Bed Bath & Beyond replaces CEO as retailer’s sales plummet

Bed Bath & Beyond on Wednesday said it is replacing CEO Mark Tritton as part of a leadership shakeup, after the retailer’s sales plummeted and it sharply missed Wall Street’s expectations on quarterly earnings and revenue.

Shares fell about 13% in premarket trading.

Sue Gove, an independent director on the board, will step in as interim chief executive, the company’s board said. It said she will focus on reversing recent results, addressing supply chain and inventory issues and strengthening the company’s balance sheet.

“We must deliver improved results,” Gove said in a statement. “Our shareholders, Associates, customers, and partners all expect more.”

The company will also get a new chief merchandising officer. Mara Sirhal, who most recently served as general merchandise manager of health, beauty and consumables, will replace Joe Hartsig, who is leaving the company.

Here’s how the retailer did in the three-month period ended May 28 compared with what analysts were anticipating, based on Refinitiv data:

• Loss per share: $2.83 vs. $1.39 expected
• Revenue: $1.46 billion vs. $1.51 billion expected

The company’s net loss widened to $358 million, or $4.49 per share, from $51 million, or 48 cents per share, a year earlier. On an adjusted basis, the company’s net loss was $2.83 per share. That was more than the $1.39 that analysts expected, according to Refinitiv.

Sales fell to $1.46 billion from $1.95 billion a year earlier. Wall Street had expected sales of $1.51 billion.

Same-store sales, a key retail metric, declined 24% in the quarter compared with a year ago, worse than the 20.1% drop that analysts expected, according to StreetAccount. Its online sales fell by 21% year over year. That included a 27% drop for its Bed Bath & Beyond banner and a mid single-digits decline for the Buybuy Baby banner.

Bed Bath has been under pressure from activist investor Ryan Cohen, chairman of GameStop and 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 have dropped 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 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.

Read the company’s earnings release here.

This story is developing. Please check back for updates.