Bed Bath & Beyond (BBBY) shares plunged lower Wednesday after the struggling home retailed posted weaker-than-expected first quarter earnings and unveiled the resignation of CEO Mark Tritton.
Bed Bath & Beyond said it posted an adjusted loss for the three months ending on may 28, the group's fiscal first quarter, of $4.49 per share on revenues of $1.46 billion and a 27% slump in comparable sales.
Tritton, who has lead the group since November of 2019, will leave both his role as CEO and on the Bed Bath & Beyond board to make way for independent director Sue Gove, the company said, who will serve on an interim basis.
"After thorough consideration, the Board determined that it was time for a change in leadership. Our banner's heritage is built on the premise that when customers are shopping for the home, Bed Bath & Beyond is the perfect destination for unique solutions and inspiration," said independent chair Harriet Edelman. "We must deliver that proposition for customers, drive growth, and unlock the value of the banners."
"Today's actions address company performance, the macroeconomic conditions under which we are operating, and the expectations of the Board on behalf of shareholders," she added. "We are confident Sue brings the right combination of industry experience and knowledge of Bed Bath & Beyond's operations to lead the Company, focus our resources, and revise strategy, as appropriate."
Bed Bath & Beyond shares were marked 21.8% lower in early trading immediately following the surprise earnings release and new of Tritton's departure to change hands at $5.08 each, a move that would extend the stock's year-to-date decline to around 70%.
Bed Bath & Beyond said it would accelerate markdowns of its existing inventories "in order to right-size inventory levels commensurate with the declining sales trends."
Incoming CEO Gove said the group suffered "an acute shift in customer sentiment" that has "materially escalated" into the summer months.
"This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory that we will be working to actively resolve," she said. "The simple reality though is that our first quarter's results are not up to our expectations, nor are they reflective of the Company's true potential."
