Strong Sales, Expense Controls Drive Bed Bath & Beyond Gain
UNION, N.J.-Thanks to a significant gain in net sales and the company's wary eye on expenses, Bed Bath & Beyond closed its fiscal year with a 25 percent increase in fourth-quarter net income, to $283.5 million.
Net sales in the quarter, which closed on Feb. 26, rose 12 percent to $2.5 billion. While selling, general and administrative expenses rose 5.2 percent in dollars, they shed 149 basis points as a percentage of sales to 24.6 percent. In a conference call to financial analysts yesterday, Steven Temares, Bed Bath & Beyond's CEO, said the chain benefited from lower costs for payroll and occupancy as a percentage of sales, and decreased advertising expenses.
Gross margin in the quarter rose 40 basis points to 43 percent. Temares told the analysts that the increase in gross margin came about due to reduced coupon expenses and a decline in markdowns as a percentage of sales.
The fourth quarter brought a finish to a fiscal year in which Bed Bath & Beyond's net income jumped 32 percent, to $791.3 million. Net sales for the fiscal year increased 12 percent to $8.8 billion.