Shares of Bed Bath & Beyond (NASDAQ:BBBY) were moving higher today after the struggling retailer announced the sale of an online brand and outlined part of its turnaround strategy.
The stock closed up 7.1%.
Bed Bath & Beyond announced last night that it would sell personalizationmall.com to 1-800-Flowers for $252 million. Investors were enthused, as they had been expecting new CEO Mark Tritton to sell off some of the company's lesser banners to raise capital to fund the company's turnaround and pay down debt. Tritton said of the move, "By unlocking valuable capital from within our business, we can accelerate the Company's ongoing business transformation and our efforts to re-establish Bed Bath & Beyond's authority in the Home space."
He followed that up today with a conference call in which he outlined the company's $1 billion capital allocation strategy for fiscal 2020, saying the retailer would spend $600 million on debt reduction and returning capital to shareholders through share buybacks and dividends, and capital expenditures of $350 million-$400 million for investment in IT and digital projects, stores, and supply chain improvements.
Tritton also said the company expected to deliver cost savings in overhead costs and on merchandise as it introduces more owned brands.
Shares of the home goods retailer have been highly volatile in recent months as hopes about the ability of Tritton, who was named the new CEO in October and was previously Target's Chief Merchandise Officer, to turn the business around have given way to occasional panicking. Last week, for example, the stock tumbled after the company reported that comparable sales had plunged in December and January after adjusting for the shift in the Cyber Monday weekend.
That's a reminder that Bed Bath & Beyond still has a lot of work to do, but Tritton clearly has investors' confidence.