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Bed Bath & Beyond Experiences Wild Swings After Cementing Interim CEO Sue Gove in The Box Seat

Shares of American home goods retailer Bed Bath & Beyond (US:BBBY) experienced wild share price swings on Wednesday after reporting the appointment of Sue Gove as the group’s new President & CEO.

BBBY’s stock only opened marginally higher before dipping  -7.5% lower briefly and then whipsawing to an intra-day high gain of 7.75% by mid-day. In afternoon trading, BBBY drifted lower erasing gains as short-term traders banked profits with the stock closing -5.5% lower at $5.00.

Despite the wild swings of optimism in the stock, BBBY remains down -67% year to date and more than -90% lower than intra-pandemic highs experienced over 2021.

Newly appointed Sue Gove was already in the box seat for the running after being appointed as interim CEO when the previous CEO Mark Tritton stepped down from the role at the end of June.

The groups Chair Harriet Edelman stated in the filing that she believes “Sue is the best person to serve at the helm of Bed Bath & Beyond and continue leading the company”

Edelman highlighted how Gove has taken actions to increase liquidity, establish the groundwork to improve customer loyalty, traffic and market share.

Back in August, Gove changed several measures in an effort to drive growth and profitability which included store closures, job cuts and cancelling plans to sell off its buybuy BABY business.

Gove also authorised a new $150 million a-the-market offering program and has since reported that just under one quarter equating to about  ~$30 million in shares had been sold through the program to raise capital.

Sue Gove is now prized in attempting to stage an impressive comeback and turnaround of the business back towards a level of growth and profitability at a time when macroeconomic headwinds are only building.

BBBY has risen 15 ranks this week and is currently the 77th most held security by retail investors who have linked their portfolio free with the Fintel platform.

At the end of September, BBBY released second quarter results to investors, reporting a 28% decline in sales to $1.44 billion which was broadly in line with forecasts of $1.45 billion as the company had pre-released results at the end of August during the strategic update.

The result missed forecasts at the earnings per share level with BBBY reporting adjusted EPS of -$3.22 which almost doubled the losses expected by analysts of -$1.80 per share.

The EPS calculation was based on an adjusted net loss of -$256 million which was a significant difference from the $4 million in net profit generated in the prior year.

Following the result, analyst Jonathan Matuszewski from Jefferies Investment bank lowered his price target for BBBY from $9 to $7 and kept his recommendation as ‘hold’.

Matuszewski highlighted that the final months of 2022 will be critical for BBBY to establish stability in the business fundamentals while ensuring liquidity and reassuring vendors ahead of uncertain consumer spending in FY23.

The firm sees limited downside risk in shares following the recent optimization efforts and store closures.

The significant share price weakness of BBBY can be partly attributed to the weakening institutional investor interest in the stock. This is explained by BBBY’s weak ownership accumulation score of 15.26 which ranks the company in the bottom 5% of 32,731 screened global securities.

Despite the weakening levels of ownership, BBBY still has 503 institutions on the register that collectively own 71.6 million shares. Some of the largest investors include: Fidelity, State Street Corp, Citadel Advisors, Jane Street Group and Susquehanna International.

This article originally appeared on Fintel

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