The verdict is out on Bed Bath & Beyond ‘s turnaround plan. While analysts think the retailer’s attempt to fix its problems and lure back customers is a good start, it will do little to imminently fix the struggling business. “While we believe the company has made progress with its upgraded management team, and the stock is not discounting much given current valuation, results indicate that much work remains, while this highly competitive, fragmented, and historically promotional category (and broader consumption) are expected to slow in 2022,” wrote JPMorgan’s Christopher Horvers in a note to clients. The commentary from analysts across the industry comes as the battered retailer on Wednesday announced a plan to close roughly 150 stores and lay off 20% of its workforce in an effort to cut costs and improve its business. The company also said it secured about $500 million in new financing. While improved liquidity could help Bed Bath & Beyond by providing additional time to fix its issues, Telsey Advisory Group’s Cristina Fernández thinks the pain persists for the retailer. “However, we remain concerned by the magnitude of the sales decline and believe it will be challenging to win consumers back in a softer economic climate when the consumer is spending less on home, and in a more competitive and promotional retail landscape,” she said in a note to clients. As part of its turnaround efforts, Bed Bath & Beyond also said it will discontinue three of its private labels and bring back national brands to lure customers. Additionally, the retailer announced the departure of additional executives after former CEO Mark Tritton and others left the company earlier this year. Bank of America’s Jason Haas believes the departure of several key management members could further stymie Bed Bath & Beyond’s turnaround efforts going forward. “BBBY is in the midst of a turnaround effort that may now be interrupted by the departure of key members of the management team,” he said. “Additionally, the company has been underperforming the industry and we think consensus estimates may be optimistic.” Bed Bath & Beyond has come under pressure in recent months as it struggles to reverse declining sales and lure back customers. The company has also said it expects a larger-than-expected 26% decline in same-store sales for the second quarter. At the same time, Bed Bath & Beyond shares have experienced enhanced volatile in recent weeks as the subject of another meme stock frenzy that at one point sent the stock skyrocketing more than 300% in August. Shares have come down from their highs as activist investor Ryan Cohen sold his entire stake in the company . Amid this backdrop, Bed Bath & Beyond stock is down 34.6% this year despite a more than 89% gain in August. Shares sit about 68% off their 52-week highs. — CNBC’s Michael Bloom contributed reporting
