$Bed Bath & Beyond Inc (BBBY.US)$ shares have fallen back to Earth following a short-squeeze induced rally in mid-August. The struggling retailer will have a chance to show that operations are improving when it reports earnings later this week.

What To Know: Retail excitement around the home furnishings company really picked up when GameStop chairman Ryan Cohen purchased a stake in Bed Bath & Beyond in March.

Near the beginning of August, Bed Bath & Beyond shares began surging alongside GameStop Corp (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) as retail traders highlighted high short interest in the names across social media platforms. The stock really took off when traders began circling a regulatory filing from Cohen showing he was still holding out-of-the-money call options.

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A day later, a separate SEC filing from Cohen's firm RC Ventures showed intent to sell his stake in the struggling retailer and sent the stock spiraling lower, which raised some eyebrows.

Cohen's Bed Bath & Beyond stake ended up generating profits of more than $68 million in just over six months.

Why It Matters: Following Cohen's departure, Bed Bath & Beyond implemented strategic changes in an effort to strengthen its balance sheet, including cost reductions expected to reduce 2022 expenses by $250 million and the closing of approximately 150 stores.

Investors should get a read on how the company's strategic plans are taking shape when Bed Bath & Beyond reports its second-quarter financial results before the market open on Thursday.

Bed Bath & Beyond is expected to report a net loss of $1.80 per share on quarterly revenue of $1.45 billion, according to Benzinga Pro.

Telsey Advisory Group analyst Cristina Fernandez reiterated Bed Bath & Beyond with an Underperform rating last week, citing September store data showing a year-over-year decline in foot traffic. The analyst expects inventory levels to be up about 11% and noted that there may be a need for an additional cash raise.

BBBY Price Action: Bed Bath & Beyond has a 52-week high of $30.06 and a 52-week low of $4.38.

The stock was down 1.81% at $6.48 Tuesday afternoon.

Photo: JJBers from Flickr.