Shares of Bed Bath & Beyond are moving sharply higher before the opening bell Wednesday after executives rolled out a raft of initiatives to turn the struggling chain around.

Six weeks after using the company’s own dismal quarterly results as motivation for change, new CEO Mark Tritton said Bed Bath & Beyond would spend $1 billion this year reinvesting in stores, upgrading technology, and on debt reduction and share buybacks.

Part of the funding for those maneuvers will come from the $252 million sale of its PersonalizationMall.com business, announced Tuesday.

“The financial strength of our business allows us to take the important steps needed to return capital to our shareholders and reduce our debt, while at the same time also investing in our customer,” said Tritton, who was brought aboard in November to redirect the company’s operations.

Shares jumped 5% before the opening bell Wednesday.

The Union, New Jersey, company withdrew its annual guidance last month after swinging to a $38.6 million third-quarter loss. Shares tumbled 8% on that day, and have fallen 32% this year.

“Our performance in the third quarter was unsatisfactory and underscores the imperative for change and strengthens our sense of priorities and purpose,” Tritton said at the time.

But same-store sales at Bed Bath & Beyond, a crucial barometer of a retailer’s health, have been negative since May 2017.

The announcement late Tuesday is the first major initiative under Tritton, the former chief merchandise officer at Target Corp. When industry analysts talk about the successful campaign to reinvigorate sales at Target Corp., Tritton’s name is usually mentioned.

Bed Bath & Beyond Inc. will devote $600 million on share repurchases, dividends and debt reduction, with a heavier weighting towards share repurchases.

Another $350 to $400 million is being marked for investments in stores, technology and supply chain infrastructure.

The company is also jettisoning inventory and, Tritton says, making wiser choices about what remains on store shelves.

“We’re closing at the moment with about 15% less inventory,” Tritton said in a conference call. “So, we’re operating leaner and getting better terms, we just need to course correct in terms of the mix of merchandise and our focus.”

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Boeing worker at Everett plant dies from coronavirus: Seattle Times

CHICAGO (Reuters) – A worker at Boeing Co’s (BA.N) Everett factory outside Seattle who had the coronavirus has died, the Seattle Times reported on Sunday, citing co-workers, a union official and a Facebook post by the man’s brother. Reuters reported…

COVID-19 and African startups

Startups in Africa have a better chance of making it than their peers in the US or India, according to a recent report called “Tracing the success and failure of African startups,” by Greentec Capital Africa Foundation and WeeTracker. African…

Pared social insurance payment to bail out enterprises

China has announced a cut on corporate contributions to the old-age pension, unemployment and workplace safety insurance funds by at least 500 billion yuan ($71.3 billion) this year, a larger burden of relief for social insurance payment on enterprises than…

Rocky business restart and an enticing offer for MLB

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the national and global response, the work place and the spread of the virus. ———————————————————————— OUT & ABOUT:…