Bed Bath & Beyond (BBBY) CEO Mark Tritton welcomes the new crop of retail investors who are rooting for him to turn the company around.
“It’s an immense responsibility that we take seriously, and we are respectful of the process and responsibility to investors,” Tritton told Yahoo Finance Live inside his newly remodeled New York City flagship store, referring to the retail investors who have rallied around the company in recent months.
Shares of Bed Bath & Beyond exploded more than 30% at one point in the session on June 30 as traders digested the retailer’s solid first quarter earnings. These same traders sent the stock surging 40% out of the blue in a session in early June.
“Every decision we make is for our investors and our customers and so we take that very seriously,” said Tritton. “Whether you put $10 or $10 million in, our goal is to make you a happy investor now and over time. That remains the same.”
The company’s revamped New York City store (among the largest in its fleet at 92,000 square feet) is one part of Tritton’s turnaround plan for the company, which he said continues to be in its early days.
Bed Bath & Beyond plans to invest $1 billion to $1.5 billion in the business over the next three years. During that stretch, Tritton will earmark $250 million to remodel some 60% of Bed Bath & Beyond stores (about 450 stores). Many of the remodels will get touches from the revitalized New York City store.
The rest of the funds will be split between improvements to e-commerce technology and the supply chain. Money is also being spent on launching 10 new private-label brands (seven have already debuted).
Bed Bath & Beyond is targeting low- to mid-single digit same-store sales growth by 2023 and $1 billion in operating profits.
To be sure, the company’s latest earnings report showed Tritton and his team are heading down the right path and hence, have the support of mom and pop investors alongside institutions.
The company’s first quarter same-store sales in the key categories of bedding, bath, food preparation, home decor and home organization rose 7% from the first quarter of 2019 (aka pre-pandemic numbers). Meanwhile, Bed Bath’s gross profit margins rose 820 basis points year-over-year on an adjusted basis as the company sold more private-label merchandise.
And lastly, the company struck an upbeat tone with its full-year outlook. Tritton raised his outlook for adjusted operating profits to $520 million to $540 million from $500 million previously. The company forecasts adjusted EPS for the full year above consensus, too.
“We’re doing a lot, I won’t doubt it. We’ve really put a lot on the agenda. There’s a lot of sweat going in there,” Tritton concedes, adding that he is confident in the company hitting its longer term financial goals.