Executive Reshuffle
For the store operator, a comprehensive transformation is the need of the hour, considering the chaotic system of stores operating without proper order or direction. As a potential solution, the company reportedly pursued its sale at one point. As of now, efforts are on to streamline operations and get rid of under-performing ancillary businesses.
Recovery Hope
But, the question is whether these initiatives would be helpful in achieving a turnaround. It needs to be noted that the company went through one of its worst phases at a time when the retail sector as a whole was doing quite well, aided by strong consumer spending. The fact that Bed Bath & Beyond has not been able to take advantage of the holiday season might dampen the market’s sentiment further.
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Obviously, a long-term program is needed to put the retailer back on track – a strategy focused on leveraging the company’s brand value, which is still intact, and its healthy cash flow. Tritton, who is a former executive of Target Corp. (TGT), might seek to include more private-label brands in Bed Bath & Beyond’s merchandise.
Mixed Q2
Meanwhile, the New Jersey-based big-box retailer reported better-than-expected adjusted earnings of $0.34 per share for the second quarter. Revenues declined 7% and missed the Street view as comparable sales dropped 6.7%.
Also Read: Bed Bath & Beyond Q2 2019 Earnings Call Transcript
Shares of the company plunged to a multi-year low mid-August, after falling steadily over the past several years. Surprisingly, they regained strength since then and crossed the $15-mark this month. It needs to be seen whether the positive momentum will be carried forward into the next year.