UNION, N.J. — July 23, 2019 — Bed Bath & Beyond Inc. today announced that in connection with its ongoing transformation and near-term priority to reset the company’s cost structure, it has initiated a reduction in corporate staff at its headquarters in Union, N.J., and at other select locations where corporate associates are based. As part of this realignment, Eugene A. Castagna, president and COO of the company, departed today and the role has been eliminated.
Mary A. Winston, interim CEO, and member of the board of directors of Bed Bath & Beyond, stated, “As we reset our approach to the business transformation underway, we are executing against 4 key near-term priorities including resetting the cost structure. While decisions that impact our staff are difficult, today’s action is an important step in simplifying our corporate structure and ensuring our resources are aligned with the business we are managing today. We remain confident in the underlying business and our ability to leverage the strength of the Bed Bath & Beyond brand and our lasting connection with customers to deliver on our near-term priorities and transform the company.”
The company recently completed a comprehensive and careful review of its corporate office cost structure, which has resulted in a reduction of approximately 7% of its corporate staff, including vice presidents, directors, managers and professional staff. Each of the impacted associates was offered severance pay and other company support to assist them with their job transition. The company will continue to review its cost structure to identify additional cost-savings opportunities.
Cost Savings and Fiscal 2019 Financial Outlook
These organizational changes are estimated to generate future annual pre-tax net savings of approximately $30.7 million. Due to the timing of these changes, the pre-tax net savings for the remainder of fiscal 2019 are estimated to be approximately $18.9 million. The company expects to incur pre-tax cash restructuring charges of approximately $12.0 million in fiscal 2019, primarily for severance and related costs in conjunction with this staff reduction, all of which will be expensed in the second quarter.
As provided during the company’s fiscal 2019 first quarter conference call on July 10, 2019, Bed Bath & Beyond Inc. expects its fiscal 2019 full year net earnings per diluted share to be at the lower end of $2.11 to $2.20, excluding goodwill and other impairments, severance and shareholder activity costs. In providing this operational guidance, the company included an estimate of the pre-tax cost savings related to today’s action to reset its cost structure. The company expects to see a gradual, sequential improvement in its quarterly net earnings per diluted share, with the vast majority of its net earnings per diluted share to be earned in the second half of the fiscal year.
Due to the inherent difficulty of forecasting the timing or amount of items that have not yet occurred and are out of the company’s control, and that would impact its net sales, diluted net earnings per share, and the most directly comparable forward-looking GAAP financial measures, the company has not provided a reconciliation to these measures for its fiscal 2019 full year outlook on a GAAP basis. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Posted July 23, 2019
Source: Bed Bath & Beyond Inc.