Bed, Bath & Beyond (NASDAQ:BBBY) shares dropped dramatically after a disappointing earnings report. The retailer lost $73 million, or 92 cents per share. Sales fell 26% to $1.98 billion for the three months ending in August. The company blamed supply chain issues and inflation. Investors blamed management. BBBY stock plunged 22% in a day.

Bed, Bath & Beyond has been undergoing a makeover under CEO Mark Tritton, a former chief merchandising officer at Target (NYSE:TGT). If that strategy is wrong, or if it has gone off the rails, the selloff makes sense.

If not, BBBY stock today is a bargain.

The Story So Far for BBBY Stock

I have been following BBBY closely both with my work and my money, pounding the table for almost two years on behalf of Tritton. His plan is to transform the stores from a jumble of brand name off-price merchandise into a curated collection of higher-end offerings.

The revamp was stalled by the Covid-19 pandemic, but is now back on track.  I panicked at the start of the pandemic, taking a loss, but got back in last fall.

Then, as BBBY became a “meme stock,” spiking under the charms of retail traders on Reddit, I sold again, this time at a profit. Overall, I’ve broken even. The meme frenzy made no sense to me — or to others, for that matter.

As for the company itself, Tritton has a long-term plan built around new store brands, more attractive shops and a new website. Gone are the kitchen gadgets piled to the ceiling. In are new store brands like Our Table kitchenware, Nestwell bedding and Haven bath essentials. If they catch on, these new items can be very profitable.

The big problem in the second quarter was the delta variant. Tritton said the variant cut foot traffic in large markets like Texas. He added that supply chain problems were also much greater than expected.

The New Bed, Bath & Beyond

The old Bed, Bath & Beyond made its name in suburban strip malls. The new Bed, Bath & Beyond is displayed in a New York “flagship” store that opened in July.

The two-story, 92,000 square foot outlet is built around experiences. There are interactive displays that allow customers to touch the merchandise. There are whole sections devoted to specific brands like Casper Sleep (NASDAQ:CSPR), Kris Jenner’s Safely cleaning products and PepsiCo’s (NASDAQ:PEP) Sodastream.

Additionally, there are dedicated pick-up areas for online orders, self-checkout stations and the ability to pay with its app while in the store, bypassing checkers entirely.

Tritton hired a raft of new executives after taking over, and one is already out. Cindy Davis, who had been chief brand officer and head of Decorist, a design service, was replaced by chief digital officer Rafeh Masood in September. It’s possible the company went too up-market, too quickly, and Tritton had to re-adjust.

The Bottom Line on BBBY Stock

It’s very hard to transform a brand, especially in retail. But Target managed it. I believe Bed, Bath & Beyond can, too. But I always warned it would take time.

At its price of nearly $16 per share, BBBY stock is selling for one-fifth its estimated 2021 sales. If the second quarter is a new normal, it’s selling for about one-fourth of its sales. The price is about 30 times the last year’s earnings, a time when Tritton was getting ramped-up and the pandemic was raging.

The price of BBBY stock is dirt cheap compared with other retailers. Warby Parker (NYSE:WRBY) just came to market selling at 10 times its sales. Target sells at a discount to its sales, but a modest one.

Even a valuation of half Bed, Bath & Beyond’s sales would, if profitable, represent a 150% gain. Just don’t play BBBY stock as a meme. Buy it like you mean it.

On the date of publication, Dana Blankenhorn held no positions in companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn?has been a financial journalist since 1978. His latest book is?Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at?@danablankenhorn.