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New Bed Bath & Beyond CEO: 'We are hungry for change'

Brian Sozzi

We imagine new Bed Bath & Beyond CEO Mark Tritton hasn’t gotten much sleep since he assumed the top spot at the struggling home furnishings retailer about 100 days ago.

“I am actually sleeping, and I am prioritizing that to make sure I am fresh and focused. It’s really important to build your resilience in these times, especially when I am drinking from a firehose and laying the foundation and making some big critical decisions about how we stabilize and grow our business,” Tritton told Yahoo Finance Tuesday evening in one of his first interviews since taking over. “I am staying resilient and focused, and using every tool in my toolkit.”

Certainly one can’t blame Tritton if sleep is the last thing on his mind at the moment.

Tritton has been non-stop at Bed Bath & Beyond (BBBY) pretty much since walking in the door after a successful stint in the C-suite at discounter Target. Tritton is credited by many on Wall Street as helping to craft Target’s successful turnaround plan, working hand in glove with current chairman CEO Brian Cornell.

Tritton’s first big move at Bed Bath & Beyond was to part ways with six long-time executives in one press release. It’s the type of house cleaning this former retail stock analyst has never seen before, but reflective of the years of poor execution in stores and online at Bed Bath & Beyond (and plunging stock price).

“When I came in there was very congealed thinking, there was no agility and no action. There were some real burning platforms that needed to be addressed,” Tritton explained, referring to the headline-grabbing leadership shakeup.

While deciding on who to keep in the C-suite, Tritton was also evaluating the company’s portfolio of assets with an eye on divesting non-core operations to raise cash to support a turnaround. For years, Wall Street has wondered why Bed Bath & Beyond operated a highly seasonal business such as Christmas Tree Shops. A portfolio evaluation is a hard gig for any retailer, but especially one like Bed Bath & Beyond that lists only two executives on the investor relations page — Tritton and CFO Robyn D’Elia.

NEW YORK, NY - SEPTEMBER 09: Mark Tritton and Imran Amed speak at the #BoF500 party during New York Fashion Week Spring/Summer 2018 at Public Hotel on September 9, 2017 in New York City. (Photo by Cindy Ord/Getty Images for The Business of Fashion)

Tritton told Yahoo Finance he has been relying on consultants Bed Bath & Beyond hired before his arrival to assess the business and some strong employees that had been at the company. Goldman Sachs has been tapped to shop non-strategic assets, Tritton said.

Tritton said he is nearing the end of his executive search and plans to make announcements in the coming weeks.

The lack of an executive team hasn’t stopped Tritton from starting to take some shareholder-friendly action.

A few strategic moves

Tritton orchestrated a sale leaseback transaction on January 6 with Oak Street Real Estate Capital for 2.1 million square feet of commercial real estate. The deal netted Bed Bath & Beyond $250 million.

And then today, Tritton returned with some more positive news. Bed Bath & Beyond said earlier it sold PersonalizationMall.com to 1-800 Flowers for a cool $250 million. Considering most on Wall Street had never even heard of this asset, the $250 million was a nice win.

After the market close, Tritton revealed a $1 billion capital return program. For 2020, Bed Bath & Beyond expects $600 million in total spending on share repurchases, dividends and debt reduction. Another $350 million to $400 million will be set aside for capital expenditures, or investments in technology projects and supply chain improvements.

That’s not to say Tritton hasn’t been the bearer of bad news early in his tenure. Wall Street has given Tritton a pass by and large as subpar sales reflect the lack of action by now ousted executives. But it has still been tough on the eyes.

On January 8, Bed Bath & Beyond revealed a challenging third quarter.

Come February 11, Bed Bath & Beyond’s stock plunged 25% on the disclosure that the holiday shopping season was far worse than feared. The period marked the ninth straight quarter of same-store sales declines. Wall Street fretted a turnaround under Tritton would take longer than expected.

“Shares could remain range-bound over the next few months as investors balance announcements of strategic actions with a continued deterioration in fundamentals and limited visibility,” wrote Jefferies analyst Jonathan Matuszewski in a note to clients. He rates the stock a Hold with an $11 price target.

All in all, a heck of a four-month stretch for Tritton.

“We are hungry for change,” Tritton said. Bed Bath & Beyond shareholders would echo that.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET or on Verizon FIOS channel 604. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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