Document And Entity Information
Document And Entity Information | 3 Months Ended |
Jun. 02, 2018shares | |
Document Information [Line Items] | |
Entity Registrant Name | BED BATH & BEYOND INC |
Entity Central Index Key | 886,158 |
Trading Symbol | bbby |
Current Fiscal Year End Date | --03-02 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 140,131,005 |
Document Type | 10-Q |
Document Period End Date | Jun. 2, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 02, 2018 | Mar. 03, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 678,646 | $ 346,140 |
Short term investment securities | 148,313 | 378,039 |
Merchandise inventories | 2,646,263 | 2,730,874 |
Prepaid expenses and other current assets | 483,159 | 516,025 |
Total current assets | 3,956,381 | 3,971,078 |
Long term investment securities | 19,957 | 19,517 |
Property and equipment, net | 1,893,230 | 1,909,289 |
Goodwill | 716,283 | 716,283 |
Other assets | 427,895 | 424,639 |
Total assets | 7,013,746 | 7,040,806 |
Current liabilities: | ||
Accounts payable | 1,082,943 | 1,197,504 |
Accrued expenses and other current liabilities | 716,069 | 633,100 |
Merchandise credit and gift card liabilities | 329,055 | 335,081 |
Total current liabilities | 2,128,067 | 2,165,685 |
Deferred rent and other liabilities | 431,799 | 431,592 |
Income taxes payable | 57,507 | 62,823 |
Long term debt | 1,492,194 | 1,492,078 |
Total liabilities | 4,109,567 | 4,152,178 |
Shareholders' equity: | ||
Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding | 0 | 0 |
Common stock - $0.01 par value; authorized - 900,000 shares; issued 342,642 and 341,795, respectively; outstanding 140,131 and 140,498 shares, respectively | 3,426 | 3,418 |
Additional paid-in capital | 2,082,238 | 2,057,975 |
Retained earnings | 11,360,572 | 11,343,503 |
Treasury stock, at cost; 202,511 and 201,297 shares, respectively | (10,490,082) | (10,467,972) |
Accumulated other comprehensive loss | (51,975) | (48,296) |
Total shareholders' equity | 2,904,179 | 2,888,628 |
Total liabilities and shareholders' equity | $ 7,013,746 | $ 7,040,806 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 02, 2018 | Mar. 03, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900,000 | 900,000 |
Common stock, shares issued (in shares) | 342,642 | 341,795 |
Common stock, shares outstanding (in shares) | 140,131 | 140,498 |
Treasury stock, shares (in shares) | 199,269 | 193,259 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 2,753,667 | $ 2,742,141 |
Cost of sales | 1,788,819 | 1,742,026 |
Gross profit | 964,848 | 1,000,115 |
Selling, general and administrative expenses | 883,619 | 853,104 |
Operating profit | 81,229 | 147,011 |
Interest expense, net | 16,732 | 16,580 |
Earnings before provision for income taxes | 64,497 | 130,431 |
Provision for income taxes | 20,921 | 55,148 |
Net earnings | $ 43,576 | $ 75,283 |
Net earnings per share - Basic | $ 0.53 | |
Net earnings per share - Diluted | $ 0.32 | $ 0.53 |
Weighted average shares outstanding - Basic | 135,987 | 141,331 |
Weighted average shares outstanding - Diluted | 136,601 | 142,141 |
Dividends declared per share | $ 0.16 | $ 0.150 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 43,576 | $ 75,283 |
Other comprehensive income (loss): | ||
Change in temporary impairment of auction rate securities, net of taxes | 315 | 166 |
Pension adjustment, net of taxes | 136 | 199 |
Currency translation adjustment | (4,130) | (5,838) |
Other comprehensive loss | (3,679) | (5,473) |
Comprehensive income | $ 39,897 | $ 69,810 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract] | ||
Net earnings | $ 43,576 | $ 75,283 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 79,578 | 74,912 |
Stock-based compensation | 23,572 | 21,490 |
Deferred income taxes | (3,548) | (6,571) |
Other | (1,109) | 555 |
Decrease (increase) in assets, net of effect of acquisitions: | ||
Merchandise inventories | 82,252 | (59,916) |
Trading investment securities | (2,069) | (6,256) |
Other current assets | 104,954 | (20,146) |
Other assets | (482) | (631) |
(Decrease) increase in liabilities, net of effect of acquisitions: | ||
Accounts payable | (78,717) | 24,567 |
Accrued expenses and other current liabilities | (5,401) | 25,591 |
Merchandise credit and gift card liabilities | 5,553 | 10,172 |
Income taxes payable | (3,767) | 55,805 |
Deferred rent and other liabilities | 602 | 9,779 |
Net cash provided by operating activities | 244,994 | 204,634 |
Cash Flows from Investing Activities: | ||
Purchase of held-to-maturity investment securities | (5,625) | 0 |
Redemption of held-to-maturity investment securities | 238,125 | 0 |
Capital expenditures | (97,813) | (80,760) |
Payment for acquisition, net of cash acquired | 0 | (4,344) |
Net cash provided by (used in) investing activities | 134,687 | (85,104) |
Cash Flows from Financing Activities: | ||
Proceeds from exercise of stock options | 0 | 10,161 |
Payment of dividends | (21,414) | (18,161) |
Repurchase of common stock, including fees | (22,110) | (127,324) |
Net cash used in financing activities | (43,524) | (135,324) |
Effect of exchange rate changes on cash and cash equivalents | (3,651) | (3,215) |
Net increase (decrease) in cash and cash equivalents | 332,506 | (19,009) |
Cash and cash equivalents: | ||
Beginning of period | 346,140 | 488,329 |
End of period | $ 678,646 | $ 469,320 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jun. 02, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared without audit. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals and elimination of intercompany balances and transactions) necessary to present fairly the financial position of Bed Bath & Beyond Inc. and subsidiaries (the "Company") as of June 2, 2018 and March 3, 2018 and the results of its operations, comprehensive income and cash flows for the three months ended June 2, 2018 and May 27, 2017 , respectively. The accompanying unaudited consolidated financial statements are presented in accordance with the requirements for Form 10-Q and consequently do not include all the disclosures normally required by U.S. generally accepted accounting principles ("GAAP"). Reference should be made to Bed Bath & Beyond Inc.'s Annual Report on Form 10-K for the fiscal year ended March 3, 2018 for additional disclosures, including a summary of the Company's significant accounting policies, and to subsequently filed Form 8-Ks. The Company accounts for its operations as two operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised of Linen Holdings, does not meet the quantitative thresholds under GAAP and therefore is not a reportable segment. Net sales outside of the U.S. for the Company were not material for the three months ended June 2, 2018 and May 27, 2017 . As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Jun. 02, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . This guidance deferred the effective date of ASU 2014-09 for one year from the original effective date. In accordance with the deferral, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In 2016, the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. At the beginning of the first quarter of fiscal 2018, the Company adopted ASU 2014-09 using the modified retrospective transition method and recognized the cumulative effect of applying this standard to opening retained earnings. The Company recorded a net after-tax reduction to opening retained earnings of approximately $4.2 million as of March 4, 2018. The comparative financial information has not been adjusted and continues to be reported under ASC Topic 605, Revenue Recognition (Topic 605) . The majority of the Company’s revenue is generated from the sale of product in its retail stores, which will continue to be recognized when control of the product is transferred to the customer. The adoption of ASU 2014-09 resulted in the following changes: • A change in the timing of recognizing advertising expense related to direct response advertising. These costs that were previously expensed over the period during which the sales were expected to occur will now be expensed on the first day of the direct response advertising event. • A change in the presentation of the sales return reserve on the consolidated balance sheet, as estimated costs of returns will be recorded as a current asset rather than netted with the sales return reserve. • Changes in the presentation of certain other revenue streams on the consolidated statement of earnings between net sales, cost of sales, and selling, general and administrative expenses. The below tables set forth the adjustments to the Company’s consolidated statement of earnings and consolidated balance sheet as a result of the newly adopted revenue recognition standard. Three months ended June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Net sales $ 2,753,667 $ 2,755,312 $ (1,645 ) Cost of sales 1,788,819 1,795,164 (6,345 ) Gross profit 964,848 960,148 4,700 Selling, general and administrative expenses 883,619 888,154 (4,535 ) Operating profit 81,229 71,994 9,235 Interest expense, net 16,732 16,732 — Earnings before provision for income taxes 64,497 55,262 9,235 Provision for income taxes 20,921 18,590 2,331 Net earnings $ 43,576 $ 36,672 $ 6,904 Net earnings per share - Diluted $ 0.32 $ 0.27 $ 0.05 June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Assets Merchandise inventories $ 2,646,263 $ 2,648,181 $ (1,918 ) Prepaid expenses and other current assets 483,159 378,516 104,643 Liabilities and Shareholders' Equity Accrued expenses and other current liabilities 716,069 605,137 110,932 Merchandise credit and gift card liabilities 329,055 339,945 (10,890 ) Retained earnings 11,360,572 11,357,889 2,683 The Company expects the impact of the adoption of the new standard to be immaterial to the Company's full year fiscal 2018 consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017-01 requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would not represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted this guidance at the beginning of the first quarter of fiscal 2018 and it did not have a material effect on the Company's consolidated financial position, results of operations, or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with earlier adoption permitted. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the second step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The adoption of this guidance is not expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jun. 02, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Revenue Recognition Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are not included in sales. Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have no provisions for reduction in the value of unused card balances over defined time periods and have no expiration dates. For the three months ended June 2, 2018 , the Company recognized net sales for gift card and merchandise credit redemptions of approximately $54.0 million which were included in merchandise credit and gift card liabilities on the consolidated balance sheet as of March 3, 2018. Sales returns are provided for in the period that the related sales are recorded based on historical experience. Although the estimate for sales returns has not varied materially from historical provisions, actual experience could vary from historical experience in the future if the level of sales return activity changes materially. In the future, if the Company concludes that an adjustment is required due to material changes in the returns activity, the liability for estimated returns and the corresponding right of return asset will be adjusted accordingly. As of June 2, 2018, the liability for estimated returns of $150.6 million is included in accrued expenses and other current liabilities and the corresponding right of return asset for merchandise of $108.8 million is included in prepaid expenses and other current assets. The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products. Sales of domestics merchandise and home furnishings accounted for approximately 36.0% and 64.0% of net sales, respectively, for the three months ended June 2, 2018 and approximately 36.2% and 63.8% of net sales, respectively, for the three months ended May 27, 2017 . |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 02, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act significantly revised the U.S. tax code by, among other things, (i) reducing the federal corporate income tax rate, effective January 1, 2018, from 35% to 21%, (ii) imposing a one-time transition tax on earnings of foreign subsidiaries deemed to be repatriated and (iii) implementing a modified territorial tax system. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 118 (“SAB 118”). This update provides guidance on income tax accounting implications under the Tax Act. SAB 118 addressed the application of GAAP to situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act and allows companies to record provisional amounts during a remeasurement period not to exceed one year after the enactment date while the accounting impact remains under analysis. The Company has reasonably estimated the impact of the Tax Act in its fiscal 2017 provision for income taxes in accordance with its interpretation of the Tax Act and available guidance. The Tax Act resulted in a net unfavorable tax impact of approximately $10.5 million recorded in the fiscal fourth quarter of 2017. During the three months ended June 2, 2018 , the Company made no adjustments to previously recorded provisional amounts related to the Tax Act. The provisional amounts are related to the remeasurement of the Company’s net deferred tax assets and the transition tax on accumulated foreign earnings, which collectively totaled approximately $26.8 million . The Company believes the remeasurement of its net deferred tax assets is complete, except for changes in estimates that can result from finalizing the filing of its 2017 U.S. income tax return and changes that may be a direct impact of other provisional amounts due to the enactment of the Tax Act. The estimated transition tax was recorded based on the Company’s initial evaluation of the impact of the Tax Act and is subject to change during fiscal 2018 as the Company continues to refine, analyze and update the underlying data, computations and assumptions used to prepare this provisional amount during the measurement period. In addition, these estimates may be impacted as the Company further analyzes available tax accounting methods and elections, and state tax conformity to the federal tax changes and guidance issued by regulatory bodies that provide interpretive guidance of the Tax Act. Any adjustments to the provisional amounts will be recognized as a component of the provision for income taxes in the period in which such adjustments are determined within the annual period following the enactment of the Tax Act. Additionally, the Company continues to evaluate the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act and the impact, if any, on its consolidated financial statements. As a result, the Company has not included any amount related to GILTI in its consolidated financial statements as of June 2, 2018 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 02, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company's judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: • Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. • Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. As of June 2, 2018 , the Company's financial assets utilizing Level 1 inputs included short term trading investment securities traded on active securities exchanges. The Company did not have any financial assets utilizing Level 2 inputs. Financial assets utilizing Level 3 inputs included long term investments in auction rate securities consisting of preferred shares of closed end municipal bond funds (See "Investment Securities," Note 7). Fair Value of Financial Instruments The Company's financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company's investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost, and auction rate securities, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company's long term debt, is representative of their fair values. The fair value of the Company's long term debt is approximately $1.192 billion as of June 2, 2018 , which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared to the carrying value of approximately $1.500 billion . |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Jun. 02, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $95.5 million and $95.6 million as of June 2, 2018 and March 3, 2018 , respectively. |
Investment Securities
Investment Securities | 3 Months Ended |
Jun. 02, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The Company's investment securities as of June 2, 2018 and March 3, 2018 are as follows: (in millions) June 2, 2018 March 3, 2018 Available-for-sale securities: Long term $ 19.9 $ 19.4 Trading securities: Short term 88.4 86.3 Held-to-maturity securities: Short term 59.9 291.7 Total investment securities 168.2 397.4 Auction Rate Securities As of June 2, 2018 and March 3, 2018 , the Company's long term available-for-sale investment securities represented approximately $20.3 million par value of auction rate securities consisting of preferred shares of closed end municipal bond funds, less temporary valuation adjustments of approximately $0.4 million and $0.9 million , respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did not affect the Company's net earnings. U.S. Treasury Securities As of June 2, 2018 and March 3, 2018 , the Company’s short term held-to-maturity securities included approximately $59.9 million and $291.7 million of U.S. Treasury Bills with remaining maturities of less than one year, respectively. These securities are stated at their amortized cost which approximates fair value, which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation). Trading Investment Securities The Company's trading investment securities, which are provided as investment options to the participants of the nonqualified deferred compensation plan (“NQDC”), are stated at fair market value. The values of these trading investment securities included in the table above are approximately $88.4 million and $86.3 million as of June 2, 2018 and March 3, 2018 , respectively. On December 27, 2017, the Company terminated its NQDC. After December 27, 2017, no participant deferrals will be accepted and all balances will be liquidated more than 12 months but less than 24 months after December 27, 2017. Until the final payment date, the NQDC will continue to operate in the ordinary course, except that no new participant deferrals will be credited to participant accounts under the NQDC. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Jun. 02, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment As of June 2, 2018 and March 3, 2018 , included in property and equipment, net is accumulated depreciation of approximately $3.2 billion and $3.1 billion , respectively. |
Long Term Debt
Long Term Debt | 3 Months Ended |
Jun. 02, 2018 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Long Term Debt Senior Unsecured Notes On July 17, 2014 , the Company issued $300 million aggregate principal amount of 3.749% senior unsecured notes due August 1, 2024 , $300 million aggregate principal amount of 4.915% senior unsecured notes due August 1, 2034 and $900 million aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044 (collectively, the "Notes"). Interest on the Notes is payable semi-annually on February 1 and August 1 of each year. The Notes were issued under an indenture (the "Base Indenture"), as supplemented by a first supplemental indenture (together, with the Base Indenture, the "Indenture"), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of June 2, 2018 . Revolving Credit Agreement On November 14, 2017, the Company replaced its existing $250 million five year senior unsecured revolving credit facility agreement with various lenders with a new $250 million five year senior unsecured revolving credit facility agreement ("Revolver") with various lenders maturing November 14, 2022 . The new Revolver has essentially the same terms and requirements as the prior revolving credit facility agreement. During the three months ended June 2, 2018 , the Company did not have any borrowings under the Revolver. The Revolver contains customary affirmative and negative covenants and also requires the Company to maintain a maximum leverage ratio. The Company was in compliance with all covenants related to the Revolver as of June 2, 2018 . Deferred financing costs associated with the Notes and the revolving credit facilities of approximately $10.5 million were capitalized. In the accompanying Consolidated Balance Sheets, the deferred financing costs are included in long term debt, net of amortization, for the Notes, and are included in other assets, net of amortization, for the Revolver. These deferred financing costs for the Notes and the Revolver are being amortized over the term of each of the Notes and the term of the Revolver and such amortization is included in interest expense, net in the Consolidated Statements of Earnings. Interest expense related to the Notes and the revolving credit facilities, including the commitment fee and the amortization of deferred financing costs, was approximately $18.2 million for both the three months ended June 2, 2018 and May 27, 2017 . Lines of Credit At June 2, 2018 , the Company maintained two uncommitted lines of credit of $100 million each, with expiration dates of August 29, 2018 and February 24, 2019 , respectively. These uncommitted lines of credit are currently and are expected to be used for letters of credit in the ordinary course of business. During the first three months of fiscal 2018 , the Company did not have any direct borrowings under the uncommitted lines of credit. Although no assurances can be provided, the Company intends to renew both uncommitted lines of credit before the respective expiration dates. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Jun. 02, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders Equity | Shareholders Equity The Company has authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations. Between December 2004 and September 2015, the Company's Board of Directors authorized, through several share repurchase programs, the repurchase of $11.950 billion of its shares of common stock. The Company also acquires shares of its common stock to cover employee related taxes withheld on vested restricted stock and performance stock unit awards. In the first three months of fiscal 2018 , the Company repurchased approximately 1.2 million shares of its common stock for a total cost of approximately $22.1 million , bringing the aggregate total of common stock repurchased to approximately 202.5 million shares for a total cost of approximately $10.5 billion since the initial authorization in December 2004. The Company has approximately $1.5 billion remaining of authorized share repurchases as of June 2, 2018 . During fiscal 2016, the Company's Board of Directors authorized a quarterly dividend program. During the three months ended June 2, 2018 and May 27, 2017 , total cash dividends of $21.4 million and $18.2 million were paid, respectively. Subsequent to the end of the first quarter of fiscal 2018 , on June 27, 2018 , the Company's Board of Directors declared a quarterly dividend of $0.16 per share to be paid on October 16, 2018 to shareholders of record as of the close of business on September 14, 2018 . The Company expects to pay quarterly cash dividends on its common stock in the future, subject to the determination by the Board of Directors, based on an evaluation of the Company's earnings, financial condition and requirements, business conditions and other factors. Cash dividends, if any, are accrued as a liability on the Company's consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Jun. 02, 2018 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. Currently, the Company's stock-based compensation relates to restricted stock awards, stock options and performance stock units. The Company's restricted stock awards are considered nonvested share awards. Stock-based compensation expense for the three months ended June 2, 2018 was approximately $23.6 million ( $15.9 million after tax or $0.12 per diluted share). Stock-based compensation expense for the three months ended May 27, 2017 was approximately $21.5 million ( $12.4 million after tax or $0.09 per diluted share). In addition, the amount of stock-based compensation cost capitalized for the three months ended June 2, 2018 and May 27, 2017 was approximately $0.7 million and $0.5 million , respectively. Incentive Compensation Plans The Company grants awards under the Bed Bath & Beyond 2012 Incentive Compensation Plan (the "2012 Plan"), which amended and restated the Bed Bath & Beyond 2004 Incentive Compensation Plan (the "2004 Plan"). The 2012 Plan includes an aggregate of 43.2 million common shares authorized for issuance and the ability to grant incentive stock options. Outstanding awards that were covered by the 2004 Plan continue to be in effect under the 2012 Plan. The 2012 Plan is a flexible compensation plan that enables the Company to offer incentive compensation through stock options (whether nonqualified stock options or incentive stock options), restricted stock awards, stock appreciation rights, performance awards and other stock based awards, including cash awards. Under the 2012 Plan, grants are determined by the Compensation Committee for those awards granted to executive officers and by an appropriate committee for all other awards granted. Awards of stock options and restricted stock generally vest in five equal annual installments beginning one to three years from the date of grant. Awards of performance stock units generally vest over a period of four years from the date of grant dependent on the Company's achievement of performance-based tests and subject, in general, to the executive remaining in the Company's service on specified vesting dates. The Company generally issues new shares for stock option exercises, restricted stock awards and vesting of performance stock units. On May 22, 2018, the Company adopted the Bed Bath & Beyond 2018 Incentive Compensation Plan (the “2018 Plan”), subject to and effective upon shareholder approval, which was obtained on June 29, 2018, subsequent to the end of the first quarter of fiscal 2018. The 2018 Plan is generally based on the provisions of the 2012 Plan as currently in effect and also includes an aggregate share reserve of 4.6 million shares of common stock. The 2012 Plan will continue in effect without modification in accordance with its existing terms. The 2012 Plan and the 2018 Plan have a total of 47.8 million shares authorized for issuance. Stock Options Stock option grants are issued at fair market value on the date of grant and generally become exercisable in either three or five equal annual installments beginning one year from the date of grant, subject, in general, to the recipient remaining in the Company's service on specified vesting dates. Option grants expire eight years after the date of grant. All option grants are nonqualified. As of June 2, 2018 , unrecognized compensation expense related to the unvested portion of the Company's stock options was $18.8 million , which is expected to be recognized over a weighted average period of 3.3 years . The fair value of the stock options granted was estimated on the date of the grant using a Black-Scholes option-pricing model that uses the assumptions noted in the following table. Three Months Ended Black-Scholes Valuation Assumptions (1) June 2, 2018 May 27, 2017 Weighted Average Expected Life (in years) (2) 6.7 6.7 Weighted Average Expected Volatility (3) 34.96 % 26.49 % Weighted Average Risk Free Interest Rates (4) 2.92 % 2.17 % Expected Dividend Yield (5) 3.80 % 1.60 % (1) Forfeitures are estimated based on historical experience. (2) The expected life of stock options is estimated based on historical experience. (3) Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company's stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company's call options, which are actively traded on multiple exchanges, had remaining maturities in excess of twelve months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date. (4) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options. (5) Expected dividend yield is estimated based on anticipated dividend payouts. Changes in the Company's stock options for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Stock Options Weighted Average Exercise Price Options outstanding, beginning of period 4,241 $ 55.76 Granted 1,065 16.85 Exercised — — Forfeited or expired (432 ) 45.20 Options outstanding, end of period 4,874 $ 48.19 Options exercisable, end of period 2,691 $ 61.05 The weighted average fair value for the stock options granted during the first three months of fiscal 2018 and 2017 was $4.31 and $9.50 , respectively. The weighted average remaining contractual term and the aggregate intrinsic value for options outstanding as of June 2, 2018 was 4.8 years and $1.0 million , respectively. The weighted average remaining contractual term for options exercisable as of June 2, 2018 was 3.1 years and the aggregate intrinsic value was $0 . There were no stock options exercised during the first three months of fiscal 2018 . The total intrinsic value for stock options exercised during the first three months of fiscal 2017 was $3.9 million . Restricted Stock Restricted stock awards are issued and measured at fair market value on the date of grant and generally become vested in five to seven equal annual installments beginning one to three years from the date of grant, subject, in general, to the recipient remaining in the Company's service on specified vesting dates. Vesting of restricted stock is based solely on time vesting. As of June 2, 2018 , unrecognized compensation expense related to the unvested portion of the Company's restricted stock awards was $134.6 million , which is expected to be recognized over a weighted average period of 4.5 years . Changes in the Company's restricted stock for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Restricted Shares Weighted Average Grant-Date Fair Value Unvested restricted stock, beginning of period 4,311 $ 48.07 Granted 476 17.64 Vested (518 ) 61.39 Forfeited (93 ) 44.76 Unvested restricted stock, end of period 4,176 $ 43.02 Performance Stock Units Performance stock units ("PSUs") are issued and measured at fair market value on the date of grant. Vesting of PSUs awarded to certain of the Company's executives is dependent on the Company's achievement of a performance-based test during a one -year period from the date of grant and during a three -year period from the date of grant and, assuming achievement of the performance-based test, time vesting over periods of up to four years , subject, in general, to the executive remaining in the Company's service on specified vesting dates. Performance during the one -year period will be based on Earnings Before Interest and Taxes ("EBIT") margin relative to a peer group of the Company and performance during the three -year period will be based on Return on Invested Capital ("ROIC") or a combination of EBIT margin and ROIC relative to such peer group. The awards based on EBIT margin and ROIC range from a floor of zero to a cap of 150% of target achievement. PSUs are converted into shares of common stock upon payment following vesting. Upon grant of the PSUs, the Company recognizes compensation expense related to these awards based on the assumption that 100% of the target award will be achieved. The Company evaluates the target assumption on a quarterly basis and adjusts compensation expense related to these awards, as appropriate. As of June 2, 2018 , unrecognized compensation expense related to the unvested portion of the Company's performance stock units was $34.9 million , which is expected to be recognized over a weighted average period of 2.1 years . Changes in the Company's PSUs for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Performance Stock Units Weighted Average Grant-Date Fair Value Unvested performance stock units, beginning of period 1,352 $ 46.06 Granted 1,253 16.85 Vested (492 ) 50.82 Forfeited — — Unvested performance stock units, end of period 2,113 $ 27.63 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Jun. 02, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method. Stock-based awards of approximately 8.5 million and 7.2 million shares were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive for the three months ended June 2, 2018 and May 27, 2017 , respectively. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Jun. 02, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The Company paid income taxes of $3.2 million and $8.7 million in the first three months of fiscal 2018 and 2017 , respectively. In addition, the Company had interest payments of approximately $2.2 million in both the first three months of fiscal 2018 and 2017 . The Company recorded an accrual for capital expenditures of $28.0 million and $34.1 million as of June 2, 2018 and May 27, 2017 , respectively. In addition, the Company recorded an accrual for dividends payable of $26.3 million and $23.6 million as of June 2, 2018 and May 27, 2017 , respectively. |
Acquisition
Acquisition | 3 Months Ended |
Jun. 02, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On March 6, 2017, the Company acquired Decorist, Inc., an online interior design platform that provides personalized home design services. Since the date of acquisition, the results of Decorist's operations, which were not material, have been included in the Company's results of operations and no proforma disclosure of financial information has been presented. Decorist is included in the North American Retail operating segment. |
Recent Accounting Pronounceme21
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
May 27, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) . This guidance requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . This guidance deferred the effective date of ASU 2014-09 for one year from the original effective date. In accordance with the deferral, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In 2016, the FASB issued several amendments to clarify various aspects of the implementation guidance. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. At the beginning of the first quarter of fiscal 2018, the Company adopted ASU 2014-09 using the modified retrospective transition method and recognized the cumulative effect of applying this standard to opening retained earnings. The Company recorded a net after-tax reduction to opening retained earnings of approximately $4.2 million as of March 4, 2018. The comparative financial information has not been adjusted and continues to be reported under ASC Topic 605, Revenue Recognition (Topic 605) . The majority of the Company’s revenue is generated from the sale of product in its retail stores, which will continue to be recognized when control of the product is transferred to the customer. The adoption of ASU 2014-09 resulted in the following changes: • A change in the timing of recognizing advertising expense related to direct response advertising. These costs that were previously expensed over the period during which the sales were expected to occur will now be expensed on the first day of the direct response advertising event. • A change in the presentation of the sales return reserve on the consolidated balance sheet, as estimated costs of returns will be recorded as a current asset rather than netted with the sales return reserve. • Changes in the presentation of certain other revenue streams on the consolidated statement of earnings between net sales, cost of sales, and selling, general and administrative expenses. The below tables set forth the adjustments to the Company’s consolidated statement of earnings and consolidated balance sheet as a result of the newly adopted revenue recognition standard. Three months ended June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Net sales $ 2,753,667 $ 2,755,312 $ (1,645 ) Cost of sales 1,788,819 1,795,164 (6,345 ) Gross profit 964,848 960,148 4,700 Selling, general and administrative expenses 883,619 888,154 (4,535 ) Operating profit 81,229 71,994 9,235 Interest expense, net 16,732 16,732 — Earnings before provision for income taxes 64,497 55,262 9,235 Provision for income taxes 20,921 18,590 2,331 Net earnings $ 43,576 $ 36,672 $ 6,904 Net earnings per share - Diluted $ 0.32 $ 0.27 $ 0.05 June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Assets Merchandise inventories $ 2,646,263 $ 2,648,181 $ (1,918 ) Prepaid expenses and other current assets 483,159 378,516 104,643 Liabilities and Shareholders' Equity Accrued expenses and other current liabilities 716,069 605,137 110,932 Merchandise credit and gift card liabilities 329,055 339,945 (10,890 ) Retained earnings 11,360,572 11,357,889 2,683 The Company expects the impact of the adoption of the new standard to be immaterial to the Company's full year fiscal 2018 consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017-01 requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of identifiable assets, the set of assets would not represent a business. Also, in order to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to produce outputs. Under the update, fewer sets of assets are expected to be considered businesses. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company adopted this guidance at the beginning of the first quarter of fiscal 2018 and it did not have a material effect on the Company's consolidated financial position, results of operations, or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This guidance requires an entity to recognize lease liabilities and a right-of-use asset for all leases on the balance sheet and to disclose key information about the entity's leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with earlier adoption permitted. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures, but expects that it will result in a significant increase in the assets and liabilities recorded on the consolidated balance sheet. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill to measure the amount of impairment loss, if any, under the second step of the current goodwill impairment test. Under the update, the goodwill impairment loss would be measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The adoption of this guidance is not expected to have a significant effect on the Company's consolidated financial position, results of operations, or cash flows. |
Recent Accounting Pronounceme22
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Jun. 02, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The below tables set forth the adjustments to the Company’s consolidated statement of earnings and consolidated balance sheet as a result of the newly adopted revenue recognition standard. Three months ended June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Net sales $ 2,753,667 $ 2,755,312 $ (1,645 ) Cost of sales 1,788,819 1,795,164 (6,345 ) Gross profit 964,848 960,148 4,700 Selling, general and administrative expenses 883,619 888,154 (4,535 ) Operating profit 81,229 71,994 9,235 Interest expense, net 16,732 16,732 — Earnings before provision for income taxes 64,497 55,262 9,235 Provision for income taxes 20,921 18,590 2,331 Net earnings $ 43,576 $ 36,672 $ 6,904 Net earnings per share - Diluted $ 0.32 $ 0.27 $ 0.05 June 2, 2018 (In thousands) As Reported Balances Without Adoption of ASU 2014-09 Impact of Adoption Increase/(Decrease) Assets Merchandise inventories $ 2,646,263 $ 2,648,181 $ (1,918 ) Prepaid expenses and other current assets 483,159 378,516 104,643 Liabilities and Shareholders' Equity Accrued expenses and other current liabilities 716,069 605,137 110,932 Merchandise credit and gift card liabilities 329,055 339,945 (10,890 ) Retained earnings 11,360,572 11,357,889 2,683 |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Jun. 02, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | The Company's investment securities as of June 2, 2018 and March 3, 2018 are as follows: (in millions) June 2, 2018 March 3, 2018 Available-for-sale securities: Long term $ 19.9 $ 19.4 Trading securities: Short term 88.4 86.3 Held-to-maturity securities: Short term 59.9 291.7 Total investment securities 168.2 397.4 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Jun. 02, 2018 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the stock options granted was estimated on the date of the grant using a Black-Scholes option-pricing model that uses the assumptions noted in the following table. Three Months Ended Black-Scholes Valuation Assumptions (1) June 2, 2018 May 27, 2017 Weighted Average Expected Life (in years) (2) 6.7 6.7 Weighted Average Expected Volatility (3) 34.96 % 26.49 % Weighted Average Risk Free Interest Rates (4) 2.92 % 2.17 % Expected Dividend Yield (5) 3.80 % 1.60 % (1) Forfeitures are estimated based on historical experience. (2) The expected life of stock options is estimated based on historical experience. (3) Expected volatility is based on the average of historical and implied volatility. The historical volatility is determined by observing actual prices of the Company's stock over a period commensurate with the expected life of the awards. The implied volatility represents the implied volatility of the Company's call options, which are actively traded on multiple exchanges, had remaining maturities in excess of twelve months, had market prices close to the exercise prices of the employee stock options and were measured on the stock option grant date. (4) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options. (5) Expected dividend yield is estimated based on anticipated dividend payouts. |
Share-based Compensation, Stock Options, Activity | Changes in the Company's stock options for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Stock Options Weighted Average Exercise Price Options outstanding, beginning of period 4,241 $ 55.76 Granted 1,065 16.85 Exercised — — Forfeited or expired (432 ) 45.20 Options outstanding, end of period 4,874 $ 48.19 Options exercisable, end of period 2,691 $ 61.05 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | Changes in the Company's restricted stock for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Restricted Shares Weighted Average Grant-Date Fair Value Unvested restricted stock, beginning of period 4,311 $ 48.07 Granted 476 17.64 Vested (518 ) 61.39 Forfeited (93 ) 44.76 Unvested restricted stock, end of period 4,176 $ 43.02 |
Share-based Compensation, Performance Shares Award Nonvested Activity | Changes in the Company's PSUs for the three months ended June 2, 2018 were as follows: (Shares in thousands) Number of Performance Stock Units Weighted Average Grant-Date Fair Value Unvested performance stock units, beginning of period 1,352 $ 46.06 Granted 1,253 16.85 Vested (492 ) 50.82 Forfeited — — Unvested performance stock units, end of period 2,113 $ 27.63 |
Basis of Presentation (Details
Basis of Presentation (Details Textual) | 3 Months Ended |
Jun. 02, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Recent Accounting Pronounceme26
Recent Accounting Pronouncements (Details Textual) - USD ($) $ in Thousands | Jun. 02, 2018 | Mar. 04, 2018 | Mar. 03, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 11,360,572 | $ 11,343,503 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 2,683 | $ (4,200) |
Recent Accounting Pronounceme27
Recent Accounting Pronouncements - Schedule of Impact on Earnings (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | $ 2,753,667 | $ 2,742,141 |
Cost of sales | 1,788,819 | 1,742,026 |
Gross profit | 964,848 | 1,000,115 |
Selling, general and administrative expenses | 883,619 | 853,104 |
Operating profit | 81,229 | 147,011 |
Interest expense, net | 16,732 | 16,580 |
Earnings before provision for income taxes | 64,497 | 130,431 |
Provision for income taxes | 20,921 | 55,148 |
Net earnings | $ 43,576 | $ 75,283 |
Net earnings per share - Diluted | $ 0.32 | $ 0.53 |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | $ 2,755,312 | |
Cost of sales | 1,795,164 | |
Gross profit | 960,148 | |
Selling, general and administrative expenses | 888,154 | |
Operating profit | 71,994 | |
Interest expense, net | 16,732 | |
Earnings before provision for income taxes | 55,262 | |
Provision for income taxes | 18,590 | |
Net earnings | $ 36,672 | |
Net earnings per share - Diluted | $ 0.27 | |
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | $ (1,645) | |
Cost of sales | (6,345) | |
Gross profit | 4,700 | |
Selling, general and administrative expenses | (4,535) | |
Operating profit | 9,235 | |
Interest expense, net | 0 | |
Earnings before provision for income taxes | 9,235 | |
Provision for income taxes | 2,331 | |
Net earnings | $ 6,904 | |
Net earnings per share - Diluted | $ 0.05 |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements - Schedule of Impact on Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 02, 2018 | Mar. 04, 2018 | Mar. 03, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Merchandise inventories | $ 2,646,263 | $ 2,730,874 | |
Prepaid expenses and other current assets | 483,159 | 516,025 | |
Accrued expenses and other current liabilities | 716,069 | 633,100 | |
Merchandise credit and gift card liabilities | 329,055 | 335,081 | |
Retained earnings | 11,360,572 | $ 11,343,503 | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Merchandise inventories | 2,648,181 | ||
Prepaid expenses and other current assets | 378,516 | ||
Accrued expenses and other current liabilities | 605,137 | ||
Merchandise credit and gift card liabilities | 339,945 | ||
Retained earnings | 11,357,889 | ||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Merchandise inventories | (1,918) | ||
Prepaid expenses and other current assets | 104,643 | ||
Accrued expenses and other current liabilities | 110,932 | ||
Merchandise credit and gift card liabilities | (10,890) | ||
Retained earnings | $ 2,683 | $ (4,200) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 02, 2018 | May 27, 2017 | Mar. 03, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Net sales for gift card and merchandise credit redemptions | $ 54 | ||
Liability for estimated returns | $ 150.6 | ||
Right of return asset for merchandise | $ 108.8 | ||
Sales Revenue, Net [Member] | Domestic Merchandise [Member] | Product Concentration Risk [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Percentage of net sales | 36.00% | 36.20% | |
Sales Revenue, Net [Member] | Home Furnishings [Member] | Product Concentration Risk [Member] | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Percentage of net sales | 64.00% | 63.80% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2018 | Jun. 02, 2018 | |
Income Tax Disclosure [Abstract] | ||
Net unfavorable tax impact | $ 10.5 | |
Provisional tax impact due to tax act | $ 26.8 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) $ in Millions | Jun. 02, 2018USD ($) |
Fair Value Disclosures [Abstract] | |
Long-term debt, fair value | $ 1,192 |
Long-term debt | $ 1,500 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details Textual) - USD ($) $ in Millions | Jun. 02, 2018 | Mar. 03, 2018 |
Cash and Cash Equivalents [Abstract] | ||
Credit and debit card receivables from banks | $ 95.5 | $ 95.6 |
Investment Securities - Summary
Investment Securities - Summary of Investment Securities (Details) - USD ($) $ in Millions | Jun. 02, 2018 | Mar. 03, 2018 |
Available-for-sale securities: | ||
Long term | $ 19.9 | $ 19.4 |
Trading securities: | ||
Short term | 88.4 | 86.3 |
Held-to-maturity securities: | ||
Short term | 59.9 | 291.7 |
Total investment securities | $ 168.2 | $ 397.4 |
Investment Securities (Details
Investment Securities (Details Textual) - USD ($) $ in Millions | Jun. 02, 2018 | Mar. 03, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Short term held-to-maturity securities | $ 59.9 | $ 291.7 |
Auction Rate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Long term available-for-sale investment securities | 20.3 | 20.3 |
Valuation adjustments | 0.4 | 0.9 |
Other Trading Investment Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Trading investment securities | $ 88.4 | $ 86.3 |
Property and Equipment (Details
Property and Equipment (Details Textual) - USD ($) $ in Billions | Jun. 02, 2018 | Mar. 03, 2018 |
Property, Plant and Equipment [Abstract] | ||
Accumulated depreciation | $ 3.2 | $ 3.1 |
Long Term Debt (Details Textual
Long Term Debt (Details Textual) $ in Thousands | Nov. 14, 2017USD ($) | Aug. 06, 2014USD ($) | Jun. 02, 2018USD ($)line_of_credit | May 27, 2017USD ($) | Jul. 17, 2014USD ($) |
Debt Instrument [Line Items] | |||||
Number of uncommitted lines of credit | line_of_credit | 2 | ||||
Senior Unsecured Notes and Revolver [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense | $ 18,200 | $ 18,200 | |||
Other Assets [Member] | Senior Unsecured Notes and Revolver [Member] | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 10,500 | ||||
Revolving Credit Facility [Member] | Revolver [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured revolving credit facility | $ 250,000 | ||||
Debt instrument term (in years) | 5 years | 5 years | |||
Revolving Credit Facility [Member] | New Revolver [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured revolving credit facility | $ 250,000 | ||||
Uncommitted Line of Credit Expiring February 25, 2018 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured revolving credit facility | $ 100,000 | ||||
Senior Unsecured Notes [Member] | The 2034 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 300,000 | ||||
Debt instrument, interest rate, stated percentage | 4.915% | ||||
Senior Unsecured Notes [Member] | The 2024 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 300,000 | ||||
Debt instrument, interest rate, stated percentage | 3.749% | ||||
Senior Unsecured Notes [Member] | The 2044 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 900,000 | ||||
Debt instrument, interest rate, stated percentage | 5.165% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 161 Months Ended | ||
Jun. 02, 2018 | May 27, 2017 | Jun. 02, 2018 | Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | ||||
Share repurchase program authorized amount | $ 11,950,000 | |||
Shares repurchased | 1.2 | 202.5 | ||
Repurchase of common stock, including fees | $ 22,110 | $ 127,324 | $ 10,500,000 | |
Remaining authorized share repurchase amount under program | 1,500,000 | $ 1,500,000 | ||
Total cash dividends paid | $ 21,414 | $ 18,161 | ||
Dividends declared per share | $ 0.16 | $ 0.150 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 23,600,000 | $ 21,500,000 |
Stock-based compensation expense, after tax | $ 15,900,000 | $ 12,400,000 |
Stock-based compensation expense, after tax, per diluted share | $ 0.12 | $ 0.09 |
Stock-based compensation cost capitalized | $ 700,000 | $ 500,000 |
Unrecognized compensation expense related to unvested stock options | $ 18,800,000 | |
Weighted average remaining contractual term (in years) | 4 years 300 days | |
Aggregate intrinsic value for options outstanding | $ 1,000,000 | |
Weighted average remaining contractual term for options exercisable (in years) | 3 years 20 days | |
Aggregate intrinsic value of options exercisable | $ 0 | |
Total intrinsic value for stock options exercised | $ 3,900,000 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition, weighted average period (in years) | 2 years 20 days | |
Unrecognized compensation expense related to unvested performance stock units | $ 34,900,000 | |
Performance Shares [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target award percentage | 150.00% | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition, weighted average period (in years) | 3 years 3 months | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition, weighted average period (in years) | 4 years 200 days | |
Unrecognized compensation expense related to unvested performance stock units | $ 134,600,000 | |
2012 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares authorized for issuance | 43.2 | |
Weighted average fair value for stock options granted (in dollars per share) | $ 4.31 | $ 9.50 |
2012 Plan [Member] | Employee Stock Options and Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period maximum | 3 years | |
2012 Plan [Member] | Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years | |
2012 Plan [Member] | Performance Shares [Member] | Scenario Assumption [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target award percentage | 100.00% | |
2012 Plan [Member] | Performance Shares [Member] | One-year Performance Period Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period minimum | 1 year | |
Vesting period maximum | 3 years | |
Vesting period (in years) | 4 years | |
2012 Plan [Member] | Performance Shares [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target award percentage | 0.00% | |
2012 Plan [Member] | Employee Stock Option Issued Since May 10, 2010 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award requisite service period (in years) | 1 year | |
Share-based compensation arrangement by share-based payment award, expiration period (in years) | 8 years | |
2012 Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period minimum | 1 year | |
Vesting period maximum | 3 years | |
2018 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate share reserve (in shares) | 4.6 | |
The 2012 and 2018 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common shares authorized for issuance | 47.8 |
Stock-based Compensation - Assu
Stock-based Compensation - Assumptions Used to Estimate the Black-scholes Fair Value of Stock Options Granted (Details) - Employee Stock Option [Member] | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Expected Life (in years) | 6 years 255 days | 6 years 255 days |
Weighted Average Expected Volatility | 34.96% | 26.49% |
Weighted Average Risk Free Interest Rates | 2.92% | 2.17% |
Expected Dividend Yield | 3.80% | 1.60% |
Stock-based Compensation - Chan
Stock-based Compensation - Changes in the Company's Stock Options (Details) shares in Thousands | 3 Months Ended |
Jun. 02, 2018$ / sharesshares | |
Number of Stock Options | |
Options outstanding, beginning of period, Number of Stock Options (in shares) | shares | 4,241 |
Granted, Number of Stock Options (in shares) | shares | 1,065 |
Exercised, Number of Stock Options (in shares) | shares | 0 |
Forfeited or expired, Number of Stock Options (in shares) | shares | (432) |
Options outstanding, end of period, Number of Stock Options (in shares) | shares | 4,874 |
Options exercisable, end of period, Number of Stock Options (in shares) | shares | 2,691 |
Weighted Average Exercise Price | |
Options outstanding, beginning of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 55.76 |
Granted, Weighted Average Exercise Price (in dollars per share) | $ / shares | 16.85 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $ / shares | 0 |
Forfeited or expired, Weighted Average Exercise Price (in dollars per share) | $ / shares | 45.20 |
Options outstanding, end of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | 48.19 |
Options exercisable, end of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 61.05 |
Stock-based Compensation - Ch41
Stock-based Compensation - Changes in the Company's Restricted Stock (Details) - Restricted Stock [Member] shares in Thousands | 3 Months Ended |
Jun. 02, 2018$ / sharesshares | |
Number of Restricted Shares | |
Unvested shares, beginning of period (in shares) | shares | 4,311 |
Granted (in shares) | shares | 476 |
Vested (in shares) | shares | (518) |
Forfeited, (in shares) | shares | (93) |
Unvested shares, end of period (in shares) | shares | 4,176 |
Weighted Average Grant-Date Fair Value | |
Unvested shares, Weighted Average Grant Date Fair Value, beginning of period (in dollars per share) | $ / shares | $ 48.07 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 17.64 |
Vested, Weighted Average Grant Date Fair Value ( in dollars per share) | $ / shares | 61.39 |
Forfeited, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 44.76 |
Unvested shares, Weighted Average Grant Date Fair Value, end of period (in dollars per share) | $ / shares | $ 43.02 |
Stock-based Compensation - Ch42
Stock-based Compensation - Changes in the Company's Performance Stock Units (Details) - Performance Shares [Member] shares in Thousands | 3 Months Ended |
Jun. 02, 2018$ / sharesshares | |
Number of Restricted Shares | |
Unvested shares, beginning of period (in shares) | shares | 1,352 |
Granted (in shares) | shares | 1,253 |
Vested (in shares) | shares | (492) |
Forfeited, (in shares) | shares | 0 |
Unvested shares, end of period (in shares) | shares | 2,113 |
Weighted Average Grant-Date Fair Value | |
Unvested shares, Weighted Average Grant Date Fair Value, beginning of period (in dollars per share) | $ / shares | $ 46.06 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 16.85 |
Vested, Weighted Average Grant Date Fair Value ( in dollars per share) | $ / shares | 50.82 |
Forfeited, Weighted Average Grant-Date Fair Value (in dollars per share) | $ / shares | 0 |
Unvested shares, Weighted Average Grant Date Fair Value, end of period (in dollars per share) | $ / shares | $ 27.63 |
Earnings per Share (Details Tex
Earnings per Share (Details Textual) - shares shares in Millions | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Earnings Per Share [Abstract] | ||
Stock-based awards excluded from computation of diluted earnings per share | 8.5 | 7.2 |
Supplemental Cash Flow Inform44
Supplemental Cash Flow Information (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 02, 2018 | May 27, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid | $ 3.2 | $ 8.7 |
Interest payments | 2.2 | 2.2 |
Accrual for capital expenditures | 28 | 34.1 |
Accrual for dividends payable | $ 26.3 | $ 23.6 |