This is a summary of the third quarter fiscal 2009 earnings call conducted by Bed Bath & Beyond, Inc. (BBBY) on January 7, 2008.
Management:
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Co-Chairman of the Board: Leonard Feinstein
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Chief Financial Officer & Treasurer: Eugene A. Castagna
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Chief Executive Officer & Director: Steven H. Temares
Key Investor Issues:
- Earnings for the third quarter fell to $87.7 million, or 34 cents a share, compared with $138.2 million, or 52 cents a share, a year earlier.
- Total sales fell 0.7% to $1.78 billion while same-store sales declined about 5.6%.
- The home furnishing retailer forecast profit of 40 to 46 cents a share for the fourth quarter and $1.50 to $1.56 a share for the full fiscal year.
- The retailer expects to open fewer stores in 2009 than last year.
Third Quarter Highlights:
- The company earned $0.34 per diluted share in the fiscal third quarter ended November 29, 2008.
- During the fiscal third quarter the company opened 18 new Bed Bath & Beyond stores including its third store in Canada, seven Christmas Tree Shop stores, one buybuy BABY store and one Harmon Face Value store.
Consolidated store space at November 29, 2008 was approximately 31.6 million square feet.
Including the stores opened since the beginning of the fourth quarter which consists of the fourth Bed Bath & Beyond store in Canada, one Christmas Tree Shop store and one buybuy Baby store, the company presently operates 922 Bed Bath & Beyond stores in 40 United States, the District of Columbia, Puerto Rico and Canada as well as 49 Christmas Tree Shop stores, 12 buybuy BABY stores and 41 stores under the name Harmon and Harmon Face Values.
In addition, the company is a joint venture in Mexico which operates two stores in the Mexico City market under the name Home & More.
For all of fiscal 2008 including stores already opened, the company expects to open approximately 49 new Bed Bath & Beyond stores throughout the United States and in Canada. This reflects the company’s conservative approach to its expansion program as well as the difficulties in the commercial real estate market.
The company believes that within the United States there is an opportunity to open in excess of 400 additional Bed Bath & Beyond stores.
The company is continuing to grow its Christmas Tree Shops, buybuy BABY and Harmon concepts. For all of fiscal 2008 the company expects to open approximately 11 Christmas Tree Shop stores and about seven buybuy BABY stores.
The company continues to open Harmon Face Value health and beauty care departments within its Bed Bath & Beyond and Christmas Tree Shop locations.
The company continues to strive to increase productivity of existing stores by introducing new merchandising initiatives as well as by expanding, renovating, remodeling and/or relocating stores to enhance the customers’ shopping experience. The bridal, baby and gift registry businesses and the continuing development of the online sales capabilities afford Bed Bath & Beyond additional opportunities to attract new shoppers to the Bed Bath & Beyond experience.
The capital spending plan for all of fiscal 2008 is currently estimated at approximately $235 million.
This represents a slight reduction from the estimate provided in September and an approximately $120 million reduction as compared to last year and among other projects a new distribution center and eservice fulfillment center were built. The company continues to review and prioritize its capital needs while continuing to make investments in the company principally for new stores, existing sore improvements and other projects whose impact is viewed as essential to the company’s future.
As announced on December 2, 2008 the third quarter was 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.
Net earnings per diluted share for the quarter were approximately $0.34 compared with $0.52 a year ago.
- For the fiscal nine months, net earnings per diluted share were approximately $1.10 compared with $1.44 reported for last year’s nine month period.
- Net sales for the fiscal third quarter were approximately $1.8 billion, a decrease of approximately 0.7% from the corresponding fiscal 2007 period.
- Third quarter comp store sales were down 5.6%. For the first nine months net sales amounted to approximately $5.3 billion, about 3.3% higher than in the similar nine month period last year.
Comp store sales for the nine months were down 1.7%.
Net sales and comp sales for the nine month period 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.
