Bed Bath & Beyond (BBBY) - Get Report shares surged on Thursday after it hired former Target (TGT) - Get Report and Nordstrom (JWN) - Get Report executive Mark Tritton to lead the struggling home-furnishings retailer.
Tritton, a three-decade retail veteran, has been credited with launching Target's private-label development, which included more than 30 new brands in just 2 1/2 years and helped the group grow comparable sales for eight consecutive quarters.
Tritton will succeed interim CEO Mary Winston on Nov. 4, Bed Bath & Beyond said, shortly after the Union, N.J., retailer trimmed its full-year profit guidance following weaker-than-expected same-store sales for its fiscal second quarter.
"There is immense opportunity ahead for Bed Bath & Beyond, which remains one of the most recognizable and best loved retailers in the country today," Tritton said.
"The foundation of the company's transformation has been set, and I'm excited at the chance to apply my industry experience and expertise to build an even better business for customers, associates and shareholders."
"I look forward to working together with all associates and the board of directors to achieve our ambitious vision," he added.
Bed Bath & Beyond shares on Thursday were trading up 21% at $11.98. They touched an intraday high of $12.74, up 28%.
"Tritton has over 30 years of experience in the retail industry and most recently held positions at Target, where he was instrumental in transforming the omnichannel shopping experience," said KeyBanc Capital Markets analyst Bradley Thomas.
"His immediate focus will be accelerating the company's ongoing business transformation, including improvements to the omnichannel customer experience, enhancing the merchandise assortment, and reviewing the company's cost structure and asset base," he added.
Earlier this month, Bed Bath & Beyond posted solid second-quarter earnings. But net sales fell 7.3% to $2.7 billion and same-store sales tumbled 6.7% -- despite an improving domestic housing market -- as customers continued to prefer online and discounted alternatives.
Looking into the final months of 2019, Bed Bath & Beyond said it saw full-year earnings coming in between $2.08 and $2.13 a share, down from a prior forecast of $2.11 to $2.20.
"Our only hangup is Mr. Tritton's lack of prior CEO experience, but we believe Bed Bath & Beyond's reconstituted [board] has plenty of experienced executives who can guide him through the transition," said Loop Capital's Anthony Chukumba, who has a hold rating on the stock with a $10 price target.
"All that said, we see no reason to get off the sidelines until we have a better idea of Tritton's turnaround plan."