turnaround

Bed Bath & Beyond turnaround under way, but analysts say outside forces are also giving the company a boost

Tonya Garcia

Bed Bath & Beyond Inc. is reaping the rewards of an ongoing turnaround, but analysts say the company is also getting a boost from a coronavirus-impacted environment that has been favorable to the home space.

Bed Bath & Beyond (BBBY) shares are soaring after second-quarter earnings beat expectations, with the company reporting the first same-store sales increase since 2016 (link). Shares were up nearly 9% in Friday trading, and have rallied more than 40% for the week.

Many research groups have raised their price target on Bed Bath & Beyond shares.

But UBS says the results need to be put in the context of a strong home furnishings category.

“It’s clear to us that the rising tide is lifting all boats,” analysts led by Michael Lasser wrote. “However, Bed Bath & Beyond also executed more effectively to take advantage of this tailwind.”

Read: Amazon will host its delayed Prime Day shopping event on Oct. 13 and 14 (link)

UBS rates Bed Bath & Beyond shares neutral with a $20 price target, up from $13.

“While we are impressed by the progress made, clearly the environment is helping with many of Bed Bath & Beyond’s key categories,” wrote JPMorgan analysts in a note. “This suggests ongoing share loss and there remains a lot of work to fix the company’s operating foundation while the COVID-induced nesting lap looms. As such, we remain neutral.”

JPMorgan moved its price target to $21 from $10.

Prior to the earnings announcement, retailers across the home design, home goods, and home improvement space were experiencing high demand from consumers who are spending more time in their houses due to the pandemic.

Watch: Why retail bankruptcies won’t necessarily create a ‘retail apocalypse’ (link)

RH (RH) was upgraded last week (link) on analyst expectation that high-end home

Continue Reading

What daunting task? New chief takes Logan’s turnaround in stride

Photo courtesy of Logan’s Roadhouse

For a good chunk of his 25-plus years in the restaurant business, Jim Mazany has been the handyman who’s dispatched to get a casual chain humming again. He did it with Joe’s Crab Shack and a sizeable piece of TGI Friday’s. Maybe that’s why he sizes up his new and likely stiffest challenge, restoking the fire of Logan’s Steakhouse and Old Chicago Pizza & Taphouse, with the verbal equivalent of a shrug.

Mazany has just been named CEO of SPB Hospitality, the investment company that bought Logan’s Roadhouse and Old Chicago out of bankruptcy in late spring. The brands were among the earliest high-profile victims of the pandemic, a result of operating under what the bankruptcy court overseeing the concepts at the time might have termed pre-existing conditions. Not long after COVID-19 arrived on the coasts, SPB’s predecessor company announced that it would  “mothball” both chains and their sister brewpub concepts, some 261 restaurants in all at the time, because it had no cash or access to liquidity.

The blackeye deepened when reports surfaced of employees learning of the shutdowns from the news coverage that followed. A mother reached out to Restaurant Business to verify that her son was out of a job, out of a paycheck and even out of a contact person at that predecessor company, CraftWorks Holdings.  It was not a Churchill-like moment of leadership. And it looked even worse when the company alerted the furloughed employees that they had been fired and their benefits had been stopped.

To make matters worse, the CEO and CFO of CraftWorks forwarded $7 million in collected sales taxes to state collectors as usual before April 1, as if the world hadn’t been turned upside down and tax moratoriums proposed. When the bankruptcy court discovered that

Continue Reading