Bed Bath & Beyond Net Rises 24 Percent in Fourth Quarter, 25 Percent for Fiscal Year
UNION, N.J.-Finishing off another strong fiscal year, Bed Bath & Beyond reported a 24 percent increase in fourth-quarter net income, which totaled $351 million, bringing its bottom line for the full fiscal year to $989.5 million, up 25 percent from the prior year.
In a conference call yesterday to industry analysts, Steven Temares, Bed Bath & Beyond's CEO, said the specialty retailer was able to firm its bottom line thanks to strong increases in sales, including number of transactions and average transaction amount, along with tightening controls over expenses. Net sales rose 9.1 percent in the quarter to $2.7 billion, including a gain of 6.8 percent in same-store sales. For the fiscal year, net sales reached $9.5 billion, up 8.5 percent over the prior year and including a pickup of 5.9 percent in same-store sales.
Fourth-quarter selling, general and administrative expenses were slimmed by 0.4 percent in dollars and 214 basis points as a percentage of sales, to 22.4 percent. Gross margin declined 38 basis points to 42.6 percent. Temares attributed the drop in gross margin to inventory acquisition costs, coupons and a shift in the mix of merchandise sold to lower margin categories.
During the conference all, Eugene Castagna, chief financial officer, said Bed Bath & Beyond is "cautiously optimistic" about the new fiscal year. The company's plans, according to Castagna, call for the opening of about 40 stores across the Bed Bath & Beyond, Christmas Tree Shops, Harmon, Harmon Face Values and buybuy Baby concepts. Same-store sales for the first quarter and the fiscal year should rise in the range of from 2 to 4 percent, Castagna said.