UNION, N.J., Sept. 19, 2017 /PRNewswire/ -- Bed Bath
& Beyond Inc. (NASDAQ:BBBY) today reported financial results
for the second quarter of fiscal 2017 ended August 26, 2017.
Second Quarter Results
For the fiscal 2017 second quarter, the Company reported net
earnings of $.67 per diluted share
($94.2 million), including the
unfavorable impacts of approximately $.08 per diluted share of cash restructuring
charges associated with the acceleration of the realignment of our
store management structure announced on August 3, 2017; the estimated costs associated
with the impact of Hurricane Harvey of approximately $.02 per diluted share; and the impact of the new
share-based payment accounting standard of approximately
$.01 per diluted share, compared with
$1.11 per diluted share ($167.3 million) for the fiscal 2016 second
quarter. Net sales for the fiscal 2017 second quarter were
approximately $2.9 billion, a
decrease of approximately 1.7% from the prior year quarter.
Comparable sales in the fiscal 2017 second quarter decreased by
approximately 2.6%. Comparable sales from customer-facing
digital channels continued to have strong growth in excess of 20%
for the 13th consecutive quarter, while comparable sales
from stores declined in the mid-single-digit percentage range
during the fiscal 2017 second quarter.
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 5:00 pm (ET).
The Company believes the initiatives to drive operational
excellence, as well as opportunities for added efficiencies, should
produce savings in excess of $150
million over the next few years, a portion of which may be
strategically reinvested toward future growth.
Capital Allocation
The Company's Board of Directors has declared a quarterly
dividend of $.15 per share, to be
paid on January 16, 2018 to
shareholders of record at the close of business on December 15, 2017.
During the fiscal 2017 second quarter, the Company repurchased
approximately $56 million of its
common stock, representing approximately 1.8 million shares, under
its existing $2.5 billion share
repurchase program. As of August 26,
2017, the program had a remaining balance of approximately
$1.6 billion.
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 $3.00, with the balance of the net earnings per
diluted share to be split approximately 20% in the fiscal third
quarter and approximately 80% in the fiscal fourth quarter.
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
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel 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, Harmon Face Values or Face Values,
buybuy BABY and World Market, Cost Plus World Market or Cost Plus.
Customers can purchase products either in-store, online, with a
mobile device or through a customer contact center. The Company
generally has the 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; One Kings Lane,
an authority in home décor and design, offering a unique collection
of select home goods, designer and vintage items;
PersonalizationMall.com, an industry-leading online retailer of
personalized products; Chef Central, an online retailer of
kitchenware, cookware and homeware items catering to cooking and
baking enthusiasts; and Decorist, an online interior design
platform that provides personalized home design services. 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,
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 August 26, 2017, the Company had a total of 1,550
stores, including 1,023 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, 114 buybuy BABY
stores, 81 stores under the names Christmas Tree Shops, Christmas
Tree Shops andThat! or andThat!, and 55 stores under the names
Harmon, Harmon Face Values or Face Values. During the fiscal
second quarter, the Company opened one Bed Bath & Beyond store,
two World Market stores, one buybuy BABY store, and one andThat!
store, and closed one World Market store. In addition, the
Company is a partner in a joint venture which operates eight stores
in Mexico under the name Bed Bath
& Beyond.
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
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Consolidated Statements of Cash Flows
(in thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
View original
content:http://www.prnewswire.com/news-releases/bed-bath--beyond-inc-reports-results-for-fiscal-2017-second-quarter-300522298.html
SOURCE Bed Bath & Beyond Inc.