Dominion Energy Inc
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Utilities : Multi-Utilities | Large Cap Value
Company profile

Dominion Energy, Inc. is a producer and distributor of energy. is focused on providing electricity, natural gas and related services to customers, primarily in the eastern and Rocky Mountain regions of the United States. The Company's segments include Dominion Energy Virginia, Gas Distribution, Dominion Energy South Carolina, and Contracted Assets. Its portfolio of assets includes approximately 30.2 gigawatt (GW) of electric generating capacity, 10,700 miles of electric transmission lines, 78,000 miles of electric distribution lines and 95,700 miles of gas distribution mains and related service facilities, which are supported by 6,000 miles of gas transmission, gathering and storage pipeline. It operates in around 13 states. The Company's operations are conducted through various subsidiaries, including Virginia Electric and Power Company (Virginia Power). Its operations also include Dominion Energy South Carolina, Inc. (DESC).

Closing Price
$59.77
Day's Change
-0.85 (-1.40%)
Bid
--
Ask
--
B/A Size
--
Day's High
60.26
Day's Low
59.44
Volume
(Light)
Volume:
3,895,453

10-day average volume:
5,718,103
3,895,453

Bed Bath & Beyond's Q2 results 'indefensible', says Wells Fargo analyst

8:17 am ET September 30, 2022 (MarketWatch)
Print

By James Rogers

Bed Bath & Beyond "has a lot of wood to chop to improve underlying trends," according to Wells Fargo analyst Zachary Fadem

Bed Bath & Beyond reported a much wider-than-expected second quarter loss before the stock market opened on Thursday, but also gave an improved inventory outlook and projected breakeven operating cash flow by the end of fiscal 2022.

Shares of the home goods retailer and meme stock darling seesawed into negative trading territory and were down 5.7% by early afternoon. Bed Bath & Beyond Inc.'s (BBBY) shares are down 58.2% this year, outpacing the S&P 500 Index's decline of 23.6%.

Bed Bath & Beyond stock skyrocketed earlier this year but was hit hard last month after activist investor and GameStop Corp. (GME) Chairman Ryan Cohen disclosed he is selling a large stake in the company.

See Now: Bed Bath & Beyond stock bounces back after another wider-than-expected loss but improved inventory outlook

As part of a turnaround plan, Bed Bath & Beyond gave a strategic update last month that included workforce cuts and store closures. At that time, the company also provided a financial update for its second quarter.

"While BBBY's Q2 update was well-telegraphed, the results were indefensible," wrote Wells Fargo analyst Zachary Fadem, in a note released on Thursday, pointing to the company's sales, which declined 28% year-over-year, and cash burn of $320.5 million during the quarter. "Needless to say, the company has a lot of wood to chop to improve underlying trends (which are tracking 'similar' in early-Q3), flatten the FCF burn and fill the unfortunate void of its lost CFO."

Earlier this month the company's CFO Gustavo Arnal leapt to his death from a New York skyscraper, marking the latest chapter in a turbulent period for the troubled retailer and meme stock phenomenon.

See Now: Bed Bath & Beyond stock sinks after Ryan Cohen discloses plan to unload stake; cash remains a worry, say analysts

In June Mark Tritton was ousted as Bed Bath & Beyond's CEO after less than three years in the role. Triton's attempts to breathe new life into the ailing company were hit by supply chain disruptions, labor shortages, inflation, and the COVID-19 pandemic, Carol Spieckerman, president of retail advisory firm Spieckerman Retail, told MarketWatch at the time.

Wells Fargo's Fadem also pointed to Bed Bath & Beyond's steeper-than-expected gross margin declines and the prospect of additional headwinds in the second half of the year as older inventory is cleared and replaced by national brands. This, he wrote, will likely exacerbate recent free cash flow pressures.

"On a positive note, new initiatives (Welcome Rewards, new merchandise and simply saying 'hello' to customers) are seemingly resonating," he wrote, but added that restructuring efforts are clearly warranted.

See Now: Bed Bath & Beyond's turnaround plan leaves 'questions that have really not been answered to any degree'

With share losses growing, a likely $900 million of cash burn in fiscal year 2022, and an increasingly challenging home goods landscape, Wells Fargo reiterated its Bed Bath & Beyond underweight rating.

In a statement released on Thursday Bed Bath & Beyond Interim CEO Sue Gove said that the retailer is heading in the right direction. "Although still very early, we are seeing signs of continued progress as merchandising and inventory changes begin," she wrote. "For example, we have seen positive sales trends where in-stock positions and visual merchandising have improved."

Gove also pointed to the company's Welcome Rewards program, which has expanded its membership by more than 1.3 million since the end of August. The program, which was launched this summer, now has 6.4 million members. "Enrolled members represent more frequent purchases and higher transaction values across all three banners," she wrote.

See Now: Is the golden age of the meme stock rally over?

"Our buybuy BABY business continues to hold market share relative to other mass market retailers in today's highly competitive environment," Gove added. "We are enhancing our capabilities while leveraging Welcome Rewards, such as the relaunch of our Baby registry business later this fiscal year, increasing the effectiveness of marketing investments, and realizing the strategic shift of our merchandise assortment which had minimal impact in this quarter, all targeted to drive customers and top-line growth."

Bed Bath & Beyond is also considering liability management transactions with particular focus on 2024 bonds, the company said.

Of 17 analysts surveyed by FactSet, five have a hold rating for Bed Bath & Beyond, while 12 have an underweight or sell rating.

-James Rogers

	

(END) Dow Jones Newswires

September 30, 2022 08:17 ET (12:17 GMT)

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