Highlights From BBBY's Q2 Conference Call: Sees Same-Store Sales Flat to Slightly Negative for FY09

September 24, 2009 10:33 AM EDT

Last night, Bed Bath & Beyond Inc. (Nasdaq: BBBY) reported Q2 EPS of $0.52, 4 cents better than the analyst estimate of $0.48. Revenue for the quarter was $1.91 billion, which compares to the estimate of $1.90 billion. Shares are down 4% in early trading.

Highlights From BBBY's Q2 Conference Call:

• Same store sales fell 0.6%.
  
• (Co-Chairman) During Q2, we opened nine new Bed Bath & Beyond stores, including four additional stores in Canada, one Harmon Face Values store and three buybuy BABY stores, bringing the number of our fiscal first half openings to 21 versus 23 in 2008.
  
• Consolidated store space at August 29, 2009 was approximately 32.5 million square feet.
  
• In fiscal 2009, including stores already open to date, we anticipate opening approximately 58 new stores across our concepts, including approximately 35 Bed Bath & Beyond stores in the United States and Canada, approximately seven Christmas Tree Shops, approximately 12 buybuy BABY stores, and approximately four Harmon Face Values stores.
  
• We believe that throughout the United States and Canada, there is an opportunity to open in excess of 400 additional Bed Bath & Beyond stores.
  
• (CEO) Our capital spending in the first half of fiscal 2009 was approximately $68 million.
  
• Net earnings per diluted share for the quarter were $0.52, an increase of 13% over the $0.46 a share earned a year-ago.
  
• Net sales for Q2 were approximately $1.9 billion, approximately 3.3% higher than the corresponding fiscal 2008 period.
  
• Q2 comp store sales were down approximately 0.6% at the favorable end of our comp store sales planning assumption.
  
• For the fiscal first half, net sales were approximately $3.6 billion, about 3.1% higher than last year.
  
• Comp store sales for the fiscal first half decreased approximately 1.1%. We believe net sales and comp store sales continue to be negatively affected by the economic slowdown.
  
• Gross profit for the fiscal Q2 was approximately 40.4% of net sales compared with approximately 39.9% of net sales during Q2 of 2008.
  
• Selling, general and administrative expenses for the fiscal Q2 were approximately 28.8% of net sales as compared to approximately 29.8% in last year's Q2.
  
• For Q2, our tax rate was approximately 39.4% compared to approximately 37.3% for the comparable quarter last year.
  
• (CFO) We are now modeling consolidated comparable store sales to be relatively flat to slightly positive for the third and fourth quarters and slightly negative to relatively flat for the full fiscal year 2009.
  
• We expect some improvement in the operating profit margin for Q3 and for all of fiscal 2009.
  
• Interest income is expected to be lower than in fiscal 2008 as a result of anticipated lower interest rates.
  
• Capital expenditures for fiscal 2009, principally for new stores, existing store refurbishment and information technology enhancements continue to be planned at approximately $250 million and will continue to be reviewed on an ongoing basis.
  
• Depreciation for fiscal 2009 is estimated to be approximately $180 million.
  
• We expect to continue to generate positive cash flow in fiscal 2009 and entirely fund operations from internally generated sources.
  
• We ended Q2 with cash and cash equivalents and investment securities of approximately $1.2 billion. This includes approximately $192 million of investments related to auction rate securities.
  
• Inventories continue to be tailored by store to meet the anticipated demands of our customers and are in good shape. As of August 29, 2009, inventories were approximately $1.8 billion or about $53.97 per square foot, a reduction of approximately 8% on a per square foot basis versus last year.

(No Q&A)

Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores.

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