The ailing company announced several changes to its leadership on Wednesday, including the replacement of Tritton. Meanwhile, Bed Bath and Beyond has hired Sue Grove, an independent director on the company’s board of directors, as CEO until someone is permanent for the position.
“We need to deliver improved outcomes,” Grove said in a statement. “First-class execution, careful cost management, greater supply chain reliability, prudent capital spending, a stronger balance sheet and robust digital capabilities will be important to our success.”
Bed Bath and Beyond (BBBY) poached Tritton from Target (TGT) in 2019. Previously, he was responsible for growing Target’s own brands, which he attempted to replicate at Bed Bath and Beyond. But those items haven’t caught on with customers like the competition — and neither have the company’s redesigned stores.
Tritton’s efforts did little to mask the company’s deep-seated problems. On Wednesday, the chain reported well-below-expected profits for the most recent quarter, and the brand’s sales fell 27% from the year-ago period.
As a result, the company’s stock fell as much as 20% in early trading. It’s now down about 65% for the year.
Tritton’s departure was “inevitable” and the earnings report “does very little to inspire confidence in the direction of the company,” GlobalData chief executive Neil Saunders said in an analyst note.
“From our blunt perspective, this was a cosmetic reinvention — copied from Target — with very little substance behind it,” Saunders said. “It’s no wonder it fell apart quickly.”
He added that the company “has been bankrupted and a change in leadership is the only way to restore credibility with investors.”
On Tuesday, a new report from Bank of America painted a bleak picture of the retailer, claiming the company has turned down air conditioning in a bid to quickly cut costs and offset a slump in sales. Bed Bath and Beyond told CNN Business that changes to store temperature guidelines were not from the company.
“We were contacted about this report and to be clear, no Bed Bath & Beyond stores have been instructed to adjust their air conditioning and there have been no changes to company policy regarding the use of utilities,” a representative said.
Still, Bank of America analysts who conducted store visits report growing concerns, including hours that have been cut significantly, reduced utilities, reduced operating hours and canceled remodeling projects. Bonus programs have also been scaled back and replaced. Analysts expect Bed Bath and Beyond management will soon announce more store closures and stop opening its Buy Buy Baby stores.
Other troubling factors for the company include the resignations of two key finance executives in recent months, chief accounting officer John Barresi resigned in May and Heather Plutino, senior vice president of financial planning and analysis and commercial finance, also left the company.
— Nicole Goodkind of CNN Business contributed to this report.