News Press Releases

Bed Bath & Beyond Inc. Reports Results For Fiscal 2015 Second Quarter

September 24, 2015

Second Quarter EPS In-Line with Company Model - Net Earnings per Diluted Share Increased to $1.21 - Net Sales Increased by Approximately 1.7%; 2.2% on a Constant Currency Basis - Comparable Sales Increased by Approximately 0.7%; 1.1% on a Constant Currency Basis - Continues to Model Fiscal 2015 Full Year Net Earnings per Diluted Share to be Between a Relatively Flat and a Mid-Single Digit Percentage Increase - Board of Directors Authorizes a New $2.5 Billion Share Repurchase Program

UNION, N.J., Sept. 24, 2015 /PRNewswire/ -- Bed Bath & Beyond Inc. today reported financial results for the second quarter of fiscal 2015 ended August 29, 2015.

Fiscal 2015 Second Quarter and Six Months Results

For the second quarter of fiscal 2015, the Company reported net earnings of $1.21 per diluted share ($201.7 million) compared with $1.17 per diluted share ($224.0 million) for the second quarter of fiscal 2014. Net sales for the second quarter of fiscal 2015 were approximately $2.995 billion, an increase of approximately 1.7% from net sales of approximately $2.945 billion reported in the second quarter of fiscal 2014. Net sales on a constant currency basis increased by approximately 2.2% for the second quarter of fiscal 2015. Comparable sales in the second quarter of fiscal 2015 increased by approximately 0.7%, compared with an increase of approximately 3.4% in last year's fiscal second quarter. Comparable sales on a constant currency basis increased by approximately 1.1% for the second quarter of fiscal 2015.

For the fiscal six months ended August 29, 2015, the Company reported net earnings of $2.13 per diluted share ($360.1 million) compared with $2.09 per diluted share ($411.0 million) in the corresponding period a year ago. Net sales for the fiscal six months of 2015 were approximately $5.734 billion, an increase of approximately 2.4% from net sales of approximately $5.602 billion in the corresponding period a year ago. Net sales on a constant currency basis increased by approximately 2.7% for the fiscal six months. Comparable sales for the fiscal six months of 2015 increased by approximately 1.4%, compared with an increase of approximately 2.0% in last year's fiscal six months. Comparable sales on a constant currency basis increased by approximately 1.8% for the fiscal six months of 2015.

Linen Holdings is excluded from the comparable sales calculations and will continue to be excluded on an ongoing basis because it represents non-retail activity.

Share Repurchase Program

The Company is pleased to announce that its Board of Directors has authorized a new $2.5 billion share repurchase program. The Company is currently planning that the new share repurchase program will commence after completion of the existing share repurchase program. During the second quarter of fiscal 2015, the Company repurchased approximately $194 million of its common stock, representing approximately 2.9 million shares, under its existing share repurchase program. As of August 29, 2015, the remaining balance of the existing share repurchase program was approximately $305 million. Since 2004 through the second quarter of 2015, the Company has returned more than $9.1 billion to its shareholders through share repurchases.

"We are pleased that we have been able to make significant investments in people and technology to position our Company for continued successful growth in the ever evolving retail environment, while at the same time, returning value to our shareholders through share repurchases," said Steven Temares, Chief Executive Officer and Member of the Board of Directors. "Our Board authorized this new share repurchase program based upon its continued confidence in our Company's long-term growth potential, financial outlook and cash flow generation, and it is anticipated that this $2.5 billion share repurchase program will be funded from current cash and future cash flows. That said, our Company's Board of Directors continues to review our capital structure on an ongoing basis."

Fiscal 2015 Financial Model

Net earnings per diluted share continue to be modeled to be between a relatively flat and a mid-single digit percentage increase for the fiscal full year. For the third quarter of fiscal 2015, the Company is modeling net earnings per diluted share to be approximately $1.14 to $1.21, compared to $1.23 in the prior year period. This modeled range would result in year-over-year net earnings per share growth of approximately 5% to 11%, after taking into account the impact of certain non-comparable items. Based on the modeled diluted weighted average shares outstanding for the fiscal third quarter of 2015, these non-comparable items, totaling about $0.15, are: the non-recurring favorable credit card fee litigation settlement that occurred in the third quarter of fiscal 2014; the significantly lower net after tax benefits that are planned in the third quarter of fiscal 2015 as compared to fiscal 2014 due to distinct tax events; and a modeled unfavorable foreign currency rate impact in the third quarter of fiscal 2015. Comparable sales are modeled to increase between 1.0% and 3.0% for the third and fourth quarters of fiscal 2015. The modeling of net earnings per diluted share is based upon a number of assumptions which will be described in the Company's second quarter of fiscal 2015 conference call. Information regarding access to the call is available in the Investor Relations section of the Company's website, www.bedbathandbeyond.com.

About the Company

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a 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 or Harmon Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus. Customers can purchase products from the Company either in-store, online or through a mobile device. The Company has the developing 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. 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. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard and Poor's 500 and Global 1200 Indices and the NASDAQ-100 Index. The Company is counted among the Fortune 500 and the Forbes 2000.

The Company operates websites at bedbathandbeyond.com, worldmarket.com, buybuybaby.com, christmastreeshops.com, harmondiscount.com, and ofakind.com. As of August 29, 2015, the Company had a total of 1,520 stores, including 1,023 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 270 stores under the names of World Market, Cost Plus World Market or Cost Plus, 99 buybuy BABY stores, 78 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 50 stores under the names Harmon or Harmon Face Values. During the fiscal second quarter, the Company opened two Bed Bath & Beyond stores, three buybuy BABY stores and one Cost Plus World Market store. In addition, the Company is a partner in a joint venture which operates six 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 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 political instability, labor disturbances and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company's growth; the ability to assess and implement technologies in support of the Company's development of its omnichannel capabilities; uncertainty in financial markets; 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; new, or developments in existing, litigation, claims or assessments; changes to, or new, tax laws or interpretation of existing tax laws; changes to, or new, accounting standards including, without limitation, changes to lease 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 29,		August 30,		August 29,		August 30,
			2015		2014		2015		2014


	Net sales		$	2,995,469	$	2,944,905	$	5,733,964	$	5,601,603

	Cost of sales			1,854,519		1,810,860		3,548,881		3,436,673

		Gross profit		1,140,950		1,134,045		2,185,083		2,164,930

	Selling, general and administrative expenses			790,756		765,304		1,561,620		1,495,488

		Operating profit		350,194		368,741		623,463		669,442

	Interest expense, net			25,053		9,528		44,954		11,622

		Earnings before provision for income taxes		325,141		359,213		578,509		657,820

	Provision for income taxes			123,463		135,260		218,380		246,815

		Net earnings	$	201,678	$	223,953	$	360,129	$	411,005

	Net earnings per share - Basic		$	1.22	$	1.18	$	2.16	$	2.11
	Net earnings per share - Diluted		$	1.21	$	1.17	$	2.13	$	2.09

	Weighted average shares outstanding - Basic			165,024		189,625		166,898		194,622
	Weighted average shares outstanding - Diluted			166,633		191,496		168,883		196,796

BED BATH & BEYOND INC. AND SUBSIDIARIES
*Consolidated Balance Sheets*
*(in thousands, unaudited)*

			August 29,		August 30,
			2015		2014

	Assets

	Current assets:
		Cash and cash equivalents	$	667,563	$	1,226,627
		Short term investment securities		28,905		59,999
		Merchandise inventories		2,875,417		2,758,726
		Other current assets		426,007		406,607

		Total current assets		3,997,892		4,451,959

	Long term investment securities			70,501		92,383
	Property and equipment, net			1,669,951		1,576,912
	Goodwill			487,139		486,279
	Other assets			425,823		426,727

			$	6,651,306	$	7,034,260

	Liabilities and Shareholders' Equity

	Current liabilities:
		Accounts payable	$	1,196,798	$	1,258,568
		Accrued expenses and other current liabilities		428,464		407,178
		Merchandise credit and gift card liabilities		317,247		294,658
		Current income taxes payable		60,690		46,494

		Total current liabilities		2,003,199		2,006,898

	Deferred rent and other liabilities			492,780		487,425
	Income taxes payable			87,059		100,758
	Long term debt			1,500,000		1,500,000

		Total liabilities		4,083,038		4,095,081

	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 337,560 and 335,904 shares, respectively;
		outstanding 166,892 and 185,239 shares, respectively		3,376		3,359
		Additional paid-in capital		1,849,677		1,560,126
		Retained earnings		9,913,505		9,006,907
		Treasury stock, at cost; 170,668 and 150,665 shares, respectively		(9,147,228)		(7,620,595)
		Accumulated other comprehensive loss		(51,062)		(10,618)

	Total shareholders' equity			2,568,268		2,939,179

			$	6,651,306	$	7,034,260

Certain reclassifications have been made to the fiscal 2014 consolidated balance sheet to conform to the fiscal 2015 consolidated balance sheet presentation.

BED BATH & BEYOND INC. AND SUBSIDIARIES
*Consolidated Statements of Cash Flows*
*(in thousands, unaudited)*

				Six Months Ended

				August 29,		August 30,
				2015		2014


	Cash Flows from Operating Activities:

		Net earnings		$	360,129	$	411,005
		Adjustments to reconcile net earnings to net cash
			provided by operating activities:
			Depreciation and amortization		127,113		117,471
			Stock-based compensation		33,859		33,760
			Excess tax benefit from stock-based compensation		(10,331)		(8,081)
			Deferred income taxes		(10,798)		(26,086)
			Other		1,169		(756)
			Increase in assets:
			Merchandise inventories		(147,486)		(178,592)
			Trading investment securities		(2,134)		(5,209)
			Other current assets		(56,272)		(28,839)
			Other assets		(6,782)		(2,174)
			Increase in liabilities:
			Accounts payable		81,421		195,364
			Accrued expenses and other current liabilities		18,115		21,196
			Merchandise credit and gift card liabilities		11,356		10,373
			Income taxes payable		1,174		1,865
			Deferred rent and other liabilities		8,800		3,683

		Net cash provided by operating activities			409,333		544,980

	Cash Flows from Investing Activities:

		Purchase of held-to-maturity investment securities			(16,873)		(84,367)
		Redemption of held-to-maturity investment securities			126,875		513,750
		Capital expenditures			(160,805)		(155,300)

		Net cash (used in) provided by investing activities			(50,803)		274,083

	Cash Flows from Financing Activities:

		Proceeds from exercise of stock options			7,879		9,704
		Proceeds from issuance of senior unsecured notes			-		1,500,000
		Payment of deferred financing costs			-		(10,157)
		Prepayment under share repurchase agreement			-		(165,000)
		Excess tax benefit from stock-based compensation			10,331		8,081
		Repurchase of common stock, including fees			(579,296)		(1,303,260)

		Net cash (used in) provided by financing activities			(561,086)		39,368

		Effect of exchange rate changes on cash and cash equivalents			(5,455)		1,680

		Net (decrease) increase in cash and cash equivalents			(208,011)		860,111

	Cash and cash equivalents:
		Beginning of period			875,574		366,516
		End of period		$	667,563	$	1,226,627

Certain reclassifications have been made to the fiscal 2014 consolidated statement of cash flows to conform to the fiscal 2015 consolidated cash flows presentation.