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Why Bed Bath & Beyond Stock Gained 47% in April

By Demitri Kalogeropoulos – May 7, 2020 at 8:00AM

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Shares recovered a small portion of recent losses last month.

What happened

Bed Bath & Beyond (BBBY 1.80%) stock outperformed a strong market last month by gaining 47% compared to a 13% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally only erased a portion of shareholders' recent losses, as the stock is still down by over 65% so far in 2020.

A man delivering packages.

Image source: Getty Images.

So what

Most of the specialty retailer's stores were closed last month due to COVID-19 containment measures. But the company still shared some encouraging news with investors, including the fact that online sales are booming and that cash savings have grown to $1.4 billion in recent weeks. Those factors, plus the soaring broader market, helped the stock recover slightly in April.

Now what

Bed Bath & Beyond remains a risky stock. Its business was struggling before the pandemic hit and it's far from clear that the company will emerge from the crisis without sacrificing a significant part of its physical selling footprint.

The retailer's rising e-commerce demand confirms that it has many loyal customers and a strong merchandising strategy. Yet investors may want to follow the next few earnings reports for signs of a rebound before jumping into this consumer stock.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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