Bed Bath & Beyond's Net Drops
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By MIKE BARRIS
January 3, 2008 5:53 p.m.
Bed Bath & Beyond Inc., which has engaged in aggressive discounting as the housing downturn hurts demand for its home products, said fiscal third-quarter net income dropped 3% despite a 11% revenue jump.
The chain reported net income of $138.2 million, or 52 cents a share, for the quarter ended Dec. 1, compared with $142.4 million, or 50 cents a share, a year earlier. The latest quarter included a gain of $8 million related to tax accounting.
In September, the Union, N.J., company predicted that third-quarter per-share earnings would range from flat to up by low single digits on a percentage basis. Analysts' mean estimates were for per-share earnings of 51 cents on revenue of $1.77 billion, according to a poll by Thomson Financial.
Net sales rose 11% to $1.79 billion from $1.62 billion.
Same-store sales rose 0.8% in the latest quarter, compared with a rise of 4.6% a year earlier.
Gross margin fell to 41.67% from 43.48%.
The company, which also operates the Christmas Tree Shops, Harmon health and beauty store and buybuy Baby chains, has been regarded as one of the best-run retailers, but it has struggled in the past year amid a slowdown in consumer spending. Home-related sales have been particularly weak.
During the quarter, Bed Bath said it bought back about 3.2 million shares of its common stock for $103 million. Through Dec. 1, the company repurchased about 24.5 million shares, valued at about $929 million. In September, Bed Bath announced plans to repurchase an additional $1 billion of its shares, its fourth buyback plan since 2004.
Looking ahead, Bed Bath expects fiscal fourth-quarter earnings of 64 to 67 cents a share. Analysts' mean estimates were for fourth-quarter earnings of 77 cents a share. Bed Bath said the estimate is based on projected flat same-store sales for the quarter.
For the full fiscal year, earnings are expected to range from $2.08 a share to $2.11 a share. The fiscal fourth quarter has one less week than the year-earlier period.
In September, the company projected fourth-quarter per-share earnings to decline by a low single- to mid-single-digit percentage. Analysts' mean estimates were for fourth-quarter earnings of 77 cents a share on revenue of $2.08 billion and 2008 earnings of $2.20 a share on revenue of $7.15 billion.
In recent after-hours trading, Bed Bath shares were at $25.15, versus Thursday's close of $27.40. |
