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Press release from PR Newswire

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

Wednesday, September 19, 2012

Bed Bath & Beyond Inc. Reports Results for Fiscal Second Quarter16:15 EDT Wednesday, September 19, 2012- Net Earnings per Diluted Share of $.98 - Quarterly Net Sales Increase by Approximately 12.1% - Quarterly Comparable Store Sales Increase by Approximately 3.5% - Modeling Fiscal Third Quarter 2012 Net Earnings per Diluted Share of Approximately $.99 to $1.04 - Continues to Model Fiscal 2012 Net Earnings per Diluted Share to Increase by a High Single to a Low Double Digit Percentage RangeUNION, N.J., Sept. 19, 2012 /PRNewswire/ -- Bed Bath & Beyond Inc. today reported net earnings of $.98 per diluted share ($224.3 million) in the fiscal second quarter ended August 25, 2012, an increase of approximately 5.4% versus net earnings of $.93 per diluted share ($229.4 million) in the same quarter a year ago.  Net sales for the fiscal second quarter of 2012 were approximately $2.593 billion, an increase of approximately 12.1% from net sales of approximately $2.314 billion reported in the fiscal second quarter of 2011.  Comparable store sales in the fiscal second quarter of 2012 increased by approximately 3.5%, compared with an increase of approximately 5.6% in last year's fiscal second quarter.  During the fiscal second quarter of 2012, the Company repurchased approximately $199 million of its common stock representing approximately 3.1 million shares.  As of August 25, 2012, the remaining balance of the current share repurchase program authorized in December 2010 was approximately $414 million.For the fiscal first half ended August 25, 2012, the Company reported net earnings of $1.87 per diluted share ($431.2 million), an increase of approximately 13.3% over net earnings of $1.65 per diluted share ($410.0 million) in the corresponding period a year ago.  Net sales for the fiscal first half of 2012 were approximately $4.811 billion, an increase of approximately 8.8% from net sales of approximately $4.424 billion in the corresponding period a year ago.  Comparable store sales for the fiscal first half of 2012 increased by approximately 3.3%, compared with an increase of approximately 6.3% in last year's fiscal first half.  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 second quarter and fiscal first half of 2012, and will continue to be excluded from the comparable store sales calculations until after the anniversary of the acquisition.The Company is modeling net earnings per diluted share to be approximately $.99 to $1.04 for the fiscal third quarter and continues to model net earnings per diluted share to increase by a high single to a low double digit percentage range 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 second 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.As of August 25, 2012, the Company had a total of 1,449 stores, including 1,000 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 258 stores under the names of World Market, Cost Plus World Market, and World Market Stores, 73 Christmas Tree Shops stores, 71 buybuy BABY stores and 47 stores under the names of Harmon or Harmon Face Values.  During the fiscal second quarter, the Company opened five Bed Bath & Beyond stores, three buybuy BABY stores, one Christmas Tree Shops store and two Harmon Face Values stores. Consolidated store space as of August 25, 2012 was approximately 41.4 million square feet. Since the beginning of the third quarter of fiscal 2012 on August 26, 2012, an additional buybuyBABY store and three World Market 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, 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 acts of third parties; changes to statutory, regulatory and legal requirements; changes to, or new, tax laws or interpretation of existing tax laws; and changes to, or new, accounting standards including, without limitation, changes to lease accounting standards.  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 Six Months Ended August 25,  August 27,  August 25,  August 27, 2012201120122011Net sales$2,593,015$2,314,064$4,811,307$4,424,015Cost of sales1,560,3461,363,0652,891,4392,615,444 Gross profit1,032,669950,9991,919,8681,808,571Selling, general and administrative expenses667,532579,3631,241,3331,147,987 Operating profit365,137371,636678,535660,584Interest income (expense), net269(1,872)(787)(1,320) Earnings before provision for income taxes365,406369,764677,748659,264Provision for income taxes 141,076140,392246,582249,314 Net earnings$224,330$229,372$431,166$409,950Net earnings per share - Basic$0.99$0.94$1.89$1.68Net earnings per share - Diluted$0.98$0.93$1.87$1.65Weighted average shares outstanding - Basic226,313242,751227,699244,148Weighted average shares outstanding - Diluted229,308246,539230,995248,169 BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Balance Sheets(in thousands, unaudited)August 25, August 27, 20122011AssetsCurrent assets: Cash and cash equivalents$744,465$1,017,990 Short term investment securities164,261724,911 Merchandise inventories2,430,9072,117,414 Other current assets381,410334,261        Total current assets3,721,0434,194,576Long term investment securities82,463113,705Property and equipment, net1,403,5201,128,998Other assets900,456311,197$6,107,482$5,748,476Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable$940,958$848,063Accrued expenses and other current liabilities422,736328,680Merchandise credit and gift card liabilities233,458195,688Current income taxes payable4,45119,265       Total current liabilities1,601,6031,391,696Deferred rent and other liabilities485,485312,584Income taxes payable100,298133,150       Total liabilities2,187,3861,837,430       Total shareholders' equity3,920,0963,911,046$6,107,482$5,748,476BED BATH & BEYOND INC. AND SUBSIDIARIESConsolidated Statements of Cash Flows(in thousands, unaudited) Six Months Ended August 25, August 27, 20122011Cash Flows from Operating Activities:Net earnings$431,166$409,950Adjustments to reconcile net earnings to net cashprovided by operating activities:Depreciation90,48688,110Stock-based compensation23,80524,268Tax benefit from stock-based compensation12,716(2,736)Deferred income taxes(16,862)(11,946)Other(517)(915)(Increase) decrease in assets, net of effect of acquisitions:     Merchandise inventories(163,100)(148,507)     Trading investment securities(2,305)(557)     Other current assets(11,478)16,284     Other assets(10,718)685Increase (decrease) in liabilities, net of effect of acquisitions:     Accounts payable143,582141,161     Accrued expenses and other current     liabilities13,07421,195     Merchandise credit and gift card liabilities18,8652,627     Income taxes payable(65,128)(60,297)     Deferred rent and other liabilities8,5376,831Net cash provided by operating activities472,123486,153Cash Flows from Investing Activities:Purchase of held-to-maturity investment securities(281,130)(856,012)Redemption of held-to-maturity investment securities881,249731,250Redemption of available-for-sale investment securities8,52515,550Capital expenditures (158,064)(89,598)Payment for acquisitions, net of cash acquired(668,780)-Payment for acquisition of trademarks(40,000)-Net cash used in investing activities(258,200)(198,810)Cash Flows from Financing Activities:Proceeds from exercise of stock options29,17477,703Excess tax benefit from stock-based compensation3,776923Repurchase of common stock, including fees(505,574)(531,566)Net cash used in financing activities(472,624)(452,940)Net decrease in cash and cash equivalents(258,701)(165,597)Cash and cash equivalents:Beginning of period 1,003,1661,183,587End of period$744,465$1,017,990 SOURCE Bed Bath & Beyond Inc.For further information: Kenneth C. Frankel, +1-908-855-4554, or Eugene A. Castagna, +1-908-855-4110