported net profit margin declined from a positive 5.61% in 2017 to negative margins starting in 2019, worsening from -1.14% in 2019 to -7.11% in 2022. This indicates increasing inefficiency or higher costs relative to sales, negatively impacting profitability.

Adjusted Net Earnings (Loss)

Adjusted net earnings followed a similar downward pattern to reported net earnings, beginning with a positive $717,731 thousand in 2017 and becoming negative from 2019 onwards. Losses peaked at $692,234 thousand in 2020 before slightly improving but remaining significantly negative through 2022.

Adjusted Net Profit Margin

The adjusted net profit margin began at 5.88% in 2017 and deteriorated to negative values starting in 2019. Although there was a minor improvement to -0.52% in 2021, the margin again declined to -5.47% in 2022, confirming a sustained challenge in achieving profitability even after adjustments.

The financial data reveals a deteriorating profitability trend over the analyzed periods. Net earnings showed a significant decline from a positive result of 685,108 thousand US dollars in early 2017 to substantial losses, reaching -559,623 thousand US dollars by early 2022. This shift indicates increasing operational or financial challenges facing the company.

Shareholders’ equity also experienced a steady decline, dropping from approximately 2.72 billion US dollars in early 2017 to just 174,145 thousand US dollars in early 2022. The consistent reduction in equity suggests ongoing value erosion, possibly due to accumulated losses and other adverse financial impacts.

Return on equity (ROE) exhibited a marked downturn paralleling net earnings and equity movements. The reported ROE fell sharply from a healthy 25.19% in early 2017 to a negative figure of -321.35% by early 2022. This indicates the company was not generating positive returns for shareholders, with negative ROE pointing to significant losses relative to equity.

Adjusted net earnings and adjusted shareholders’ equity follow similar downward paths, confirming that the negative trends are not due solely to extraordinary or one-off items. Adjusted net earnings fell from 717,731 thousand US dollars in early 2017 to -430,727 thousand US dollars in early 2022, while adjusted shareholders’ equity decreased from about 2.52 billion US dollars to 189,281 thousand US dollars over the same time frame.

The adjusted ROE figures mirror these difficulties, dropping from a positive 28.44% in early 2017 to -227.56% in early 2022, reinforcing the conclusion that the company consistently struggled to generate sustainable returns.

Profitability Trends

Substantial decline in both reported and adjusted net earnings with a transition from profitability to heavy losses over five years.

Equity Position

Significant erosion of shareholders’ equity, reducing the firm’s net asset base dramatically.

Return on Equity

Steep decrease in ROE metrics indicating very poor utilization of equity capital amid sustained losses.

Adjustment Effects

The adjusted figures reinforce the overall negative trends, suggesting that impairments or irregular items are not masking the underlying financial difficulties.

The financial data indicates a marked decline in profitability and return on assets over the analyzed periods. Net earnings report positive values in the early years but transition into substantial losses starting from the fiscal year ending March 2, 2019, with losses deepening considerably through subsequent years. This trend is mirrored in the adjusted net earnings, which also show positive figures initially followed by increasing losses, though the adjusted losses for the most recent year appear to be less severe compared to earlier negative figures.

Total assets exhibit variability with a peak around the fiscal year end February 29, 2020, followed by a declining trend through to the last period analyzed. Adjusted total assets, which provide an alternative asset base measurement, also decline steadily especially after the peak period, indicating potential asset contractions or revaluation effects leading into the latest fiscal year.

Reported return on assets (ROA) aligns closely with net earnings patterns, showcasing a gradual decrease from a strong positive return in early years to negative returns in later years, reaching the lowest point in the final year. The adjusted ROA follows a similar trajectory but consistently reflects lower profitability levels when normalized for adjustments. The negative returns on assets in recent years highlight operational challenges and diminished efficiency in asset utilization.

Profitability Trends

Net and adjusted net earnings transitioned from profitability to substantial losses starting in 2019, which worsened through 2022, evidencing ongoing financial stress.

Asset Base Trends

Total assets peaked in 2020 but then declined steadily, indicating possible divestitures or asset impairments. Adjusted total assets similarly decreased, reinforcing evidence of a shrinking asset base.

Return on Assets (ROA)

Both reported and adjusted ROA declined over the period, moving from positive double-digits to significantly negative values, indicating poor utilization of assets and deteriorating operational performance.

Overall, the data reveals a company experiencing financial difficulties in recent years, reflected in declining earnings, shrinking asset values, and reduced returns on assets. These findings suggest a need for strategic review to address profitability and asset management challenges.