Bed Bath Posts Weak Q4, FY Results
UNION, N.J.-A poor fourth quarter ended Bed Bath & Beyond's fiscal year with shortfalls in the bottom line for both periods.
Net income in the quarter dropped 10.9 percent to $333.3 million, bringing net income for the fiscal year ending on March 1 to $1 billion, down 1.5 percent from the previous fiscal year. Net sales in the quarter were off 5.8 percent to $3.2 billion, including a same-store sales gain of 1.7 percent. For the year, net sales totaled $11.5 billion, up 5.4 percent and including a pickup of 2.4 percent in same-store sales.
In a conference call to financial analysts yesterday, Steve Temares, Bed Bath's CEO, said fourth-quarter sales were affected by the severe winter weather that hurt other retailers' results as well. For the year, sales benefited from increases in average transaction amounts and the number of transactions, Temares said.
Gross margin in the quarter was off 51 basis points to 40.5 percent. Selling, general and administrative expenses decreased 3.3 percent in dollars but rose 62 basis points as a percentage of sales, to 24.1 percent.
Temares said a goodly portion of Bed Bath's costs last year were due to its investments in upgrading its e-commerce function, including the addition of improvements to its Bed Bath & Beyond and buy buy Baby websites, the replatforming of its mobile sites and applications, and the completion of its new IT data center in North Carolina. He added that the company will continue to add functionalities and assortments to its websites, mobile sites and apps in the current fiscal year.
Looking ahead further into this fiscal year, Co-chairman Warren Eisenberg told the analysts that Bed Bath is planning to open 30 new stores in all of its nameplates. "We believe that throughout the United States and Canada, there is an opportunity to operate in excess of 1,300 Bed Bath & Beyond stores as well as grow our Cost Plus World Market, Christmas Tree Shops andThat! and buy buy Baby concepts from coast to coast," Eisenberg said.
Also during the conference call, Susan Lattmann, chief financial officer, said Bed Bath is modeling for same-store sales increases of from 1 to 2.5 percent in the first quarter and 3 percent for the year as a whole. Consolidated net sales are expected to gain 2 to 3.5 percent in the quarter and about 4 percent for the year, Lattmann said.