(Bloomberg) -- Bed Bath & Beyond Inc.’s new chief executive officer went to a well established play for new corporate leaders: Get the bad news out of the way right away and set expectations low.
The shares plunged 12% to $14.65 in early trading Thursday after the U.S. retailer withdrew its financial guidance following another quarter of declining sales. CEO Mark Tritton, whose recent hiring from retail stalwart Target Corp. was celebrated by investors, said that the “unsatisfactory” performance at Bed Bath & Beyond “underscores the imperative for change.”
On a conference call with analysts late Wednesday, the CEO said he’ll be back in the spring with a turnaround plan.
Same-store sales, a key measure for retailers, fell 8.3% in the fiscal third quarter that ended early December, the 11th consecutive decline. That was a deeper slide than the 4.9% drop anticipated by analysts, according to Consensus Metrix.
Profit and sales will remain under pressure in the current quarter, Bed Bath & Beyond said in a statement. In pulling the full-year outlook, Tritton is clearing the deck as he crafts plans to reverse the retailer’s lengthy sales slump. The company has struggled to draw shoppers amid a barrage of competition from online retailers, discounters and big-box stores.
Early data on the holiday shopping season this week indicated that some mall-based and traditional retailers are losing ground despite robust growth in consumer spending. Macy’s Inc., Kohl’s Corp., J.C. Penney Co. and L Brands Inc. all posted declines in same-store sales.
On his call with analysts, Tritton said Bed Bath & Beyond had troubles with inventories, uncompetitive prices and a lack of convenience for digital-savvy shoppers.
Employees still have a favorable impression of the brand, he added. This “demonstrates that Bed Bath & Beyond is still a well-loved, well-known brand with tremendous opportunity to grow share within a $51 billion U.S. market for the home-related
The shares had gained more than 50% last year -- almost double the advance of the S&P 500 Index. Gains accelerated in October after the company announced Tritton would take over as CEO.
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