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

-- Net Earnings per Diluted Share of $1.16
-- Quarterly Comparable Store Sales Increase by Approximately 3.7%
-- Quarterly Net Sales Increase by Approximately 8.9%
-- Modeling Fiscal Third Quarter 2013 Net Earnings per Diluted Share of Approximately $1.11 to $1.16
-- Modeling Fiscal 2013 Net Earnings per Diluted Share to be Approximately $4.88 to $5.01

PR Newswire

UNION, N.J., Sept. 25, 2013 /PRNewswire/ -- Bed Bath & Beyond Inc. today reported net earnings of $1.16 per diluted share ($249.3 million) in the fiscal second quarter ended August 31, 2013, an increase of approximately 18.4% versus net earnings of $0.98 per diluted share ($224.3 million) in the same quarter a year ago.  Net sales for the fiscal second quarter of 2013 were approximately $2.824 billion, an increase of approximately 8.9% from net sales of approximately $2.593 billion reported in the fiscal second quarter of 2012.  Comparable store sales in the fiscal second quarter of 2013 increased by approximately 3.7%, compared with an increase of approximately 3.5% in last year's fiscal second quarter.  

During the fiscal second quarter of 2013, the Company repurchased approximately $257 million of its common stock, representing approximately 3.5 million shares.  As of August 31, 2013, the remaining balance of the existing share repurchase program authorized in December 2012 was approximately $1.8 billion. 

For the fiscal first half ended August 31, 2013, the Company reported net earnings of $2.09 per diluted share ($451.8 million), an increase of approximately 11.8% over net earnings of $1.87 per diluted share ($431.2 million) in the corresponding period a year ago.  Net sales for the fiscal first half of 2013 were approximately $5.436 billion, an increase of approximately 13.0% from net sales of approximately $4.811 billion in the corresponding period a year ago.  Comparable store sales for the fiscal first half of 2013 increased by approximately 3.5%, compared with an increase of approximately 3.3% in last year's fiscal first half. 

The Company is modeling net earnings per diluted share in 2013 to be approximately $1.11 to $1.16 for the fiscal third quarter, $1.70 to $1.77 for the fiscal fourth quarter, and to be approximately $4.88 to $5.01 for the full year, which will include Cost Plus, Inc. ("World Market") and Linen Holdings for all of fiscal 2013.  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 2013 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 for fiscal 2013 includes the accounts of Linen Holdings and World Market from the beginning of the fiscal year and for fiscal 2012, includes the accounts of Linen Holdings since the date of its acquisition on June 1, 2012 and World Market since the date of its acquisition on June 29, 2012.  Linen Holdings 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 through the end of the fiscal first half of 2013 and will be included beginning with the fiscal third quarter of 2013.

As of August 31, 2013, the Company had a total of 1,484 stores, including 1,009 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 266 stores under the names of World Market, Cost Plus World Market or Cost Plus, 86 buybuy BABY stores, 74 stores under a combination of the names of Christmas Tree Shops or andThat!, and 49 stores under the names of Harmon or Harmon Face Values.  During the fiscal second quarter, the Company opened one Bed Bath & Beyond store, one Christmas Tree Shops store, three buybuy BABY stores and one Harmon Face Values store. Consolidated store space, net of openings and closings for all our concepts, as of August 31, 2013 was approximately 42.3 million square feet. Since the beginning of the fiscal third quarter of 2013 on September 1, 2013, one World Market store and two Bed Bath & Beyond stores have been opened.  In addition, the Company is a partner in a joint venture which operates three stores in the Mexico City market under the name Bed Bath & Beyond.

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, Cost Plus, 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 Bed Bath & Beyond.  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 provider of a variety of textile products, amenities and other goods to institutional 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 qualified employees 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; 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; 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; 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 


Six Months Ended
























 August 31, 


 August 25, 


 August 31, 


 August 25, 







2013


2012


2013


2012


































Net sales


$

2,823,672


$

2,593,015


$

5,435,812


$

4,811,307




















Cost of sales



1,710,188



1,560,346



3,289,357



2,891,439






















Gross profit



1,113,484



1,032,669



2,146,455



1,919,868




















Selling, general and administrative expenses


723,718



667,532



1,433,588



1,241,333






















Operating profit



389,766



365,137



712,867



678,535




















Interest (expense) income, net


(1,675)



269



(1,900)



(787)






















Earnings before provision for income taxes


388,091



365,406



710,967



677,748




















Provision for income taxes 


138,787



141,076



259,173



246,582






















Net earnings


$

249,304


$

224,330


$

451,794


$

431,166




















Net earnings per share - Basic

$

1.18


$

0.99


$

2.11


$

1.89



Net earnings per share - Diluted

$

1.16


$

0.98


$

2.09


$

1.87




















Weighted average shares outstanding - Basic


212,134



226,313



213,792



227,699



Weighted average shares outstanding - Diluted


214,697



229,308



216,516



230,995


 

BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, unaudited)


















August 31, 


August 25, 







2013


2012













Assets





















Current assets:











 Cash and cash equivalents



$

383,336


$

744,465



 Short term investment securities



455,579



164,261



 Merchandise inventories




2,591,247



2,430,907



 Other current assets




434,299



381,410














        Total current assets




3,864,461



3,721,043













Long term investment securities




81,552



82,463


Property and equipment, net




1,477,336



1,403,520


Goodwill





486,279



471,393


Other assets





398,345



429,063


















$

6,307,973


$

6,107,482













Liabilities and Shareholders' Equity



















Current liabilities:











Accounts payable



$

1,033,709


$

940,958



Accrued expenses and other current liabilities



389,689



422,736



Merchandise credit and gift card liabilities



264,281



233,458



Current income taxes payable



18,616



4,451














       Total current liabilities




1,706,295



1,601,603













Deferred rent and other liabilities




493,199



485,485


Income taxes payable




81,767



100,298














       Total liabilities




2,281,261



2,187,386













Total shareholders' equity




4,026,712



3,920,096


















$

6,307,973


$

6,107,482



BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands, unaudited)






















 Six Months Ended 






















August 31, 


August 25, 









2013


2012



























Cash Flows from Operating Activities:























Net earnings





$

451,794


$

431,166



Adjustments to reconcile net earnings to net cash










provided by operating activities:










Depreciation





105,160



90,486




Stock-based compensation




28,439



23,805




Tax benefit from stock-based compensation



12,036



12,716




Deferred income taxes





(13,722)



(16,862)




Other






(666)



(517)




Increase in assets, net of effect of acquisitions:










     Merchandise inventories




(125,033)



(163,100)




     Trading investment securities



(5,696)



(2,305)




     Other current assets




(46,977)



(11,478)




     Other assets





(3,624)



(10,718)




Increase (decrease) in liabilities, net of effect of acquisitions:









     Accounts payable





135,589



143,582




     Accrued expenses and other current liabilities



(1,886)



13,074




     Merchandise credit and gift card liabilities



12,800



18,865




     Income taxes payable




(57,031)



(65,128)




     Deferred rent and other liabilities



4,412



8,537
















Net cash provided by operating activities



495,595



472,123















Cash Flows from Investing Activities:























Purchase of held-to-maturity investment securities



(652,342)



(281,130)



Redemption of held-to-maturity investment securities



646,875



881,249



Redemption of available-for-sale investment securities



-



8,525



Capital expenditures 





(130,322)



(158,064)



Payment for acquisitions, net of cash acquired



-



(643,269)



Payment for acquisition of trademarks



-



(40,000)
















Net cash used in investing activities




(135,789)



(232,689)















Cash Flows from Financing Activities:























Proceeds from exercise of stock options



36,230



29,174



Excess tax benefit from stock-based compensation



3,590



3,776



Payment for credit facility assumed in acquisition



-



(25,511)



Repurchase of common stock, including fees



(581,261)



(505,574)
















Net cash used in financing activities




(541,441)



(498,135)
















Net decrease in cash and cash equivalents



(181,635)



(258,701)















Cash and cash equivalents:











Beginning of period 





564,971



1,003,166



End of period





$

383,336


$

744,465

 

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