Bed Bath & Beyond confident as profits crimped
April 7, 2009-- Home Textiles Today,
Union, N.J. – Dominant home furnishings specialty retailer Bed Bath & Beyond turned in a respectable if not spectacular 2008, as sales were off 0.5% and profits shrank in a turbulent marketplace.
For the fiscal year ended February 28, Bed Bath net profit of $1.64 per diluted share was 21.9% below EPS of $2.10 in the prior year. (Profit of $425.1 million was down 24.5% from $562.8 million one year ago.)
Q4 net earnings per diluted share of 55 cents fell 16.7% from 66 cents EPS in the same period one year ago. (Net earnings of $141.4 million fell 18.2% from $172.9 million.)
Bed Bath & Beyond projects that the effects of the general economic downturn have not yet bottomed out. The company expects that fiscal 2009 will see BBB sales growth in the low-single-digit range, while comps are expected to decline by a low-single-digit percent rate. And the current consensus earnings projection of $1.50 per diluted share would be 8.5% under the year just ended.
On today’s earnings call, co-chairman Warren Eisenberg characteristically stated that the current troubled economy shows that the “unique strength of our decentralized culture” delivers benefits to BBB that are “even more apparent.”
He spoke of a market that has been “inundated” with off-price and distressed home goods – but BBB’s plan is to keep expanding and soak some of them up. The company still sees room for at least 400 new Bed Bath locations in the U.S., and plans to open 35 or so during the current fiscal year.
BBB opened 67 new units last year, including 49 Bed Bath & Beyond stores. Across the U.S., Puerto Rico and Canada the company currently operates 931 BBBs, 52 Christmas Tree Shops, 16 Buy-Buy Baby stores and one freestanding Harmon unit, plus two Mexico City stores in its joint venture there.
BBB made $216 million in capital expenditures during fiscal 2008 – $142 million less than 2007 cap ex – but plans to ramp up to roughly $250 million this year, said ceo Steven Temares.
Both executives touched on the bridal, baby, and online businesses as segments driving the continued expansion of Bed Bath & Beyond.
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