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Bed Bath & Beyond is being accused of turning off air conditioning in stores in order to cut costs while the retailer struggles with a significant drop in sales.
Bank of America analysts visited the Bed Bath & Beyond stores and reported that the air conditioning had been turned off to make up for the loss of revenue.
The report also said the household product chain had cut employee hours, reduced store hours, canceled remodeling projects and replaced rewards programs.
“Based on our in-store visits, we believe Bed Bath & Beyond is trying to quickly reduce costs to align costs with [sales] decreases, ”the Bank of America report said.
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Bed Bath and Beyond (iStock / iStock)
Some stores have recently been forced to close operations, and analysts predict that the retailer will soon announce even more closures.
But Bed Bath & Beyond denies allegations that it instructed stores to cut utilities.
“We have been contacted about this report and, to be clear, no Bed Bath & Beyond store was ordered to adjust the air conditioning and there have been no changes in corporate policy regarding the use of utilities, ”the company told the New York Post. .
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Bed Bath and Store Sign Beyond (iStock / iStock)
Bed Bath & Beyond reported in April that sales fell 22% in the fourth quarter of fiscal year 2021 which ended in late February. CEO Mark Tritton attributed the downtime to certain products not being available due to supply chain problems, which he says caused a loss of sales of about $ 175 million during that period.
Analysts do not believe there will be improvements when the company releases its first-quarter 2022 results, which will be released on Wednesday. Bank of America analysts expect sales to fall 20% more this quarter.
“The company has performed poorly in the industry and we think there are consensus estimates [of an 18% drop in sales] it can be optimistic, ”Bank of America analysts wrote.
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People pass by a Bed Bath & Beyond store on October 1, 2021 in the Tribeca neighborhood of New York City. (Michael M. Santiago / Getty Images / Getty Images)
Other analysts are also not optimistic about the company’s results this quarter.
“It’s no wonder they can look for incremental ways to save money, because sales trends aren’t going in their favor,” M Science analyst John Tomlinson said, according to the Post. “Our data looks pretty negative” for the company and “people clearly expect sales to be weak tomorrow.”
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In addition to the firestorm, two Bed Bath & Beyond financial executives, chief accounting officer John Barressi and senior financial planning vice president Heather Plutino, have recently resigned.