EX-99.1 2 exhibit991-pressreleaseq22.htm EXHIBIT 99.1 Exhibit

FOR IMMEDIATE RELEASE

    
BED BATH & BEYOND INC. REPORTS RESULTS
FOR FISCAL 2018 SECOND QUARTER


•
Net Earnings Per Diluted Share of $.36, In-Line with Company Model
•
Net Sales Flat to Prior Year; Comparable Sales Declined Approximately 0.6%
•
Cash and Investments Balance Increased Approximately $532 Million
•
Board of Directors Declares Quarterly Dividend of $.16 Per Share

UNION, New Jersey, September 26, 2018 --- Bed Bath & Beyond Inc. (Nasdaq: BBBY) today reported financial results for the second quarter of fiscal 2018 ended September 1, 2018.

Fiscal 2018 Second Quarter Results

For the fiscal 2018 second quarter, the Company reported net earnings of $.36 per diluted share ($48.6 million), compared with $.67 per diluted share ($94.2 million) for the fiscal 2017 second quarter. Net sales for the fiscal 2018 second quarter were approximately $2.9 billion, flat to the prior year quarter. Comparable sales in the fiscal 2018 second quarter decreased by approximately 0.6%, and included strong sales growth from the Company’s customer-facing digital channels, and sales from stores that declined in the mid-single-digit percentage range.

Capital Allocation

The Company’s Board of Directors today declared a quarterly dividend of $.16 per share payable on January 15, 2019 to shareholders of record at the close of business on December 14, 2018.

During the fiscal 2018 second quarter, the Company repurchased approximately $41 million of its common stock, representing approximately 2.1 million shares, under its existing $2.5 billion share repurchase program. As of September 1, 2018, the program had a remaining balance of approximately $1.4 billion.

The Company ended the fiscal 2018 second quarter with approximately $1.1 billion in cash and investment balances, an increase of approximately $532 million, compared with approximately $563 million at the end of the fiscal 2017 second quarter.

Fiscal 2018

During the conference call with analysts and investors, the Company plans to review its quarterly results and its financial planning assumptions for fiscal 2018.

The Company’s planning assumptions reflect actual results through the fiscal second quarter, the current trends the Company has been experiencing, and other factors to be discussed on the conference call. Based on its planning assumptions, the Company has slightly reduced its net sales model, with comparable sales to be relatively flat to last year, and net earnings per diluted share for the full year to be at the low end of its previously modeled range, at about $2.00.

In connection with its three-year financial goals that comprise its vision for 2020, the Company remains on track to achieve moderating declines in operating profit and net earnings per diluted share in fiscal 2018 and fiscal 2019, and to achieve growth in net earnings per diluted share by fiscal 2020.







Fiscal 2018 Second Quarter Conference Call and Investor Presentation

Bed Bath & Beyond Inc.’s fiscal 2018 second quarter conference call may be accessed by dialing 1-888-771-4371, or if international, 1-847-585-4405, using conference ID number 47547438. The replay of the call can be accessed by dialing 1-888-843-7419, using conference ID number 47547438. The call and replay can also be accessed via audio webcast on the investor relations section of our website at www.bedbathandbeyond.com.

The Company has also made available an Investor Presentation on the investor relations section of its website that provides information related to its strategic initiatives, fiscal second quarter financial results, and modeling assumptions for fiscal 2018.

About the Company

Bed Bath & Beyond Inc. and subsidiaries (the “Company”) is an omnichannel 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, Harmon Face Values or Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus. Customers can purchase products either in-store, online, with a mobile device or through a customer contact center. The Company generally has the 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; One Kings Lane, an authority in home décor and design, offering a unique collection of select home goods, designer and vintage items; PersonalizationMall.com, an industry-leading online retailer of personalized products; Chef Central, an online retailer of kitchenware, cookware and homeware items catering to cooking and baking enthusiasts; and Decorist, an online interior design platform that provides personalized home design services. 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.

The Company operates websites at bedbathandbeyond.com, bedbathandbeyond.ca, worldmarket.com, buybuybaby.com, buybuybaby.ca, christmastreeshops.com, andthat.com, harmondiscount.com, facevalues.com, ofakind.com, onekingslane.com, personalizationmall.com, chefcentral.com, decorist.com, harborlinen.com, and t-ygroup.com. As of September 1, 2018, the Company had a total of 1,560 stores, including 1,018 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 281 stores under the names of World Market, Cost Plus World Market or Cost Plus, 121 buybuy BABY stores, 83 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 57 stores under the names Harmon, Harmon Face Values or Face Values. During the fiscal second quarter, the Company opened one Bed Bath & Beyond store and two World Market stores. The joint venture, to which the Company is a partner, operates ten 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, goal, 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 across all channels; pricing pressures; liquidity; the ability to achieve anticipated cost savings, and to not exceed anticipated costs, associated with organizational changes and investments; 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 trade restrictions, political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company’s plans for new stores; the ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets it serves; the ability to assess and implement technologies in support of the Company’s development of its omnichannel capabilities; uncertainty in financial markets; volatility in the price of the Company’s common stock and its effect, and the effect of other factors, on the Company’s capital allocation strategy; disruptions to the Company’s information technology systems including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; reputational risk arising from challenges to the Company’s or a third party product or service 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, including without limitation proposed changes affecting international trade; changes to, or new, tax laws or interpretation of existing tax laws; new, or developments in existing, litigation, claims or assessments; changes to, or new, 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.

INVESTOR CONTACT:

Janet M. Barth    (908) 613-5820






BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)

 
Three Months Ended
 
Six Months Ended
 
September 1, 2018
 
August 26, 2017
 
September 1, 2018
 
August 26, 2017
 
 
 
 
 
 
 
 
Net sales
$
2,935,018

 
$
2,936,357

 
$
5,688,685

 
$
5,678,498

 
 
 
 
 
 
 
 
Cost of sales
1,946,457

 
1,867,798

 
3,735,276

 
3,609,824

 
 
 
 
 
 
 
 
    Gross profit
988,561

 
1,068,559

 
1,953,409

 
2,068,674

 
 
 
 
 
 
 
 
Selling, general and administrative expenses
909,703

 
899,712

 
1,793,322

 
1,752,816

 
 
 
 
 
 
 
 
    Operating profit
78,858

 
168,847

 
160,087

 
315,858

 
 
 
 
 
 
 
 
Interest expense, net
14,611

 
19,166

 
31,343

 
35,746

 
 
 
 
 
 
 
 
    Earnings before provision for income taxes
64,247

 
149,681

 
128,744

 
280,112

 
 
 
 
 
 
 
 
Provision for income taxes
15,608

 
55,451

 
36,529

 
110,599

 
 
 
 
 
 
 
 
    Net earnings
$
48,639

 
$
94,230

 
$
92,215

 
$
169,513

 
 
 
 
 
 
 
 
Net earnings per share - Basic
$
0.36

 
$
0.67

 
$
0.68

 
$
1.21

Net earnings per share - Diluted
$
0.36

 
$
0.67

 
$
0.68

 
$
1.20

 
 
 
 
 
 
 
 
Weighted average shares outstanding - Basic
135,410

 
139,868

 
135,698

 
140,599

Weighted average shares outstanding - Diluted
135,675

 
140,211

 
136,138

 
141,176

 
 
 
 
 
 
 
 
Dividends declared per share
$
0.16

 
$
0.15

 
$
0.32

 
$
0.30





BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
 
 
September 1, 2018
 
August 26, 2017
Assets
 

 
 

 
 
 
 
Current assets:
 

 
 

    Cash and cash equivalents
$
869,297

 
$
464,062

    Short term investment securities
205,916

 
—

    Merchandise inventories
2,813,588

 
2,878,638

    Prepaid expenses and other current assets
387,343

 
187,664

 
 
 
 
        Total current assets
4,276,144

 
3,530,364

 
 
 
 
Long term investment securities
19,742

 
99,157

Property and equipment, net
1,881,957

 
1,834,470

Goodwill
716,283

 
707,127

Other assets
425,737

 
611,541

 
 
 
 
 
$
7,319,863

 
$
6,782,659

 
 
 
 
Liabilities and Shareholders' Equity
 

 
 

 
 
 
 
Current liabilities:
 

 
 

    Accounts payable
$
1,366,161

 
$
1,168,092

    Accrued expenses and other current liabilities
748,629

 
486,719

    Merchandise credit and gift card liabilities
329,227

 
318,407

    Current income taxes payable
—

 
15,802

 
 
 
 
        Total current liabilities
2,444,017

 
1,989,020

 
 
 
 
Deferred rent and other liabilities
427,118

 
514,902

Income taxes payable
54,010

 
65,203

Long term debt
1,492,310

 
1,491,836

 
 
 
 
        Total liabilities
4,417,455

 
4,060,961

 
 
 
 
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 342,708 and 341,582, respectively; outstanding 138,051 and 143,242 shares, respectively
3,427

 
3,416

Additional paid-in capital
2,096,282

 
2,022,826

Retained earnings
11,386,561

 
11,130,348

Treasury stock, at cost; 204,657 and 198,340 shares, respectively
(10,530,712
)
 
(10,399,254
)
Accumulated other comprehensive loss
(53,150
)
 
(35,638
)
 
 
 
 
Total shareholders' equity
2,902,408

 
2,721,698

 
 
 
 
 
$
7,319,863

 
$
6,782,659





BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands, unaudited)
 
 
Six Months Ended
 
September 1, 2018
 
August 26, 2017
Cash Flows from Operating Activities:
 

 
 

 
 
 
 
    Net earnings
$
92,215

 
$
169,513

    Adjustments to reconcile net earnings to net cash provided by operating activities:
 

 
 

        Depreciation and amortization
161,668

 
148,497

        Stock-based compensation
37,043

 
36,904

        Deferred income taxes
(4,074
)
 
(10,707
)
        Other
(1,029
)
 
182

        (Increase) decrease in assets, net of effect of acquisitions:
 

 
 

           Merchandise inventories
(85,805
)
 
31,852

           Trading investment securities
(4,174
)
 
(9,221
)
           Other current assets
175,479

 
10,590

           Other assets
1,475

 
(4,052
)
        Increase (decrease) in liabilities, net of effect of acquisitions:
 

 
 

           Accounts payable
218,945

 
22,004

           Accrued expenses and other current liabilities
51,734

 
2,723

           Merchandise credit and gift card liabilities
5,774

 
8,604

           Income taxes payable
(7,268
)
 
(46,766
)
           Deferred rent and other liabilities
(2,967
)
 
4,578

 
 
 
 
    Net cash provided by operating activities
639,016

 
364,701

 
 
 
 
Cash Flows from Investing Activities:
 

 
 

 
 
 
 
    Purchase of held-to-maturity investment securities
(121,625
)
 
—

    Redemption of held-to-maturity investment securities
298,125

 
—

    Capital expenditures
(181,541
)
 
(176,955
)
    Payment for acquisition, net of cash acquired
—

 
(5,207
)
 
 
 
 
    Net cash used in investing activities
(5,041
)
 
(182,162
)
 
 
 
 
Cash Flows from Financing Activities:
 

 
 

 
 
 
 
    Proceeds from exercise of stock options
—

 
10,161

    Payment of dividends
(43,401
)
 
(39,241
)
    Repurchase of common stock, including fees
(62,740
)
 
(183,715
)
 
 
 
 
    Net cash used in financing activities
(106,141
)
 
(212,795
)
 
 
 
 
    Effect of exchange rate changes on cash and cash equivalents
(4,677
)
 
5,989

 
 
 
 
    Net increase (decrease) in cash and cash equivalents
523,157

 
(24,267
)
 
 
 
 
Cash and cash equivalents:
 

 
 

    Beginning of period
346,140

 
488,329

    End of period
$
869,297

 
$
464,062