News Release

View printer-friendly version << Back
Bed Bath & Beyond Inc. Reports Results For Fiscal 2015 Third Quarter
Jan 07 2016
- 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

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.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bed-bath--beyond-inc-reports-results-for-fiscal-2015-third-quarter-300201214.html

SOURCE Bed Bath & Beyond Inc.

INVESTOR CONTACTS: Janet M. Barth, (908) 613-5820; Kenneth C. Frankel, (908) 855-4554