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Press release from PR Newswire

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

Wednesday, December 22, 2010

Bed Bath & Beyond Inc. Reports Results for Fiscal Third Quarter16:15 EST Wednesday, December 22, 2010-- Quarterly Net Earnings per Diluted Share Increase by Approximately 28% to $.74 -- Quarterly Net Sales Increase by Approximately 11.1% -- Quarterly Comparable Store Sales Increase by Approximately 7.0% -- Full Year Net Earnings per Diluted Share Modeled to Increase Approximately 25%; Previously Modeled at Approximately 20% -- Board of Directors Authorizes a New $2 Billion Share Repurchase ProgramUNION, N.J., Dec. 22, 2010 /PRNewswire-FirstCall/ -- Bed Bath & Beyond Inc. (Nasdaq: BBBY) today reported net earnings of $.74 per diluted share ($188.6 million) in the fiscal third quarter ended November 27, 2010, an increase of approximately 28% versus net earnings of $.58 per diluted share ($151.3 million) in the same quarter a year ago.  Net sales for the fiscal third quarter of 2010 were approximately $2.194 billion, an increase of approximately 11.1% from net sales of approximately $1.975 billion reported in the fiscal third quarter of 2009.  Comparable store sales in the fiscal third quarter of 2010 increased by approximately 7.0%, compared with an increase of approximately 7.3% in last year's fiscal third quarter. During the fiscal third quarter of 2010, the Company also repurchased approximately $211 million of its common stock representing approximately 5.0 million shares. For the fiscal nine months ended November 27, 2010, the Company reported net earnings of $1.95 per diluted share ($507.9 million), an increase of approximately 35% over net earnings of $1.44 per diluted share ($374.0 million) in the corresponding period a year ago.  Net sales for the fiscal nine months of 2010 were approximately $6.254 billion, an increase of approximately 12.0% from net sales of approximately $5.585 billion in the corresponding period a year ago.  Comparable store sales for the fiscal nine months of 2010 increased by approximately 7.6%, compared with an increase of approximately 1.7% in last year's fiscal nine months.The Company is now modeling net earnings per diluted share to be approximately $.91 to $.95 for the fiscal fourth quarter of 2010 and approximately $2.86 to $2.90 for all of fiscal 2010.  The Company is pleased to announce that its Board of Directors has authorized a new $2 billion share repurchase program.  The Company is currently planning that the new share repurchase program will commence in early fiscal 2011 after completion of the existing share repurchase program.  Since 2004 through the fiscal third quarter of 2010, the Company has returned approximately $2.6 billion to our shareholders through share repurchases."Our Board took this action based upon its continued confidence in our Company's long-term growth potential, financial outlook and cash flow generation," said Steven Temares, Chief Executive Officer and Member of the Board of Directors. "It is currently anticipated that this new $2 billion share repurchase program will be funded from current cash and from present and expected future cash flows. That said, our Company's Board of Directors continues to review our capital structure on an ongoing basis. In addition to providing value to our shareholders through share repurchase programs, our strong operations should allow us to continue to invest in our infrastructure and maintain our flexibility to take advantage of opportunities as they may arise."As of November 27, 2010, the Company had a total of 1,127 stores, including 976 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico and Canada, 66 Christmas Tree Shops stores, 40 buybuy BABY stores and 45 stores under the names of Harmon or Harmon Face Values.  During the fiscal third quarter, the Company opened five Bed Bath & Beyond stores, five Christmas Tree Shops stores, and seven buybuy BABY stores. Consolidated store space as of November 27, 2010 was approximately 34.7 million square feet. Since the beginning of the fourth quarter of fiscal 2010 on November 28, 2010, two Bed Bath & Beyond stores and two buybuy BABY stores 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.  Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles.  Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile products.  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; changes to, or new, accounting standards including, without limitation, changes to lease accounting standards; 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 EndedNine Months EndedNovember 27,November 28,November 27,November 28,2010200920102009Net sales$2,193,755$1,975,465$6,253,536$5,584,714Cost of sales1,297,2471,163,0533,707,0743,332,091        Gross profit896,508812,4122,546,4622,252,623Selling, general and administrative expenses591,398566,8011,719,0561,642,677        Operating profit305,110245,611827,406609,946Interest income1,9967372,8393,980        Earnings before provision for income taxes307,106246,348830,245613,926Provision for income taxes118,53295,060322,363239,935        Net earnings$188,574$151,288$507,882$373,991Net earnings per share - Basic$0.75$0.59$1.98$1.45Net earnings per share - Diluted$0.74$0.58$1.95$1.44Weighted average shares outstanding - Basic252,233258,074256,216257,610Weighted average shares outstanding - Diluted255,936260,913259,834259,872BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Balance Sheets(in thousands, unaudited)November 27,November 28,20102009AssetsCurrent assets:     Cash and cash equivalents$840,333$854,641     Short term investment securities599,805162,934     Merchandise inventories2,171,7831,954,995     Other current assets337,094353,419        Total current assets3,949,0153,325,989Long term investment securities134,663152,248Property and equipment, net1,124,7041,118,272Other assets351,765331,257$5,560,147$4,927,766Liabilities and Shareholders' EquityCurrent liabilities:     Accounts payable$856,646$718,921     Accrued expenses and other current liabilities319,969281,494     Merchandise credit and gift card liabilities182,617162,882     Current income taxes payable10,74224,216        Total current liabilities1,369,9741,187,513Deferred rent and other liabilities277,078238,660Income taxes payable114,183103,160        Total liabilities1,761,2351,529,333        Total shareholders' equity3,798,9123,398,433$5,560,147$4,927,766BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(in thousands, unaudited)Nine Months EndedNovember 27,November 28,20102009Cash Flows from Operating Activities:  Net earnings$507,882$373,991  Adjustments to reconcile net earnings to net cash     provided by operating activities:     Depreciation135,217137,034     Stock-based compensation33,31632,809     Tax benefit from stock-based compensation (2,589)(1,805)     Deferred income taxes(10,708)(16,206)     Other(1,247)(147)      (Increase) decrease in assets:        Merchandise inventories(412,080)(312,656)        Trading investment securities(4,161)(4,998)        Other current assets(62,524)(83,633)        Other assets(2,562)377      Increase (decrease) in liabilities:        Accounts payable247,991206,883        Accrued expenses and other current liabilities39,93237,363        Merchandise credit and gift card liabilities9,813(2,739)        Income taxes payable(62,331)10,607        Deferred rent and other liabilities32,11815,216  Net cash provided by operating activities448,067392,096Cash Flows from Investing Activities:  Purchase of held-to-maturity investment securities(1,146,153)(119,950)  Redemption of held-to-maturity investment securities920,645-  Redemption of available-for-sale investment securities16,52533,320  Redemption of trading investment securities42,825-  Capital expenditures(142,186)(108,619)  Net cash used in investing activities(308,344)(195,249)Cash Flows from Financing Activities:  Proceeds from exercise of stock options91,08353,190  Excess tax benefit from stock-based compensation2,4953,028  Repurchase of common stock, including fees(489,068)(66,633)  Net cash used in financing activities(395,490)(10,415)  Net (decrease) increase in cash and cash equivalents(255,767)186,432Cash and cash equivalents:  Beginning of period1,096,100668,209  End of period$840,333$854,641SOURCE Bed Bath & Beyond Inc.For further information: Kenneth C. Frankel, +1-908-855-4554 or Eugene A. Castagna, +1-908-855-4110