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Bed Bath 3Q profits up from '99

UNION, NJ -Riding the crest of new store openings, and chipping modestly away at costs, superstore specialist Bed Bath & Beyond reported that third-quarter profits climbed higher by 28.3 percent, to $40.7 million from $31.7 million last year.

Sales growth generated by rapid expansion remains the earnings driver, and sales moved up by 25.3 percent, to $609.5 million from $486.5 million last year, as the retailer opened 37 new superstores and expanded two others during the third quarter.

But bitten by the same bug that's put most American retailers on the sick list for much of the last six months, the retailer recorded strong, but slowing, same-store sales growth during the September-November period. Comps increased by 4.2 percent, said Steven Temares, president, in a conference call for analysts and investors, cooling off somewhat from last year's blistering pace of 7.8 percent same-store sales growth.

Even though the holiday season is off to a sluggish start for most American retailers, Temares said he's confident the retailer will reach its 12-month same-store growth target of 3 to 5 percent.

Importantly, said Temares, in what's turning out to be a typically promotional selling season for most retailers, "Our gross margins have held and our expenses are at traditional levels."

Scoping out the outlook for the crucial Christmas quarter, when retailers typically generate most of the year's profits, Ronald Curwin, chief financial officer, said Bed Bath & Beyond sales growth "should come in about the mid 20 percent," while same-store sales grow at a targeted rate of three to five percent, generating a "modest improvement in operating margin."

Looking ahead to 2001, Curwin said the retailer plans to ratchet up the pace of new store openings once again, adding about 80 units next year, compared with 70 in Year 2000. "We'll open 11 in the first quarter, 22 in the second quarter, 43 in the third quarter, and four in the fourth quarter."

BED BATH & BEYOND


Qtr. 11/25 (x000) 2000 1999 %CHG

Sales

$609,519

$486,457

25.3

Oper. income (EBIT)

64,592

50,607

27.6

Net income

40,665

31,707

28.3

Per share (Diluted)

0.14

0.11

27.3

Average gross margin

40.4%

40.5%

-

SG & A expenses

29.8%

30.0%

-

NINE MONTHS

2000

1999

%CHG

Sales

1,669,255

1,303,415

28.1

Oper. income (EBIT)

170,940

132,202

29.3

Net income

107,607

82,837

29.9

Per share (diluted)

0.37

0.29

27.6

Average gross margin

40.4%

40.6%

-

SG & A expenses

30.2%

30.4%

-


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