Results of Operations for Bed_Bath_&

Send us Feedback

Bed Bath & Beyond (BBBY)

	SUMMARY

	BULLS

	BEARS

	TOPICS

	DATA CENTRAL

	STOCK CHART

	SEC FILINGS

	BALANCE

	INCOME

	CASH FLOW

BBBY » Topics » Results of Operations

This excerpt taken from the BBBY 10-Q filed Jan 8, 2009.

Results of Operations

Net Sales

Net sales for the three months ended November 29, 2008 were $1.783 billion, a decrease of $12.1 million or approximately 0.7% less than net sales of $1.795 billion for the corresponding quarter last year. For the three months ended November 29, 2008, the decrease in net sales was primarily attributable to a decrease in the Company’s comparable store sales, substantially offset by an increase in the Company’s new store sales.

For the three months ended November 29, 2008, comparable store sales for 905 stores represented $1.661 billion of net sales and for the three months ended December 1, 2007, comparable store sales for 822 stores represented $1.637 billion of net sales. The number of stores includes only those which constituted a comparable store for the entire respective fiscal period. The decrease in comparable store sales for the three months ended November 29, 2008 was approximately 5.6%, as compared with an increase of approximately 0.8% for the comparable period last year. Net sales and comparable store sales were adversely affected by the declining overall macroeconomic environment during the period, the liquidation sales of a major competitor, as well as a one week shift in the Thanksgiving holiday.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 43% and 57% of net sales, respectively, for the three months ended November 29, 2008 and approximately 45% and 55% of net sales, respectively, for the three months ended December 1, 2007.

For the nine months ended November 29, 2008, net sales were $5.285 billion, an increase of $169.3 million or approximately 3.3% over net sales of $5.116 billion for the corresponding nine months last year. For the nine months ended November 29, 2008, the increase in net sales was primarily attributable to an increase in the Company’s new store sales, partially offset by a decrease in comparable store sales.

For the nine months ended November 29, 2008, comparable store sales for 875 stores represented $4.929 billion of net sales and for the nine months ended December 1, 2007, comparable store sales for 793 stores represented $4.685 billion of net sales. The number of stores includes only those which constituted a comparable store for the entire respective fiscal period. Comparable store sales for the first fiscal nine months of 2008 decreased by approximately 1.7%, as compared with an increase of approximately 1.5% for the comparable period last year. Net sales and comparable store sales were negatively affected by the economic slowdown, including issues specific to the housing industry, and the liquidation sales of a number of retailers, including a major competitor.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 44% and 56% of net sales, respectively, for the nine months ended November 29, 2008 and approximately 45% and 55% of net sales, respectively, for the nine months ended December 1, 2007.

Gross Profit

Gross profit for the three months ended November 29, 2008 was $692.9 million or 38.9% of net sales compared with $747.9 million or 41.7% of net sales for the three months ended December 1, 2007. Gross profit for the nine months ended November 29, 2008 was $2.088 billion or 39.5% of net sales compared with $2.126 billion or 41.6% of net sales for the nine months ended December 1, 2007. The decreases in gross profit as a percentage of net sales for the three and nine months ended November 29, 2008 were primarily due to increases in inventory acquisition costs, increases in coupon redemptions and the shift in the mix of merchandise sold to lower margin categories.

Selling, General and Administrative Expenses

SG&A for the three months ended November 29, 2008 was $556.5 million or 31.2% of net sales compared with $544.7 million or 30.4% of net sales for the three months ended December 1, 2007. SG&A as a percentage of net sales increased for the three months ended November 29, 2008 compared to December 1, 2007 primarily due to the 5.6% decline in comparable store sales, resulting in relative increases in fixed costs, such as occupancy costs (including rent, real estate taxes and depreciation), as well as relative increases in payroll-related items (including salaries and benefits).

SG&A for the nine months ended November 29, 2008 was $1.646 billion or 31.1% of net sales compared with $1.548 billion or 30.3% of net sales for the nine months ended December 1, 2007. This increase in SG&A as a percentage of net sales was primarily due to the 1.7% decline in comparable store sales, resulting in relative increases in occupancy costs (including rent, depreciation and real estate taxes), as well as relative increases in payroll-related items (including salaries and benefits). Also contributing to the increase in SG&A as a percentage of sales were relative increases in advertising expenses, including increases in postage, paper and other production costs.

Operating Profit

Operating profit for the three months ended November 29, 2008 was $136.4 million or 7.6% of net sales compared to $203.2 million or 11.3% of net sales during the comparable period in 2007. For the nine months ended November 29, 2008, operating profit was $442.6 million or 8.4% of net sales compared to $578.6 million or 11.3% of net sales during the comparable period in 2007. The decreases in operating profit as a percentage of net sales in the comparable periods were a result of deleverage in the gross profit margin and SG&A expenses.

Interest Income

Interest income was $1.4 million for the three months ended November 29, 2008 compared to $5.0 million for the three months ended December 1, 2007. The decrease in interest income primarily resulted from lower interest rates. For the nine months ended November 29, 2008, interest income was $8.9 million compared to $21.6 million for the comparable period in 2007. The decrease in interest income resulted from lower interest rates and lower cash and investment securities balances, reflecting cumulative share repurchase activity.

Income Taxes

The effective tax rate for the three months ended November 29, 2008 was 36.3% compared to 33.6% for the three months ended December 1, 2007. The tax rate for the three months ended November 29, 2008 included an approximate $1.6 million benefit primarily due to the recognition of certain discrete tax items. The tax rate for the three months ended December 1, 2007 included an approximate $8.0 million benefit primarily due to the effective settlement in the quarter of certain discrete tax items from ongoing examinations.

The effective tax rate for the nine months ended November 29, 2008 was 37.2% compared to 35.0% for the nine months ended December 1, 2007. The tax rate for the nine months ended November 29, 2008 included an approximate $2.6 million benefit primarily due to the recognition of certain discrete tax items. The tax rate for the nine months ended December 1, 2007 included an approximate $17.1 million benefit primarily due to the effective settlement of certain discrete tax items from ongoing examinations, the recognition of favorable discrete state tax items and from changing the blended state tax rate of deferred income taxes.

The Company expects that Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109” will continue to create volatility in the effective tax rate from quarter to quarter because the Company is required each quarter to determine whether new information changes the assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

Net Earnings

As a result of the factors described above, net earnings were $87.7 million for the fiscal third quarter of 2008 and $283.7 million for the fiscal nine months of 2008, compared with $138.2 million and $389.9 million for the corresponding periods in 2007, respectively.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 921 BBB stores, 48 CTS stores, 41 Harmon stores and 11 buybuy BABY stores at the end of the fiscal third quarter of 2008, compared with 859 BBB stores, 39 CTS stores, 40 Harmon stores and 8 buybuy BABY stores at the end of the corresponding quarter last year. At November 29, 2008, Company-wide total store square footage was approximately 31.6 million square feet.

During the fiscal third quarter of 2008, the Company opened 18 BBB stores, including its third store in Canada, 7 CTS stores, 1 Harmon store and 1 buybuy BABY store. Including the 40 BBB stores opened in the fiscal nine months, the Company plans to open approximately 49 new BBB stores throughout the United States and Canada in fiscal 2008. For all of fiscal 2008, the Company also expects to open approximately 11 new CTS stores, about 7 new buybuy BABY stores and 1 new Harmon store. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

In May 2008, the Company entered into a joint venture with Home & More, S.A. de C.V., a privately-held home products retailer operating two stores in Mexico.

This excerpt taken from the BBBY 10-Q filed Oct 9, 2008.

Results of Operations

Net Sales

Net sales for the three months ended August 30, 2008 were $1.854 billion, an increase of $86.2 million or approximately 4.9% over net sales of $1.768 billion for the corresponding quarter last year. For the three months ended August 30, 2008, the increase in net sales was primarily attributable to an increase in the Company’s new store sales.

For the three months ended August 30, 2008, comparable store sales for 895 stores represented $1.742 billion of net sales and for the three months ended September 1, 2007, comparable store sales for 810 stores represented $1.631 billion of net sales. The number of stores includes only those which constituted a comparable store for the entire respective fiscal period. The decrease in comparable store sales for the three months ended August 30, 2008 was 0.1%, as compared with an increase of approximately 2.2% for the comparable period last year. Net sales and comparable store sales were negatively affected by the overall economic environment, in general, and by issues specific to the housing industry, in particular. California, Florida, Arizona and Nevada were some of the states most significantly affected by these issues. In addition, the Company also experienced severe weather as well as a competitor’s going out of business sales in a number of markets.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 45% and 55% of net sales, respectively, for the three months ended August 30, 2008 and approximately 47% and 53% of net sales, respectively, for the three months ended September 1, 2007.

For the six months ended August 30, 2008, net sales were $3.502 billion, an increase of $181.4 million or approximately 5.5% over net sales of $3.321 billion for the corresponding six months last year. For the six months ended August 30, 2008, approximately 90% of the increase in net sales was attributable to an increase in the Company’s new store sales, approximately 6% of the increase was attributable to the increase in comparable store sales, and the balance of the increase was primarily attributable to the increase in buybuy BABY net sales, prior to inclusion in comparable store sales.

For the six months ended August 30, 2008, comparable store sales for 876 stores represented $3.268 billion of net sales and for the six months ended September 1, 2007, comparable store sales for 794 stores represented $3.048 billion of net sales. The number of stores includes only those which constituted a comparable store for the entire respective fiscal period. The increase in comparable store sales for the fiscal first half of 2008 was 0.3%, as compared with an increase of approximately 1.9% for the comparable period last year. Net sales and comparable store sales continued to be negatively affected by the economic slowdown, in general, and by issues specific to the housing industry, in particular. California, Florida, Arizona and Nevada were some of the states most significantly affected by these issues.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 44% and 56% of net sales, respectively, for the six months ended August 30, 2008 and approximately 46% and 54% of net sales, respectively, for the six months ended September 1, 2007.

Gross Profit

Gross profit for the three months ended August 30, 2008 was $739.3 million or 39.9% of net sales compared with $732.2 million or 41.4% of net sales for the three months ended September 1, 2007. Gross profit for the six months ended August 30, 2008 was $1.395 billion or 39.8% of net sales compared with $1.378 billion or 41.5% of net sales for the six months ended September 1, 2007. The decreases in gross profit as a percentage of net sales for the three and six months ended August 30, 2008 were primarily due to an increase in coupon redemptions, an increase in inventory acquisition costs and the shift in the mix of merchandise sold to lower margin categories.

Selling, General and Administrative Expenses

SG&A for the three months ended August 30, 2008 was $551.9 million or 29.8% of net sales compared with $511.1 million or 28.9% of net sales for the three months ended September 1, 2007. SG&A as a percentage of net sales increased for the three months ended August 30, 2008 compared to September 1, 2007 primarily due to the 0.1% decline in comparable store sales, resulting in relative increases in fixed costs, such as occupancy costs (including rent, real estate taxes and depreciation) and relative increases in payroll and payroll-related items (including salaries, medical insurance and workers’ compensation insurance). Although the number of advertising events was comparable to the prior year, the Company also experienced relative increases in advertising expenses primarily as a result of increases in postage, paper and other production costs.

SG&A for the six months ended August 30, 2008 was $1.089 billion or 31.1% of net sales compared with $1.003 billion or 30.2% of net sales for the six months ended September 1, 2007. This increase in SG&A as a percentage of net sales was primarily due to the relatively flat comparable store sales, resulting in relative increases in occupancy costs (including rent, real estate taxes and depreciation). Also contributing to the increase in SG&A as a percentage of net sales were relative increases in advertising expenses (including increases in postage, paper and other production costs) and relative increases in payroll and payroll-related items (including salaries, medical insurance and workers’ compensation insurance).

Operating Profit

Operating profit for the three months ended August 30, 2008 was $187.4 million or 10.1% of net sales compared to $221.0 million or 12.5% of net sales during the comparable period in 2007. For the six months ended August 30, 2008, operating profit was $306.2 million or 8.7% of net sales compared to $375.4 million or 11.3% of net sales during the comparable period in 2007. The decreases in operating profit as a percentage of net sales in the comparable periods were a result of deleverage in the gross profit margin and SG&A expenses.

Interest Income

Interest income was $2.9 million and $7.5 million for the three and six months ended August 30, 2008, respectively, compared to $6.7 million and $16.6 million for the three and six months ended September 1, 2007, respectively. These decreases in interest income resulted from lower interest rates and lower cash and investment securities balances, reflecting cumulative share repurchase activity.

Income Taxes

The effective tax rate for the three months ended August 30, 2008 was 37.3% compared to 35.5% for the three months ended September 1, 2007. The tax rate for the three months ended September 1, 2007 included a net $5.8 million benefit, primarily due to the recognition of favorable discrete state tax items, partially offset by an increase in tax contingency reserves related to ongoing income tax audits.

The effective tax rate for the six months ended August 30, 2008 was 37.5% compared to 35.8% for the six months ended September 1, 2007. The tax rate for the six months ended September 1, 2007 included a net $9.1 million benefit, primarily due to the recognition of favorable discrete state tax items and from changing the blended state tax rate of deferred tax assets, partially offset by an increase in tax contingency reserves related to ongoing income tax audits.

Net Earnings

As a result of the factors described above, net earnings were $119.3 million for the fiscal second quarter of 2008 and $196.0 million for the fiscal first half of 2008, compared with $147.0 million and $251.7 million for the corresponding periods in 2007, respectively.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 903 BBB stores, 41 CTS stores, 40 Harmon stores and 10 buybuy BABY stores at the end of the fiscal second quarter of 2008, compared with 831 BBB stores, 36 CTS stores, 39 Harmon stores and 8 buybuy BABY stores at the end of the corresponding quarter last year. At August 30, 2008, Company-wide total store square footage was approximately 30.8 million square feet.

During the fiscal second quarter of 2008, the Company opened 13 BBB stores, including its second store in Canada. Including the 22 BBB stores opened in the fiscal first half, the Company plans to open approximately 50 new BBB stores throughout the United States and Canada in fiscal 2008. For all of fiscal 2008, the Company also expects to open approximately 12 new CTS stores, several new buybuy BABY stores and one new Harmon Face Values store. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

In May 2008, the Company announced the formation of a joint venture with Home & More, S.A. de C.V., a privately-held home products retailer operating two stores in Mexico.

This excerpt taken from the BBBY 10-Q filed Jul 10, 2008.

Results of Operations

Net Sales

Net sales for the three months ended May 31, 2008 were approximately $1.648 billion, an increase of $95.2 million or approximately 6.1% over net sales of approximately $1.553 billion for the corresponding quarter last year. Approximately 83% of the increase in net sales for the three months ended May 31, 2008 was attributable to an increase in the Company’s new store sales, approximately 13% of the increase was attributable to the increase in comparable stores sales and the balance of the increase was attributable to the increase in buybuy BABY net sales, prior to inclusion in comparable store sales.

For the three months ended May 31, 2008, comparable stores sales for 877 stores represented $1.526 billion of net sales and for the three months ended June 2, 2007, comparable store sales for 794 stores represented $1.417 billion of net sales. The number of stores includes only those which were a comparable store for the entire respective fiscal period. The increase in comparable store sales for the fiscal three months of 2008 was 0.8%, as compared with an increase of approximately 1.6% for the comparable period last year. The increase in comparable store sales reflects the continued consumer acceptance of the Company’s merchandise offerings and advertising programs, but was negatively affected by the economic slowdown, in general, and by issues specific to the housing and mortgage industries, in particular. In those areas of the Country that have been reported as being the most significantly affected by these issues, notably Arizona, California, Florida and Nevada, comparable store sales were noticeably weaker than in less affected areas.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 44% and 56% of net sales, respectively, for the three months ended May 31, 2008. The sales of domestics merchandise and home furnishings accounted for approximately 45% and 55% of net sales, respectively, for the three months ended June 2, 2007.

Gross Profit

Gross profit for the three months ended May 31, 2008 was $656.0 million or 39.8% of net sales compared with $646.1 million or 41.6% of net sales for the three months ended June 2, 2007. The decrease in gross profit as a percentage of net sales for the three months ended May 31, 2008 was primarily due to an increase in coupon redemptions associated with a heightened promotional environment, an increase in inventory acquisition costs and a shift in the mix of merchandise sold.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three months ended May 31, 2008 was $537.2 million or 32.6% of net sales compared with $491.7 million or 31.7% of net sales for the three months ended June 2, 2007. SG&A as a percentage of net sales increased for the three months ended May 31, 2008 compared to June 2, 2007 primarily due to increases in advertising expense as a result of increased distribution of advertising pieces in response to the heightened promotional environment and relative increases in occupancy costs including rent, real estate taxes and depreciation.

Operating Profit

Operating profit for the three months ended May 31, 2008 was $118.8 million, or 7.2% of net sales, compared to $154.4 million, or 9.9% of net sales, during the comparable period in 2007. The decrease in operating profit as a percentage of net sales was a result of deleverage in the gross profit margin and SG&A expenses.

Interest Income

Interest income was $4.5 million for the fiscal three month period of 2008 compared to $9.9 million for the corresponding period last year. Interest income decreased as a result of lower cash balances, reflecting share repurchase activity, and lower interest rates.

Income Taxes

The effective tax rate was 37.8% for the fiscal three month period of 2008 and 36.3% for the fiscal three month period of 2007. The 2007 first quarter tax expense includes a favorable $3.3 million adjustment primarily from changing the blended state tax rate on deferred tax assets.

Net Earnings

As a result of the factors described above, net earnings were $76.8 million for the fiscal three month period of 2008 compared with $104.6 million for the fiscal three month period of 2007.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 890 BBB stores, 41 CTS stores, 40 Harmon stores and 10 buybuy BABY stores at the end of the fiscal first quarter of 2008, compared with 821 BBB stores, 35 CTS stores, 39 Harmon stores and 8 buybuy BABY stores at the end of the corresponding quarter last year. At May 31, 2008, Company-wide total store square footage was approximately 30.4 million square feet.

During the fiscal first quarter of 2008, the Company announced the formation of a joint venture with Home & More, S.A. de C.V., a privately-held home products retailer operating two stores in Mexico.

The Company opened 9 BBB stores and 1 buybuy BABY store during the first quarter of fiscal 2008. Including the stores opened during the first quarter, the Company plans to open approximately 50 to 55 new BBB stores throughout the United States and Canada in fiscal 2008. The Company also expects to open approximately 12 new CTS stores and several new buybuy BABY stores as well as continue to open new Harmon stores. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

This excerpt taken from the BBBY 10-Q filed Jan 10, 2008.

Results of Operations

Net Sales

Net sales for the three months ended December 1, 2007 were approximately $1.795 billion, an increase of $175.5 million or approximately 10.8% over net sales of approximately $1.619 billion for the three months ended November 25, 2006. For the three months ended December 1, 2007, approximately 50% of the increase in net sales was attributable to an increase in the Company’s new store sales, with the remainder of the increase primarily attributable to a one week calendar shift in the current year’s quarter

end, the acquisition of buybuy BABY (acquired on March 22, 2007) and the increase in comparable store sales.

The increase in comparable store sales for the fiscal third quarter of 2007 was approximately 0.8%, as compared with an increase of approximately 4.6% for the corresponding period last year. The comparable store sales calculation for the three months ended December 1, 2007 compares the thirteen weeks in the third quarter of fiscal 2007 to the same calendar thirteen weeks in the prior year, so that the week after Thanksgiving in fiscal 2007 is compared to the week after Thanksgiving in fiscal 2006. The Company believes the smaller increase in the comparable store sales percentage versus the same period last year was primarily due to the challenging retailing environment related to the home. The overall comparable store sales increase was particularly impacted by lower comparable store sales in those areas of the Country significantly affected by housing market issues, notably Arizona, California, Florida and Nevada.

For the three months ended December 1, 2007, sales of domestics merchandise and home furnishings for the Company accounted for approximately 45% and 55% of net sales, respectively. For the three months ended November 25, 2006, sales of domestics merchandise and home furnishings for the Company accounted for approximately 47% and 53% of net sales, respectively.

For the nine months ended December 1, 2007, net sales were approximately $5.116 billion, an increase of $493.3 million or approximately 10.7% over net sales of approximately $4.622 billion for the nine months ended November 25, 2006. For the nine months ended December 1, 2007, approximately 55% of the increase in net sales was attributable to an increase in the Company’s new store sales, with the remainder of the increase primarily attributable to the acquisition of buybuy BABY, the increase in comparable store sales and a one week calendar shift during the current year.

Comparable store sales for the fiscal nine months of 2007 increased by approximately 1.5%, as compared with an increase of approximately 4.8% for the corresponding period last year. The comparable store sales calculation for the nine months ended December 1, 2007 compares the thirty-nine weeks in the nine months of fiscal 2007 to the same calendar thirty-nine weeks in the prior year. The Company believes the smaller increase in the comparable store sales percentage versus the same period last year was primarily due to the challenging retailing environment related to the home and the results of a few key markets most affected by certain macroeconomic factors related to the home.

For the nine months ended December 1, 2007, sales of domestics merchandise and home furnishings for the Company accounted for approximately 45% and 55% of net sales, respectively. For the nine months ended November 25, 2006, sales of domestics merchandise and home furnishings for the Company accounted for approximately 47% and 53% of net sales, respectively.

Gross Profit

Gross profit for the three months ended December 1, 2007 was $747.9 million or 41.7% of net sales compared with $704.1 million or 43.5% of net sales for the three months ended November 25, 2006. Gross profit for the nine months ended December 1, 2007 was $2.126 billion or 41.6% of net sales compared with $1.972 billion or 42.7% of net sales for the nine months ended November 25, 2006. The decreases in gross profit as a percentage of net sales for the three and nine months ended December 1, 2007 were attributable to a number of factors, including an increase in coupon redemptions associated with a heightened promotional environment, an increase in inventory acquisition costs and a shift in the mix of merchandise sold, as the Company experienced a higher percentage of sales of home furnishings.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three months ended December 1, 2007 was $544.7 million or 30.4% of net sales compared to $492.9 million or 30.4% of net sales for the three months ended November 25, 2006. SG&A as a percentage of net sales was relatively flat for the three months ended December 1, 2007 compared to November 25, 2006 primarily due to a relative decrease in payroll and payroll-related items (due to a non-recurring $7.2 million charge in the fiscal third quarter of 2006 related to the review of stock option grants and procedures), offset by a relative increase in advertising expense for the current quarter as a result of increased distribution of advertising pieces in response to a heightened promotional environment.

SG&A for the nine months ended December 1, 2007 was $1.548 billion or 30.3% of net sales compared to $1.393 billion, or 30.1% of net sales for the nine months ended November 25, 2006. SG&A as a percentage of net sales increased for the nine months ended December 1, 2007 compared to November 25, 2006 due to a relative increase in advertising expense as a result

of increased distribution of advertising pieces in response to a heightened promotional environment partially offset by a relative decrease in payroll and payroll-related items (including a non-recurring $7.2 million charge in the fiscal third quarter of 2006 related to the review of stock option grants and procedures).

Operating Profit

Operating profit for the three months ended December 1, 2007 was $203.2 million, or 11.3% of net sales, compared to $211.1 million, or 13.0% of net sales, during the comparable period in 2006. For the nine months ended December 1, 2007, operating profit was $578.6 million, or 11.3% of net sales, compared to $579.5 million, or 12.5% of net sales, during the comparable period in 2006. The decreases in operating profit as a percentage of net sales for the three and nine month periods ended December 1, 2007 were primarily a result of the deleverage in the gross margin.

Interest Income

Interest income was $5.0 million and $21.6 million for the fiscal three and nine months ended December 1, 2007, respectively, compared to $10.6 million and $30.2 million for the corresponding periods last year. Interest income decreased primarily as a result of lower cash balances principally due to increased share repurchases during the current year.

Income Taxes

The effective tax rate was 33.6% and 35.0% for the three and nine months ended December 1, 2007, respectively, and 35.8% and 36.3% for the three and nine months ended November 25, 2006, respectively. The tax rate for the three months ended December 1, 2007 included an approximate $8.0 million benefit principally due to the effective settlement in the quarter of certain discrete tax items from ongoing examinations. The tax rate for the nine months ended December 1, 2007 included an approximate $17.1 million benefit primarily due to the effective settlement of certain discrete tax items from ongoing examinations, the recognition of favorable discrete state tax items and from changing the blended state tax rate of deferred income taxes.

The Company expects that FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109” (“FIN 48”) may, over time, create more volatility in the effective tax rate from quarter to quarter because the Company is required each quarter to determine whether new information changes the assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

Net Earnings

As a result of the factors described above, net earnings were $138.2 million for the fiscal third quarter of 2007 and $389.9 million for the fiscal nine months of 2007, compared with $142.4 million and $388.4 million for the corresponding periods in 2006, respectively.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 859 BBB stores, 39 CTS stores, 40 Harmon stores and 8 buybuy BABY stores (acquired as of March 22, 2007) at the end of the fiscal third quarter of 2007, compared with 795 BBB stores, 35 CTS stores and 38 Harmon stores at the end of the corresponding quarter last year. At December 1, 2007, Company-wide total store square footage was approximately 29.5 million square feet.

The Company opened 28 BBB stores, 3 CTS stores and 1 Harmon store during the third quarter of fiscal 2007. Including the 44 BBB stores opened in the fiscal nine months, the Company plans to open approximately 70 BBB stores (including its first store in Canada, which opened on December 6, 2007) in fiscal 2007; however, it is possible that approximately 3 to 5 of these openings may occur subsequent to year-end in March 2008. Additionally, including the 5 CTS stores opened in the fiscal nine months, the Company plans to open 6 to 7 CTS stores and 1 buybuy BABY store in fiscal 2007. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

This excerpt taken from the BBBY 10-Q filed Oct 9, 2007.

Results of Operations

Net Sales

Net sales for the three months ended September 1, 2007 were approximately $1.768 billion, an increase of $160.5 million or approximately 10.0% over net sales of approximately $1.607 billion for the corresponding quarter last year. For the six months ended September 1, 2007, net sales were approximately $3.321 billion, an increase of $317.8 million or approximately 10.6% over net sales of approximately $3.003 billion for the corresponding six months last year.

For the three months ended September 1, 2007, approximately 55.8% of the increase in net sales was attributable to an increase in the Company’s new store sales, 18.0% of the increase was attributable to buybuy BABY (acquired on March 22, 2007), and the balance of the increase was primarily attributable to the increase in comparable store sales. For the six months ended September 1, 2007, approximately 57.4% of the increase in net sales was attributable to an increase in the Company’s new store sales, 16.9% of the increase was attributable to buybuy BABY, and the balance of the increase was primarily attributable to the increase in comparable store sales. The increase in comparable store sales for the fiscal second quarter of 2007 was 2.2%, as compared with an increase of approximately 4.8% for the comparable period last year. Comparable store sales for the fiscal first half of 2007 increased by approximately 1.9%, as compared with an increase of 4.8% for the comparable period last year. The Company believes the decrease in comparable store sales percentage versus the same period last year is primarily due to the challenging retailing environment related to the home.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 47% and 53% of net sales, respectively, for the three months ended September 1, 2007 and approximately 46% and 54% of net sales, respectively, for the six months ended September 1, 2007. The sales of domestics merchandise and home furnishings accounted for approximately 48% and 52% of net sales, respectively, for the three months ended August 26, 2006 and approximately 47% and 53% of net sales, respectively, for the six months ended August 26, 2006.

Gross Profit

Gross profit for the three months ended September 1, 2007 was $732.2 million or 41.4% of net sales compared with $678.2 million or 42.2% of net sales for the three months ended August 26, 2006. Gross profit for the six months ended September 1, 2007 was $1.378 billion or 41.5% of net sales compared with $1.268 billion or 42.2% of net sales for the six months ended August 26, 2006. The decrease in gross profit as a percentage of net sales for the three and six months ended September 1, 2007 was attributable to a number of factors, including an increase in inventory acquisition costs, a heightened promotional environment and a change in the mix of merchandise sold, due to a higher percentage of sales of home furnishings.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three and six months ended September 1, 2007 was $511.1 million and $1.003 billion, or 28.9% and 30.2% of net sales, respectively. SG&A for the three and six months ended August 26, 2006 was $458.6 million and $900.0 million, or 28.5% and 30.0% of net sales, respectively. SG&A as a percentage of net sales increased for the three and six months ended September 1, 2007 compared to August 26, 2006 due primarily to a relative increase in advertising expense. Although the number of advertising events remained relatively consistent, increased distribution resulted in higher postage and paper costs.

Operating Profit

Operating profit for the three months ended September 1, 2007 increased to $221.0 million, or 12.5% of net sales, compared to $219.6 million, or 13.7% of net sales, during the comparable period in 2006. For the six months ended September 1, 2007, operating profit was $375.4 million, or 11.3% of net sales compared to $368.4 million, or 12.3% of net sales during the comparable period in 2006. The decrease in operating profit as a percentage of net sales was a result of the deleverage in the gross margin and SG&A.

Interest Income

Interest income was $6.7 million and $16.6 million for the fiscal three and six months ended September 1, 2007, respectively, compared to $9.9 million and $19.6 million for the corresponding periods last year. Interest income decreased primarily as a result of a decrease in cash balances due to share repurchases and the acquisition of buybuy BABY.

Income Taxes

The effective tax rate was 35.5% and 35.8% for the fiscal three and six months ended September 1, 2007, respectively, and 36.6% for the fiscal three and six months ended August 26, 2006. The tax rate for the three months ended September 1, 2007 included a net $5.8 million benefit, primarily due to the recognition of favorable discrete state tax items, partially offset by an increase in tax contingency reserves related to ongoing income tax audits. The tax rate for the six months ended September 1, 2007 included a net $9.1 million benefit, primarily due to the recognition of favorable discrete state tax items and from changing the blended state tax rate of deferred tax assets, partially offset by an increase in tax contingency reserves related to ongoing income tax audits.

Net Earnings

As a result of the factors described above, net earnings increased to $147.0 million for the fiscal second quarter of 2007 and $251.7 million for the fiscal first half of 2007, compared with $145.5 million and $246.0 million for the corresponding periods in 2006, respectively.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 831 BBB stores, 36 CTS stores, 39 Harmon stores and 8 buybuy BABY stores (acquired as of March 22, 2007) at the end of the fiscal second quarter of 2007, compared with 762 BBB stores, 31 CTS stores and 38 Harmon stores at the end of the corresponding quarter last year. At September 1, 2007, Company-wide total store square footage was approximately 28.6 million square feet.

The Company opened 10 BBB stores and 1 CTS store during the second quarter of fiscal 2007. Including the 16 BBB stores opened in the fiscal first half, the Company plans to open approximately 70 BBB stores (including its first store in Canada) in fiscal 2007; however, it is possible a few of these openings may occur subsequent to year-end in March 2008. Additionally, including the 2 CTS stores opened in the fiscal first half, the Company plans to open 6 CTS stores, 1 Harmon store and 2 buybuy BABY stores in fiscal 2007. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

This excerpt taken from the BBBY 10-Q filed Jul 11, 2007.

Results of Operations

Net Sales

Net sales for the three months ended June 2, 2007 were approximately $1.553 billion, an increase of $157.3 million or approximately 11.3% over net sales of approximately $1.396 billion for the corresponding quarter last year.

Approximately 58.8% of the increase in net sales for the three months ended June 2, 2007 was attributable to an increase in the Company’s new store sales, 15.8% of the increase was attributable to buybuy BABY (acquired on March 22, 2007), and the balance of the increase was primarily attributable to the increase in comparable store sales. The increase in comparable store sales for the fiscal three months of 2007 was 1.6%, as compared with an increase of approximately 4.9% for the comparable period last year. The Company believes the decrease in comparable store sales percentage versus the same period last year is primarily due to the challenging retailing environment related to the home.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 45% and 55% of net sales, respectively, for the three months ended June 2, 2007. The sales of domestics merchandise and home furnishings accounted for approximately 47% and 53% of net sales, respectively, for the three months ended May 27, 2006.

Gross Profit

Gross profit for the three months ended June 2, 2007 was $646.1 million or 41.6% of net sales compared with $590.1 million or 42.3% of net sales for the three months ended May 27, 2006. The decrease in gross profit as a percentage of net sales for the three months ended June 2, 2007 was primarily attributable to an increase in inventory acquisition costs, a shift in the merchandise mix sold and a heightened promotional environment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three months ended June 2, 2007 was $491.7 million or 31.7% of net sales compared with $441.3 million or 31.6% of net sales for the three months ended May 27, 2006. SG&A as a percentage of net sales increased for the three months ended June 2, 2007 compared to May 27, 2006 due primarily to a relative increase in advertising expense, although the number of advertising events remained consistent. This was partially offset by relative decreases in payroll and payroll-related items, as well as store pre-opening expenses.

Operating Profit

Operating profit for the three months ended June 2, 2007 increased to $154.4 million, or 9.9% of net sales, compared to $148.8 million, or 10.7% of net sales, during the comparable period in 2006. The decrease in operating profit as a percentage of net sales was a result of the deleverage in the gross margin and SG&A expenses.

Interest Income

Interest income was $9.9 million for the fiscal three month period of 2007 compared to $9.7 million for the corresponding period last year. Interest income remained relatively flat as a result of increases in the Company’s average interest rate offset by a decrease in the cash balance due to share repurchases and the acquisition of buybuy BABY.

Income Taxes

The effective tax rate was 36.3% for the fiscal three month period of 2007 and 36.6% for the fiscal three month period of 2006. The 2007 first quarter tax expense includes a favorable $3.3 million adjustment primarily from changing the blended state tax rate on deferred tax assets.

The Company expects that FIN 48 may, over time, create more volatility in the effective tax rate from quarter to quarter because the Company is required each quarter to determine whether new information changes the assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

Net Earnings

As a result of the factors described above, net earnings increased to $104.6 million for the fiscal three month period of 2007 compared with $100.4 million for the fiscal three month period of 2006.

Expansion Program

stores, 30 CTS stores and 38 Harmon stores at the end of the corresponding quarter last year. Additionally, the Company acquired 8 buybuy BABY stores as of March 22, 2007. At June 2, 2007, Company-wide total store square footage was approximately 28.3 million square feet.

The Company opened 6 BBB stores and 1 CTS store during the first quarter of fiscal 2007. Including the stores opened during the first quarter, the Company plans to open approximately 70 BBB stores and 5 CTS stores in fiscal 2007. The Company also plans to continue to improve and grow its Harmon and buybuy BABY concepts in fiscal 2007. The continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully.

This excerpt taken from the BBBY 10-Q filed Oct 10, 2006.

Results of Operations

Net Sales

Net sales for the three months ended August 26, 2006 were approximately $1.607 billion, an increase of $176.1 million or approximately 12.3% over net sales of approximately $1.431 billion for the corresponding quarter last year. For the six months ended August 26, 2006, net sales were approximately $3.003 billion, an increase of $327.6 million or approximately 12.2% over net sales of approximately $2.676 billion for the corresponding six months last year.

Approximately 59.2% and 59.5% of the increase in net sales for the three and six months ended

August 26, 2006, respectively, was attributable to an increase in the Company’s new store sales with the balance of the increase primarily attributable to the increase in comparable store sales. Comparable store sales for the fiscal second quarter of 2006 increased by approximately 4.8%, as compared with an increase of approximately 4.5%, for the comparable period last year. Comparable store sales for the fiscal first half of 2006 increased by approximately 4.8%, as compared with an increase of approximately 4.4%, for the comparable period last year. The increases in comparable store sales were due to a number of factors, including but not limited to, the continued consumer acceptance of the Company’s merchandise offerings and a strong focus on customer service with an emphasis on responding to customer feedback.

Sales of domestics merchandise and home furnishings for the Company accounted for approximately 48% and 52% of net sales, respectively, for the three months ended August 26, 2006 and approximately 47% and 53% of net sales, respectively, for the six months ended August 26, 2006. The sales of domestics merchandise and home furnishings accounted for approximately 49% and 51% of net sales, respectively, for both the three and six months ended August 27, 2005.

Gross Profit

Gross profit for the three months ended August 26, 2006 was $678.2 million, or 42.2% of net sales, compared to $601.8 million, or 42.0% of net sales, for the comparable period in 2005. Gross profit for the six months ended August 26, 2006 was $1.268 billion, or 42.2% of net sales, compared to $1.123 billion, or 42.0% of net sales, for the comparable period in 2005. The increase in gross profit as a percentage of net sales for the three and six months ended August 26, 2006 was driven primarily by the reduction of inventory acquisition costs attributable to the Company’s current merchandise offerings.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three and six months ended August 26, 2006 was $458.6 million and $900.0 million, or 28.5% and 30.0% of net sales, respectively. SG&A for the three and six months ended August 27, 2005 was $383.9 million and $753.8 million, or 26.8% and 28.2% of net sales, respectively. SG&A as a percentage of net sales increased due to the expensing of stock options and the related changes in our employee compensation program, as well as increased occupancy costs (including utilities and depreciation) and increased litigation expense (due to a prior year reduction of the estimated amounts required for outstanding litigation in the comparable periods in 2005).

Operating Profit

Operating profit for the three months ended August 26, 2006 was $219.6 million, or 13.7% of net sales compared to $217.9 million, or 15.2% of net sales during the comparable period in 2005. For the six months ended August 26, 2006, operating profit was $368.4 million, or 12.3% of net sales compared to $368.8 million, or 13.8% of net sales during the comparable period in 2005. The decrease in operating profit as a percentage of net sales was a result of the deleverage in SG&A expenses partially offset by gross margin improvement, as described above.

Interest Income

Interest income was $9.9 million and $19.6 million for the fiscal three and six months ended August 26, 2006, respectively, compared to $8.0 million and $15.1 million for the corresponding periods last year. Interest income increased due to an increase in the Company’s average investment interest rate as a result of the upward trend in short term interest rates.

Income Taxes

The effective tax rate was 36.6% for the fiscal three and six months ended August 26, 2006 and 37.4% for the fiscal three and six months ended August 27, 2005. The decrease is primarily due to a reduction in the weighted average effective tax rate resulting from a change in the mix of the business within the taxable jurisdictions in which the Company operates.

Net Earnings

As a result of the factors described above, net earnings increased to $145.5 million for the fiscal second quarter of 2006 and $246.0 million for the fiscal first half of 2006, compared with $141.4 million and $240.3 million for the corresponding periods in 2005, respectively.

Expansion Program

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. As a result of this program, the Company operated 762 BBB stores, 31 CTS stores and 38 Harmon stores at the end of the fiscal second quarter of 2006, compared with 686 BBB stores, 27 CTS stores and 36 Harmon stores at the end of the corresponding quarter last year. At August 26, 2006, Company-wide total store square footage was approximately 26.2 million square feet.

The Company opened 11 BBB stores and one CTS store during the second quarter of fiscal 2006. Including the 21 stores opened in the fiscal first half of 2006, the Company expects to open approximately 75 BBB stores in fiscal 2006; however, it is possible a few of these openings may occur subsequent to year-end in March 2007. Also during 2006, the Company intends to continue the expansion and integration of its CTS and Harmon concepts, including the opening of six CTS stores for the year.

EXCERPTS ON THIS PAGE:

10-Q	Jan 8, 2009

10-Q	Oct 9, 2008

10-Q	Jul 10, 2008

10-Q	Jan 10, 2008

10-Q	Oct 9, 2007

10-Q	Jul 11, 2007

10-Q	Oct 10, 2006

Bed Bath & Beyond (BBBY)

BBBY » Topics » Results of Operations

EXCERPTS ON THIS PAGE:

RELATED TOPICS for BBBY: