This authorized the company to purchase shares of its common stock with funds from present and expected future cash flow. From the time of approval to the end of fiscal year 2006, it repurchased approximately $300 million of its common shares. Since the initial buyback program commenced in fiscal 2004, the company has returned to shareholders an aggregate of approximately $1.3 billion through share repurchases, while maintaining a debt free balance sheet, investing in its infrastructure and expanding its retail concepts.
A total of 20 new Bed Bath & Beyond stores were opened in the latest quarter. This included the company’s first store in the state of Alaska.
Fiscal 2007 Outlook
Fiscal 2007 will be a 52-week year ending on March 1, 2008.
The company bought a privately held retailer of infant and toddler merchandise called buybuy BABY for approximately $67 million cash in fiscal year 2007. Buybuy BABY was founded in 1996 and operates eight stores in New York, New Jersey, Maryland and Virginia. The stores range in size from 28,000 square feet to 60,000 square feet, and offer a broad assortment of merchandise for expectant parents, infants and toddlers.
The benefit of the acquisition of buybuy BABY is not expected to have a material effect on the company’s operating results or financial condition in fiscal 2007. The acquisition of buybuy BABY did not affect the results for the fiscal fourth quarter and fiscal 2006, since the acquisition was consummated in fiscal 2007.
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Net sales for each of the first three quarters of 2007 are expected to grow by 10% to 12%.
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Earnings per share are expected at 39 cents per share for the fiscal first quarter.
- EPS for the second and third fiscal quarters are expected to grow by a low double digit percentage.
- The fourth quarter, which will be 13-week versus 14 weeks in fiscal 2006, is planned to result in low single digit increases in net sales and EPS over the 2006 fourth quarter EPS.
Efforts are continuing to open new stores and to increase the productivity of existing stores and departments
The company anticipates opening approximately 70 new Bed Bath & Beyond stores, relocating several others, and improving and growing its Christmas Tree Shops, Harmon and buybuy BABY operations, with the majority of the new store openings expected to occur in the second half of the fiscal year. It is also developing a new state-of-the-art Christmas Tree Shops distribution center and a new e-service fulfillment center to accommodate future growth.
Consolidated same-store sales are modeled to increase from 3% to 5%.
- New Bed Bath & Beyond stores are expected to generate between $160 and $185 per square foot in the first 12 months of operation.
- Operating profit margin is anticipated to decrease for the full year.
- Interest income is expected to decline in fiscal 2007 as a result of the share repurchase program, the acquisition of buybuy BABY, an increase in capital expenditures and the current interest rate environment among other considerations.
- The share repurchase program is expected to continue.
- Provision for income taxes continues to be estimated at 36.3% of pre-tax earnings.
- Depreciation has been planned at approximately $150 million.
Expected capital expenditures amounts to $375 million for fiscal 2007 and will be principally for new stores and existing stores refurbishment, information technology enhancements, the new Christmas Tree Shops distribution center, a new e-service fulfillment center and other infrastructure investments.
There is no Questions and Answer section associated with the fourth quarter earnings call conducted by Bed Bath & Beyond, Inc. (BBBY) on April 11, 2007.
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