UNION, N.J., July 10, 2019 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today reported financial results for the
first quarter of fiscal 2019 ended June
1, 2019.
Mary A. Winston, Interim CEO,
stated, "Bed Bath & Beyond is an iconic brand with tremendous
opportunity and we recognize that there needs to be a fundamental
change in our approach to executing the Company's business
transformation. We have set four key near-term priorities
that include stabilizing and driving top-line growth; resetting the
cost structure; reviewing and optimizing the Company's asset base,
including our portfolio of retail banners; and refining our
organization structure. The Board and management team are
aligned on these priorities, and we are committed to completing a
deep review of the business to prioritize and drive forward the
most meaningful initiatives to improve performance. As we
execute against these near-term priorities, our focus will remain
on delighting our customers and delivering long-term value for our
shareholders."
Fiscal 2019 First Quarter Results
For the fiscal 2019 first quarter, the Company reported a net
loss of ($2.91) per diluted share
(($371.1) million), which included an
unfavorable impact of approximately $3.03 per diluted share related to a non-cash
impairment of goodwill and other intangible assets, as well as
severance and shareholder activity costs incurred during the
quarter, compared with net earnings of $.32 per diluted share ($43.6 million) for the fiscal 2018 first quarter,
which included an unfavorable impact of approximately $.06 from severance costs. Excluding the
goodwill and other impairments, severance and shareholder activity
costs, the Company reported adjusted net earnings of $.12 per
diluted share ($15.5 million) for the
fiscal 2019 first quarter. Net sales for the fiscal 2019
first quarter were approximately $2.6
billion, a decrease of approximately 6.6% compared to the
prior year period. Comparable sales in the fiscal 2019 first
quarter declined approximately 6.6%.
Capital Allocation
On July 8, 2019, the Company's
Board of Directors declared a quarterly dividend of $0.17 per share payable on October 15, 2019 to shareholders of record at the
close of business on September 13,
2019.
During the fiscal 2019 first quarter, the Company repurchased
approximately $81.5 million of its
common stock, representing approximately 5.3 million
shares.
The Company ended the fiscal 2019 first quarter with
approximately $923 million in cash
and investments, an increase of approximately 9.0%, compared with
approximately $847 million in cash
and investments at the end of the fiscal 2018 first quarter.
Fiscal 2019 Financial Outlook
For the fiscal 2019 full year, excluding the goodwill and other
impairments, severance and shareholder activity costs, the Company
is modeling to be at the lower end of its previously provided
ranges of $11.4 billion to
$11.7 billion for net sales and
$2.11 to $2.20 for net earnings per diluted share.
Due to the inherent difficulty of forecasting the timing or
amount of items that have not yet occurred and are out of the
Company's control, and that would impact its net sales, diluted net
earnings per share, and the most directly comparable
forward-looking GAAP financial measures, the Company has not
provided a reconciliation to these measures for its fiscal 2019
full year outlook on a GAAP basis. For the same reasons, the
Company is unable to address the probable significance of the
unavailable information. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures.
Adoption of Lease Accounting Standard
The Company adopted ASU 2016-02, Leases (Topic 842),
related to its accounting for leases at the beginning of the fiscal
2019 first quarter. The adoption of this standard resulted in
the recording on the consolidated balance sheet of approximately
$2.0 billion of operating lease
assets and approximately $2.2 billion
of operating lease liabilities, with no significant change to the
consolidated statements of operations or cash flows. The
standard has no impact on the Company's debt covenant compliance
under its Indenture or Revolving Credit Agreement.
Fiscal 2019 First Quarter Conference Call and Investor
Presentation
Bed Bath & Beyond Inc.'s fiscal 2019 first quarter
conference call with analysts and investors will be held today at
5:00pm EDT and may be accessed by
dialing 1-888-771-4371, or if international, 1-847-585-4405, using
conference ID number 48713230. The replay of the call will be
available beginning today at 8:00pm
EDT through 8:00pm EDT on Friday,
July 12, 2019, and can be accessed by dialing
1-888-843-7419, using conference ID number 48713230. The call
and replay can also be accessed via audio webcast on the investor
relations section of the Company's website at
www.bedbathandbeyond.com.
The Company has also made available an Investor Presentation on
the investor relations section of the Company's website at
www.bedbathandbeyond.com.
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that is the trusted expert for the home and
heart-felt life events. The Company sells a wide assortment of
domestics merchandise and home furnishings. The Company also
provides 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,
bedbathandbeyond.ca, worldmarket.com, buybuybaby.com,
buybuybaby.ca, christmastreeshops.com, andthat.com,
harmondiscount.com, facevalues.com, ofakind.com, onekingslane.com,
personalizationmall.com, decorist.com, harborlinen.com, and
t-ygroup.com. As of June 1,
2019, the Company had a total of 1,536 stores, including 995
Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 277 stores under the names of World
Market, Cost Plus World Market or Cost Plus, 126 buybuy BABY
stores, 81 stores under the names Christmas Tree Shops, Christmas
Tree Shops andThat! or andThat!, 55 stores under the names Harmon,
Harmon Face Values or Face Values, and two retail stores under the
name One Kings Lane. During the fiscal first
quarter, the Company opened three stores including one Bed Bath
& Beyond store and two buybuy Baby stores. The joint
venture, to which the Company is a partner, operates ten stores in
Mexico under the name Bed Bath
& Beyond.
Non-GAAP Information
This press release contains certain non-GAAP information, such
as adjusted net earnings per diluted share, which is intended to
provide visibility into the Company's core operations by excluding
the effects of the goodwill and other impairments, severance and
shareholder activity costs. The Company's definition and
calculation of non-GAAP measures may differ from that of other
companies. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company's reported
GAAP financial results.
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, anticipated net earnings per diluted
share, and operating margin. 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, goal, 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 across all channels; pricing pressures; liquidity; the
ability to achieve anticipated cost savings, and to not exceed
anticipated costs, associated with organizational changes and
investments; the ability to attract and retain qualified
employees in all areas of the organization, including a permanent
Chief Executive Officer; 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 establish and
profitably maintain the appropriate mix of digital and physical
presence in the markets it serves; the ability to assess and
implement technologies in support of the Company's development of
its omnichannel capabilities; 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; the impact of goodwill and intangible asset
impairments; disruptions to the Company's information technology
systems including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; reputational risk arising
from challenges to the Company's or a third party product or
service 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
Operations
|
(in
thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
1,
|
|
June
2,
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,572,989
|
|
$
|
2,753,667
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
1,685,810
|
|
|
1,788,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
887,179
|
|
|
964,848
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
892,754
|
|
|
883,619
|
|
Goodwill and other
impairments
|
|
401,267
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
|
(406,842)
|
|
|
81,229
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
15,898
|
|
|
16,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
before provision for income taxes
|
|
(422,740)
|
|
|
64,497
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision
for income taxes
|
|
(51,655)
|
|
|
20,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
$
|
(371,085)
|
|
$
|
43,576
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
per share - Basic
|
$
|
(2.91)
|
|
$
|
0.32
|
|
Net (loss) earnings
per share - Diluted
|
$
|
(2.91)
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - Basic
|
|
127,614
|
|
|
135,987
|
|
Weighted average
shares outstanding - Diluted
|
|
127,614
|
|
|
136,601
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.17
|
|
$
|
0.16
|
BED BATH &
BEYOND INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(in thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
1,
|
|
June
2,
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
700,389
|
|
$
|
678,646
|
|
|
Short term
investment securities
|
|
|
201,664
|
|
|
148,313
|
|
|
Merchandise
inventories
|
|
|
|
2,540,852
|
|
|
2,646,263
|
|
|
Prepaid
expenses and other current assets
|
|
|
254,187
|
|
|
483,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
|
3,697,092
|
|
|
3,956,381
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term investment
securities
|
|
|
|
20,677
|
|
|
19,957
|
|
Property and
equipment, net
|
|
|
|
1,822,679
|
|
|
1,893,230
|
|
Operating lease
assets
|
|
|
|
1,990,963
|
|
|
-
|
|
Goodwill
|
|
|
|
|
-
|
|
|
716,283
|
|
Other
assets
|
|
|
|
|
456,784
|
|
|
427,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,988,195
|
|
$
|
7,013,746
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
|
1,066,282
|
|
$
|
1,082,943
|
|
|
Accrued expenses and
other current liabilities
|
|
|
590,087
|
|
|
716,069
|
|
|
Merchandise credit
and gift card liabilities
|
|
|
343,087
|
|
|
329,055
|
|
|
Current operating
lease liabilities
|
|
|
410,417
|
|
|
-
|
|
|
Current income taxes
payable
|
|
|
21,209
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
|
2,431,082
|
|
|
2,128,067
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
|
|
184,242
|
|
|
431,799
|
|
Income taxes
payable
|
|
|
|
47,745
|
|
|
57,507
|
|
Operating lease
liabilities
|
|
|
|
1,775,081
|
|
|
-
|
|
Long term
debt
|
|
|
|
|
1,488,051
|
|
|
1,492,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
|
5,926,201
|
|
|
4,109,567
|
|
|
|
|
|
|
|
|
|
|
|
|
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 343,419
and 342,642 shares, respectively;
|
|
|
|
|
|
|
|
outstanding
127,774 and 140,131 shares, respectively
|
|
3,434
|
|
|
3,426
|
|
|
Additional paid-in
capital
|
|
|
|
2,138,362
|
|
|
2,082,238
|
|
|
Retained
earnings
|
|
|
|
10,679,515
|
|
|
11,360,572
|
|
|
Treasury stock, at
cost; 215,645 and 202,511 shares, respectively
|
|
(10,697,540)
|
|
|
(10,490,082)
|
|
|
Accumulated other
comprehensive loss
|
|
|
(61,777)
|
|
|
(51,975)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
|
2,061,994
|
|
|
2,904,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,988,195
|
|
$
|
7,013,746
|
BED BATH &
BEYOND INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(in thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
1,
|
|
June
2,
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
|
|
|
$
|
(371,085)
|
|
$
|
43,576
|
|
|
Adjustments to
reconcile net earnings to net cash
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
83,542
|
|
|
79,578
|
|
|
|
Goodwill and other
impairments
|
|
|
401,267
|
|
|
-
|
|
|
|
Stock-based
compensation
|
|
|
|
19,348
|
|
|
23,572
|
|
|
|
Deferred income
taxes
|
|
|
|
(54,514)
|
|
|
(3,548)
|
|
|
|
Other
|
|
|
|
|
|
(2,301)
|
|
|
(1,109)
|
|
|
|
Decrease (increase)
in assets:
|
|
|
|
|
|
|
|
|
|
|
Merchandise
inventories
|
|
|
|
76,455
|
|
|
82,252
|
|
|
|
Trading investment
securities
|
|
|
21
|
|
|
(2,069)
|
|
|
|
Other current
assets
|
|
|
|
137
|
|
|
104,954
|
|
|
|
Other assets
|
|
|
|
|
88
|
|
|
(482)
|
|
|
|
(Decrease) increase
in liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
(10,996)
|
|
|
(78,717)
|
|
|
|
Accrued expenses and other
current liabilities
|
|
|
(30,580)
|
|
|
(5,401)
|
|
|
|
Merchandise credit and gift
card liabilities
|
|
|
3,896
|
|
|
5,553
|
|
|
|
Income taxes
payable
|
|
|
|
(880)
|
|
|
(3,767)
|
|
|
|
Operating lease assets and
liabilities, net
|
|
|
(23,922)
|
|
|
-
|
|
|
|
Other liabilities
|
|
|
|
|
(389)
|
|
|
602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
90,087
|
|
|
244,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of
held-to-maturity investment securities
|
|
|
(57,000)
|
|
|
(5,625)
|
|
|
Redemption of
held-to-maturity investment securities
|
|
|
343,000
|
|
|
238,125
|
|
|
Capital
expenditures
|
|
|
|
|
(68,375)
|
|
|
(97,813)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
investing activities
|
|
|
217,625
|
|
|
134,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of
dividends
|
|
|
|
|
(21,894)
|
|
|
(21,414)
|
|
|
Repurchase of common
stock, including fees
|
|
|
(81,495)
|
|
|
(22,110)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
|
|
(103,389)
|
|
|
(43,524)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
(2,095)
|
|
|
(3,651)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
202,228
|
|
|
332,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash:
|
|
|
|
|
|
|
|
|
Beginning of
period
|
|
|
|
|
529,971
|
|
|
367,140
|
|
|
End of
period
|
|
|
|
|
$
|
732,199
|
|
$
|
699,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Fiscal Year 2018
consolidated statement of cash flows was revised to include
restricted cash due to the
|
adoption of
Accounting Standards Update 2016-18 Statement of Cash Flows
(Topic 230)in Fiscal Year 2018.
|
Non-GAAP Financial Measures
The following table reconciles non-GAAP financial measures
presented in this press release. The Company believes that
these non-GAAP financial measures provide meaningful supplemental
information regarding the performance of the Company's
business. These non-GAAP financial measures should not be
considered superior to, but in addition to other financial measures
prepared in accordance with GAAP, including the year-to-year
results. The Company's method of determining these non-GAAP
financial measures may be different from other companies' methods
and, therefore, may not be comparable to those used by other
companies and the Company does not recommend the sole use of this
non-GAAP measure to assess its financial and earnings
performance.
Non-GAAP
Reconciliation
|
(in
thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
1,
|
|
|
June
2,
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net (loss)
earnings
|
$
|
(371,085)
|
|
|
$
|
43,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other
impairments (a)
|
|
401,267
|
|
|
|
-
|
|
|
|
Severance
costs
|
|
|
38,662
|
|
|
|
9,333
|
|
|
|
Shareholder activity
costs
|
|
|
8,000
|
|
|
|
-
|
|
|
|
Total pre-tax
adjustments
|
|
|
447,929
|
|
|
|
9,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of
adjustments
|
|
(61,387)
|
|
|
|
(1,618)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments,
after tax
|
|
386,542
|
|
|
|
7,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$
|
15,457
|
|
|
$
|
51,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net Earnings per Diluted Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net (loss)
earnings per diluted share
|
$
|
(2.91)
|
|
|
$
|
0.32
|
|
|
|
Goodwill and other
impairments, severance and shareholder
|
|
|
|
|
|
|
|
|
|
activity
costs
|
|
|
3.03
|
|
|
|
0.06
|
|
|
|
Adjusted earnings per
diluted share
|
$
|
0.12
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Goodwill and
other impairments include: (1) goodwill and tradename impairments
related to the North American Retail reporting
|
|
|
|
unit;
and (2) tradename impairments related to the Institutional Sales
reporting unit.
|
|
|
View original
content:http://www.prnewswire.com/news-releases/bed-bath--beyond-inc-reports-results-for-fiscal-2019-first-quarter-300882921.html
SOURCE Bed Bath & Beyond Inc.