Bed Bath & Beyond announced its CEO, Mark Tritton, was stepping down on June 29. The news came following missed earnings and in an effort to focus “on reversing recent results, addressing supply chain and inventory, and strengthening its balance sheet,” the company said in a press release.
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Sue Gove, board member and chair of the board’s strategy committee, has been named interim CEO, replacing Tritton — who also vacated his position on the board.
Shares of the company were down 13.3% in pre-market trading on June 29 and are down 56.9% year-to-date.
“Today’s actions address company performance, the macroeconomic conditions under which we are operating, and the expectations of the Board on behalf of shareholders,” board member Harriet Edelman said in the release. “We are committed to addressing the urgent issues that have been impacting sales, profitability, and cash flow generation.”
For its first-quarter earnings, the company reported net sales of $1.46 billion — a whopping 25% decline from a year earlier — according to the earnings report. It also reported a net loss of $358 million, a huge increase from the $51 million loss reported a year earlier.
The company, a meme stock darling during the early days of the pandemic, has been struggling for a while. In March, GameStop chair and Chewy co-founder Ryan Cohen revealed his company, RC Ventures, held a 9.8% share of Bed Bath & Beyond. Cohen penned a letter to Bed Bath & Beyond’s board at that time, advising several necessary and significant operational changes — including a potential full sale of the company.
Cohen also noted at the time that almost two-and-a-half years into Tritton’s tenure, Bed Bath had underperformed the S&P Retail Select Industry Index by more than 58% on an absolute basis and was looking at an approximately 29% decline in full-year sales from pre-pandemic levels.
Experts Skeptical on Bed Bath & Beyond’s Performance Metrics
Peter Cohan, a senior lecturer at Babson College, told GOBankingRates that “just because meme-meister Ryan Cohen owns 10% of a company’s stock, it does not make it a good investment. As I wrote in ‘Goliath Strikes Back’ Bed Bath & Beyond has long suffered from management that did not adapt to change.”
Cohan added that its latest management team was too slow to react to a very rapid shift in consumer behavior between 2021 and 2022.
“Last year, consumers were still buying furniture, consumer electronics, and other products to make their nests more comfortable. In 2022, people are getting out, flying around the world, going to restaurants or — if they are not high-income — just trying to afford gasoline and food,” Cohan said, adding that what they are not doing is buying the stuff that “is cluttering Bed Bath & Beyond’s inventory.”
“The company surely needs help with basic supply chain blocking and tackling — but that will not fix its more fundamental problem, which is that in an inflationary environment with rising interest rates and a growing risk of recession, it will be years before there is strong demand growth for Bed Bath & Beyond’s product line… Since its April 2021 pandemic high, the stock has lost 90% of its value — will it lose its remaining $5?”
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