Second Quarter Results
For the fiscal 2017 second quarter, the Company reported net earnings of
Transformational Initiatives
The Company is undertaking a number of transformational initiatives to drive operational excellence and further its mission to be its customer's first choice for the home and heart-felt life events. These initiatives will be discussed in further detail on the Company's conference call with analysts and investors to be held today at
The Company believes the initiatives to drive operational excellence, as well as opportunities for added efficiencies, should produce savings in excess of
Capital Allocation
The Company's Board of Directors has declared a quarterly dividend of
During the fiscal 2017 second quarter, the Company repurchased approximately
Fiscal 2017
During the call, the Company plans to review its financial planning assumptions for fiscal 2017, which is a 53-week year.
The Company's planning assumptions reflect actual results through the fiscal second quarter and the continuation of the trends the Company has been experiencing, and the unfavorable impacts of: the cash restructuring charges associated with the acceleration of the realignment of our store management structure; Hurricanes Harvey and Irma; the adoption of the new shared based payment accounting standard; and further increases in its overall expense structure to reflect some of the accelerated spending associated with the Company's organizational changes and transformational initiatives. Based upon these planning assumptions, the Company is now modeling net earnings per diluted share for the full year to be about
Fiscal 2017 Second Quarter Conference Call
The Company's fiscal 2017 second quarter conference call may be accessed by dialing 1-800-446-1671, or if international, 1-847-413-3362, using conference ID number 45587344. The replay of the call can be accessed by dialing 1-888-843-7419, using conference ID number 45587344. The call and replay can also be accessed via audio webcast on the investor relations section of our website at www.bedbathandbeyond.com.
About the Company
The Company operates websites at bedbathandbeyond.com, bedbathandbeyond.ca, worldmarket.com, buybuybaby.com, buybuybaby.ca, christmastreeshops.com, andthat.com, harmondiscount.com, facevalues.com, ofakind.com, onekingslane.com, personalizationmall.com, chefcentral.com, decorist.com, harborlinen.com, and t-ygroup.com. As of
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 achieve anticipated cost savings, and to not exceed anticipated costs, associated with organizational changes; 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 trade restrictions, political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, 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; the ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets it serves; uncertainty in financial markets; volatility in the price of the Company's common stock and its effect, and the effect of other factors, on the Company's capital allocation strategy; 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, including without limitation proposed changes affecting international trade; changes to, or new, tax laws or interpretation of existing tax laws; new, or developments in existing, litigation, claims or assessments; changes to, or new, 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 |
Six Months Ended |
|||||||||||||||
August 26, |
August 27, |
August 26, |
August 27, |
|||||||||||||
2017 |
2016 |
2017 |
2016 |
|||||||||||||
Net sales |
$ |
2,936,357 |
$ |
2,988,235 |
$ |
5,678,498 |
$ |
5,726,319 |
||||||||
Cost of sales |
1,867,798 |
1,871,342 |
3,609,824 |
3,585,834 |
||||||||||||
Gross profit |
1,068,559 |
1,116,893 |
2,068,674 |
2,140,485 |
||||||||||||
Selling, general and administrative expenses |
899,712 |
835,920 |
1,752,816 |
1,646,486 |
||||||||||||
Operating profit |
168,847 |
280,973 |
315,858 |
493,999 |
||||||||||||
Interest expense, net |
19,166 |
18,199 |
35,746 |
34,514 |
||||||||||||
Earnings before provision for income taxes |
149,681 |
262,774 |
280,112 |
459,485 |
||||||||||||
Provision for income taxes |
55,451 |
95,439 |
110,599 |
169,531 |
||||||||||||
Net earnings |
$ |
94,230 |
$ |
167,335 |
$ |
169,513 |
$ |
289,954 |
||||||||
Net earnings per share - Basic |
$ |
0.67 |
$ |
1.12 |
$ |
1.21 |
$ |
1.92 |
||||||||
Net earnings per share - Diluted |
$ |
0.67 |
$ |
1.11 |
$ |
1.20 |
$ |
1.91 |
||||||||
Weighted average shares outstanding - Basic |
139,868 |
149,725 |
140,599 |
150,941 |
||||||||||||
Weighted average shares outstanding - Diluted |
140,211 |
150,515 |
141,176 |
152,133 |
||||||||||||
Dividends declared per share |
$ |
0.150 |
$ |
0.125 |
$ |
0.300 |
$ |
0.250 |
BED BATH & BEYOND INC. AND SUBSIDIARIES |
|||||||||
August 26, |
August 27, |
||||||||
2017 |
2016 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
464,062 |
$ |
577,844 |
|||||
Merchandise inventories |
2,878,638 |
2,903,647 |
|||||||
Other current assets |
187,664 |
229,560 |
|||||||
Total current assets |
3,530,364 |
3,711,051 |
|||||||
Long term investment securities |
99,157 |
82,740 |
|||||||
Property and equipment, net |
1,834,470 |
1,739,952 |
|||||||
Goodwill |
707,127 |
520,226 |
|||||||
Other assets |
611,541 |
599,785 |
|||||||
$ |
6,782,659 |
$ |
6,653,754 |
||||||
Liabilities and Shareholders' Equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
1,168,092 |
$ |
1,192,574 |
|||||
Accrued expenses and other current liabilities |
486,719 |
473,595 |
|||||||
Merchandise credit and gift card liabilities |
318,407 |
307,969 |
|||||||
Current income taxes payable |
15,802 |
23,539 |
|||||||
Total current liabilities |
1,989,020 |
1,997,677 |
|||||||
Deferred rent and other liabilities |
514,902 |
513,968 |
|||||||
Income taxes payable |
65,203 |
76,744 |
|||||||
Long term debt |
1,491,836 |
1,491,370 |
|||||||
Total liabilities |
4,060,961 |
4,079,759 |
|||||||
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 341,582 and 339,520, respectively; |
|||||||||
outstanding 143,242 and 152,084 shares, respectively |
3,416 |
3,395 |
|||||||
Additional paid-in capital |
2,022,826 |
1,939,470 |
|||||||
Retained earnings |
11,130,348 |
10,646,033 |
|||||||
Treasury stock, at cost; 198,340 and 187,436 shares, respectively |
(10,399,254) |
(9,968,003) |
|||||||
Accumulated other comprehensive loss |
(35,638) |
(46,900) |
|||||||
Total shareholders' equity |
2,721,698 |
2,573,995 |
|||||||
$ |
6,782,659 |
$ |
6,653,754 |
||||||
Certain reclassifications have been made to the Fiscal Year 2016 consolidated balance sheet to conform to the Fiscal Year 2017 consolidated balance sheet presentation. |
BED BATH & BEYOND INC. AND SUBSIDIARIES |
||||||||||||
Six Months Ended |
||||||||||||
August 26, |
August 27, |
|||||||||||
2017 |
2016 |
|||||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net earnings |
$ |
169,513 |
$ |
289,954 |
||||||||
Adjustments to reconcile net earnings to net cash |
||||||||||||
provided by operating activities: |
||||||||||||
Depreciation and amortization |
148,497 |
141,293 |
||||||||||
Stock-based compensation |
36,904 |
37,563 |
||||||||||
Deferred income taxes |
(10,707) |
11,842 |
||||||||||
Other |
182 |
(809) |
||||||||||
Decrease (increase) in assets, net of effect of acquisitions: |
||||||||||||
Merchandise inventories |
31,852 |
(48,849) |
||||||||||
Trading investment securities |
(9,221) |
(11,657) |
||||||||||
Other current assets |
10,590 |
(51,624) |
||||||||||
Other assets |
(4,052) |
(11,611) |
||||||||||
Increase (decrease) in liabilities, net of effect of acquisitions: |
||||||||||||
Accounts payable |
22,004 |
121,431 |
||||||||||
Accrued expenses and other current liabilities |
2,723 |
(225) |
||||||||||
Merchandise credit and gift card liabilities |
8,604 |
9,850 |
||||||||||
Income taxes payable |
(46,766) |
(35,438) |
||||||||||
Deferred rent and other liabilities |
4,578 |
17,977 |
||||||||||
Net cash provided by operating activities |
364,701 |
469,697 |
||||||||||
Cash Flows from Investing Activities: |
||||||||||||
Redemption of held-to-maturity investment securities |
- |
86,240 |
||||||||||
Capital expenditures |
(176,955) |
(184,789) |
||||||||||
Investment in unconsolidated joint venture |
- |
(3,318) |
||||||||||
Payment for acquisition, net of cash acquired |
(5,207) |
(11,777) |
||||||||||
Net cash used in investing activities |
(182,162) |
(113,644) |
||||||||||
Cash Flows from Financing Activities: |
||||||||||||
Proceeds from exercise of stock options |
10,161 |
20,258 |
||||||||||
Payment of dividends |
(39,241) |
(18,827) |
||||||||||
Repurchase of common stock, including fees |
(183,715) |
(299,486) |
||||||||||
Net cash used in financing activities |
(212,795) |
(298,055) |
||||||||||
Effect of exchange rate changes on cash and cash equivalents |
5,989 |
4,273 |
||||||||||
Net (decrease) increase in cash and cash equivalents |
(24,267) |
62,271 |
||||||||||
Cash and cash equivalents: |
||||||||||||
Beginning of period |
488,329 |
515,573 |
||||||||||
End of period |
$ |
464,062 |
$ |
577,844 |
||||||||
Certain reclassifications have been made to the Fiscal Year 2016 consolidated statement of cash flows to conform to the Fiscal Year 2017 consolidated cash flows presentation. |
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SOURCE
INVESTOR CONTACT: Janet M. Barth, (908) 613-5820