Bed Bath and Beyond, Inc. (BBBY)
Q4 2009 Earnings Call Transcript
April 7, 2010 5:00 p.m. ET

Executives

Eugene A. Castagna – Chief Financial Officer & Treasurer
Warren Eisenberg – Co-Chairman of Bed Bath and Beyond
Steven H. Temares – Chief Executive Officer & Director

Presentation

Operator

Please standby we are about to begin. Welcome to Bed Bath and Beyond’s fourth quarter of fiscal 2009 results conference call. (Operator Instructions) All participants are in a listen only mode for the duration of the call. This call is being recorded. A rebroadcast of the conference will be available beginning on Wednesday, April the 7th 2010 at 6:30 PM Eastern till 6:30 Eastern on Friday April the 9th, 2010. To access the rebroadcast you may dial 1-888-203-1112 with pass code ID of 7577241. Now, at this time it is my pleasure to turn the conference over to Gene Castagna, Chief Financial Officer and Treasurer of Bed Bath and Beyond. Mr. Castagna, please go ahead.

Eugene Castagna – Chief Financial Officer

Thank you and good afternoon. Welcome to Bed Bath and Beyond’s fourth quarter fiscal 2009 conference call. Within the past hour we issued a press release announcing Bed Bath and Beyond’s results for the three and 12 month period ended February 27, 2010.

During this call we will comment on some of the fourth quarter highlights and provide our fiscal 2010 planning assumptions. Before proceeding I will read the following statement, “Bed Bath and Beyond’s fiscal fourth quarter press release and comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities & Exchange Act of 1934 as amended. Many of these forward-looking statements can be identified by the use of words such as may, will, expect, anticipate, estimate, assume, project, plan and similar words and phrases. The company’s actual results or future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside the company’s control. Please refer to Bed, Bath & Beyond’s SEC filings including its Form 10K for the year ended February 28, 2009. The company does not undertake any obligation to update its forward-looking statements.”

Joining me on today’s call are Warren Eisenberg, Co-Chairman of Bed Bath and Beyond and Steven Temares, Chief Executive Officer and Member of the Board of Directors. I am now very pleased to introduce Warren Eisenberg. Warren?

Warren Eisenberg – Co-Chairman

Good afternoon. I am very pleased to report that our company’s net earnings per diluted share increased approximately 56% in the fiscal fourth quarter to $0.86 and approximately 40% in the fiscal year to $2.30.

You will recall that last year’s fiscal fourth quarter was negatively impacted by challenging economic conditions as well as the completion of liquidation sales of a then major competitor. While the economy appears to be showing some signs of improvement we believe the consumer continues to face economic challenges and the pressure of the macroeconomic environment still remains. As such we remain cautiously optimistic as we begin fiscal 2010.

During the fiscal fourth quarter we opened eight Bed Bath and Beyond stores, four Christmas Tree shops, three Harmon Face Value stores and three buybuy BABY stores bringing the total number of openings in fiscal ‘09 to 67. Additionally, we closed one and relocated three Bed Bath and Beyond stores during the quarter. We continued to add fine china departments in additional Bed Bath and Beyond stores as well as placed Harmon Face Value’s health and beauty care offerings in all of our concepts.

Consolidated store space at February 27, 2010 was approximately 33.7 million square feet, an increase of approximately 5% over last year. Since the beginning of fiscal 2010 we have opened one Bed Bath and Beyond store and one buybuy BABY store. We currently operate 1,102 stores including 966 Bed Bath and Beyond stores in 49 states, the District of Columbia, Puerto Rico and Canada as well as 61 Christmas Tree shops, 30 buybuy BABY stores and 45 stores under the names Harmon or Harmon Face Value. In addition, we are a partner in a joint venture which operates two stores in the Mexico City market under the name Home & More.

In fiscal 2010 we anticipate opening a total of approximately 60 stores. Currently we believe that fiscal 2010’s mix of store openings will consist of approximately 30 Bed Bath and Beyond stores in the United States and Canada, approximately 10 Christmas Tree shops and approximately 20 buybuy BABY stores. Additionally we will continue to place Harmon Face Value health and beauty care offerings in all our concepts. We also look forward to expanding into our 50th state, Hawaii, with a Bed Bath and Beyond store expected to open this summer.

We remain committed to and are excited about the continued growth of all of our concepts. We continue to apply our stringent standards of growth as we evaluate new store price as well as continue to review our existing locations and lease terms for opportunities to relocate and/or right size our stores in response to changing market conditions. We believe throughout the United States and Canada there is an opportunity to open in excess of 1,300 Bed Bath and Beyond stores as well as grow the Christmas Tree shops and buybuy BABY concepts from coast to coast. We continue to work to increase the productivity of our existing stores by introducing new merchandising initiatives, as well as by expanding, renovating, remodeling and/or relocating stores to enhance our customers’ shopping experience.

Our ability to leverage the breadth and depth of our merchandise offering, grow our bridal, BABY and gift registries and continue the development of our online sales capabilities has afforded us additional opportunities to attract new customers to Bed Bath and Beyond.

We continue to believe that these challenging macroeconomic times have provided us an exceptional opportunity to further solidify and enhance our position in the merchandising categories that we offer our customers. The success of our company is due in large part to the tremendous efforts of our associates and our unique, decentralized culture. This culture, which takes advantage of the knowledge, independence and customer focus of our associates has always been the foundation of our long-term performance and allows us to respond more quickly as economic conditions change on a market by market basis. We are confident we have the people, the resources and the capability to achieve our near and long-term goals. Now I will turn the call over to Steven Temares. Steve?

Steven Temares – Chief Executive Officer