The beleaguered company announced numerous changes to its management on Wednesday, including a replacement for Tritton. Meanwhile, Bed Bath and Beyond has appointed Sue Grove, an independent director on the company’s board of directors, as its CEO, until they fine someone permanent for the position.
“We must achieve improved results,” Grove said in a statement. “Excellent execution, careful cost management, improved supply chain reliability, sound capital investment, strong balance sheet and robust digital capabilities will all be essential to our success.”
Tritton’s efforts did little to hide the company’s deep problems. On Wednesday, the chain reported significantly lower-than-expected earnings for its most recent quarter, with brand sales down 27% from the same period a year ago.
This caused the company’s shares to drop 20% at the start of trading. It is now down about 65% in a year.
Tritton’s departure was “inevitable” and that the earnings report “does very little to instill confidence in the company’s trajectory,” said Neil Saunders, managing director of GlobalData, in an analyst note.
“In our direct opinion, it was a cosmetic reimagining – copied from Target – with very little content,” Saunders said. “No wonder it fell apart quickly.”
He added that the company “has collapsed and a change in management is the only way to restore investor confidence.”
On Tuesday, a new report from Bank of America painted a bleak picture for the retailer, saying the company was phasing out air conditioners to quickly cut costs and offset sluggish sales. Bed Bath and Beyond told CNN Business that any changes to the store’s temperature rules did not come from the corporation.
“We were contacted about this report and, to be clear, none of the Bed Bath & Beyond stores were instructed to set up air conditioners, and there were no changes to corporate policy regarding the use of utilities,” a spokesperson said.
However, Bank of America analysts who have visited the stores are reporting growing concerns, including massive reductions in working hours, cuts to utilities, reduced store hours and cancellation of renovation projects. The rewards programs have also been cut and replaced. Analysts expect Bed Bath and Beyond management to announce new store closures soon and suspend the opening of its Buy Buy Baby stores.
Other worrisome factors for the company include the resignation of two key financial executives in recent months, chief accountant John Barresi resigned in May, and Heather Plutino, senior vice president of financial planning, analysis and commercial finance, also left the company.
— Nicole Goodkind of CNN Business contributed to this report.