Tuesday Morning Corporation (NASDAQ:TUES) – Push For CEO Ousting

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES)

Tuesday Morning Corporation (NASDAQ:TUES) shares jumped 11.1% after the off-price retailer reaffirmed its FY2018 outlook. The retailer expects same-store sales to increase 2% – 5% in addition to a significant improvement in EBITDA. The company expects its first-quarter sales to increase by the same amount.

Disappointing Financial Results

Shares of Tuesday Morning Corporation (NASDAQ:TUES) broke through a key resistance level, on the embattled retailer reaffirming its full year and first quarter sales. The remarks support the uptrend that began last month after the stock had plunged to multi-year lows. However, the stock is still down by more than 50%, year to date.

Tuesday Morning Corporation (NASDAQ:TUES)

The off-price retailer is under pressure to survive at the backdrop of a vicious retail environment that continues to dent its prospects. The retailer has already relocated 52 stores, opened 21 and expanded 13, as it continues to explore ways of accelerating sales growth.

Tuesday Morning Corporation (NASDAQ:TUES) felt the wrath of Wall Street after reporting a severe decline in earnings for the better part of the year. For the fourth quarter, the company says it generated a net loss of (-$17.1) million which led to a full year net loss of $32.5 million.

Management Changes

The underperformance has already led to calls for the resignation of the current Chief Executive Officer, Steve Becker. Jeerddi II LP and Purple Mountain Capital Partners LLC which own 2.4% of the company are pushing for management changes. The two firms are pushing for the appointment of Michael Barnes as the new CEO to replace Becker.

The board of directors has remained firm; refusing to cave into pressure from the two stockholders. Two hedge funds have since threatened to publicly nominate Barnes and Purple Mountain founder James Corcoran for the board. Calls for the firing of the current CEO comes on the heels of his appointment to the position.

“It is regrettable that Jeerddi has chosen to disregard the company’s progress and, instead, propose what we believe is an ill-advised director slate while pursuing a disruptive and protracted proxy fight at the expense of all Tuesday Morning stockholders,” said Terry Barman, chairman of the company’s board of directors.

Tuesday Morning Corporation (NASDAQ:TUES) will hold its annual general meeting on November 15, where shareholders are to vote for members of the board of directors.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Author: Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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