UNION, N.J.-Third-quarter net income for Bed Bath & Beyond totaled $237.2 million, up 1.9 percent from the third quarter of last year.
Net sales in the quarter, which ended on Nov. 30, rose 6 percent to $2.9 billion, including an increase of 1.3 percent in same-store sales. Gross margin was down 60 basis points as a percentage of sales, to 39.2 percent. In a conference call yesterday to financial analysts, Steven Temares, Bed Bath’s CEO, attributed the gross-profit decline to an increase in coupons, which came about because of an increase in both redemptions and the average coupon amount, and to a shift in merchandise mix toward lower-margin products.
Selling, general and administrative expenses rose 4.9 percent in dollars but decreased by 29 basis points as a percentage of sales, to 26.1 percent. Temares said the expense percentage was down due to reduced occupancy, payroll and payroll-related costs.
Temares also said Bed Bath’s performance since the beginning of the fourth quarter has not met the company’s initial projections. Following up on this comment, Gene Castagna, chief financial officer, said Bed Bath’s fourth-quarter model now calls for a sales decrease of between 3.9 percent and 5.7 percent, although the model also calls for same-store sales to rise by from 2 to 4 percent.