Bed Bath & Beyond Inc. Reports Results For Fiscal 2015 Third Quarter

- Net Earnings per Diluted Share of $1.09

- Net Sales Increased by Approximately 0.3%; 0.7% on a Constant Currency Basis

- Comparable Sales Decreased by Approximately 0.4%; Relatively Flat on a Constant Currency Basis

- Comparable Sales from Customer Facing Digital Channels Grew in Excess of 25%

- Modeling Fiscal Fourth Quarter and Full Year 2015 Net Earnings per Diluted Share of Approximately $1.72 to $1.86 and Approximately $4.91 to $5.05, respectively

Jan 07, 2016, 16:15 ET from Bed Bath & Beyond Inc.

UNION, N.J., Jan. 7, 2016 /PRNewswire/ -- Bed Bath & Beyond Inc. (NASDAQ: BBBY) today reported financial results for the third quarter of fiscal 2015 ended November 28, 2015.

Fiscal 2015 Third Quarter and Nine Months Results

For the third quarter of fiscal 2015, the Company reported net earnings of $1.09 per diluted share ($177.8 million) compared with $1.23 per diluted share ($225.4 million) for the third quarter of fiscal 2014.  On December 22, 2015, the Company announced revised net earnings estimates of $1.07 to $1.10 per diluted share for the fiscal third quarter of 2015.  The third quarter year-over-year comparison of net earnings per diluted share was unfavorably impacted by approximately $0.13, based on the fiscal 2015 diluted weighted average shares outstanding, due to the following non-comparable items:  a non-recurring credit card fee litigation settlement benefit that occurred in the third quarter of fiscal 2014; lower net after tax benefits in the third quarter of fiscal 2015 as compared to fiscal 2014 due to distinct tax events; and an unfavorable foreign currency rate impact in the third quarter of fiscal 2015.

For the third quarter of fiscal 2015, net sales were approximately $2.952 billion, an increase of approximately 0.3% from net sales of approximately $2.943 billion reported in the third quarter of fiscal 2014.  Net sales on a constant currency basis (a non-GAAP measure) increased by approximately 0.7% for the third quarter of fiscal 2015. Comparable sales in the third quarter of fiscal 2015 decreased by approximately 0.4%, compared with an increase of approximately 1.7% in last year's fiscal third quarter.  Comparable sales on a constant currency basis (a non-GAAP measure) were relatively flat for the third quarter of fiscal 2015.  Comparable sales from customer facing digital channels grew in excess of 25% while comparable sales from stores declined in the low single-digit percentage range during the third quarter of fiscal 2015.

For the fiscal nine months ended November 28, 2015, the Company reported net earnings of $3.22 per diluted share ($537.9 million) compared with $3.31 per diluted share ($636.4 million) in the corresponding period a year ago.  Net sales for the fiscal nine months of 2015 were approximately $8.686 billion, an increase of approximately 1.7% from net sales of approximately $8.545 billion in the corresponding period a year ago.  Net sales on a constant currency basis increased by approximately 2.0% for the fiscal nine months. Comparable sales for the fiscal nine months of 2015 increased by approximately 0.8%, compared with an increase of approximately 1.9% in last year's fiscal nine months.  Comparable sales on a constant currency basis increased by approximately 1.2% for the fiscal nine months of 2015.  Comparable sales from customer facing digital channels grew approximately 30% while comparable sales from stores declined in the low single-digit percentage range during the fiscal nine months of 2015.  

Share Repurchase Program

During the third quarter of fiscal 2015, the Company repurchased approximately $194 million of its common stock, representing approximately 3.3 million shares, under its existing share repurchase program.  As of November 28, 2015, the remaining balance of the current $2.0 billion share repurchase program was approximately $110 million.  The Company is modeling to complete its current share repurchase program during the fourth quarter of 2015 and commence repurchases under the new $2.5 billion authorization, approved by the Board of Directors in September 2015. 

Fiscal 2015 Financial Model

The Company is now modeling comparable sales to be between relatively flat and an increase of approximately 2.0% for the fiscal 2015 fourth quarter which results in a range of approximately 0.6% to 1.1% for the fiscal full year.  Net earnings per diluted share are modeled to be in the range of approximately $1.72 to $1.86 for the fiscal 2015 fourth quarter and approximately $4.91 to $5.05 for the fiscal full year.  The modeling of net earnings per diluted share is based upon a number of assumptions which will be described in the Company's third quarter of fiscal 2015 conference call. Information regarding access to the call is available in the Investor Relations section of the Company's website, www.bedbathandbeyond.com.

About the Company

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond, Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, Harmon or Harmon Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus. Customers can purchase products from the Company either in-store, online or through a mobile device. The Company has the developing ability to have customer purchases picked up in-store or shipped direct to the customer from the Company's distribution facilities, stores or vendors.  In addition, the Company operates Of a Kind, an e-commerce website that features specially commissioned, limited edition items from emerging fashion and home designers.  The Company also operates Linen Holdings, a provider of a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries.  Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond. 

The Company operates websites at bedbathandbeyond.com, worldmarket.com, buybuybaby.com, christmastreeshops.com, harmondiscount.com, and ofakind.com.  As of November 28, 2015, the Company had a total of 1,526 stores, including 1,022 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 276 stores under the names of World Market, Cost Plus World Market or Cost Plus, 100 buybuy BABY stores, 78 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 50 stores under the names Harmon or Harmon Face Values.  During the fiscal third quarter, the Company opened five Bed Bath & Beyond stores, one buybuy BABY store and six Cost Plus World Market stores and closed six Bed Bath & Beyond stores.  In addition, the Company is a partner in a joint venture which operates six stores in Mexico under the name Bed Bath & Beyond.

Non-GAAP Information

This press release contains certain non-GAAP information, such as net sales on a constant currency basis, which is intended to provide visibility into the Company's operations by excluding the effects of foreign currency exchange rate fluctuations.

Forward-Looking Statements

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, spending habits and adoption of new technologies; 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; liquidity; the ability to attract and retain qualified employees in all areas of the organization; the cost of labor, merchandise and other costs and expenses; potential supply chain disruption due to political instability, labor disturbances and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company's plans for new stores; the ability to assess and implement technologies in support of the Company's development of its omnichannel capabilities; uncertainty in financial markets; disruptions to the Company's information technology systems including but not limited to security breaches of systems protecting consumer and employee information; reputational risk arising from challenges to the Company's or a third party supplier's compliance with various laws, regulations or standards, including those related to labor, health, safety, privacy or the environment; reputational risk arising from third-party merchandise or service vendor performance in direct home delivery or assembly of product for customers; changes to statutory, regulatory and legal requirements; new, or developments in existing, litigation, claims or assessments; 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; foreign currency exchange rate fluctuations; 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 28, 

 November 29, 

 November 28, 

 November 29, 

2015

2014

2015

2014

Net sales

$

2,952,031

$

2,942,980

$

8,685,995

$

8,544,583

Cost of sales

1,836,720

1,814,006

5,385,601

5,250,679

Gross profit

1,115,311

1,128,974

3,300,394

3,293,904

Selling, general and administrative expenses

822,453

776,291

2,384,073

2,271,779

Operating profit

292,858

352,683

916,321

1,022,125

Interest expense, net

18,052

19,569

63,006

31,191

Earnings before provision for income taxes

274,806

333,114

853,315

990,934

Provision for income taxes 

96,990

107,706

315,370

354,521

Net earnings

$

177,816

$

225,408

$

537,945

$

636,413

Net earnings per share - Basic

$

1.10

$

1.24

$

3.26

$

3.34

Net earnings per share - Diluted

$

1.09

$

1.23

$

3.22

$

3.31

Weighted average shares outstanding - Basic

162,005

181,629

165,267

190,292

Weighted average shares outstanding - Diluted

163,582

183,794

167,116

192,463

 

 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, unaudited)

November 28, 

November 29, 

2015

2014

Assets

Current assets:

 Cash and cash equivalents

$

490,737

$

1,043,838

 Short term investment securities

-

134,993

 Merchandise inventories

3,219,667

3,065,774

 Other current assets

480,132

487,387

        Total current assets

4,190,536

4,731,992

Long term investment securities

74,666

94,876

Property and equipment, net

1,686,632

1,601,208

Goodwill

487,166

486,279

Other assets

404,992

421,480

$

6,843,992

$

7,335,835

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

1,402,968

$

1,309,002

Accrued expenses and other current liabilities

467,654

458,278

Merchandise credit and gift card liabilities

317,430

296,776

Current income taxes payable

4,327

14,559

       Total current liabilities

2,192,379

2,078,615

Deferred rent and other liabilities

504,469

487,998

Income taxes payable

81,390

79,915

Long term debt

1,500,000

1,500,000

       Total liabilities

4,278,238

4,146,528

Shareholders' equity:

Preferred stock - $0.01 par value; authorized - 1,000

  shares; no shares issued or outstanding

-

-

Common stock - $0.01 par value; authorized - 900,000 shares;

  issued 337,554 and 336,276 shares, respectively;

  outstanding 163,587 and 185,601 shares, respectively

3,376

3,363

Additional paid-in capital

1,866,071

1,594,066

Retained earnings

10,091,321

9,232,315

Treasury stock, at cost; 173,967 and 150,675 shares, respectively

(9,341,450)

(7,621,286)

Accumulated other comprehensive loss

(53,564)

(19,151)

Total shareholders' equity

2,565,754

3,189,307

$

6,843,992

$

7,335,835

Certain reclassifications have been made to the fiscal 2014 balance sheet to conform

to the fiscal 2015 consolidated balance sheet presentation.

 

 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 Nine Months Ended 

November 28, 

November 29, 

2015

2014

Cash Flows from Operating Activities:

Net earnings

$

537,945

$

636,413

Adjustments to reconcile net earnings to net cash

provided by operating activities:

Depreciation and amortization

193,633

179,466

Stock-based compensation

49,848

49,284

Excess tax benefit from stock-based compensation

(10,380)

(11,127)

Deferred income taxes

22,848

(27,247)

Other

740

(1,399)

Increase in assets:

     Merchandise inventories

(493,054)

(489,198)

     Trading investment securities

(6,300)

(7,364)

     Other current assets

(124,143)

(105,683)

     Other assets

(6,611)

(1,064)

Increase (decrease) in liabilities:

     Accounts payable

288,304

236,450

     Accrued expenses and other current liabilities

64,986

72,479

     Merchandise credit and gift card liabilities

11,584

12,709

     Income taxes payable

(60,933)

(48,017)

     Deferred rent and other liabilities

21,465

6,475

Net cash provided by operating activities

489,932

502,177

Cash Flows from Investing Activities:

Purchase of held-to-maturity investment securities

(16,873)

(219,353)

Redemption of held-to-maturity investment securities

126,875

573,750

Redemption of available-for-sale investment securities

28,905

-

Capital expenditures 

(244,255)

(232,658)

Net cash (used in) provided by investing activities

(105,348)

121,739

Cash Flows from Financing Activities:

Proceeds from exercise of stock options

7,879

24,790

Proceeds from issuance of senior unsecured notes

-

1,500,000

Payment of deferred financing costs

-

(10,092)

Prepayment under share repurchase agreement

-

(165,000)

Payment of other liabilities

(7,646)

-

Excess tax benefit from stock-based compensation

10,380

11,127

Repurchase of common stock, including fees

(773,518)

(1,303,951)

Net cash (used in) provided by financing activities

(762,905)

56,874

Effect of exchange rate changes on cash and cash equivalents

(6,516)

(3,468)

Net (decrease) increase in cash and cash equivalents

(384,837)

677,322

Cash and cash equivalents:

Beginning of period 

875,574

366,516

End of period

$

490,737

$

1,043,838

Certain reclassifications have been made to the fiscal 2014 cash flows to conform

to the fiscal 2015 consolidated cash flows presentation.

 

SOURCE Bed Bath & Beyond Inc.



RELATED LINKS

http://www.bedbathandbeyond.com