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Press release from PR Newswire

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

Wednesday, December 19, 2012

Bed Bath & Beyond Inc. Reports Results For Fiscal Third Quarter16:15 EST Wednesday, December 19, 2012- Net Earnings per Diluted Share of $1.03 - Quarterly Net Sales Increase by Approximately 15.3% - Quarterly Comparable Store Sales Increase by Approximately 1.7% - Board of Directors Authorizes a New $2.5 Billion Share Repurchase Program - Modeling Fiscal Fourth Quarter 2012 Net Earnings per Diluted Share of Approximately $1.60 to $1.67 - Modeling Full Year Net Earnings per Diluted Share to Increase by Approximately 10% to 12%, Consistent with Prior EstimatesUNION, N.J., Dec. 19, 2012 /PRNewswire/ -- Bed Bath & Beyond Inc. today reported net earnings of $1.03 per diluted share ($232.8 million) in the fiscal third quarter ended November 24, 2012, an increase of approximately 8.4% versus net earnings of $.95 per diluted share ($228.5 million) in the same quarter a year ago.  Net sales for the fiscal third quarter of 2012 were approximately $2.702 billion, an increase of approximately 15.3% from net sales of approximately $2.344 billion reported in the fiscal third quarter of 2011.  Comparable store sales in the fiscal third quarter of 2012 increased by approximately 1.7%, compared with an increase of approximately 4.1% in last year's fiscal third quarter.  The Company estimates that the impact of Hurricane Sandy reduced its comparable store sales percentage during the fiscal third quarter by approximately 0.9%.The Company is pleased to announce that its Board of Directors has authorized a new $2.5 billion share repurchase program.  The Company is currently planning that the new share repurchase program will commence after completion of the existing share repurchase program.  During the fiscal third quarter of 2012, the Company repurchased approximately $191 million of its common stock, representing approximately 3.1 million shares, under its existing share repurchase program authorized in December 2010.  As of November 24, 2012, the remaining balance of the existing share repurchase program was approximately $223 million.  Since 2004 through the fiscal third quarter of 2012, the Company has returned approximately $4.7 billion to our shareholders through share repurchases."Our Board authorized this new share repurchase program 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 anticipated that this $2.5 billion share repurchase program will be funded from current cash and 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."For the fiscal nine months ended November 24, 2012, the Company reported net earnings of $2.89 per diluted share ($663.9 million), an increase of approximately 11.2% over net earnings of $2.60 per diluted share ($638.5 million) in the corresponding period a year ago.  Net sales for the fiscal nine months of 2012 were approximately $7.513 billion, an increase of approximately 11.0% from net sales of approximately $6.768 billion in the corresponding period a year ago.  Comparable store sales for the fiscal nine months of 2012 increased by approximately 2.7%, compared with an increase of approximately 5.5% in last year's fiscal nine months.  The Company is modeling net earnings per diluted share to be approximately $1.60 to $1.67 for the fiscal fourth quarter of 2012 and, consistent with prior estimates, to be approximately $4.48 to $4.54 for all of fiscal 2012, which will be 53 weeks and includes World Market and Linen Holdings from the date of each acquisition to the end of the fiscal year.  The modeling of net earnings per diluted share is based upon a number of planning assumptions which will be described in the Company's third quarter of fiscal 2012 conference call. Information regarding access to the call is available in the Investor Relations section of the Company's website, www.bedbathandbeyond.com.The accompanying consolidated financial information includes the accounts of Linen Holdings since the date of its acquisition on June 1, 2012 and Cost Plus, Inc. ("World Market") since the date of its acquisition on June 29, 2012.  Linen Holdings, a business-to-business distributor, is excluded from the comparable store sales calculations and will continue to be excluded on an ongoing basis as long as it does not meet the Company's definition of comparable store sales.  World Market is excluded from the comparable store sales calculations for the fiscal third quarter and nine months of 2012, and will continue to be excluded from the comparable store sales calculations until after the anniversary of the acquisition.As of November 24, 2012, the Company had a total of 1,466 stores, including 1,003 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 264 stores under the names of World Market, Cost Plus World Market, or World Market Stores, 74 stores under the names of Christmas Tree Shops or andThat!, 78 buybuy BABY stores and 47 stores under the names of Harmon or Harmon Face Values.  During the fiscal third quarter, the Company opened four Bed Bath & Beyond stores, seven buybuy BABY stores, six World Market stores and one andThat! store while closing one Bed Bath & Beyond store. Consolidated store space as of November 24, 2012 was approximately 41.9 million square feet. Since the beginning of the fourth quarter of fiscal 2012 on November 25, 2012, one Bed Bath & Beyond store and two buybuyBABY 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") operates a chain of retail stores under the names of Bed Bath & Beyond, World Market, Cost Plus World Market, World Market Stores, Christmas Tree Shops, andThat!, Harmon, Harmon Face Values and buybuy BABY.  The Company is also a partner in a joint venture which operates retail stores in Mexico under the name "Home & More."  Through its retail stores, 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.  Additionally, the Company includes Linen Holdings, a business-to-business distributor of a variety of textile products, amenities and other goods to customers in the hospitality, cruise line, food service, healthcare and other industries.  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. 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; civil disturbances and terrorist acts; unusual weather patterns and natural disasters; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the ability to attract and retain associates in all areas of the organization; the cost of labor, merchandise and other costs and expenses; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company's expansion program; the impact of failed auctions for auction rate securities held by the Company;  uncertainty in financial markets; disruptions to the Company's information technology systems including but not limited to security breaches of the Company's systems protecting consumer and employee information; reputational risk arising from the acts of third parties; changes to statutory, regulatory and legal requirements; changes to, or new, tax laws or interpretation of existing tax laws; changes to, or new, accounting standards including, without limitation, changes to lease accounting standards; and the integration of acquired businesses.  The Company does not undertake any obligation to update its forward-looking statements.   BED BATH & BEYOND INC. AND SUBSIDIARIES  Consolidated Statements of Earnings  (in thousands, except per share data)   (unaudited)  Three Months Ended Nine Months Ended November 24,  November 26,  November 24,  November 26, 2012201120122011Net sales$2,701,801$2,343,561$7,513,108$6,767,576Cost of sales1,627,7911,384,8684,519,2304,000,312Gross profit1,074,010958,6932,993,8782,767,264Selling, general and administrative expenses712,361601,6731,953,6941,749,660Operating profit361,649357,0201,040,1841,017,604Interest expense, net(3,122)(602)(3,909)(1,922)Earnings before provision for income taxes358,527356,4181,036,2751,015,682Provision for income taxes 125,777127,874372,359377,188Net earnings$232,750$228,544$663,916$638,494Net earnings per share - Basic$1.04$0.96$2.93$2.64Net earnings per share - Diluted$1.03$0.95$2.89$2.60Weighted average shares outstanding - Basic223,687237,802226,362242,033Weighted average shares outstanding - Diluted226,661241,718229,551246,019 BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Balance Sheets(in thousands, unaudited)November 24, November 26, 20122011AssetsCurrent assets: Cash and cash equivalents$672,262$765,750 Short term investment securities112,450761,930 Merchandise inventories2,763,9072,357,254 Other current assets419,234405,950        Total current assets3,967,8534,290,884Long term investment securities74,668101,864Property and equipment, net1,433,5921,160,994Other assets910,723301,374$6,386,836$5,855,116Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable$1,088,651$954,281Accrued expenses and other current liabilities423,202346,871Merchandise credit and gift card liabilities235,789197,932Current income taxes payable89,2712,444       Total current liabilities1,836,9131,501,528Deferred rent and other liabilities479,164318,814Income taxes payable93,637124,262       Total liabilities2,409,7141,944,604Total shareholders' equity3,977,1223,910,512$6,386,836$5,855,116 BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(in thousands, unaudited) Nine Months Ended November 24, November 26, 20122011Cash Flows from Operating Activities:Net earnings$663,916$638,494Adjustments to reconcile net earnings to net cashprovided by operating activities:Depreciation139,411131,989Stock-based compensation34,59134,682Tax benefit from stock-based compensation13,056(430)Deferred income taxes(13,897)13,596Other826(1,262)(Increase) decrease in assets, net of effect of acquisitions:     Merchandise inventories(496,100)(388,347)     Trading investment securities(3,508)(882)     Other current assets(86,975)(55,697)     Other assets(10,655)903Increase (decrease) in liabilities, net of effect of acquisitions:     Accounts payable292,305238,495     Accrued expenses and other current liabilities8,39833,663     Merchandise credit and gift card liabilities21,1964,871     Income taxes payable32,110(97,435)     Deferred rent and other liabilities12,74215,850Net cash provided by operating activities607,416568,490Cash Flows from Investing Activities:Purchase of held-to-maturity investment securities(393,578)(1,277,815)Redemption of held-to-maturity investment securities1,031,2491,128,125Redemption of available-for-sale investment securities31,71515,550Capital expenditures (238,405)(159,244)Payment for acquisitions, net of cash acquired(668,609)-Payment for acquisition of trademarks(40,000)-Net cash used in investing activities(277,628)(293,384)Cash Flows from Financing Activities:Proceeds from exercise of stock options31,660161,705Excess tax benefit from stock-based compensation3,8854,638Repurchase of common stock, including fees(696,237)(859,286)Net cash used in financing activities(660,692)(692,943)Net decrease in cash and cash equivalents(330,904)(417,837)Cash and cash equivalents:Beginning of period 1,003,1661,183,587End of period$672,262$765,750 SOURCE Bed Bath & Beyond Inc.For further information: Kenneth C. Frankel, +1-908-855-4554; or Eugene A. Castagna, +1-908-855-4110