Let's just say that investors really, really, REALLY love that Bed Bath & Beyond (BBBY) introduced three new, high margin private label brands on Wednesday.
Shares of the home goods retailer exploded by as much as 50% in afternoon trading as retail traders returned to old friend Bed Bath & Beyond (and meme trades such as AMC and BlackBerry) amid its positive product news. The company said it will debut the three new home brands —Our Table, Wild Sage and Squared Away — in the coming weeks as part of CEO Mark Tritton's ongoing revival of the business.
Bed Bath and Beyond has now unveiled six new private label brands in five months. It plans to release two more by February 2022. The company is targeting 10 new private label brands overall within the next three years.
Tritton told Yahoo Finance Live he is staying focused on executing the turnaround plan rather than getting swept up into watching the surging stock price.
"I can honestly say this is not distracting. We believe in the plan," Tritton said.
FILE – In this March 25, 2021 file photo, shoppers look at items in Bed, Bath and Beyond, in New York. It can be too easy to overspend on products in the name of self-care. Of course you want to comfort yourself during this horrendous pandemic, and retailers are quick to offer all sorts of items to do just that. (AP Photo/Mark Lennihan, File)
That's good seeing as Tritton has big goals on tap for Bed Bath & Beyond.
The company plans to invest $1 billion to $1.5 billion in the business over the next three years. During that stretch, Tritton will earmark $250 million to remodel some 60% of Bed Bath & Beyond stores. The rest of the funds will be split between improvements to e-commerce technology and the supply chain. Money will be spent on launching the aforementioned 10 new private label brands.
Bed Bath & Beyond is targeting low- to mid-single digit same-store sales growth by 2023 and $1 billion in operating profits.
The moves are paying off already.
Bed Bath & Beyond notched its third straight quarter of same-store sales gains in its most recent quarter amid better merchandising and promotional strategies. Adjusted operating profits rose 13% in the quarter from a year ago.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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