Bed Bath & Beyond (NASDAQ:BBBY) stock opened lower by over 14% following the death of CFO Gustavo Arnal. The CFO first joined the company in May of 2020 and had previously served roles for Walgreens Boots Alliance (NASDAQ:WBA) and Procter & Gamble (NYSE:PG).
A former colleague of Arnal added:
Our memory of Gustavo is of a great professional and a happy family man, very devoted to his lovely family. He was a very smart ‘work hard play hard’ man, always ready to share his energy and smiles with the people around him, both in the office and outside.
The tragic incident only adds more pressure to BBBY stock. Shares of the struggling retailer are down over 45% year-to-date.
BBBY Stock Falls Following Death of CFO Gustavo Arnal
Chief accounting officer (CAO) Lauren Crossen will step up as interim CFO while the company searches for a permanent replacement. Crossen will still continue to hold her role as CAO.
Arnal’s death follows the announcement of Bed Bath’s restructuring plan earlier this month. The company announced that it would lay off about 20% of its staff, close 150 of its “lower-producing” stores out of 955 total stores, and focus less on in-house brands. In addition, Bed Bath is preparing to offer 12 million shares in an at-the-market (ATM) offering in an attempt to boost liquidity. The shares would represent about 15% of BBBY shares currently outstanding.
As rumored earlier, Bed Bath will also receive a $375 million first-in-last-out (FILO) loan from Sixth Street Partners. In the past, Sixth Street has provided loans to other distressed companies, such as J.C. Penney. Bed Bath also increased its asset-backed revolving credit facility to $1.13 billion, bolstering its new financing to a total of $500 million.
Meanwhile, there is speculation that Bed Bath may file for Chapter 11 bankruptcy soon. Restructuring expert Drew McManigle believes that the new financing won’t be enough to lift the company out of its hole and that Bed Bath should have announced restructuring plans earlier.
Finally, guidance for the second quarter was disclosed. For Q2, net sales are expected to be $1.45 billion, falling short of the estimated $1.52 billion. Meanwhile, same-store sales are expected to fall 26% year-over-year, greater than the expectation for a decline of 20.7%. The company has confirmed that it will report Q2 earnings on Sept. 29.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.