It said Mary Winston, who was recently named to the board, will serve as interim CEO until a replacement is found. The company said Temares is also resigning from Bed Bath & Beyond's board.
Winston has held various roles in retail, including serving as CFO at Family Dollar Stores. She also was CFO at Scholastic, and she's currently president at WinsCo Enterprises, a financial and board governance consulting firm, in addition to being a board member at Acuity Brands, Domtar and Dover.
Bed Bath & Beyond shares jumped more than 3% in premarket trading following the news but were last down more than 6%. The stock has gained nearly 35% this year, with many of those gains coming after a trio of activists revealed their stake in the company. Shares are still down about 10% over the past 12 months.
Bed Bath & Beyond, faced with pressure from activist investors Legion Partners Asset Management, Macellum Advisors and Ancora Advisors, recently appointed five new independent members to its board, including Winston. The activists had been pushing to replace the entire board and to oust Temares as CEO.
Temares has been CEO since 2003 but had held various other roles at the company for nearly three decades. He has been criticized for not doing enough to get the retailer out of its sales slump.
"The board determined that now is the right time to identify the next generation of leadership," said Patrick Gaston, independent chairman of the retailer's board.
Bed Bath & Beyond, with more than 1,000 stores across the U.S. and Puerto Rico, has been struggling to grow sales as more shoppers head online to platforms like Amazon. It laid off nearly 150 people in March, which also impacted its Christmas Tree Shops business, a discount home decor chain it acquired in 2003.
The company also said Monday that Andrea Weiss, a recent appointment to the board, will head the retailer's Business Transformation and Strategy Review Committee, "which will be responsible for ensuring that all aspects of the Company's ongoing business transformation are addressed." Weiss has held executive leadership roles at other retailers including The Limited, Guess and Ann Taylor Stores.
"As we continue to review our business initiatives, we will be focused on driving continued margin improvement, enhancing the in-store and online experience, and accelerating our transformation to the benefit of our shareholders, customers and other stakeholders," Winston said in a statement.
Bed Bath & Beyond said it's formed an independent search committee to find a replacement CEO and it hired an executive search firm to help in that process.
Telsey Advisory Group analyst Cristina Fernandez called the news a "positive development" for stockholders and "a sign that more meaningful change is underway."
"We believe the CEO transition creates an opportunity for the board to choose a leader with a vision for competing more effectively in today's consumer environment and experience with omnichannel retailing, developing private label brands, and creating immersive store experiences," Fernandez said in a research note.