Attached files
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| 8-K - FORM 8-K - BED BATH & BEYOND INC | f8k_040815.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
BED BATH & BEYOND INC. REPORTS RESULTS
FOR FISCAL 2014 FOURTH QUARTER AND FULL YEAR
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Net Earnings per Diluted Share of $1.80; $5.07 for Full Year
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Quarterly Net Sales Increase by Approximately 4.2%
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Quarterly Comparable Sales Increase by Approximately 3.7% (3.9% on a constant currency basis)
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Provides Initial Model for First Quarter and Fiscal Year 2015
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UNION, New Jersey, April 8, 2015 --- Bed Bath & Beyond Inc. today reported financial results for the fourth quarter and full year of fiscal 2014 ended February 28, 2015.
Fiscal 2014 Fourth Quarter and Full Year Results
For the fourth quarter of fiscal 2014, the Company reported net earnings of $1.80 per diluted share ($321.1 million) compared with net earnings for the fourth quarter of fiscal 2013 of $1.60 per diluted share ($333.3 million). Net sales for the fourth quarter of fiscal 2014 were approximately $3.337 billion, an increase of approximately 4.2% from net sales of approximately $3.203 billion reported in the fourth quarter of fiscal 2013. Comparable sales in the fourth quarter of fiscal 2014 increased by approximately 3.7%, compared with an increase of approximately 1.7% in last year’s fiscal fourth quarter. Comparable sales for the fourth quarter of fiscal 2014 include an approximate 0.2% unfavorable impact from the change in the Canadian currency exchange rate.
For the fiscal full year ended February 28, 2015, the Company reported net earnings of $5.07 per diluted share ($957.5 million) compared with $4.79 per diluted share ($1.022 billion) in the full year of fiscal 2013. Net sales for fiscal 2014 were approximately $11.881 billion, an increase of approximately 3.3% from net sales of approximately $11.504 billion in fiscal 2013. Comparable sales for both fiscal 2014 and fiscal 2013 increased by approximately 2.4%.
Cost Plus World Market was excluded from the comparable sales calculations through the end of the fiscal first half of 2013 and is included beginning with the fiscal third quarter of 2013. 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
During the fourth quarter of fiscal 2014, the Company repurchased approximately $947 million of its common stock, representing approximately 11.8 million shares. Of this total, approximately $782 million, representing approximately 10.3 million shares, were from open market repurchases, and the remaining $165 million and 1.5 million shares represented the net settlement at the completion of the Company’s $1.1 billion accelerated share repurchase program in December 2014. As of February 28, 2015, the remaining balance of the current $2.0 billion share repurchase program was approximately $884 million.
Fiscal 2015 Financial Model
The Company is modeling a 2.0% to 3.0% increase for comparable sales for both the fiscal 2015 first quarter and full year, net earnings per diluted share to be between $.90 to $.95 for the first quarter of fiscal 2015, and to be between relatively flat and a mid-single digit percentage increase for the fiscal full year. The Company’s fiscal 2015 model includes the impact of approximately $.24 per diluted share related to four non-comparable items between its 2014 results and its 2015 model. These non-comparable items are: an increase in the 2015 tax rate due to a reduction in the amount of distinct tax events modeled in fiscal 2015; a credit card fee litigation settlement benefit in fiscal 2014 that is not expected to reoccur in 2015; the modeled unfavorable foreign currency exchange rate impact in 2015; and an increase in investments in compensation and benefits in 2015 beyond those historically planned. The modeling of net earnings per diluted share is based upon a number of assumptions which will be described in the Company’s fourth quarter of fiscal 2014 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. 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, food service, 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, and harmondiscount.com. As of February 28, 2015, the Company had a total of 1,513 stores, including 1,019 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, 96 buybuy BABY stores, including its first in Canada, 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 fourth quarter, the Company opened one Bed Bath & Beyond store, three buybuy BABY stores, and one Cost Plus World Market store, and closed one Bed Bath & Beyond store and one Cost Plus World Market store. In addition, the Company is a partner in a joint venture which operates five stores in the Mexico City market 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 and spending habits; 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; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company’s expansion program; 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; 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.
INVESTOR CONTACTS:
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Janet M. Barth
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(908) 613-5820
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Kenneth C. Frankel
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(908) 855-4554
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BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share data)
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Three Months Ended
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Twelve Months Ended
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February 28,
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March 1,
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February 28,
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March 1,
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2015
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2014
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2015
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2014
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(unaudited)
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(unaudited)
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(unaudited)
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Net sales
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$ | 3,336,593 | $ | 3,203,314 | $ | 11,881,176 | $ | 11,503,963 | ||||||||
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Cost of sales
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2,010,718 | 1,905,877 | 7,261,397 | 6,938,381 | ||||||||||||
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Gross profit
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1,325,875 | 1,297,437 | 4,619,779 | 4,565,582 | ||||||||||||
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Selling, general and administrative expenses
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793,707 | 770,364 | 3,065,486 | 2,950,995 | ||||||||||||
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Operating profit
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532,168 | 527,073 | 1,554,293 | 1,614,587 | ||||||||||||
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Interest expense, net
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19,267 | 554 | 50,458 | 1,140 | ||||||||||||
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Earnings before provision for income taxes
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512,901 | 526,519 | 1,503,835 | 1,613,447 | ||||||||||||
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Provision for income taxes
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191,840 | 193,220 | 546,361 | 591,157 | ||||||||||||
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Net earnings
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$ | 321,061 | $ | 333,299 | $ | 957,474 | $ | 1,022,290 | ||||||||
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Net earnings per share - Basic
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$ | 1.83 | $ | 1.62 | $ | 5.13 | $ | 4.85 | ||||||||
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Net earnings per share - Diluted
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$ | 1.80 | $ | 1.60 | $ | 5.07 | $ | 4.79 | ||||||||
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Weighted average shares outstanding - Basic
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175,764 | 205,553 | 186,659 | 210,710 | ||||||||||||
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Weighted average shares outstanding - Diluted
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178,135 | 208,106 | 188,880 | 213,363 | ||||||||||||
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
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February 28,
2015 |
March 1,
2014 |
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(unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 875,574 | $ | 366,516 | ||||
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Short term investment securities
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109,992 | 489,331 | ||||||
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Merchandise inventories
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2,731,881 | 2,578,956 | ||||||
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Other current assets
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366,156 | 354,184 | ||||||
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Total current assets
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4,083,603 | 3,788,987 | ||||||
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Long term investment securities
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97,160 | 87,393 | ||||||
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Property and equipment, net
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1,676,700 | 1,579,804 | ||||||
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Goodwill
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486,279 | 486,279 | ||||||
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Other assets
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415,251 | 413,570 | ||||||
| $ | 6,758,993 | $ | 6,356,033 | |||||
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Liabilities and Shareholders' Equity
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Current liabilities:
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Accounts payable
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$ | 1,156,368 | $ | 1,104,668 | ||||
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Accrued expenses and other current liabilities
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403,547 | 385,954 | ||||||
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Merchandise credit and gift card liabilities
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306,160 | 284,216 | ||||||
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Current income taxes payable
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76,606 | 60,298 | ||||||
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Total current liabilities
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1,942,681 | 1,835,136 | ||||||
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Deferred rent and other liabilities
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493,137 | 486,996 | ||||||
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Income taxes payable
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79,985 | 92,614 | ||||||
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Long term debt
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1,500,000 | - | ||||||
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Total liabilities
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4,015,803 | 2,414,746 | ||||||
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Total shareholders' equity
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2,743,190 | 3,941,287 | ||||||
| $ | 6,758,993 | $ | 6,356,033 | |||||
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
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Twelve Months Ended
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February 28,
2015
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March 1,
2014
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(unaudited)
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Cash Flows from Operating Activities:
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Net earnings
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$ | 957,474 | $ | 1,022,290 | ||||
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Adjustments to reconcile net earnings to net cash provided by operating activities:
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Depreciation and amortization
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239,193 | 220,116 | ||||||
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Stock-based compensation
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66,539 | 56,244 | ||||||
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Tax benefit from stock-based compensation
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6,686 | 12,846 | ||||||
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Deferred income taxes
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(22,295 | ) | 11,729 | |||||
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Other
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(2,244 | ) | (1,784 | ) | ||||
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(Increase) decrease in assets, net of effect of acquisitions:
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Merchandise inventories
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(161,506 | ) | (117,926 | ) | ||||
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Trading investment securities
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(9,530 | ) | (11,382 | ) | ||||
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Other current assets
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19,012 | (5,287 | ) | |||||
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Other assets
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(254 | ) | (3,812 | ) | ||||
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Increase (decrease) in liabilities, net of effect of acquisitions:
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Accounts payable
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44,563 | 179,522 | ||||||
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Accrued expenses and other current liabilities
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18,494 | (1,336 | ) | |||||
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Merchandise credit and gift card liabilities
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22,520 | 33,014 | ||||||
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Income taxes payable
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3,768 | (4,406 | ) | |||||
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Deferred rent and other liabilities
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3,428 | 3,735 | ||||||
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Net cash provided by operating activities
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1,185,848 | 1,393,563 | ||||||
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Cash Flows from Investing Activities:
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Purchase of held-to-maturity investment securities
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(298,094 | ) | (1,156,634 | ) | ||||
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Redemption of held-to-maturity investment securities
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677,500 | 1,117,500 | ||||||
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Capital expenditures
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(330,637 | ) | (320,812 | ) | ||||
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Investment in unconsolidated joint venture
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- | (3,436 | ) | |||||
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Net cash provided by (used in) investing activities
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48,769 | (363,382 | ) | |||||
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Cash Flows from Financing Activities:
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Proceeds from exercise of stock options
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41,197 | 54,815 | ||||||
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Proceeds from issuance of senior unsecured notes
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1,500,000 | - | ||||||
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Payment of deferred financing costs
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(10,092 | ) | - | |||||
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Excess tax benefit from stock-based compensation
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7,202 | 7,289 | ||||||
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Repurchase of common stock, including fees
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(2,250,597 | ) | (1,283,995 | ) | ||||
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Net cash used in financing activities
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(712,290 | ) | (1,221,891 | ) | ||||
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Effect of exchange rate changes on cash
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(13,269 | ) | (6,745 | ) | ||||
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Net increase (decrease) in cash and cash equivalents
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509,058 | (198,455 | ) | |||||
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Cash and cash equivalents:
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Beginning of period
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366,516 | 564,971 | ||||||
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End of period
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$ | 875,574 | $ | 366,516 | ||||