Painful.
That's the only way to describe the conference call last night from still one more disappointing quarter from Bed Bath & Beyond (BBBY) .
Bed Bath has been a slow motion train wreck for years, an outfit that fell behind the times and got crushed by Amazon (AMZN) , even as I get the sense they they never saw it coming and, amazingly, still might not.
I say that because after one of the most long-winded description of the "foundational" changes that the company is bringing about I heard nothing that I think could seriously change the direction of the company.
I say that for a simple reason: The company, on the call, says it expects same-store sales to decrease in the low to mid-single digit range and the first quarter will be down 5%-6%. That's the essence of deterioration.
How do they intend to fix it? From what they told us, you really have no idea other than a series of buzzwords about how they are making big changes. The proof? They have some new store concepts that are producing results that are 2.2% better than their regular stores.
Now that's saying something.
The only shocking thing about last night's numbers?
That the stock initially went up despite the fact that same-store sales and gross margins were abysmal and the company, for all of its bluster about a turn, is simply looking to "Moderate the declines in our operating margins and earnings per share with the expectation of returning to earnings per share growth by 2020."
Now, there's a bar worth crowing about.
How bad was this quarter? The analysts in the Q&A seemed stunned about how little the company either plans to do or can do to save the trajectory of the joint. There was an open rebellion moment at the beginning of the questioning, when Steven Forbes from Guggenheim, after listening to all of the mumbo jumbo the company talked about doing, asked "So, you're saying you're not going to provide, no additional color other than that?"
I think it was a crystallizing moment: These guys do not know how to fix their problems but they said they will fix it, that things will be much better after they get much worse and trust us that it will work because we are more customer-facing than the old team even as we are the old team.
It was stupefying.
Right now, there are a group of insurgents who want to take over the board of directors.
After last night's call, I have a message to management. Why not let them do it? Could they be doing worse than you?
I don't think so. At least they have a plan that can fail instead of no plan that can fail. The motto of this incumbent team? I would say it's "If you don't know where you're going, any route looks fine."
That's the route they are on.
The route to oblivion with continual buybacks along the way -- as if they have done a thing. Five years ago, the company had 213 million shares outstanding and a stock at $80.
Now it has 132 million shares outstanding and a stock at $17.
That says all you need to know about why it is time for a change. Wholesale change. This company is JC Penney (JCP) with a good balance sheet. It may not be too late to save the company, because of that balance sheet and the $1 billion they have in cash.
But this current team can't do it. They just know to buy stock -- and buy it badly. Now there's a legacy not worth preserving.
