UNION, N.J., July 23, 2019 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today announced that in connection with
its ongoing transformation and near-term priority to reset the
Company's cost structure, it has initiated a reduction in corporate
staff at its headquarters in Union, New
Jersey and at other select locations where corporate
associates are based. As part of this realignment,
Eugene A. Castagna, President and
Chief Operating Officer of the Company, departed today and the role
has been eliminated.
Mary A. Winston, Interim CEO, and
Member of the Board of Directors of Bed Bath & Beyond Inc.
stated, "As we reset our approach to the business transformation
underway, we are executing against 4 key near-term priorities
including resetting the cost structure. While decisions that
impact our staff are difficult, today's action is an important step
in simplifying our corporate structure and ensuring our resources
are aligned with the business we are managing today. We
remain confident in the underlying business and our ability to
leverage the strength of the Bed Bath & Beyond brand and our
lasting connection with customers to deliver on our near-term
priorities and transform the Company."
The Company recently completed a comprehensive and careful
review of its corporate office cost structure, which has resulted
in a reduction of approximately 7% of its corporate staff,
including vice presidents, directors, managers and professional
staff. Each of the impacted associates was offered severance
pay and other Company support to assist them with their job
transition. The Company will continue to review its cost
structure to identify additional cost-savings opportunities.
Cost Savings and Fiscal 2019 Financial Outlook
These organizational changes are estimated to generate future
annual pre-tax net savings of approximately $30.7 million. Due to the timing of these
changes, the pre-tax net savings for the remainder of fiscal 2019
are estimated to be approximately $18.9
million. The Company expects to incur pre-tax cash
restructuring charges of approximately $12.0
million in fiscal 2019, primarily for severance and related
costs in conjunction with this staff reduction, all of which will
be expensed in the second quarter.
As provided during the Company's fiscal 2019 first quarter
conference call on July 10, 2019, Bed
Bath & Beyond Inc. expects its fiscal 2019 full year net
earnings per diluted share to be at the lower end of $2.11 to $2.20,
excluding goodwill and other impairments, severance and shareholder
activity costs. In providing this operational guidance, the Company
included an estimate of the pre-tax cost savings related to today's
action to reset its cost structure. The Company expects to
see a gradual, sequential improvement in its quarterly net earnings
per diluted share, with the vast majority of its net earnings per
diluted share to be earned in the second half of the fiscal
year.
Due to the inherent difficulty of forecasting the timing or
amount of items that have not yet occurred and are out of the
Company's control, and that would impact its net sales, diluted net
earnings per share, and the most directly comparable
forward-looking GAAP financial measures, the Company has not
provided a reconciliation to these measures for its fiscal 2019
full year outlook on a GAAP basis. For the same reasons, the
Company is unable to address the probable significance of the
unavailable information. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures.
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that is the trusted expert for the home and
heart-felt life events. The Company sells a wide assortment of
domestics merchandise and home furnishings. The Company also
provides a variety of textile products, amenities and other goods
to institutional customers in the hospitality, cruise line,
healthcare and other industries. Additionally, the Company is a
partner in a joint venture which operates retail stores in
Mexico under the name Bed Bath
& Beyond.
The Company operates websites at bedbathandbeyond.com,
bedbathandbeyond.ca, worldmarket.com, buybuybaby.com,
buybuybaby.ca, christmastreeshops.com, andthat.com,
harmondiscount.com, facevalues.com, ofakind.com, onekingslane.com,
personalizationmall.com, decorist.com, harborlinen.com, and
t-ygroup.com.
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, anticipated net earnings per diluted
share and the amount and timing of estimated future annual pre-tax
cost savings and pre-tax cash restructuring charges associated with
the workforce reduction, as well as the ability to identify
additional cost savings opportunities. Many of these
forward-looking statements can be identified by use of words such
as may, will, expect, anticipate, approximate, estimate, assume,
continue, model, project, plan, goal, and similar words and
phrases. The Company's actual results and future financial
condition may differ materially from those expressed in any such
forward-looking statements as a result of many factors. Such
factors include, without limitation: general economic conditions
including the housing market, a challenging overall macroeconomic
environment and related changes in the retailing environment;
consumer preferences, spending habits and adoption of new
technologies; demographics and other macroeconomic factors that may
impact the level of spending for the types of merchandise sold by
the Company; civil disturbances and terrorist acts; unusual weather
patterns and natural disasters; competition from existing and
potential competitors across all channels; pricing pressures;
liquidity; the ability to achieve anticipated cost savings, and to
not exceed anticipated costs, associated with organizational
changes and investments; the ability to attract and retain
qualified employees in all areas of the organization, including a
permanent Chief Executive Officer; the cost of labor, merchandise
and other costs and expenses; potential supply chain disruption due
to trade restrictions, political instability, labor disturbances,
product recalls, financial or operational instability of suppliers
or carriers, and other items; the ability to find suitable
locations at acceptable occupancy costs and other terms to support
the Company's plans for new stores; the ability to establish and
profitably maintain the appropriate mix of digital and physical
presence in the markets it serves; the ability to assess and
implement technologies in support of the Company's development of
its omnichannel capabilities; uncertainty in financial markets;
volatility in the price of the Company's common stock and its
effect, and the effect of other factors, on the Company's capital
allocation strategy; the impact of goodwill and intangible asset
impairments; disruptions to the Company's information technology
systems including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; reputational risk arising
from challenges to the Company's or a third party product or
service supplier's compliance with various laws, regulations or
standards, including those related to labor, health, safety,
privacy or the environment; reputational risk arising from
third-party merchandise or service vendor performance in direct
home delivery or assembly of product for customers; changes to
statutory, regulatory and legal requirements, including without
limitation proposed changes affecting international trade; changes
to, or new, tax laws or interpretation of existing tax laws; new,
or developments in existing, litigation, claims or assessments;
changes to, or new, accounting standards; foreign currency exchange
rate fluctuations; and the integration of acquired businesses. The
Company does not undertake any obligation to update its
forward-looking statements.
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SOURCE Bed Bath & Beyond Inc.