After a brief surge of optimism around a potential strategic shakeup, investors have turned sour on Bed Bath & Beyond's (NASDAQ:BBBY) stock. The specialty retailer's shares are trailing the market so far in 2019 despite having been up by over 60% at one point.

That volatility reflects all the uncertainty around Bed Bath & Beyond's turnaround plans that aim to stop its market-share slide without resorting to huge markdowns to keep customer traffic flowing. The chain isn't likely to show much progress on that score when it announces fiscal first-quarter results on Wednesday, July 10. However, investors will be looking for any signs of stabilization -- or a clear strategic shift -- as the retailer's new management team steps in.

Let's take a closer look.

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Better market-share trends

Bed Bath & Beyond's 2018 went about as well as management had predicted it would, with sales at existing locations falling by just 1% in the context of modest profitability declines. Yet those results translated into significant market-share losses given the growth that many rivals have been posting. Walmart and Target each managed their fastest customer traffic gains in years, and off-price retailing giants such as TJX Companies put up record numbers as well. Given that performance gap, it's no surprise that shareholders became impatient with Bed Bath & Beyond's turnaround strategy.

On Wednesday, we'll see if the chain started fiscal 2019 on a positive note. Following three consecutive years of roughly 1% declines, investors will be looking for signs that management can capitalize on the strength of the broader industry to return to sales growth this year. Flat or modestly positive comps results this week would mark an encouraging step in the right direction.

Making money

Bed Bath & Beyond has some flexibility to protect profits since much of its store base is operating under short-term leases. That arrangement frees management up to close underperforming locations, and executives are targeting at least 40 such terminations in 2019.

It's even more important for the chain to show that it can make its existing stores more profitable, though. Operating margin fell to 3.5% of sales last year, from 6.2% in 2017 and 9.3% in fiscal 2016.

Management is aiming for stabilization in that key metric this year thanks to firmer pricing discipline, cost cuts, and the sourcing of higher-margin products. But these wins will be hard to achieve without a rebound in customer traffic trends. Ultimately, success on these initiatives will determine whether Bed Bath & Beyond endures a fourth consecutive year of declining profitability in 2019.

Strategic updates

The broad outlines of Bed Bath & Beyond's rebound goals are clear, but big questions remain about the quality of the chain's new management team. It has been operating under an interim CEO since Steven Temares stepped down in May. Bed Bath & Beyond's board of directors has been almost completely refreshed, too, with 12 of its 13 members having been appointed within the past two years.

On Wednesday, investors will get their first chance to start judging the new management team's predictions against actual results. However, the stock will likely remain under pressure until the chain fills its CEO position and shareholders begin seeing evidence of improving operating trends.