Exhibit 99.1
BED BATH & BEYOND INC. REPORTS NET EARNINGS OF $.47 PER SHARE
IN FISCAL SECOND QUARTER
• Net Earnings for Quarter Increase by 17.8%
• Quarterly Net Sales Increase by 12.3%
• Comparable Quarterly Store Sales Increase by 4.5%
UNION, New Jersey, September 21, 2005 — Bed Bath & Beyond Inc. today reported net earnings of $141.4 million ($.47 per share) in the fiscal second quarter ended August 27, 2005, an increase of approximately 17.8% from the $120.0 million ($.39 per share) earned in the fiscal second quarter of 2004. Net sales for the fiscal second quarter of 2005 were approximately $1.431 billion, an increase of approximately 12.3% from net sales of approximately $1.274 billion in the fiscal second quarter of 2004. Comparable store sales in the fiscal second quarter of 2005 grew by approximately 4.5%.
For the fiscal first half ended August 27, 2005, net earnings increased 18.9% to $240.3 million ($.80 per share) from $202.1 million ($.66 per share) earned in the comparable period of the prior year. Net sales for the fiscal first half of 2005 rose 12.7% to approximately $2.676 billion from approximately $2.375 billion in the corresponding period of the prior year. Comparable store sales for the fiscal first half of 2005 increased by approximately 4.4%.
As of August 27, 2005, the Company operated a total of 749 stores, including 686 Bed Bath & Beyond stores (of which 15 were opened during the fiscal second quarter) in 44 states and Puerto Rico. In addition, as of that date, Christmas Tree Shops, Inc. operated 27 stores in 7 states and Harmon Stores, Inc. operated 36 stores in 3 states. Consolidated store space as of August 27, 2005 was approximately 23.7 million square feet. As a result of Hurricane Katrina, which occurred at the beginning of the fiscal third quarter, and its aftermath, 2 Bed Bath & Beyond stores located in the Gulf Coast region have had to suspend operations. Several other Bed Bath & Beyond stores in the region, which were affected by the hurricane for several days, have since resumed operations.
Since the beginning of the fiscal third quarter on August 28, 2005, 6 new Bed Bath & Beyond stores have been opened, bringing the total number of Bed Bath & Beyond stores to 692 in 44 states and Puerto Rico.
* * * * * * * *
Bed Bath & Beyond Inc. is a nationwide chain of retail stores. The Company’s Bed Bath & Beyond stores sell better quality domestics merchandise and home furnishings. The Company’s Christmas Tree Shops and Harmon Stores sell giftware and household items and health and beauty care items, respectively. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol “BBBY” and are included in the Standard & Poor’s 500 and Global 1200 Indices and the NASDAQ-100 Index. The Company is counted among the Fortune 500 and the Forbes 2000.
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, estimate, assume, continue, 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 that may be outside the Company’s control. Such factors include, without limitation: general economic conditions, changes in the retailing environment and consumer spending habits; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; unusual weather patterns; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the ability to find suitable locations at reasonable occupancy costs to support the Company’s expansion program; and the cost of labor, merchandise and other costs and expenses. The Company does not undertake any obligation to update its forward-looking statements.
INVESTOR CONTACTS (at 908/688-0888): | | | | |
| | |
Ronald Curwin | | Kenneth C. Frankel | | Paula J. Marbach |
Chief Financial Officer | | Director of Financial | | Investor Relations |
and Treasurer | | Planning | | Ext. 4552 |
Ext. 4550 | | Ext. 4554 | | Fax: 908-810-8813 |
| | | | | | |
(Tables Follow)
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
| | Three Months Ended | | Six Months Ended | |
| | August 27, | | August 28, | | August 27, | | August 28, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Net sales | | $ | 1,431,182 | | $ | 1,273,960 | | $ | 2,675,603 | | $ | 2,374,877 | |
Cost of sales | | 829,398 | | 743,131 | | 1,553,038 | | 1,387,274 | |
Gross profit | | 601,784 | | 530,829 | | 1,122,565 | | 987,603 | |
Selling, general and administrative expenses | | 383,907 | | 341,721 | | 753,804 | | 669,788 | |
Operating profit | | 217,877 | | 189,108 | | 368,761 | | 317,815 | |
Interest income | | 8,005 | | 3,676 | | 15,113 | | 6,774 | |
Earnings before provision for income taxes | | 225,882 | | 192,784 | | 383,874 | | 324,589 | |
Provision for income taxes | | 84,480 | | 72,776 | | 143,569 | | 122,532 | |
Net earnings | | $ | 141,402 | | $ | 120,008 | | $ | 240,305 | | $ | 202,057 | |
| | | | | | | | | |
Net earnings per share - Basic | | $ | 0.48 | | $ | 0.40 | | $ | 0.81 | | $ | 0.67 | |
Net earnings per share - Diluted | | $ | 0.47 | | $ | 0.39 | | $ | 0.80 | | $ | 0.66 | |
| | | | | | | | | |
Weighted average shares outstanding - Basic | | 295,458 | | 300,778 | | 294,936 | | 300,598 | |
Weighted average shares outstanding - Diluted | | 301,362 | | 306,495 | | 300,208 | | 306,539 | |
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, unaudited)
| | August 27, | | August 28, | |
| | 2005 | | 2004 (1) | |
Assets | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 296,477 | | $ | 295,075 | |
Short term investment securities | | 703,395 | | 656,773 | |
Merchandise inventories | | 1,238,875 | | 1,052,813 | |
Other current assets | | 114,173 | | 108,443 | |
| | | | | |
Total current assets | | 2,352,920 | | 2,113,104 | |
| | | | | |
Long term investment securities | | 353,516 | | 305,832 | |
Property and equipment, net | | 645,574 | | 534,795 | |
Goodwill | | 147,559 | | 147,559 | |
Other assets | | 21,709 | | 21,559 | |
| | | | | |
| | $ | 3,521,278 | | $ | 3,122,849 | |
| | | | | |
Liabilities and Shareholders’ Equity | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 503,056 | | $ | 428,393 | |
Accrued expenses and other current liabilities | | 249,368 | | 256,482 | |
Merchandise credit and gift card liabilities | | 93,907 | | 69,098 | |
Income taxes payable | | 50,255 | | 50,469 | |
| | | | | |
Total current liabilities | | 896,586 | | 804,442 | |
| | | | | |
Deferred rent and other liabilities | | 131,701 | | 110,877 | |
| | | | | |
Total liabilities | | 1,028,287 | | 915,319 | |
| | | | | |
Total shareholders’ equity | | 2,492,991 | | 2,207,530 | |
| | | | | |
| | $ | 3,521,278 | | $ | 3,122,849 | |
(1) Reflects the classification of investments in auction rate securities as investments rather than as cash and cash equivalents to conform with current presentation.
BED BATH & BEYOND INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands, unaudited)
| | Six Months Ended | |
| | August 27, | | August 28, | |
| | 2005 | | 2004 (1) | |
Cash Flows from Operating Activities: | | | | | |
| | | | | |
Net earnings | | $ | 240,305 | | $ | 202,057 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | |
Depreciation | | 52,303 | | 46,168 | |
Amortization | | 4,458 | | 585 | |
Tax benefit from exercise of stock options | | 18,523 | | 5,947 | |
Deferred income taxes | | (650 | ) | 1,070 | |
Increase in assets: | | | | | |
Merchandise inventories | | (86,847 | ) | (40,479 | ) |
Other current assets | | (17,507 | ) | (14,842 | ) |
Other assets | | (173 | ) | (85 | ) |
Increase (decrease) in liabilities: | | | | | |
Accounts payable | | 52,531 | | 29,743 | |
Accrued expenses and other current liabilities | | (5,372 | ) | (10,798 | ) |
Merchandise credit and gift card liabilities | | 6,846 | | 5,910 | |
Income taxes payable | | (31,109 | ) | 16,624 | |
Deferred rent and other liabilities | | 13,194 | | 1,736 | |
| | | | | |
Net cash provided by operating activities | | 246,502 | | 243,636 | |
| | | | | |
Cash Flows from Investing Activities: | | | | | |
| | | | | |
Purchase of held-to-maturity investment securities | | (179,771 | ) | (216,286 | ) |
Redemption of held-to-maturity investment securities | | 107,147 | | 84,333 | |
Purchase of available-for-sale investment securities | | (955,075 | ) | (1,187,144 | ) |
Redemption of available-for-sale investment securities | | 922,875 | | 1,138,790 | |
Capital expenditures | | (88,046 | ) | (64,793 | ) |
| | | | | |
Net cash used in investing activities | | (192,870 | ) | (245,100 | ) |
| | | | | |
Cash Flows from Financing Activities: | | | | | |
| | | | | |
Proceeds from exercise of stock options | | 27,404 | | 8,706 | |
Payment of deferred purchase price for acquisition | | (6,667 | ) | (6,667 | ) |
| | | | | |
Net cash provided by financing activities | | 20,737 | | 2,039 | |
| | | | | |
Net increase in cash and cash equivalents | | 74,369 | | 575 | |
| | | | | |
Cash and cash equivalents: | | | | | |
Beginning of period | | 222,108 | | 294,500 | |
End of period | | $ | 296,477 | | $ | 295,075 | |
(1) Reflects the classification of investments in auction rate securities as investments rather than as cash and cash equivalents to conform with current presentation.
