What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) were up 6.7% as of 3:30 p.m. EDT Thursday after the specialty retailer provided an encouraging update on its ongoing business transformation initiatives. 

So what

In a letter to shareholders released late yesterday, Bed Bath & Beyond chairman Patrick Gaston and interim CEO Mary Winston said the company has "initiated significant changes" and advanced toward its previously outlined goals for improving its financial performance and competitive industry position.

Man in suit drawing a digital arrow chart indicating gains.

IMAGE SOURCE: GETTY IMAGES.

To start, the two executives say Bed Bath & Beyond is poised to complete a "rapid refresh" of almost 160 stores in time for the 2019 holiday season, which should improve its in-store shopping experience in the near term. Over the longer term, the company is tackling a more comprehensive renovation program for both its physical stores and customer-facing digital channels.

Bed Bath & Beyond also anticipates "tens of millions of dollars" in cost savings in the short term, largely stemming from its recent lease-renewal initiatives and workforce reductions initiated in July, with additional expense reductions coming over the long term from a revamped sourcing and buying approach designed to favor its private-label products.

The chain further expects to aggressively reduce up to $1 billion of inventory over the next 18 months, with an initial focus on clearing older inventory to refresh its product assortment in time for the holidays.

Now what

The company also lauded sweeping changes to its board of directors, including nine new independent directors appointed in recent months, as well as "substantial progress" toward finding its next permanent CEO with the help of an executive search firm.

Of course, investors will eventually need more tangible proof that Bed Bath & Beyond's transformation efforts are yielding fruit. And we could potentially receive more color to that end when the company announces fiscal second-quarter results in the coming weeks. Until then, with the company having so much work yet to be done, I'm perfectly content watching Bed Bath & Beyond's progress from the sidelines.