Bed Bath & Beyond, Inc. · NYSE:BBBY
Bed Bath & Beyond — Proxy Contest (April 2019)
168 slides from Bed Bath & Beyond's proxy contest presentation, Apr 26, 2019
Slide 1: April 26, 2019
April 26, 2019 Proprietary and Confidential
Slide 2: Mission Statement
Mission Statement “We strongly believe Bed Bath is not realizing its true potential. Our goals are to make Bed Bath a more rewarding place to work for its 65,000 employees and a more profitable company in which to invest – two goals we believe are 100% aligned.” ~Chris Kiper, Legion Partners “It all
Slide 3: Background of Investor Group
Background of Investor Group • Legion Partners, Macellum Capital, and Ancora are deep research-oriented investment firms Significant investing expertise focused on catalyzing sustainable business and governance improvements for the long-term benefit of all shareholders Investor Group partnered toget
Slide 4: Table of Contents
Table of Contents I. Introduction and executive summary II. Argument for reconstitution of board and replacement of CEO a) Deterioration of operating performance b) Investor communication and capital allocation history c) Record of gross overcompensation of CEO and founders d) Corporate governance f
Slide 5: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture b) Sales c) Gross Margin d) SG&A Expenses e) Inventory f) Capital Allocation VII. 100-Day Plan VIII. Drivers of the $5 EPS forecast a) Investor Group forecast assumptions
Slide 6: Executive Summary: Failing Business with Tremendous Potential
Executive Summary: Failing Business with Tremendous Potential • Historical performance demonstrates Bed Bath & Beyond’s Board and management have failed shareholders BBBY’s shares have underperformed retail peers in shareholder return by 800% since Steven Temares became CEO on April 2, 2003 The boar
Slide 7: Diligence Process
Diligence Process • The Investor Group and our nominees have performed detailed financial and operational diligence to understand what has gone wrong and to strategize how a refreshed board and management team will return Bed Bath to prominence • The Investor Group and our nominees believe substanti
Slide 8: Compelling Upside - A Business Worth Fighting For
Compelling Upside - A Business Worth Fighting For • Iconic brand with $12 billion of sales and a loyal customer base offers considerable opportunity to better monetize existing customer interaction - recovery story doesn’t require believing comparable sales will accelerate in a meaningful way • The
Slide 9: Material Board Reconstitution is Required
Material Board Reconstitution is Required • Under the current CEO, the Company’s operational performance is deteriorating at an accelerating pace and he must be removed immediately and replaced with a highly qualified and capable leader • In our view, the Board and CEO’s “plan” does not seem compreh
Slide 10: Our Core Priorities for Newly Constituted Board
Our Core Priorities for Newly Constituted Board 1. Conduct a global CEO search to find the best possible executive to address the specific challenges facing Bed Bath and appoint an interim CEO if new CEO has not been identified by the time of the Annual Meeting 2. Establish a culture of success base
Slide 11: Once Leading Concept Failed to Adapt
Once Leading Concept Failed to Adapt Public Company History: Adjusted EBIT Margin % and Number of Stores Adjusted EBIT MArgin % Number of Stores Founded IPO 2003 -- period of impressive growth and profitability, Failed Strategy and in 1971 1992 but also under-investment in capabilities -- 2013 Execu
Slide 12: High Level Overview of Plan
High Level Overview of Plan Improving 100-Day Plan & Medium-Term Strategic Shareholder Vote Long-Term Hire New CEO Imperatives Growth Reconstitute Appoint CEO or an interim Focus efforts on key priorities As margins are board and CEO from nominees until that increase sales and recovering, test insti
Slide 13: New Board and CEO Can Drive Better Performance
New Board and CEO Can Drive Better Performance Investor Group and nominees believe profitability can be enhanced while investments in core capabilities and sales-driving initiatives are made to improve topline 100 bps to (100 bps) to 190 bps (300 bps) 80 bps to 130 bps 9% to 10% 220 bps to 360 bps 6
Slide 14: Table of Contents
Table of Contents II. Argument for reconstitution of board and replacement of CEO a) Deterioration of operating performance b) Investor communication and capital allocation history c) Record of gross overcompensation of CEO and founders d) Corporate governance failures 14
Slide 15: BBBY Shares Have Materially Underperformed
BBBY Shares Have Materially Underperformed Bed Bath shares have underperformed the retail industry (share price adjusted for dividends) 8 (4) 8 8 (2) (3) Significant destruction of shareholder value over the last 15 years Source: Capital IQ, Bloomberg (1) Total shareholder return shown through March
Slide 16: Serial Underperformer on Total Shareholder Return
Serial Underperformer on Total Shareholder Return(1) 1-Year TSR 3-Year TSR Bottom Bottom Quartile Quartile 5-Year TSR 10-Year TSR Bottom Bo B ottttom o m Bottom Quarrrtille Q Quartile Quartile Bottom quartile performance in virtually any time horizon in last 10 years Source: Capital IQ Note: Peer gr
Slide 17: Accelerating Declines in Return on Invested Capital
Accelerating Declines in Return on Invested Capital Annual Return on Invested Capital (15 Year History) Return on invested capital has gone from 23% in 2003 to below the Company’s cost of capital in 2018 Source: SEC Filings, Earnings Transcripts, Investor Group estimates Note: See appendix for detai
Slide 18: Stagnant Same Store Sales
Stagnant Same Store Sales Trailing 3-Year Average Annual Same Store Sales vs Retail Peers(1) Despite “buying the comp”(2) with coupons, same store sales have lagged retail peers - Bed Bath has not risen to the competitive challenge by offering a customer-centric experience and value proposition Sour
Slide 19: EBITDA Margins at Lowest Level in 15 Years
EBITDA Margins at Lowest Level in 15 Years Annual Adjusted EBITDA Margin (15 Year History) EBITDA margins have declined for seven straight years with the deterioration in profitability accelerating in the last three years Source: SEC Filings, Earnings Transcipts, Investor Group estimates Note: See a
Slide 20: EBITDA Margins Lag Peers by Significant Difference
EBITDA Margins Lag Peers by Significant Difference Retail Peers(1): EBITDA Margins EBITDA margins lag retail peers by a large gap – we believe Bed Bath should likely be earning a double-digit margin Source: SEC Filings, Capital IQ, Investor Group estimates Note: Detailed benchmarking assumptions and
Slide 21: Table of Contents
Table of Contents II. Argument for reconstitution of board and replacement of CEO a) Deterioration of operating performance b) Investor communication and capital allocation history c) Record of gross overcompensation of CEO and founders d) Corporate governance failures 21
Slide 22: CEO's Guidance Has Little Credibility Given Track Record
CEO’s Guidance Has Little Credibility Given Track Record Annual EPS Guidance Range vs Actual Results Adjusteed EPS (2) (1) / Given the very consistent over-promise and under-deliver track record, it’s clear to us that management doesn’t have a handle on how various initiatives impact the bottom line
Slide 23: Prolific Value Destruction through Share Buybacks
Prolific Value Destruction through Share Buybacks Historical Share Buyback Program and Average Repurchase Price In December 2014, the Company completed an accelerated share repurchase for 16.8 Cash Spent on Share Repurchases ($'s in millions) million shares at an average price of $65.41 funded with
Slide 24: History of Distracting and Dilutive Acquisitions
History M&A History HistoryofofDistracting Distracting – Distracting, and andDilutive Dilutive Dilutive Transactions Acquisitions and Corrupt BBBY has spent over $1 billion on questionable M&A during CEO Temares’ tenure yet the performance of these acquisitions has never been disclosed – many appear
Slide 25: The Result is a Worst-in-Class Valuation Multiple
The Result is a Worst-in-Class Valuation Multiple LTM EV/EBITDA Ratio(1) vs Retail Peers(2) Mid & Large Box Retail and Home Related Retail Department Off-Price Valuation is among worst in retail which we believe is due to lack of investor confidence in management Source: SEC Filings, Capital IQ (1)
Slide 26: Table of Contents
Table of Contents II. Argument for reconstitution of board and replacement of CEO a) Deterioration of operating performance b) Investor communication and capital allocation history c) Record of gross overcompensation of CEO and founders d) Corporate governance failures 26
Slide 27: Compensation Overview: Historical Perspective
Compensation Overview: Historical Perspective We believe there has been a breakdown in alignment with shareholders demonstrated through a history of excessive compensation and self-dealing • Inappropriate Chairmen Compensation - Co-Chairmen Warren Eisenberg (88) and Leonard Feinstein (82) have been
Slide 28: Excessive Executive Office Compensation
Excessive “Executive Office”(1) Compensation Cumulative Total Compensation of Steven Temares, Warren Eisenberg, and Leonard Feinstein Since 2003 $313 million Total Cumulative Compensation (2) (2) (2) Massive transfer of wealth from shareholders to management Source: SEC Filings, Capital IQ, Investor
Slide 29: Low Alignment of Compensation with Performance
Low Alignment of Compensation with Performance Annual Total Compensation of CEO Steven Temares Since 2003 Negative correlation of relative TSR and CEO pay (correlation = -0.28) Total Annual Shareholder Return (Fiscal Year Period) CEO Annual Compensation in Millions CEO Temares only had positive rela
Slide 30: Outsized CEO Salary Confirmed by Peer Comparison
Outsized CEO Salary Confirmed by Peer Comparison Peer(1) Comparison of CEO Cash Salary “Following a third consecutive failed say-on-pay vote, the compensation committee has not demonstrated sufficiently robust responsiveness to shareholders' concerns. Even after an LTI value reduction and the volunt
Slide 31: Best-in-Class Pay for Worst-in-Class Performance
Best-in-Class Pay for Worst-in-Class Performance Total 3-Year CEO Compensation vs. 3-Year Total Shareholder Return vs Peers(1) Total CEO Compensation in Millions 3-Year Total Shareholder Return BBBY has the worst TSR over the last three fiscal years for which the CEO was awarded the third highest co
Slide 32: Long-Term Performance Metrics are Problematic
Long-Term Performance Metrics are Problematic Long-term Performance Share Metrics Based on Relative Performance Performance share awards were determined by measuring absolute performance versus proxy peers • Bonuses were granted as long as margins remained above the peer group • This allowed for ful
Slide 33: Table of Contents
Table of Contents II. Argument for reconstitution of board and replacement of CEO a) Deterioration of operating performance b) Investor communication and capital allocation history c) Record of gross overcompensation of CEO and founders d) Corporate governance failures 33
Slide 34: Governance History
Governance History Governance history prior to reactionary changes in response to the Investor Group’s nomination 2007: Nepotism 2003: - Jordan Purchase 2009: 2018: Board Heller of Robert keeps Victoria and buybuy Kaplan Morrison Stanley BABY steps 2015 through despite Barshay from down 2018: Failed
Slide 35: Additional Governance Failures
Additional Governance Failures • Board changes appear orchestrated to keep in place failing CEO Steven Temares and his executive team Legacy director Patrick Gaston has been appointed new Chairman despite 12 year tenure on Board Three of four legacy directors have been appointed to Nomination and Go
Slide 36: Questionable Transfer of Wealth from Shareholders to Founders' Children
Questionable Transfer of Wealth from Shareholders to Founders’ Children • Buybuy BABY, a retailer of infant and toddler merchandise, was acquired on March 22, 2007 for approximately $67 million (net of cash acquired) and repayment of debt of approximately $19 million – buybuy BABY only had 7 stores
Slide 37: Ignoring the Results of the 2018 Shareholder Vote
Ignoring the Results of the 2018 Shareholder Vote In July 2018, the Board UNANIMOUSLY voted to reject Victoria Morrison’s resignation from the board after she failed to receive a majority of “FOR” votes in an uncontested election Voting results June 29, 2018 Rejection of resignation September 26, 20
Slide 38: Options Backdating: Further Evidence of Corruption
Options Backdating: Further Evidence of Corruption On October 10, 2006, the Company reported findings from an independent review of stock option grants and procedures. The following is taken from the filing verbatim: Conclusion: “Excluding grants only to Form 4 filers beginning in 2003, almost all a
Slide 39: Table of Contents
Table of Contents III. The Bed Bath turnaround team a) Janet E. Grove - Private Label and Supply Chain Expertise Specific to Home Category b) Victor Herrero Amigo - Leadership, Cultural Transformation, Global Supply Chain and Product Sourcing in Home c) Hugh R. Rovit - Vendor Perspectives, Supply Ch
Slide 40: Retail Experience is Needed on the Board to Fix Bed Bath
Retail Experience is Needed on the Board to Fix Bed Bath • Investor Group nominees are aligned with operating plan • A Board reconstitution that will result in the replacement of a CEO requires directors that have comprehensive knowledge of all material operational elements of the business • The new
Slide 41: Board Skills Comparison: Lack of Retail Experience
Board Skills Comparison: Lack of Retail Experience Private Label / Finance / Past/Present Retail Age Retail Operations Supply Chain Marketing Technology / Digital Investments Legal / Governance CEO Other Public Boards Tenure BED BATH & BEYOND DIRECTORS: Independent Directors Stephanie Bell-Rose 60 X
Slide 42: Our Nominees: Sourcing, Supply Chain and Private Label
Our Nominees: Sourcing, Supply Chain and Private Label Private Label and Supply Chain Expertise Specific to Home Category • Former Corporate Vice Chairman from February 2003 to June 2011 for Macy’s, Inc. • Chairman and Chief Executive Officer of Macy’s Merchandise Group from December 1999 to Februar
Slide 43: Our Nominees: Sourcing, Supply Chain and Private Label
Our Nominees: Sourcing, Supply Chain and Private Label Vendor Perspectives, Supply Chain and Product Sourcing in Home and Décor Categories • Former Chief Executive Officer of Ellery Homestyles from May 2013 through its sale in September 2018. During his tenure, he repositioned merchandising and dist
Slide 44: Our Nominees: Retail Operations
Our Nominees: Retail Operations Retail Execution and Growth • Currently serves as the Managing Director and Chief Operating Officer of Independent Pet Partners, LLC, which operates nearly 150 independent Natural Pet Wellness Centers across the US • Former President and Chief Operating Officer from O
Slide 45: Our Nominees: Retail Operations
Our Nominees: Retail Operations Retail Execution, Turnarounds and Growth • Founder and CEO of Stanmore Partners, a senior leadership consultant to CEOs • Brand President of Chico’s, a women’s clothing chain, from February 2009 to September 2016 driving rapid turnaround at the brand • After Chico’s p
Slide 46: Our Nominees: Retail Operations
Our Nominees: Retail Operations Retail Operations and Global Supply Chain • Chairman of Maurices, Inc., a specialty retailer focused on women’s value apparel, since March 2019 • Global President of Gap Brand at The Gap, Inc. from December 19, 2014 to February 20, 2018 and Chief Executive Officer, Ga
Slide 47: Our Nominees: Retail Operations
Our Nominees: Retail Operations Retail Execution and Turnarounds – Expertise in Home & Décor • Chief Executive Officer and a member of the Board of Directors of Pier 1 Imports, Inc. an omnichannel retailer specializing in imported home furnishings and decor, particularly furniture, table-top items,
Slide 48: Our Nominees: Marketing, Branding and Ecommerce
Our Nominees: Marketing, Branding and Ecommerce Branding Merchandising, Branding, Digital Marketing, Ecommerce, Consumer Experience • Mr. Duplantis held a number of senior level management positions at Coach, Inc. (“Coach”), a global fashion company, from November 1998 to July 2016 • Mr. Duplantis w
Slide 49: Our Nominees: Marketing, Branding and Ecommerce
Our Nominees: Marketing, Branding and Ecommerce Ecommerce Operations, Strategy and Growth – Experience in Kitchen, Home and Baby • Founder of Alchemy-Rx, a strategy, marketing and ecommerce agency, since October 2018 • Prior to that, he held executive level positions at Newell Brands Inc., from June
Slide 50: Our Nominees: Marketing, Branding and Ecommerce
Our Nominees: Marketing, Branding and Ecommerce Marketing, Advertising, Branding and Ecommerce • Ms. Reardon has over 30 years of retail marketing experience, including her most recent role as Chief Marketing Officer at Macy's Inc., from which she retired in 2016 • As CMO, directed a budget of $1.25
Slide 51: Our Nominees: Investments, Governance and Turnarounds
Our Nominees: Investments, Governance and Turnarounds Retail Investments, Turnarounds and Corporate Governance • Mr. Duskin has served as Chief Executive Officer of Macellum Capital Management, LLC, which operates a New York-based pooled investment fund, since July 2009 • Mr. Duskin served as a Mana
Slide 52: Our Nominees: Investments, Governance, and Real Estate
Our Nominees: Investments, Governance, and Real Estate Corporate Governance, Investments and Turnarounds • Mr. Lukomnik is managing partner of Sinclair Capital LLC, where he has consulted Fortune 100 companies and a number of the world’s largest institutional investors • Mr. Lukomnik served as inves
Slide 53: Table of Contents
Table of Contents IV. What’s broken? a) Company Culture b) Sales c) Gross Margin d) SG&A Expenses e) Inventory f) Capital Allocation g) Execution and Accountability 53
Slide 54: What's Broken? Summary
What’s Broken? Summary • After many years of pursuing initiatives that have failed to improve the business, we believe the Company still suffers from: A poor shopping environment that is neither experiential nor curated A merchandise assortment that causes confusion and forces customers to struggle
Slide 55: What's Broken? Company Culture
What’s Broken? Company Culture • We believe Bed Bath’s current corporate culture is best described as one where tenure is the biggest driver of upward mobility rather than merit • Common themes from Glassdoor reviews: No Collaboration: “The culture doesn’t prompt openness and collaboration.” (anonym
Slide 56: What's Broken? The Shopping Environment
What’s Broken? The Shopping Environment • Experiential store - the store experience has not progressed to an engaging experience in order to capture the customer’s attention, a retail requirement for success today Company has talked about making the stores more “experiential” for years with little p
Slide 57: Customer Surveys: Clutter is a Big Complaint!
Customer Surveys: “Clutter” is a Big Complaint! “Less clutter “More streamlined selection – the aisles of products - it’s are packed” overwhelming to go in” “Make stores less congested” “The buggies are all so huge, it’s difficult to get around them, and that’s in the main aisles. Side aisles get bl
Slide 58: What's Broken? Stores Are Difficult to Shop
What’s Broken? Stores Are Difficult to Shop Cleaning Out the Clutter – Store Base Looks Tired Customers need to be able to walk down the aisle to purchase the product Stores are Random assortments a mess shoved into fixtures Wires hanging from the ceiling and mounds of product stacked in aisles “Bed
Slide 59: What's Broken? Merchandising Architecture
What’s Broken? Merchandising Architecture Can Opener Example: Multiple Products Without “Good, Better, Best” Architecture Lack of differentiation in price points can cause frustration and confusion with customers Source: Investor Group store visits 59
Slide 60: What's Broken? Store Experience – Garbage Cans Galore
What’s Broken? Store Experience – Garbage Cans Galore Trash baskets in six different locations within the store and an entire wall *all photos on this page taken from single store site Square footage inside store can be reallocated to eliminate redundancy and improve productivity Source: Investor Gr
Slide 61: What's Broken? Customer Price Perception
What’s Broken? Customer Price Perception How do you think pricing compares at Bed Bath & Beyond versus How do you think Bed Bath & Beyond's pricing compares to Amazon? Amazon when using a 20% off coupon? 40% 37% 35% 32% 35% 30% 26% 30% 25% 25% 23% % of repondents % of repondents 20% 20% 17% 17% 15%
Slide 62: What's Broken? Omnichannel Execution
What’s Broken? Omnichannel Execution Are customers looking to buy diamond rings Company lags peers in online penetration and execution and frying pans from the same retailer? • The Company has not created an “easy-to-shop” internet experience – (bedbathandbeyond.com) website is difficult to navigate
Slide 63: What's Broken? Website Content
What’s Broken? Website Content • Bed Bath TV on website has stale content that doesn’t highlight products or customer experience • Bed Bath TV on the website was a step in the right direction, however, the first click in ‘cooking’ and ‘home’ serve content from December 2017 and September 2015, respe
Slide 64: What's Broken? Digital Marketing Mix
What’s Broken? Digital Marketing Mix The Company appears to over-rely on paid SEM (“Search Engine Marketing”) as its direct traffic lags a number of peers, email efforts seem ineffective, and social media strategy is underwhelming Direct as % of Total Traffic Email as % of Total Traffic 56% “The Com
Slide 65: What's Broken? Search Execution
What’s Broken? Search Execution Screen 1: Pottery Barn, Zola, Crate & Screen 3: Barrel, Bloomingdale’s, TheKnot.com, Amazon, Blue Print Brides.com, and Registry MyRegistry.com Screen 2: Amazon, Target, Zola, Walmart, Martha Stewart Weddings, Thewirecutter.com Bed Bath isn’t anywhere on first three s
Slide 66: What's Broken? Social Engagement
What’s Broken? Social Engagement Social media accounts for <2% of BBBY’s total online traffic, of which Pinterest accounts for 40%+ and Facebook properties account for 20%+ “They’ve had little success from social channels – the culture is very old school. Historically PINTEREST FOLLOWERS (000’s): ma
Slide 67: What's Broken? Mobile Execution
What’s Broken? Mobile Execution Multiple competing Search bar promo open and clear banners Automatic Font too localization small Unclear Clear layout which of categories products are and promos being promoted Modern Cluttered design and layout with easy-to-read elements elements overlapping Given th
Slide 68: What's Broken? Online Conversion
What’s Broken? Online Conversion Despite spending a fortune on “upgrading” their web properties, the conversion process appears suboptimal, likely hampering efforts to convert traffic into revenue Step 3: After searching Step 6: Shipping estimate Step 10: Consumers shown full Step 12: Promo banner P
Slide 69: What's Broken? Digital Experience is Not Competitive
What’s Broken? Digital Experience is Not Competitive Competitors’ online businesses appear to be growing much faster – they offer a higher quality, more seamless digital experience that likely results in better conversion rates Identical Desk Lamp Found on Bed Bath and Wayfair Websites # of Steps -
Slide 70: What's Broken? Gross Margin Performance
What’s Broken? Gross Margin Performance • Promotional Activity - heavy reliance on promotional activity (coupons) to drive store traffic • Sourcing - the Company has failed to develop direct sourcing capabilities - given its dominance in the segment it is hard to understand why middlemen touch 90% o
Slide 71: What's Broken? Gross Margin Performance
What’s Broken? Gross Margin Performance • Vendor proliferation - as number of vendors have increased, we understand that the Company’s clout with any one vendor has diminished, driving vendor relations to an all-time low BBBY: Vendor Count • Mix - by the Company’s own admission, they have expanded p
Slide 72: What's Broken? Gross Margins Below Peers
What’s Broken? Gross Margins Below Peers Closest Retail Peers: Gross Margins (Adjusted to Exclude Occupancy and Depreciation) top quartile 2nd quartile 3rd quartile bottom quartile Higher ticket sale High consumable and food mix Significantly higher ticket sale Bed Bath gross margins should be close
Slide 73: What's Broken? Private Label and Exclusive Likely a Factor
What’s Broken? Private Label and Exclusive Likely a Factor Private Label and Exclusive Penetration %(1) Private label and exclusive products are important tools for enhancing margins and differentiating assortment – Bed Bath lags many peers Source: Company filings, Investor Group estimates Note: Det
Slide 74: What's Broken? Supply Chain Complexity Has Exploded
What’s Broken? Supply Chain Complexity Has Exploded • Complexity of supply chain and sourcing function has exploded as the Company has increased SKUs at core Bed Bath & Beyond concept and acquired new concepts to fold into the organization • Low centralization and coordination between central supply
Slide 75: What's Broken? Vendor and SKU Proliferation
What’s Broken? Vendor and SKU Proliferation Frying pan display included 18 vendors, each with a wide variety of SKUs, making the department difficult to navigate and likely gross margin dilutive Source: Investor Group store visits 75
Slide 76: What's Broken? Product Sourcing
What’s Broken? Product Sourcing Product Sourcing Example: Baking Pans Commodity products, like baking pans, are still being sourced domestically through a middle-man?! There is significant low hanging fruit in product sourcing and supply chain Source: Investor Group store visits 76
Slide 77: What's Broken? SG&A has Exploded +55% Since 2011
What’s Broken? SG&A has Exploded +55% Since 2011 • Given the lack of disclosure it’s challenging for shareholders to understand where additional spend is being directed – what is clear is that it has not produced commensurate increases in revenues • While it’s understandable that investments would b
Slide 78: What's Broken? Many Peers Are Better Holding SG&A %
What’s Broken? Many Peers Are Better Holding SG&A % • The peers listed below are all investing in omnichannel and digital initiatives in a major way, but are achieving better results with less impact to SG&A as a % of sales • During a period of time where Bed Bath has been spending considerable time
Slide 79: What's Broken? SG&A per Square Foot is Elevated
What’s Broken? SG&A per Square Foot is Elevated Retail Brick and Mortar Peers: SG&A per Square Foot (Adjusted to Exclude Occupancy and Depreciation) bottom quartile 3rd quartile 2nd quartile top quartile Higher ticket sale and more services SG&A is a key driver of lagging profitability, which we bel
Slide 80: What's Broken? SG&A Investments Yielding Little Benefit
What’s Broken? SG&A Investments Yielding Little Benefit • During this period of tremendous SG&A investment, few resources were likely funneled to customer facing initiatives • Inflated executive compensation, consultant fees, and corporate headcount expansion and other “non-working” spend appear to
Slide 81: What's Broken? Advertising Efficiency
What’s Broken? Advertising Efficiency While the Company talks about personalization, digital/social, and investments in data analytics, poor execution of modern advertising tools has resulted in subpar returns despite large P&L and capital investments • Experts estimate as much as 50% of the adverti
Slide 82: What's Broken? Online Customer Acquisition
What’s Broken? Online Customer Acquisition Despite major IT upgrades that appear more harmful than helpful, and promises for a recovery by March 2019, online traffic continues to significantly decline “Okay, so the answer to the back half of the question is that we're shooting for the middle of Marc
Slide 83: What's Broken? Advertising per Square Foot is Elevated
What’s Broken? Advertising per Square Foot is Elevated Closest Retail Peers: Advertising per Square Foot Considering Bed Bath spends little to no money on TV advertising, it appears current levels of spend can be optimized to drive more sales for less Source: Company filings, Capital IQ, Investor Gr
Slide 84: What's Broken? Inventory Turns are Below Peers
What’s Broken? Inventory Turns are Below Peers Closest Retail Peers: Inventory Turnover LFY (Trailing 4 Quarter Average Inventory) Increasing furniture mix is likely not the answer to driving asset efficiency higher Significant slow turning furniture mix Slow inventory turns tie up cash and are a dr
Slide 85: What's Broken? Capital Allocation
What’s Broken? Capital Allocation Capital Allocation History Change in ROIC $15.9 billion Capital Investments & Uses ($'s in billions) $1.9 billion(1) Capital deployed has not earned adequate returns for shareholders Source: SEC Filings, Capital IQ (1) Valuation date 3/25/19, the day before the rele
Slide 86: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community “BBBY intends to implement a go-forward strategy that prioritizes profitability over sales. To achieve this, it will cut back on couponing, lower marketing spend, reduce store labor, & make returns more stringent. This strategy runs counter to wha
Slide 87: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community “Management is pursuing a plethora of growth initiatives that have yet to materially benefit earnings.” -(Curtis Nagle, CFA, Bank of America Merrill Lynch 4/10/19) What they’re saying now What they’ve said in the past “Development of portfolio of
Slide 88: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community What they’re saying now What they’ve said in the past “A couple of weeks ago we opened the doors of our new shopping venue, Beyond at Liberty View, located in the Sunset Park community within Brooklyn. With approximately 120,000 square feet, this
Slide 89: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community What they’re saying now What they’ve said in the past “Looking back on 2013, we have made considerable progress in many areas. To mention a few, we enhanced our omnichannel experience for our customers by re-platforming and adding improved functio
Slide 90: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community What they’re saying now What they’ve said in the past Steven Temares (CEO): “We continue to assess our supply chain network for opportunities to achieve greater efficiencies as we build world-class fulfillment capabilities.” (9/21/2016) Eugene Cas
Slide 91: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community What they’re saying now What they’ve said in the past “We are also continuing our deployment of systems, equipment and increased bandwidth in our stores. These in-store system enhancements enable our associates to optimize our shipping costs for h
Slide 92: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community “Bed Bath & Beyond has been operating as an omnichannel retailer long before it became the norm. When you are customer-centric, these services are a natural extension of what you do to satisfy the customer.” - (Steven Temares, 4/8/2015) “Over the
Slide 93: What's Broken? Credibility with Investment Community
What’s Broken? Credibility with Investment Community What they’re saying now What they’ve said in the past “Where were we? Several years ago, our dedicated IT resources were much smaller and operated under a budget about a quarter of the size it is now. Since then, these IT resources have increased
Slide 94: What the Investment Community is Saying
What the Investment Community is Saying “As we have written in the past, we note that the Board of Directors at BBBY is the longest tenured in our coverage…we strongly believe retailers today need fresh perspectives, especially considering the rapid evolution of retail/consumer landscape.” (Bradley
Slide 95: What the Investment Community is Saying
What the Investment Community is Saying “So here’s my message to Bed Bath & Beyond: give the activists what they want. At least the activists have a plan, the current management? I say their motto is this: if you don’t know where you’re going, any route looks fine. Bottom line: it’s time for wholesa
Slide 96: What's Broken? 4th Quarter FY2018 Earnings
What’s Broken? 4th Quarter FY2018 Earnings • Q4 results and 2019 guidance represent what is broken: Q1 same store sales guidance of (5)-(6)% decline and a drop in EBIT of 47% 2019 guidance requires a significant acceleration in second half of the year CEO provided no meaningful explanation or quanti
Slide 97: Table of Contents
Table of Contents V. Addressing the Secular Challenge: Reason to exist 97
Slide 98: Reason to Exist: Customers Want Omnichannel
Reason to Exist: Customers Want Omnichannel • Amazon headwind diminishing - already endured the worse of the Amazon onslaught Pricing is stable if not increasing In some sectors, like electronics, omnichannel retailers are taking share from ecommerce-only players • Evidence that omnichannel is winni
Slide 99: Reason to Exist: Online and Physical Worlds are Colliding
Reason to Exist: Online and Physical Worlds are Colliding • For successful omnichannel retailers, stores are a valuable weapon Same-day delivery is here: BBY, COST, HD, WMT, and TGT all offering or testing same-day Return processing in stores drives additional purchases In-store, web-assisted sales
Slide 100: Reason to Exist: Best Buy Case Study
Reason to Exist: Best Buy Case Study Sept to Dec 2012: Nov 2012: Best Buy’s Renew Blue Priorities: Customer Experience Improves: Board hires new Company • Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE • Latest products and services offered • Work with VENDOR PARTNERS to innovate and drive valu
Slide 101: Reason to Exist: Best Buy Case Study
Reason to Exist: Best Buy Case Study • Best Buy vs. Bed Bath – Similarities and Differences • Some of the narrative is very similar - Best Buy recovery had: Broken ecommerce and omnichannel experience Price perception problem Bloated SG&A structure Non-core / underperforming businesses Low inventory
Slide 102: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 103: Turnaround Plan: Introduction
Turnaround Plan: Introduction • Bed Bath & Beyond has enormous potential - with improved leadership and governance it can reclaim its once great status of a consistently growing category authority • Fix the shopping environment – provide the customer with a compelling shopping experience and merchan
Slide 104: Turnaround Plan: Introduction
Turnaround Plan: Introduction • Improve gross margin – a combination of supply chain initiatives and a careful review of the promotional stance can materially enhance margins Direct sourcing – developing a direct sourcing model can remove middlemen and allow Bed Bath to capture the profit internally
Slide 105: Turnaround Plan: EPS Bridge
Turnaround Plan: EPS Bridge EPS Bridge: 2018 to 2022 Forecast +$0.63 to $1.18 +$1.29(1) $5.35 +$0.49 to $0.79 +$1.36 to $2.22 ($0.58 to $1.80) $1.92 We believe margin expansion and share repurchases can drive a 150% increase in earnings per share by FY2022 Source: SEC Filings, Investor Group estimat
Slide 106: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 107: Turnaround the Culture: Improving Company Culture
Turnaround the Culture: Improving Company Culture • Major upgrade of C-suite is needed to revitalize enthusiasm of employee base Leadership restoration to start at the board level by adding fresh retail operating perspective and instituting culture of results, measurement and accountability New CEO
Slide 108: Turnaround the Culture: Employee Incentives
Turnaround the Culture: Employee Incentives BBBY Current Structure New Structure (Home Depot Example) • Base salary: • Base salary in line with peers – CEO $4.0 million per employment contract, but $3.5 • Annual cash bonus: million in 2018 (27% of target compensation) – Sales $’s Current CEO • No an
Slide 109: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 110: Turnaround Sales: Summary
Turnaround Sales: Summary • Stabilize and grow sales – create a customer-centric organization that improves the shopping experience and the way Bed Bath communicates with its customers • Build a customer–centric organization – move from an item focused organization to customer solution focused organ
Slide 111: Turnaround Sales: Line Reviews are a Cornerstone
Turnaround Sales: Line Reviews are a Cornerstone • Line reviews will be conducted to systematically evaluate product categories and rationalize SKU count • Communicate new strategy to partners during vendor summit and allow vendors to compete for a larger portion of the business More streamlined and
Slide 112: Turnaround Sales: Enhancing the In-Store Experience
Turnaround Sales: Enhancing the In-Store Experience • Line review initiative – from a sales perspective, line reviews can create a compelling assortment and eliminate unproductive products Make stores easier for customers to shop and understand Curated assortment can reduce clutter Allow for growth
Slide 113: Turnaround Sales: Enhancing the In-Store Experience
Turnaround Sales: Enhancing the In-Store Experience Bed Bath should emulate successful formats of competitors Connected Home (Best Buy) Vignetting (Target) Dyson – Shop-in-shop (Best Buy) Cooking Demos (Williams-Sonoma) Alexa Station (Best Buy) Improve pictures to be more defensible Source: Investor
Slide 114: Turnaround Sales: Enhancing the In-Store Experience
Turnaround Sales: Enhancing the In-Store Experience Bed Bath Learning from the Competition Floor to ceiling – Curated assortment Experience the product: Unappealing vertical cooking, coffee, water No excitement! Easter weekend and inventory stacks first thing customer sees in front of store is an un
Slide 115: Turnaround Sales: Provide Service and Solutions
Turnaround Sales: Provide Service and Solutions • Successful retailers today are going beyond selling products to provide superior services and solutions • Delivering interior design services to customers can increase sales and customer loyalty Utilize existing business Decorist Prominently place De
Slide 116: Turnaround Sales: Fix Omnichannel Execution
Turnaround Sales: Fix Omnichannel Execution • Website – the website does not offer a competitive experience - fixing the website will entail addressing: Site functionality Stale content Navigational ability Product assortment Product adjacencies Number of clicks to find products and complete an orde
Slide 117: Turnaround Sales: Revitalization of Marketing
Turnaround Sales: Revitalization of Marketing • Bed Bath should develop an appropriate customer-centric approach to marketing Utilize CRM data for personalization – extracting meaningful information from the customer file and data gathering can be used to enhance the customer’s shopping experience E
Slide 118: Turnaround Sales: Improve Price Messaging
Turnaround Sales: Improve Price Messaging • Combatting the higher price perception and modernizing the marketing approach and capabilities are, in our view, the most significant opportunities to improve efficiency and potency of Bed Bath’s marketing plan The Investor Group’s proprietary pricing stud
Slide 119: Turnaround Sales: Improve Price Messaging
Turnaround Sales: Improve Price Messaging Pricing Comparison (Illustrative) Opportunities exist to better communicate on value vs. peers rather than blanket discounting Source: Company websites 119
Slide 120: Turnaround Sales: Improve Price Messaging
Turnaround Sales: Improve Price Messaging • The Company seems to have an aversion to OPP strategy and offering lower price mix of products • In reality, BBBY is missing a market share opportunity and causing the Company to appear more expensive than its competitors With appropriate supply chain, the
Slide 121: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 122: Turnaround Gross Margins: Supply Chain Initiatives
Turnaround Gross Margins: Supply Chain Initiatives As a starting point, we believe the vendor relationships need to be rehabilitated – from there, fewer, but more collaborative partnerships can be established • Gross margin improvement – material gross margin expansion will be realized through impro
Slide 123: Turnaround Margins: Home Depot Case Study
Turnaround Margins: Home Depot Case Study • As early as 1998, Home Depot started to implement a global sourcing strategy • By 2004, most of the merchandise was purchased directly from manufacturers, eliminating "middleman" costs and enhancing gross margin Home Depot Gross Margin History 1998: "We ar
Slide 124: Turnaround Margins: Uplift from Removing the Middleman
Turnaround Margins: Uplift from Removing the Middleman • Consultants estimate impact to AUC (average unit cost) of products sourced through domestic vendors could decline by ~7.5% to ~12.5%, resulting in meaningful savings from eliminating existing middlemen in BBBY sourcing • Some savings will be o
Slide 125: Turnaround Margins: A Holistic Private Label Program
Turnaround Margins: A Holistic Private Label Program Home Depot’s “HDX” Program: Executing in Private Label and Building a Comprehensive Solution Toilet Paper Window Cleaner Trash Bags Bleach Tools Extension Cords Source: Investor Group store visits 125
Slide 126: Turnaround Margins: Increase Private Label Penetration
Turnaround Margins: Increase Private Label Penetration In-Store Product SKU Depth Illustration: Turners / Spatulas Crate & Williams Bed Be d Bath Bath Barrel Sur La Table Sonoma Walmart Target # of SKUs 3 377 19 26 35 11 20 Number of brands 8 4 5 4 3 5 Private Label % 5 5%% 58% 65% 86% 82% 30% Avera
Slide 127: Turnaround Margins: Private Label Margin Uplift
Turnaround Margins: Private Label Margin Uplift Three goals for new focus on building a differentiated private label offering: 1. Develop store-wide branded solution and build equity 2. Determine priorities for programs including enhancing value through greater build out of OPP private label offerin
Slide 128: Turnaround Margins: More Supply Chain Opportunity
Turnaround Margins: More Supply Chain Opportunity • Reduce role of store managers in product ordering – rely more on a centralized planning and allocation function to predict demand and allow for direct sourcing from factories Stores determining when to order product requires the product sit with do
Slide 129: Turnaround Plan: Promotional Activity
Turnaround Plan: Promotional Activity • Investor Group (4/10/19): “We were deeply concerned to hear management suggest, during the fourth quarter call, that they were going to reduce coupon availability to improve profitability. Our proprietary consumer survey work indicates this is a risky path to
Slide 130: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 131: Turnaround SG&A: Corporate / Centralized Expense
Turnaround SG&A: Corporate / Centralized Expense • Reducing corporate overhead remains the most significant opportunity Proprietary consultant analysis suggests 6% to 10% non-personnel savings are possible based on outside-in assessment Additional personnel related savings should be centered around
Slide 132: Turnaround SG&A: Store-level Operating Expenses
Turnaround SG&A: Store-level Operating Expenses • Store payroll optimization is already underway, but we are concerned it may not be implemented correctly • Most significant opportunity to improve store performance on Day 1 is to implement an incentive compensation plan for store managers that ties
Slide 133: Turnaround SG&A: Real Estate & Rent Reduction
Turnaround SG&A: Real Estate & Rent Reduction • With approximately 1/3 of store leases expiring over next 3 years, savings can be material • Rent reductions – estimate from real estate expert indicates that over the last 2 years, strip retailers with healthy balance sheets have been able to see a 5%
Slide 134: Turnaround SG&A: SG&A % of Sales
Turnaround SG&A: SG&A % of Sales Closest Retail Peer Comparison(1): SG&A % of Sales (Adjusted to Exclude Occupancy and Depreciation) bottom quartile 3rd quartile 2nd quartile top quartile High-touch and large Significant product design Given product mix Bed High ticket business design capabilities c
Slide 135: Turnaround SG&A: SG&A per Square Foot
Turnaround SG&A: SG&A per Square Foot Closest Retail Peers(1): SG&A per Square Foot (Adjusted to Exclude Occupancy and Depreciation) bottom quartile 3rd quartile 2nd quartile top quartile Higher ticket sale and more services Based on business mix and operating model, proprietary consultant assessmen
Slide 136: Turnaround SG&A: Cost Reduction Detail
Turnaround SG&A: Cost Reduction Detail • Largest cost reductions coming from non-working “corporate and administrative expense bucket” of approximately $200 million(2) • Reduction in store payroll below is primarily driven by store closures, but includes impact of labor optimization, which is partia
Slide 137: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 138: Turnaround Inventory: Turns are Below Retail Peers
Turnaround Inventory: Turns are Below Retail Peers Closest Retail Peers(1): Inventory Turnover LFY(2) (Trailing 4 Quarter Average Inventory) Increasing furniture mix is likely not the answer to driving asset efficiency higher Significant peer average = 3.7x slow turning furniture mix Trailing invent
Slide 139: Turnaround Inventory: Improving Turns
Turnaround Inventory: Improving Turns • Inventory turn is the common thread that runs across many functional areas: Potential to release +$500 million in cash from the balance sheet Recapture space for higher margin faster turning items Recapture space for experiential customer engagement Increase n
Slide 140: Table of Contents
Table of Contents VI. Turnaround plan: Refocusing on operational priorities to drive sales, margins and turns a) Company Culture: Adding key competencies and exploiting talent within the organization b) Sales: Improve sales by fixing the assortment, marketing and shopping experience c) Gross Margin:
Slide 141: Turnaround Capital Allocation: Prioritization Process
Turnaround Capital Allocation: Prioritization Process • We believe Bed Bath must instill a capital allocation framework that sets appropriate risk- adjusted hurdle rates for organic investment and weigh deployment of capital for investment against returning cash to shareholders • This new framework
Slide 142: Turnaround Plan: Non-Core Assets
Turnaround Plan: Non-Core Assets • In 2012, acquired Cost Plus World Market for $560.5mm (258 stores vs currently 277) - we estimate this asset could sell for over $400mm • In 2003, acquired Christmas Tree Shops for $194.4mm (24 stores vs currently 81) - we estimate this asset could sell for ~$100mm
Slide 143: VII. 100-Day Plan
Table of Contents VII. 100-Day Plan 143
Slide 144: 100-Day Plan and Beyond: Summary
100-Day Plan and Beyond: Summary 100-Day Plan and Beyond: Assess – Analyze – Develop - Implement 1. Assess 2. Analyze 3. Develop 4. Implement 1-4 Weeks 4-7 Weeks 7-10 Weeks 11-14 Weeks • Leadership talent • Culture • Customer-centricity • Line reviews • Organizational chart • SKU productivity • In-s
Slide 145: Assessment of People and Culture
Assessment of People and Culture Human Resources 145
Slide 146: Shopping Experience: Sales Opportunity
Shopping Experience: Sales Opportunity Line Reviews and Merchandise Architecture 146
Slide 147: Shopping Experience: Sales Opportunity
Shopping Experience: Sales Opportunity New Categories, Private Label, Planning and Allocation, and Service 147
Slide 148: Shopping Experience: Sales Opportunity
Shopping Experience: Sales Opportunity In-Store Experience 148
Slide 149: Shopping Experience: Sales Opportunity
Shopping Experience: Sales Opportunity Website and Omnichannel and Marketing 149
Slide 150: Supply Chain: Gross Margin Opportunity
Supply Chain: Gross Margin Opportunity Supply Chain 150
Slide 151: Supply Chain: Gross Margin Opportunity
Supply Chain: Gross Margin Opportunity Supply Chain (Continued) 151
Slide 152: Expense Reduction Opportunity
Expense Reduction Opportunity Corporate Cost Assessment and Advertising 152
Slide 153: Expense Reduction Opportunity
Expense Reduction Opportunity Store Operating Expenses and Real Estate 153
Slide 154: Other Areas of Focus
Other Areas of Focus Capital Allocation and Information Technology 154
Slide 155: VIII. Drivers of the $5 EPS forecast
Table of Contents VIII. Drivers of the $5 EPS forecast 155
Slide 156: Turnaround Plan Forecast Overview
Turnaround Plan Forecast Overview • Low-single digit declines in revenue annually driven by same store sales of -2.5% in 2019, -1.5% in 2020 and flat thereafter • Closure of 20 to 40 stores annually for next four years • No significant changes to couponing contemplated immediately, but intensity of
Slide 157: Turnaround Plan: EBITDA Margin Bridge
Turnaround Plan: EBITDA Margin Bridge Investor Group believes profitability can be enhanced while investments in core capabilities and sales-driving initiatives are made to improve topline 100 bps to (100 bps) to 190 bps (300 bps) 80 bps to 130 bps 220 bps to 9% to 10% 360 bps ~6% We believe targete
Slide 158: Turnaround Plan: EBITDA Bridge
Turnaround Plan: EBITDA Bridge EBITDA Bridge: 2018 to 2022 Forecast $’s in millions +$114 to $212 +$87 to +$243 to $142 $398 $1,053 ($105 to $323) ($75) $745 Even with modeling a conservative topline trajectory, margin improvement can drive over $1 billion in EBITDA annually in 4 years Source: SEC F
Slide 159: Turnaround Plan: EPS Bridge
Turnaround Plan: EPS Bridge EPS Bridge: 2018 to 2022 Forecast +$0.63 to $1.18 +$1.29(1) $5.35 +$0.49 to $0.79 +$1.36 to $2.22 ($0.58 to $1.80) $1.92 We believe margin expansion and share repurchases drive a 150% increase in earnings per share by FY2022 Source: SEC Filings, Investor Group estimates (
Slide 160: Investor Group Forecast: Income Statement
Investor Group Forecast: Income Statement +$5 in Earnings Power over next three to five years Source: SEC filings, Investor Group estimates and internal projections Note: Investor Group model assumes conservative assumptions for share repurchase and capital structure; also assumes no benefit from va
Slide 161: Investor Group Forecast: Cash Flow Forecast
Investor Group Forecast: Cash Flow Forecast $2.1 billion in cumulative free cash flow over the forecast period Source: SEC filings, Investor Group estimates and internal projections Note: Investor Group model assumes conservative assumptions for share repurchase and capital structure; also assumes n
Slide 162: IX. Appendix
Table of Contents IX. Appendix 162
Slide 163: Appendix: ROIC Calculation
Appendix: ROIC Calculation Bed Bath & Beyond ROIC History: ROIC = NOPAT / 4Q Trailing Average Debt & Equity Source: SEC Filings, Company Transcripts 163
Slide 164: Appendix: Benchmarking Detail
Appendix: Benchmarking Detail Note: See footnotes on next page 164
Slide 165: Appendix: Benchmarking Detail
Appendix: Benchmarking Detail Note: All financial data shown is for the last reported fiscal year period where a 10-K has been filed, except Bed Bath which is shown Fiscal Year 2018, but makes certain assumptions based on Investor Group estimates for figures provided in the 10-K, namely rent expense
Slide 166: Disclaimer – Important Information
Disclaimer – Important Information The materials in this presentation (the “Materials” ) are for informational purposes only and may not be relied on by any person for any purpose and are not, and should not be construed as investment, financial, legal, tax or other advice. The Materials represent t
Slide 167: Disclaimer – Important Information
Disclaimer – Important Information CERTAIN INFORMATION CONCERNING PARTICIPANTS Legion Partners Holdings, LLC, a Delaware limited liability company (“Legion Partners Holdings”), Macellum Advisors GP, LLC, a Delaware limited liability company (“Macellum GP”), and Ancora Advisors, LLC, a Delaware limit
Slide 168: Disclaimer – Important Information
Disclaimer – Important Information As of the date of this press release, Legion Partners I directly beneficially owns 3,452,124 shares of Common Stock, including 898,000 shares underlying long call options, Legion Partners II directly beneficially owns 199,952 shares of Common Stock, including 52,00