Bed Bath & Begone

Shares of Bed Bath & Beyond tanked in Wednesday trading after the company reported a big first-quarter loss and said CEO Mark Tritton was stepping down.

Bed Bath stock fell nearly 24% for its worst day since June 3, 2021, when it fell nearly 28%. It's down to its lowest close since April 23, 2020. The company after the close reported an adjusted net loss of $2.83 a share, much larger than Wall Street's expectations for $1.39 a share.

Sue Gove, an independent director on the firm's board, will step in as interim CEO while the company looks for a successor. Tritton, a former chief merchandising officer at Target, joined the company in late 2019 as it was in desperate need of a turnaround. While at Target, he oversaw initiatives like rolling out sleek private label brands, which he tried to bring to Bed Bath, note Barron's Sabrina Escobar and Teresa Rivas. Sabrina and Teresa add:

Perhaps that strategy would have worked if he had been brought in at another time. As it was, his tenure was almost entirely overlapped by the pandemic. That crisis at first provided a much needed lift for Bed Bath, as people spent more on home goods. However, snarled global supply chains and hampered inventory levels had more recently weighed on the company.

Or perhaps Tritton’s plans were a mismatch for a company with a considerably smaller reach and capitalization than Target. Then again, Bed Bath may have had too many problems—both internal and external, as rivals from big-box players to department stores continue to move into its market—to make a turnaround in just a couple of years. Today’s news will likely do little to mollify bears who are concerned that the company may ultimately have to file for Chapter 11.

Also on Tuesday, Pinterest said CEO Ben Silbermann was stepping down to be replaced by Google alum Bill Ready. Unlike Bed Bath stock, Pinterest shares closed up 1.3%.

Sabrina and Gisela Salim-Peyer write for Barron's that Tritton joins a wave of executives shown the door amid falling stock prices. They point to data from workforce consulting firm Challenger, Gray & Christmas, which says 100 U.S. public company CEOs left their jobs between January and May. They add:

Over the course of this year, rising inflation and the Federal Reserve’s interest rate hikes have fueled fears that the economy could be slowing headed into a recession. As a result, boardrooms around the country are scrambling to position their companies accordingly. 

“The CEO exodus continues,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “Economic conditions, rising inflation, and recession concerns are making boards rethink leadership and leaders rethink if they want to take on these challenges.”

Sabrina and Gisela note that not all companies are dumping their CEOs at the first sign of trouble: Walt Disney extended CEO Bob Chapek's contract for three years on Tuesday, even though Disney stock has struggled since he took the reins from Bob Iger in February 2020.

Read more of Sabrina and Teresa's Bed Bath & Beyond coverage here, as well as Sabrina and Gisela's coverage of executive departures here.