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Total buyback spend across 14 fiscal years: roughly **$9.55 billion**.
Early on this was a legitimately strong retailer. Gross margins in the low-to-mid 40s, operating margins in the mid-teens, an Altman Z-Score sitting well above **5**, deep in the safe zone.
Then two things happened at once. Long-term debt shows up on the balance sheet for the first time in the quarter ended August 2014, at **$1.5 billion**. That's the same fiscal year the company spent a record **$2.25 billion** on buybacks. Gross margin had already been sliding about a point a year since 2010. The company started borrowing to keep the buyback pace going in the exact year it hit its highest spend ever.
Here's the year-by-year, buyback spend against total shareholders' equity:
* FY2010: **$95M** buyback, equity \~**$3.65B** (start of the window)
* FY2015: **$2.25B** buyback, the peak year, equity still solidly positive (same year debt first shows up)
* FY2019: **$148M** buyback, equity positive but thin, operating margin turns negative for the first time at **-0.7%**
* FY2021: **$332.5M** buyback, equity **$1.28B**
* FY2022: **$589.4M** buyback, equity **$174M**
* Q1 FY2023, May 2022: **$43.0M** buyback, equity **-$220M** (first negative-equity quarter)
* FY2023 final quarter: **$219K** buyback, equity **-$2.80B** (buybacks essentially stopped) By the time operating margin first went negative in February 2019, the company had already spent a cumulative **$8.58 billion** buying back stock. Buybacks slowed after that but never actually stopped. **$1.10B** in FY2016, then **$547M**, then **$252M**, then **$148M** by FY2019, dropping every year but never to zero.
In May 2022, equity had just crossed negative for the first time in the company's history and operating margin was **-9.1%** and getting worse. The board still authorized **$43 million** in repurchases that same quarter. Within one more quarter the Altman Z-Score, which had sat above 5.0 for most of the company's history, dropped to **3.44**.
Basic shares outstanding had fallen from **257.8 million** to **79.6 million** over the buyback era, a **69%** reduction. In the final two quarters, share count went the other way, up to **90.7 million** then **97.1 million**, as the company started issuing new stock just to raise cash. A program built to return capital to shareholders ended by diluting the same shareholders to survive a few more months.
Bed Bath & Beyond's real problem was a retail business getting outcompeted by Amazon and hit hard by the pandemic. **$9.55 billion** over 13 years also isn't obviously reckless for a company that size, plenty of healthy retailers run buyback programs of similar scale relative to revenue without going bankrupt. The buybacks didn't cause the collapse. What they did was remove the cash cushion that might have bought the company another year or two to actually fix the business, right when the business most needed it.