Dive Brief:

• Bed Bath & Beyond this week laid off almost 150 employees, including less than 50 in its flagship store operations and less than 100 in its Christmas Tree Shops stores, CNBC reports.

• In a statement to Retail Dive, a spokesperson for the retailer declined to confirm those specifics, but said that it's shifting resources to support digital sales. "At Bed Bath & Beyond, we have been, and continue to make significant investments to enhance our omnichannel capabilities, and our stores remain a critical part of our future growth strategy," according to the spokesperson's email. "However, with the ongoing shift in consumer purchasing behavior to online, we initiated a realignment of our field support structure. Through this process, we were able to reassign many of those impacted by this realignment to other available store and corporate roles, but ultimately we had to reduce our headcount. This decision was a difficult but necessary step, and we are committed to treating all associates across the organization fairly and with respect."

• The report comes amid strife between the retailer and some of its investors. This week three activists called for the ouster of its CEO and entire board based on the "value destruction" of Bed Bath & Beyond, but the retailer fired back at their rationale and many of their claims.  

Dive Insight:

Bed Bath & Beyond has had a rough week, but the retailer saw shares surge when its most recent earnings report included signs of profit strength.

Store comps in the quarter fell about 1.8%, reflecting a decline in store transactions, but included "strong sales growth in ... customer-facing digital channels," according to a Seeking Alpha transcript of an earnings call. Net sales rose 2.6% year over year to about $3 billion, and while net income fell to $24.4 million from $61.3 million a year ago, the result beat expectations. 

The retailer is working against the commoditization of its goods by developing private labels and toward meeting elevated expectations with in-store experiences by testing new brick-and-mortar concepts. The company has identified about 40 Bed Bath & Beyond stores as working labs to test new assortments, visual merchandising and other aspects of the in-store experience, with 18 already operating and stores opened at least four weeks "contributing to sales and transactions ... [and] performing at a mid single percentage rate better than the rest of our Bed Bath & Beyond stores," CEO Steven Temares said during the company's most recent call with analysts. 

But progress has been slow, and the company is also grappling with an overextended store base. Another 40 locations, mostly flagship, will shutter next year, and the company plans 20 openings, mostly its buybuy BABY and Cost Plus World Market banners.