Bed Bath & Beyond (BBBY) CEO Mark Tritton continues to pour dirt on the company’s challenged operational past.
“We are drawing a line of demarcation with the past,” Tritton told Yahoo Finance’s The First Trade.
Now he just has to convince more folks on Wall Street there is no returning to that past.
After a year spent cleaning up the major failings of prior management, Tritton unveiled his playbook on how he will reinvent the home furnishings retailer at an investor conference Wednesday. The company plans to invest $1 billion to $1.5 billion in the business over the next three years. During that stretch, Tritton will earmark $250 million to remodel some 60% of Bed Bath & Beyond stores. The rest of the funds will be split between improvements to e-commerce technology and the supply chain.
Tritton — credited with bringing new profit-boosting private label brands during his stint at Target — plans to do the same at Bed Bath & Beyond with 10 new brand launches.
And yes, the company will do away with many of its trademark aggressive coupon promotions.
Bed Bath & Beyond is targeting low- to mid-single digit same-store sales growth by 2023 and $1 billion in operating profits. For next fiscal year, the company see “stable” same-store sales and operating profits.
Shares fell 12% Wednesday amid some disappointment in next year’s operating profit forecast and a broader market rout.
“Bed Bath & Beyond’s Investor Day reinforced our view that the executive team is energized with prior experience and a thoughtful playbook of initiatives to effectuate change. The focus on home, baby and kids, and beauty and wellness across core banners will enhance execution, but we do see risks in the competitive landscape, certain tailwinds from recent shopping behavior more transitory vs. structural, and potential lackluster returns from owned brands and remodels,” cautioned Jefferies analyst Jonathan Matuszewski.
The new efforts by Tritton will build on the foundation he has set after canning most of his executives two months into the job in December 2019. Since then, Tritton has rebuilt his team and rolled up his sleeves.
Bed Bath & Beyond announced earlier this month it will sell its Christmas Tree Shops brand and a New Jersey distribution center for $250 million.
Other strategic moves by Tritton include a sale leaseback of 2.1 million square feet in commercial real estate in January. That netted the company $250 million. In August, the company closed on a $250 million sale of PersonalizationMall.com to 1-800-Flowers. It was an asset that most on Wall Street never even knew about, let alone it being worth $250 million.
The company also trimmed its workforce by 2,800 people and will close about 200 stores.
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