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Press release from PR Newswire

Bed Bath & Beyond Inc. Reports Results for Fiscal Second Quarter

Wednesday, September 22, 2010

Bed Bath & Beyond Inc. Reports Results for Fiscal Second Quarter16:15 EDT Wednesday, September 22, 2010- Net Earnings per Diluted Share Increase 35% to $.70 - Quarterly Comparable Store Sales Increase by 7.4% - Quarterly Net Sales Increase by 11.6% - Full Year Net Earnings per Diluted Share Modeled to Increase Approximately 20%; Previously Modeled at Approximately 15%UNION, N.J., Sept. 22 /PRNewswire-FirstCall/ -- Bed Bath & Beyond Inc. today reported net earnings of $.70 per diluted share ($181.8 million) in the fiscal second quarter ended August 28, 2010, an increase of approximately 35% versus net earnings of $.52 per diluted share ($135.5 million) in the same quarter a year ago.  Net sales for the fiscal second quarter of 2010 were approximately $2.137 billion, an increase of approximately 11.6% from net sales of approximately $1.915 billion reported in the fiscal second quarter of 2009.  Comparable store sales in the fiscal second quarter of 2010 increased by approximately 7.4%, compared with a decrease of approximately 0.6% in last year's fiscal second quarter. Also during the fiscal second quarter of 2010, the Company repurchased approximately $193 million of its common stock representing approximately 4.9 million shares. For the fiscal first half ended August 28, 2010, the Company reported net earnings of $1.22 per diluted share ($319.3 million), an increase of approximately 42% over net earnings of $.86 per diluted share ($222.7 million) in the corresponding period a year ago.  Net sales for the fiscal first half of 2010 were approximately $4.060 billion, an increase of approximately 12.5% from net sales of approximately $3.609 billion in the corresponding period a year ago.  Comparable store sales for the fiscal first half of 2010 increased by approximately 7.9%, compared with a decrease of approximately 1.1% in last year's fiscal first half.For the fiscal third quarter of 2010, the Company is modeling net earnings per diluted share to be approximately $.61 to $.65.  For fiscal 2010, the Company is now modeling net earnings per diluted share to increase by approximately 20%, up from the previous model of approximately 15%.  As of August 28, 2010, the Company had a total of 1,111 stores, including 972 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico and Canada, 61 Christmas Tree Shops stores, 33 buybuy BABY stores and 45 stores under the names of Harmon or Harmon Face Values.  During the fiscal second quarter, the Company opened five Bed Bath & Beyond stores, including the first store in its 50th state, Hawaii, and two buybuy BABY stores. Consolidated store space as of August 28, 2010 was approximately 34.1 million square feet. Since the beginning of the third quarter of fiscal 2010 on August 29, 2010, one additional Bed Bath & Beyond store, two buybuy BABY stores and one Christmas Tree Shops store have been opened.  In addition, the Company is a partner in a joint venture which operates two stores in the Mexico City market under the name "Home & More."Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a chain of retail stores, operating under the names of Bed Bath & Beyond, Christmas Tree Shops, Harmon, Harmon Face Values and buybuy BABY.  In addition, the Company is a partner in a joint venture which operates retail stores in Mexico under the name "Home & More."  The Company sells a wide assortment of domestics merchandise and home furnishings, which include food, giftware, health and beauty care items and infant and toddler merchandise.  Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard and Poor's 500 and Global 1200 Indices and the NASDAQ-100 Index.  The Company is counted among the Fortune 500 and the Forbes 2000.    This press release may contain forward-looking statements.  Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, and similar words and phrases.  The Company's actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside the Company's control. Such factors include, without limitation: general economic conditions including the housing market, a challenging overall macroeconomic environment and related changes in the retailing environment, consumer preferences and spending habits; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; unusual weather patterns; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the cost of labor, merchandise and other costs and expenses; the ability to find suitable locations at acceptable occupancy costs to support the Company's expansion program; the impact of failed auctions for auction rate securities held by the Company; and matters arising out of or related to the Company's stock option grants and procedures and related matters, including any tax implications relating to the Company's stock option grants.  The Company does not undertake any obligation to update its forward-looking statements.  BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Statements of Earnings(in thousands, except per share data)(unaudited)Three Months EndedSix Months EndedAugust 28,August 29,August 28,August 29,2010200920102009Net sales$   2,136,730$   1,914,909$   4,059,781$   3,609,249Cost of sales1,261,8121,141,5162,409,8272,169,038     Gross profit874,918773,3931,649,9541,440,211Selling, general and administrative expenses578,016551,3621,127,6581,075,876     Operating profit296,902222,031522,296364,335Interest income3271,4768433,243     Earnings before provision for income taxes297,229223,507523,139367,578Provision for income taxes115,47487,976203,831144,875     Net earnings$     181,755$     135,531$     319,308$     222,703Net earnings per share - Basic$           0.71$           0.53$           1.24$           0.87Net earnings per share - Diluted$           0.70$           0.52$           1.22$           0.86Weighted average shares outstanding - Basic257,013257,814258,207257,378Weighted average shares outstanding - Diluted259,928259,940261,783259,352BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Balance Sheets(in thousands, unaudited)August 28,August 29,20102009AssetsCurrent assets:     Cash and cash equivalents$   1,040,504$   1,035,601     Short term investment securities602,22343,125     Merchandise inventories1,903,0961,755,377     Other current assets306,571289,101          Total current assets3,852,3943,123,204Long term investment securities132,242157,193Property and equipment, net1,105,2971,111,971Other assets350,079343,070$   5,440,012$   4,735,438Liabilities and Shareholders' EquityCurrent liabilities:     Accounts payable$     771,752$     682,936     Accrued expenses and other current liabilities306,316264,066     Merchandise credit and gift card liabilities179,119163,338     Current income taxes payable25,24429,159          Total current liabilities1,282,4311,139,499Deferred rent and other liabilities262,198236,107Income taxes payable110,64298,928          Total liabilities1,655,2711,474,534          Total shareholders' equity3,784,7413,260,904$   5,440,012$   4,735,438BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(in thousands, unaudited)Six Months EndedAugust 28,August 29,20102009Cash Flows from Operating Activities:     Net earnings$  319,308$  222,703     Adjustments to reconcile net earnings to net cash          provided by operating activities:          Depreciation89,88289,746          Stock-based compensation22,63622,137          Tax benefit from stock-based compensation (2,660)(964)          Deferred income taxes(11,281)(13,943)          Other(694)(12)          (Increase) decrease in assets:               Merchandise inventories(143,393)(113,038)               Trading investment securities(1,859)(4,071)               Other current assets(29,525)(32,756)               Other assets(2,562)302          Increase (decrease) in liabilities:               Accounts payable168,903183,176               Accrued expenses and other current liabilities24,32219,123               Merchandise credit and gift card liabilities6,315(2,283)               Income taxes payable(51,370)11,318               Deferred rent and other liabilities16,08010,968     Net cash provided by operating activities404,102392,406Cash Flows from Investing Activities:     Purchase of held-to-maturity investment securities(780,750)-     Redemption of held-to-maturity investment securities555,020-     Redemption of available-for-sale investment securities14,02527,245     Redemption of trading investment securities42,825-     Capital expenditures(83,574)(67,631)     Net cash used in investing activities(252,454)(40,386)Cash Flows from Financing Activities:     Proceeds from exercise of stock options70,05445,663     Excess tax benefit from stock-based compensation1,0382,778     Repurchase of common stock, including fees(278,336)(33,069)     Net cash (used in) provided by financing activities(207,244)15,372     Net (decrease) increase in cash and cash equivalents(55,596)367,392Cash and cash equivalents:     Beginning of period1,096,100668,209     End of period$  1,040,504$  1,035,601SOURCE Bed Bath & Beyond Inc.For further information: Investor Contacts: Kenneth C. Frankel, +1-908-855-4554; Eugene A. Castagna, +1-908-855-4110