What happened

Just one day after the stock plunged 19% on an ugly earnings report, Bed Bath and Beyond (NASDAQ:BBBY) was recovering some of those losses today, a sign investors think the stock was oversold after the post-earnings dive. Shares were up 6.3% as of 12:48 p.m. EST, as investors remain optimistic about the turnaround plan from new CEO Mark Tritton.

So what

It wasn't surprising to see the home-goods retailer tumble following its third-quarter earnings report. Comparable sales fell 8.3% in the period, and the company reported an adjusted loss of $0.38 per share, which was much worse than expectations of a $0.02 profit. Management also retracted its prior guidance.

A woman shopping for pillows and towels in a store

Image source: Getty Images.

The earnings report, and Tritton's decision in December to dismiss nearly all of his executive team, underscore the need for the company to make drastic changes.

That's why Tritton was hired, after all. He was previously the chief merchandising officer at Target, where he helped to guide that retailer's successful turnaround.

On the earnings call, Tritton underscored a number of opportunities and initiatives he planned to focus on, including implementing a full buy-online-pick-up-in-store program, refining the company's couponing strategy, improving the digital and omnichannel experiences, launching more owned brands, and potentially selling off secondary chains like Christmas Tree Shops.

Tritton's assessment seemed to indicate that the company had a lot of low-hanging fruit to pick, improvements that have become the standard at other retailers such as Target. That sentiment -- that the business could only improve from here -- seemed to help lift the stock today.

Now what

Tritton, who took the helm on Nov. 4, said he would unveil a detailed turnaround plan this spring, though he didn't give a specific date. In the meantime, the company is aiming to fill out its C-suite following the December terminations. Though Bed Bath and Beyond shares have plunged in recent years, the company is profitable and has a solid balance sheet, making it a better candidate for a recovery than some of its retail peers.

As the last two days have shown, the stock should continue to be volatile in the coming months as Tritton takes the first steps in the turnaround process, including hiring a new executive team. Keep an eye out for the investor conference this spring: If Wall Street likes what it hears then, the stock could soar.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.