Bed Bath & Beyond Inc. (NASDAQ:BBBY)

The analysis of the quarterly financial data reveals significant trends and fluctuations in the leverage and interest coverage metrics over the observed periods.

Debt to Equity Ratio

The debt to equity ratio remained relatively stable between 0.51 and 0.58 from mid-2017 through early 2019, indicating a consistent financing structure during this period. From mid-2019 onward, a gradual increase is observed, peaking dramatically at 6.77 by May 2022. This suggests a significant rise in debt relative to equity, reflecting increased reliance on debt financing or a reduction in equity base.

Debt to Equity Ratio Including Operating Lease Liability

This measure follows a similar trend but with higher absolute values, highlighting the impact of operating lease liabilities on the company’s leverage. It remained around 0.51 to 0.58 until early 2019, then surged to 17.42 by May 2022. This substantial increase points to a growing burden from lease obligations over time, amplifying overall financial leverage.

Debt to Capital Ratio

The debt to capital ratio showed a stable pattern near 0.34 to 0.37 until early 2019, followed by a gradual increase to 0.87 by May 2022 and further to 1.50 by August 2022. The values exceeding 1.0 later indicate an extraordinary financing structure, possibly due to negative equity or significant new debt issuances.

Debt to Capital Ratio Including Operating Lease Liability

This ratio follows the same upward trend as the standard debt to capital ratio but starts from a higher base, approximately 0.34 initially and rising steadily to 1.20 by August 2022. The growing leverage associated with lease liabilities amplifies the overall financial risk.

Debt to Assets Ratio

The debt to assets ratio, excluding lease liabilities, remained fairly constant around 0.20 until early 2019, with slight fluctuations thereafter, reaching 0.28 to 0.37 in the last observed periods. Although the increase is less pronounced than in equity-based ratios, it indicates a moderate growth in debt relative to total assets.

Debt to Assets Ratio Including Operating Lease Liability

The inclusion of operating lease liabilities significantly increases this ratio, from about 0.22 in early periods to 0.66–0.76 in 2022. This indicates a substantial increase in overall liabilities relative to assets when lease obligations are considered, underlining higher financial risk.

Financial Leverage

The financial leverage ratio initially hovered around 2.4 to 2.6 from 2017 to early 2019, then escalated sharply over the subsequent years, reaching an extreme value of 29.46 by May 2022. This surge corresponds to increased debt or reduced equity and signals heightened vulnerability in the company’s capital structure.

Interest Coverage Ratio

The interest coverage ratio exhibited a consistent decline from a strong 15.31 in mid-2017 to negative values starting in early 2019. This negative trend persisted, with occasional minor recoveries, but largely remained below zero, indicating that earnings before interest and taxes were insufficient to cover interest expenses for several quarters. The trend reflects deteriorating operational profitability or increased financial costs, raising concerns about the company’s ability to service its debt.

Overall, the data reveals a trend towards increased financial leverage, intensified by operating lease liabilities, accompanied by deteriorating interest coverage. These patterns suggest growing financial risk and potential stress in debt servicing capacity over the analyzed periods.

The financial data reveals several significant trends regarding the company's leverage and equity over the analyzed quarters.

Total Debt

The total debt remained relatively stable around 1,492 million US dollars from May 2017 through February 2020, indicating a consistent debt level during that period. However, a notable increase occurred starting in May 2020, with fluctuations thereafter, peaking near 1,730 million US dollars by August 2022. This reflects increased borrowing or refinancing activities during the more recent periods.

Shareholders’ Equity (Deficit)

Shareholders’ equity showed a declining trend over the timeframe. Beginning at approximately 2,672 million US dollars in May 2017, equity gradually decreased over time with some intermittent recoveries. Notably, after May 2020, equity declined sharply from above 1,460 million US dollars to negative territory by May 2022, reaching deficits exceeding 577 million US dollars by August 2022. This downward trajectory suggests cumulative losses or significant write-downs impacting net asset value.

Debt to Equity Ratio

The debt to equity ratio initially trended downward, moving from 0.56 in May 2017 to 0.51 by December 2018, reflecting a relatively balanced leverage position. However, from March 2019 onward, the ratio increased substantially, surpassing 1.0 in late 2021 and peaking at an extreme level of 6.77 by May 2022, after which the data is not reported. This sharp rise corresponds with decreasing equity and relatively high debt, indicating a substantially elevated leverage risk and potential solvency concerns.

In summary, the data shows a shift from a period of stable financial structure to a phase marked by rising debt and significant equity erosion. The transition into equity deficits combined with soaring debt to equity ratios highlights increased financial risk and possible distress in more recent quarters. Close monitoring of debt management and efforts to restore equity value are implied as critical for improving the company's financial health.

Total Debt (Including Operating Lease Liability)

The total debt remained relatively stable between May 2017 and March 2019, fluctuating slightly around 1.49 billion US dollars. However, a significant increase occurred starting in June 2019, where debt surged markedly from approximately 1.49 billion to over 3.6 billion US dollars. Following this jump, the debt figures exhibited volatility but remained elevated, oscillating between about 3.0 billion and 4.0 billion US dollars through August 2022.

Shareholders’ Equity (Deficit)

Shareholders’ equity demonstrated an overall declining trend across the analyzed period. Initially, it increased moderately from about 2.67 billion in May 2017 to approximately 2.9 billion by June 2018. Afterwards, equity consistently decreased, dropping sharply between March 2019 and August 2022. Notably, the figure turned negative starting May 2022, with a deficit increasing further by August 2022, indicating a deterioration in the company’s net asset position.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio was relatively low and stable during the period from May 2017 to March 2019, ranging approximately from 0.51 to 0.58. Beginning in June 2019, the ratio increased substantially, reflecting both the surge in debt and the declining equity. The ratio escalated dramatically after May 2022, reaching an extremely high value of 17.42, underscoring heightened financial leverage and potential solvency concerns as the company’s equity turned negative.

Summary of Financial Trends

The company’s financial structure experienced notable stress over the reviewed period. While debt levels remained steady initially, a pronounced increase in leverage occurred around mid-2019. Concurrently, shareholders’ equity declined markedly from early 2019 onward, culminating in negative equity status by mid-2022. The rising debt to equity ratio reflects this dual pressure of increasing liabilities and eroding net assets, suggesting elevated financial risk and potential challenges in maintaining capital stability. These patterns may signal the need for strategic financial management and review of capital structure to address the deteriorating equity position and heightened leverage.

The analysis of the quarterly financial data reveals noteworthy trends in the company’s leverage position and capital structure over the observed periods.

Total Debt

The total debt remained relatively stable around 1.49 billion US dollars until early 2020, with minor fluctuations. A significant drop occurred in the second half of 2020, declining from approximately 1.72 billion to about 1.19 billion US dollars by early 2021. After this decrease, the total debt hovered slightly above 1.18 billion US dollars through most of 2021, before rising sharply again in 2022, reaching nearly 1.73 billion US dollars by the last reported period.

Total Capital

Total capital showed a steady downward trend from mid-2017 to late 2022. Starting at approximately 4.16 billion US dollars in mid-2017, it declined progressively, with some accelerated decreases starting in early 2019. By the latest period, total capital had fallen dramatically to about 1.15 billion US dollars, reflecting a significant contraction in the company’s overall capital base.

Debt to Capital Ratio

This ratio exhibits a general upward trajectory, indicating increasing financial leverage. Initially near 0.35, the ratio gradually climbed after early 2019, reaching 0.46 in early 2020. Despite some temporary decreases mid-2020, the ratio surged notably throughout 2021 and into 2022, culminating in very high leverage levels above 1.0, with the last recorded ratio at 1.5. This suggests that debt exceeded total capital during the most recent periods, highlighting a potentially heightened risk profile and reliance on debt financing.

In summary, the company's financial structure has shifted significantly, with rising debt levels relative to its capital base and a marked decline in total capital. Such trends point to increased leverage and a potentially more precarious financial position, emphasizing the need for close monitoring of debt management and capital adequacy in forthcoming periods.

Total Debt (Including Operating Lease Liability)

The total debt remained relatively stable around 1.49 billion USD from mid-2017 through early 2019. Starting in June 2019, there was a pronounced and sudden increase, with debt levels more than doubling to exceed 3.6 billion USD by mid-2019. This elevated level experienced some fluctuations but generally remained above 3 billion USD through to mid-2022, peaking near 4.1 billion USD in mid-2020 before settling slightly lower in subsequent periods.

Total Capital (Including Operating Lease Liability)

Total capital showed a modest upward trajectory from mid-2017 to early 2018, ranging between approximately 4.16 billion and 4.39 billion USD. However, there was a noticeable drop by early 2019 to around 4 billion USD. Following this, total capital initially surged sharply to over 5.7 billion USD by mid-2019, subsequently declining through 2021 and falling steadily thereafter. By mid-2022, total capital had decreased to just under 3 billion USD, signaling a downward trend in the capital base over the later periods.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio was relatively stable and moderate, fluctuating around 0.34 to 0.37 from mid-2017 to early 2019. Beginning in mid-2019, the ratio rose sharply, reflecting the substantial increase in debt relative to capital. It climbed steadily from 0.64 in June 2019 to above 1.0 by late 2021, reaching 1.2 by August 2022. This indicates that debt exceeded total capital in recent periods, reflecting a heavier reliance on debt financing and a potential increase in financial risk.

Summary of Trends and Insights

Overall, the data reveals a significant shift in the company's financial structure starting around mid-2019, characterized by a dramatic increase in total debt coupled with fluctuating and ultimately declining total capital. The consequent sustained rise in the debt to capital ratio beyond 1.0 suggests that debt financing became predominant over equity or other capital sources. This shift may imply increased leverage and financial risk, warranting closer scrutiny of liquidity, debt servicing capacity, and the implications for long-term financial stability.

The financial data reveals several notable trends in debt, assets, and leverage ratios over the analyzed periods.

Total Debt

The total debt level remained relatively stable from May 2017 to February 2020, fluctuating slightly around 1,492,000 thousand USD. A significant decrease was observed in August 2020, dropping to approximately 1,190,000 thousand USD, signaling a substantial debt reduction. However, this trend did not sustain as debt levels began to rise again from May 2022, reaching its highest point in the period at approximately 1,730,000 thousand USD by August 2022. This increase suggests renewed borrowing or an accumulation of obligations in the latter periods.

Total Assets

Total assets showed moderate fluctuations across the periods, starting around 6,875,801 thousand USD in May 2017 and peaking near 8,018,988 thousand USD by November 2019. From February 2020 onward, a consistent downward trend is evident, with assets declining sharply, ending at approximately 4,666,639 thousand USD by August 2022. This consistent decrease indicates asset base contraction, which could be attributable to divestitures, depreciation or potential impairments.

Debt to Assets Ratio

The ratio of debt to assets fluctuated within a range of 0.19 to 0.23 through most of the earlier periods, remaining relatively stable and indicating moderate leverage. Notably, this ratio dropped to its lowest value of 0.16 in August 2020, aligning with the observed debt reduction at that time. Post this decline, the debt to assets ratio gradually increased, reaching 0.37 by August 2022. This sharp upward trend in leverage indicates growing financial risk, as debt is rising while asset levels are declining.

Overall, the data suggests a period of moderate stability in debt and asset levels until early 2020, followed by a phase of debt reduction coupled with slight deleveraging. However, from mid-2021 onwards, the company experienced an increase in financial leverage and debt, while its asset base contracted materially. These trends may highlight potential concerns regarding financial stability and capital structure management in the latest periods analyzed.

Total Debt (Including Operating Lease Liability)

The total debt remained relatively stable between May 2017 and March 2019, fluctuating slightly around 1.49 million US$ (in thousands). However, from June 2019 onwards, there was a pronounced and sustained increase in debt levels. The total debt more than doubled in June 2019, reaching over 3.6 million US$ (in thousands), and continued to rise with some fluctuations. After peaking around 4.06 million US$ (in thousands) in February 2020, debt levels experienced some decline but generally remained elevated, staying above 3 million US$ (in thousands) through to August 2022.

Total Assets

Total assets exhibited minor volatility from May 2017 to March 2019, moving within a range of approximately 6.5 to 7.5 million US$ (in thousands). Starting June 2019, assets peaked near 8 million US$ (in thousands) but then displayed a steady decline over subsequent quarters. From May 2020 onwards, total assets consistently decreased, reaching just under 4.7 million US$ (in thousands) by August 2022, indicating a significant reduction in the asset base over this period.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio was stable around 0.20 to 0.22 from May 2017 through March 2019, demonstrating moderate leverage. A sharp increase occurred in June 2019, with the ratio more than doubling to 0.46, reflecting the simultaneous increase in debt and a shrinking asset base. Between June 2019 and August 2022, the ratio showed a generally increasing trend, reaching 0.76 by August 2022. This upward trend indicates a rising reliance on debt financing relative to assets and signals growing financial leverage and potential vulnerability.

Summary of Trends and Insights

The data reveals a marked shift in financial structure starting mid-2019, characterized by a significant increase in total debt coinciding with a decline in total assets. This confluence led to a substantial increase in the debt-to-assets ratio, moving from low leverage levels to a high degree of indebtedness by mid-2022. The rising leverage may suggest increased financial risk and possible challenges in asset management or operational cash flow. The decline in total assets might reflect disposals, impairments, or decreased investments, which, combined with rising debt, warrants careful attention to solvency and liquidity aspects going forward.

The analysis of the quarterly financial data reveals notable trends in total assets, shareholders' equity, and financial leverage over the considered periods.

Total assets

Total assets exhibit fluctuations throughout the timeline. Initially, there is a moderate increase from approximately 6.88 billion US dollars to around 7.54 billion by late 2018. However, from early 2019 onwards, total assets undergo a general downward trend, declining steadily to approximately 4.67 billion US dollars by the last reported quarter. This decline reflects a reduction in resource base over time.

Shareholders’ equity (deficit)

Shareholders’ equity remains relatively stable near 2.7 to 2.9 billion US dollars through mid-2018, followed by a marked decrease beginning in early 2019. The decline accelerates over the subsequent periods, turning into a deficit by the later quarters of 2022, reaching negative values of approximately -577 million US dollars. This trend indicates a deterioration in net worth, suggesting losses exceeding equity contributions or other adjustments impacting equity adversely.

Financial leverage

The financial leverage ratio shows an increasing pattern, especially pronounced from early 2019. Starting around a modest 2.5 ratio, the leverage ratio roughly doubles by 2020 and experiences a sharp spike in recent quarters, peaking above 29 by mid-2022. This sharp rise corresponds with the decreasing equity base, implying the company is increasingly funded by debt relative to equity, thereby elevating financial risk.

Overall, the data depicts a company facing diminishing asset levels and eroding equity, which results in a substantial increase in financial leverage. Such changes suggest heightened financial vulnerability and possibly operational challenges impacting equity and asset retention.

Earnings Before Interest and Tax (EBIT) Trend

The EBIT figures exhibit notable volatility over the observed periods. Initially, EBIT displayed positive values with a peak of 337,103 thousand USD in March 2018, indicating strong operating profitability. Subsequently, from March 2019 onwards, EBIT turned negative and persisted in negative territory throughout the remainder of the periods, reaching significant lows around -460,929 thousand USD in May 2020. This downward trend highlights considerable operational challenges and a sustained period of losses.

Interest Expense, Net Trend

Interest expense remained relatively stable within a narrow range between approximately 13,621 thousand USD and 23,371 thousand USD, without dramatic fluctuations. Despite operational losses, interest expense did not show a corresponding decrease, suggesting that debt levels or interest rates remained steady or potentially increased in some periods.

Interest Coverage Ratio Analysis

The interest coverage ratio, defined as EBIT divided by interest expense, declined sharply throughout the timeline. Starting at a favorable level above 15 in May 2017, it steadily decreased to below 8 by late 2018, and then sharply into negative territory from early 2019 onwards. This negative ratio, reaching as low as -14.12 and even lower values in subsequent quarters, signals that EBIT was insufficient to cover interest expenses, indicating heightened financial distress and weakened ability to service debt obligations.

Overall Financial Health Observation

The data reveals a clear deterioration in operational profitability beginning in 2019, coinciding with persistent negative EBIT and negative interest coverage ratios. The steady interest expenses juxtaposed against declining earnings suggest growing pressure on financial sustainability. These trends collectively point to increased risk associated with meeting debt service requirements and potential liquidity concerns during the latter half of the observed time frame.