It is too late for Bed Bath & Beyond Inc. (NASDAQ: BBBY) to turn around, despite plans to repair the company. These plans have not been released by its new chief executive officer. There is no other way to characterize its comparable-store sales posted in its most recent quarter, which dropped 8.3%. In the current world of brick-and-mortar retail, it signals the finish.
The drop in same-store sales has run for 11 quarters in a row. The most recent quarter can be measured by poor earnings as well. They were particularly disturbing. Revenue dropped 9% to $2.8 billion. The retailer posted a loss of $0.31 a share, compared to an $0.18 per share profit in the same period a year ago.
CEO Mark J. Tritton commented, “Our performance in the third quarter was unsatisfactory and underscores the imperative for change and strengthens our sense of priorities and purpose.” He said it would take several months to set new plans for the retailer, which is much too long. He has lost his handle on upcoming earnings, so Bed Bath & Beyond pulled its guidance. Investors have little to consider now, other than doubt.
The one notable thing Tritton has done is ax six senior executives. Even if these people were weak managers, he did not replace them, and he has lost all their institutional knowledge.
Bed Bath & Beyond’s board may have begun to question why they hired Tritton. He has no special e-commerce skills, which would have been key to fixing the company. Even if other plans were not in place, he should have at least articulated how he planned to attack his rivals online.
Bed Bath & Beyond is also burdened by a large store footprint. It has 1,524 stores, which operate under several brands. Of these, 981 carry the Bed Bath & Beyond name. Given the company’s same-store sales falloff, many of these stores have to lose money.
It is too late for Tritton to fix a company that has such horrible sales problems. It is left to him to salvage as much of Bed Bath & Beyond as he can, which is very little.
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