Bed Bath & Beyond is closing 60 stores, new CEO expected ‘soon’
By Tonya Garcia
Published: Oct 3, 2019 2:02 pm ET
Analysts are optimistic that new leadership, store closures and other steps will drive growth
Bed Bath & Beyond is taking steps to boost sales, including closing 60 stores with hundreds of leases about to expire
Bed Bath & Beyond Inc. is closing more stores than expected, one of a few reasons analysts are bullish about the struggling home retailer.
During its earnings call late Wednesday, Mary Winston, Bed Bath & Beyond’s BBBY+2.69% interim chief executive, said the company is closing about 60 stores in fiscal 2019, up from 40 that was previously estimated. The closures will include 40 Bed Bath & Beyond stores and 20 “concept” stores.
Other brands in the Bed Bath & Beyond portfolio include Cost Plus World Market and Harmon.
“With this action, we are increasing the profitability of our remaining portfolio and believe that our remaining fleet will benefit from our renewed focus on driving traffic and operating efficiency,” Winston said, according to a FactSet transcript.
Read: Costco earnings: Texas and Florida alone could get dozens more warehouses and it wouldn’t be enough
The company also has more than 400 leases expiring over the next couple of years that the company said.
“[W]e are encouraged about the progress the interim leadership is making around gross margins and SG&A as well as the accelerated store closures,” wrote Raymond James analysts in a note. “Moving forward, the potential for non-core asset sales and new CEO announcement are two catalysts that should move Bed Bath & Beyond higher over the coming weeks/ months.
Bed Bath & Beyond’s CEO stepped down in May. Winston, a new addition on the company’s board at the time, was appointed on an interim basis.
She said on the call that the search has made “substantial progress” and a selection is expected “soon.”
“As we highlighted in our March 2019 upgrade, we believe there is still value in the enterprise and with the right management team and store investment strategy Bed Bath & Beyond is a fixable business,” wrote Raymond James, which rates Bed Bath & Beyond stock a strong buy with a $17 price target.
See: Here are 3 tips for picking retail stocks
On Monday, Bed Bath & Beyond was upgraded at Wedbush based on factors like store remodels and sale of non-core assets.
By Tonya Garcia
Published: Oct 3, 2019 2:02 pm ET
Analysts are optimistic that new leadership, store closures and other steps will drive growth
Bed Bath & Beyond is taking steps to boost sales, including closing 60 stores with hundreds of leases about to expire
Bed Bath & Beyond Inc. is closing more stores than expected, one of a few reasons analysts are bullish about the struggling home retailer.
During its earnings call late Wednesday, Mary Winston, Bed Bath & Beyond’s BBBY+2.69% interim chief executive, said the company is closing about 60 stores in fiscal 2019, up from 40 that was previously estimated. The closures will include 40 Bed Bath & Beyond stores and 20 “concept” stores.
Other brands in the Bed Bath & Beyond portfolio include Cost Plus World Market and Harmon.
“With this action, we are increasing the profitability of our remaining portfolio and believe that our remaining fleet will benefit from our renewed focus on driving traffic and operating efficiency,” Winston said, according to a FactSet transcript.
Read: Costco earnings: Texas and Florida alone could get dozens more warehouses and it wouldn’t be enough
The company also has more than 400 leases expiring over the next couple of years that the company said.
“[W]e are encouraged about the progress the interim leadership is making around gross margins and SG&A as well as the accelerated store closures,” wrote Raymond James analysts in a note. “Moving forward, the potential for non-core asset sales and new CEO announcement are two catalysts that should move Bed Bath & Beyond higher over the coming weeks/ months.
Bed Bath & Beyond’s CEO stepped down in May. Winston, a new addition on the company’s board at the time, was appointed on an interim basis.
She said on the call that the search has made “substantial progress” and a selection is expected “soon.”
“As we highlighted in our March 2019 upgrade, we believe there is still value in the enterprise and with the right management team and store investment strategy Bed Bath & Beyond is a fixable business,” wrote Raymond James, which rates Bed Bath & Beyond stock a strong buy with a $17 price target.
See: Here are 3 tips for picking retail stocks
On Monday, Bed Bath & Beyond was upgraded at Wedbush based on factors like store remodels and sale of non-core assets.
