Bed Bath & Beyond replaces CEO Mark Tritton
Decision comes as retailer's quarterly results came in worse than expected
Sound Planning Group CEO David Stryzewski warns about the 'early innings' of low consumer confidence.
Bed Bath & Beyond CEO Mark Tritton has exited his roles at the retailer and its board of directors.
Independent board director Sue Gove will replace Tritton on an interim basis, while the firm Russell Reynolds has been tapped to lead the search for a permanent chief executive.
| Ticker | Security | Last | Change | Change % |
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| BBBY | NO DATA AVAILABLE | - | - | - |
Additionally, Mara Sirhal, Bed Bath & Beyond's general merchandise manager of health, beauty and consumables, has been named chief merchandising officer. She replaces Joe Hartsig, who is leaving the company.
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Since taking the reins of Bed Bath & Beyond in 2019, Tritton has led the company's transformation strategy, which has included remodeling stores, closing underperforming stores and introducing a private label line called Owned Brands. However, the efforts have not been enough to turn the company's struggling business around.
In the first quarter of 2022, Bed Bath & Beyond’s net loss widened to $358 million, or $4.49 per share, from $51 million, or 48 cents per share, a year ago. On an adjusted basis, the company’s net loss was $2.83 per share. Meanwhile, sales fell to $1.46 billion from $1.95 billion a year earlier. Total comparable sales for the quarter plunged 23% year over year. The Bed Bath & Beyond banner's comparable sales dropped 27%, while buybuy BABY comparable sales saw a decline in the mid-single digits.
The company attributed the results to rising inflation, a rapid shift in consumer spending patterns and declining demand in its Home sector.
"Bed, Bath and Beyond is facing a difficult macro environment. However, even during these periods of industry-wide challenge, our shareholders, associates, customers and partners all expect more from us," Gove told analysts and investors on Wednesday. "We must deliver better results. We have products that are positioned to meet needs for customers across important and resilient categories, and we have identified areas of focus in which we can improve our offerings and brand need better balance to what our customer wants."
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Bed Bath & Beyond has been facing pressure from Chewy co-founder and GameStop Chairman Ryan Cohen, who purchased a 9.8% stake in the company in March through his firm RC Ventures.
In a letter disclosing the stake, Cohen criticized top executives' pay and called on the company to "narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating buybuy BABY, Inc. and a full sale of the Company."
Bed Bath & Beyond agreed to add new independent directors to its board and explore strategic alternatives for the company’s buyBuy Baby business.
On Wednesday, the board said that its strategy committee continues to work to properly assess the inherent value potential of the buybuy Baby brand. It identified several strategies to "further increase the synergies and compelling growth potential to be unlocked within Bed Bath & Beyond Inc.," including focusing on its registry program and improving its digital platform.
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In the near term, Gove said the company's focus would be on driving traffic to its stores and digital platforms and prioritizing how it serves customers to recapture market share. The company expects same-store sales to recover in the second half of the fiscal year, but did not offer a specific forecast.
Over the long-term, the focus will be on stabilizing its supply chain, reducing costs, lowering inventory and strengthening its balance sheet. Bed Bath & Beyond Chief Financial Officer Gustavo Arnal said the company would reduce its planned capital expenditures by a minimum of $100 million to approximately $300 million in fiscal 2022. The company has also retained Berkeley Research Group (BRG), a leading retail advisory firm, to focus on cash, inventory and balance sheet optimization.
Gove also teased that a potential sale of the buybuy Baby business remains an option on the table.
"The business is a very attractive business, and we're not alone in appreciating its value," she said. "We know there is interest and the strategy committee has done a great deal of work to date on evaluating the potential of the business."
As of publication time, Bed Bath & Beyond shares are down approximately 66% year to date.