In this segment from the Motley Fool Money podcast, host Chris Hill and Fool senior analysts David Kretzmann, Seth Jayson, and Jason Moser try to find bright spots in the situation of troubled retailer Bed Bath & Beyond (NASDAQ:BBBY), and there aren't many. The company is generating reasonable free cash flow, but the Fools find many of the choices made by management inexplicable. Plus, its competitors are growing stronger, all of which leaves them with little room for optimism about this company.

A full transcript follows the video.

This video was recorded on Sept. 28, 2018.

Chris Hill: Shares of Bed Bath & Beyond hit an 18-year low this week after a dreadful second-quarter report. Jason, for all of its struggles, Bed Bath & Beyond is still a much bigger retailer than Sears.

Jason Moser: I mean, that's the Beyond, right? We can't really quantify it, and that's probably what's getting it a little bit of credit today. I think, unfortunately, the bottom line, there is no magic bullet for these guys. There's no obvious catalyst that turns this story around. When was the last time you went to a Bed Bath & Beyond, out of curiosity?

Hill: Years.

Moser: Right? I can't remember, either. I don't even know where one is at this point.

Seth Jayson: It's in a strip mall somewhere.

Moser: Exactly. Can the concept continue to exist? Of course it will. Would I invest in it? Never. Never, never, never. I think we're going to continue to see sales remain challenged. We'll see a stagnating store base. They'll start shutting down stores in order to streamline.

It feels like management is chasing their own falling knife here, too, which is just confounding. Since 2012, they spent around $7.5 billion on share repurchases. Throughout that entire time, it's like that Price Is Right game, where the guy climbs up to the mountain and gets up to the very top, and the person overbids and the guy falls off the mountain. That's what their stock price looks like since around then.

The balance sheet, being in a net debt position, there's really not a lot to like about this situation right now. Perhaps one day, we'll have something positive to discuss with these guys. But I don't think this quarter is it.

David Kretzmann: The worst part of all is that they actually went into debt to fund those share repurchases. What baffles me is, the company is actually producing a decent amount of free cash flow, but they aren't using any of that to pay back debt. You see so many retailers -- Toys R Us, it wasn't operational issues that caused Toys R Us to go bankrupt. It was the massive amount of debt that the company amassed. I think if you are a retailer generating free cash flow, you have to pay down the debt so you do have more flexibility down the road.

Jayson: Are they just getting killed by online sales? What's their response to this? I haven't looked at these folks for 10 years, probably.

Moser: They actually have tried to develop an Amazon Prime-like subscription. As I understand, it's still in beta form. I just can't imagine, at this point, they can make a whole lot of inroads there, given the popularity with Amazon's Prime, not to mention Wayfair and what it's done in such a short amount of time.

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