Amid increased worries on Wall Street about Bed Bath & Beyond’s (NASDAQ:BBBY) ability to pay its bills, the beleaguered retailer is slated to hold a post-earnings conference call on Thursday, Sept. 29. When analyzing the call, the owners of BBBY stock should assess the retailer’s financial condition, the chances that it will have to issue more shares of its stock, any news about the state of its business, and its forecasts for the holiday shopping season.

BBBY Stock and Financial Issues

On Aug. 31, the retailer announced that it would eliminate “a third of its owned brands” lay off 20% of the employees in its “corporate and supply chain” divisions and close 150 of its top stores. Bed, Bath, and Beyond also disclosed that it had obtained access to an additional $500 million.

Despite these steps, multiple Wall Street analysts expressed concerns about the company’s solvency.

For example, on Sept. 1, S&P Global lowered its rating on BBBY’s “senior unsecured notes to “CCC-” from “CCC.” The firm warned that the retailer’s ability to pay off the notes had declined “given [its] greater amount of priority debt.”

S&P now believes that Bed, Bath & Beyond’s ability to redeem the unsecured notes fully is “modest… in the event of a default.” The firm added that “we believe BBBY’s turn-around prospects remain very weak based on its ongoing cash burn, unfavorable macroeconomic conditions, and our view that its vendor relationships could be strained.”

Similarly, on Sept. 1, Bank of America cut its price target on BBY stock to $2 from $2.40, as the firm thinks that the company’s cash burn rate could increase if the retailer’s vendors impose more unfavorable payment terms on it.

Given these warnings, investors should watch for any indications during Thursday’s call that the retailer’s cash burn rate is increasing or that it needs to sell additional shares of BBBY stock. If the company is experiencing these issues, BBBY stock could decline further in the short term, and the company could declare bankruptcy in the long term.

Bed, Bath and Beyond’s Business and Its Outlook for the Holiday Season

The retailer may reveal news about the past performance of its business and indications as to how it expects to perform during the upcoming holiday shopping season.

On a positive note, another prominent retailer, Costco (NASDAQ:COST), recently reported stronger-than-expected fiscal fourth-quarter results, indicating that U.S.  consumer spending may be healthier than some fear. Additionally, investment bank Jefferies wrote that COST had “called out recent improvements in inflation and the supply chain” during its earnings conference call.

Also encouragingly, Macy’s (NYSE:M) today stated that it intends to “hire… more than 41,000 full- and part-time seasonal positions for the upcoming holiday season” and noted that the number of new employees it is looking to recruit for the holidays will be close to that of previous years.

On the publication date, Larry Ramer did not have (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.