A pedestrian walks by a Mattress Bathtub and Past retailer in San Francisco, California.
Justin Sullivan | Getty Photographs
Mattress Bathtub & Past is changing CEO Mark Tritton in a management shakeup after the retailer struggled by way of one other quarter of declining gross sales and posted a steeper loss.
The corporate mentioned Wednesday that Sue Gove, an impartial director on the board, will step in as interim CEO. The change comes after a multi-year push to revive Mattress Bathtub’s model, develop on-line gross sales and win again prospects. Tritton, a Goal veteran, had led the trouble after becoming a member of in 2019.
Shares had been down about 20% in morning buying and selling.
However together with firm challenges, Mattress Bathtub is going through a more durable financial backdrop.
“I step into this position keenly conscious of the macro-economic setting,” Gove mentioned in a press release, citing steep inflation and shifting shopping for habits.
Nonetheless, Gove mentioned the corporate wants to enhance its efficiency and that its first quarter outcomes are “less than our expectations.” Along with working to repair provide chain issues, cut back prices and enhance its stability sheet, Gove mentioned Mattress Bathtub & Past will embrace a “again to fundamentals mantra” to win again prospects.
Mattress Bathtub & Past mentioned it expects same-store gross sales to recuperate within the second half of the fiscal 12 months, however didn’t present a selected forecast.
The retailer additionally named a brand new chief merchandising officer. Mara Sirhal, who most just lately served as normal merchandise supervisor of well being, magnificence and consumables, will exchange Joe Hartsig, who’s leaving the corporate.
Here is how the retailer did within the three-month interval ended Could 28 in contrast with what analysts had been anticipating, based mostly on Refinitiv information:
- Loss per share: $2.83 vs. $1.39 anticipated
- Income: $1.46 billion vs. $1.51 billion anticipated
The corporate’s web loss widened to $358 million, or $4.49 per share, from $51 million, or 48 cents per share, a 12 months earlier. On an adjusted foundation, the corporate’s web loss was $2.83 per share. That was greater than the $1.39 that analysts anticipated, in keeping with Refinitiv.
Gross sales fell to $1.46 billion from $1.95 billion a 12 months earlier. Wall Avenue anticipated gross sales of $1.51 billion.
Similar-store gross sales, a key retail metric, declined 24% within the quarter in contrast with a 12 months in the past, worse than the 20.1% drop that analysts anticipated, in keeping with StreetAccount. On-line gross sales fell by 21% 12 months over 12 months. The figures embrace a 27% drop for its Mattress Bathtub & Past banner and a mid single-digits decline for the Buybuy Child banner.
A management shakeup
The management shakeup comes after a greater than two-year effort to revive the corporate’s model, develop its on-line enterprise and win again prospects who’ve fled to different locations to purchase towels, fill up on dorm provides and register for weddings.
Below Tritton, a Target veteran, the company launched numerous private label brands, shuttered underperforming locations and remodeled stores. Despite the efforts, Bed Bath struggled to reverse trends and bumped into new obstacles. During the holiday quarter, for example, the company missed out on about $175 million in sales because of out-of-stocks. Merchandise got stuck at ports and there were shortages of items like vacuums because of the lack of microchips.
In the most recent quarter, by contrast, Bed Bath racked up excess inventory as demand fell, Chief Financial Officer Gustavo Arnal said. Inventory rose about 15% from a year ago, he said.
He told analysts the company will move quickly to clear excess inventory, a problem other retailers including Target face.
Bed Bath will reduce full-year capital expenditures by at least $100 million to about $300 million, too, Arnal said.
Bed Bath has been under pressure from activist investor Ryan Cohen, chairman of GameStop and co-founder of Chewy. Early this year, Cohen’s firm, RC Ventures, revealed a 10% stake in the company. Cohen called for sweeping changes, criticized top executives’ high pay and urged the sale or spinoff of the company’s baby gear chain, Buybuy Baby.
Bed Bath and Cohen came to a truce in late March. The retailer agreed to add new independent directors to its board and look into alternatives for the Buybuy Baby chain. But the challenges for the home goods retailer have not let up.
Shares of the company are down 55% so far this year and hit a fresh 52-week low earlier this month. On Tuesday, shares of the company closed at $6.53, down more than 3%.
Bed Bath on Wednesday said a board committee is looking into ways to maximize the value of its baby chain, including by boosting its registry program and by improving its website and app. Gove did not rule out a potential sale of the business.
“The business is a very attractive business and we’re not alone in appreciating its value. We know there is interest,” she said on the call with analysts.
Bed Bath & Beyond said it hired retail advisory firm Berkeley Research Group to look at its inventory and balance sheet. It has also hired national search firm, Russell Reynolds, to look for a permanent CEO.