UNION, N.J., Sept. 24, 2015 /PRNewswire/ -- Bed Bath & Beyond Inc. today reported financial results for the second quarter of fiscal 2015 ended August 29, 2015.

Fiscal 2015 Second Quarter and Six Months Results

For the second quarter of fiscal 2015, the Company reported net earnings of $1.21 per diluted share ($201.7 million) compared with $1.17 per diluted share ($224.0 million) for the second quarter of fiscal 2014. Net sales for the second quarter of fiscal 2015 were approximately $2.995 billion, an increase of approximately 1.7% from net sales of approximately $2.945 billion reported in the second quarter of fiscal 2014. Net sales on a constant currency basis increased by approximately 2.2% for the second quarter of fiscal 2015. Comparable sales in the second quarter of fiscal 2015 increased by approximately 0.7%, compared with an increase of approximately 3.4% in last year's fiscal second quarter. Comparable sales on a constant currency basis increased by approximately 1.1% for the second quarter of fiscal 2015.

For the fiscal six months ended August 29, 2015, the Company reported net earnings of $2.13 per diluted share ($360.1 million) compared with $2.09 per diluted share ($411.0 million) in the corresponding period a year ago. Net sales for the fiscal six months of 2015 were approximately $5.734 billion, an increase of approximately 2.4% from net sales of approximately $5.602 billion in the corresponding period a year ago. Net sales on a constant currency basis increased by approximately 2.7% for the fiscal six months. Comparable sales for the fiscal six months of 2015 increased by approximately 1.4%, compared with an increase of approximately 2.0% in last year's fiscal six months. Comparable sales on a constant currency basis increased by approximately 1.8% for the fiscal six months of 2015.

Linen Holdings is excluded from the comparable sales calculations and will continue to be excluded on an ongoing basis because it represents non-retail activity.

Share Repurchase Program

The Company is pleased to announce that its Board of Directors has authorized a new $2.5 billion share repurchase program. The Company is currently planning that the new share repurchase program will commence after completion of the existing share repurchase program. During the second quarter of fiscal 2015, the Company repurchased approximately $194 million of its common stock, representing approximately 2.9 million shares, under its existing share repurchase program. As of August 29, 2015, the remaining balance of the existing share repurchase program was approximately $305 million. Since 2004 through the second quarter of 2015, the Company has returned more than $9.1 billion to its shareholders through share repurchases.

"We are pleased that we have been able to make significant investments in people and technology to position our Company for continued successful growth in the ever evolving retail environment, while at the same time, returning value to our shareholders through share repurchases," said Steven Temares, Chief Executive Officer and Member of the Board of Directors. "Our Board authorized this new share repurchase program based upon its continued confidence in our Company's long-term growth potential, financial outlook and cash flow generation, and it is anticipated that this $2.5 billion share repurchase program will be funded from current cash and future cash flows. That said, our Company's Board of Directors continues to review our capital structure on an ongoing basis."

Fiscal 2015 Financial Model

Net earnings per diluted share continue to be modeled to be between a relatively flat and a mid-single digit percentage increase for the fiscal full year. For the third quarter of fiscal 2015, the Company is modeling net earnings per diluted share to be approximately $1.14 to $1.21, compared to $1.23 in the prior year period. This modeled range would result in year-over-year net earnings per share growth of approximately 5% to 11%, after taking into account the impact of certain non-comparable items. Based on the modeled diluted weighted average shares outstanding for the fiscal third quarter of 2015, these non-comparable items, totaling about $0.15, are: the non-recurring favorable credit card fee litigation settlement that occurred in the third quarter of fiscal 2014; the significantly lower net after tax benefits that are planned in the third quarter of fiscal 2015 as compared to fiscal 2014 due to distinct tax events; and a modeled unfavorable foreign currency rate impact in the third quarter of fiscal 2015. Comparable sales are modeled to increase between 1.0% and 3.0% for the third and fourth quarters of fiscal 2015. The modeling of net earnings per diluted share is based upon a number of assumptions which will be described in the Company's second quarter of fiscal 2015 conference call. Information regarding access to the call is available in the Investor Relations section of the Company's website, www.bedbathandbeyond.com.

About the Company

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond, Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, Harmon or Harmon Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus. Customers can purchase products from the Company either in-store, online or through a mobile device. The Company has the developing ability to have customer purchases picked up in-store or shipped direct to the customer from the Company's distribution facilities, stores or vendors. In addition, the Company operates Of a Kind, an e-commerce website that features specially commissioned, limited edition items from emerging fashion and home designers. The Company also operates Linen Holdings, a provider of a variety of textile products, amenities and other goods to institutional customers in the hospitality, cruise line, healthcare and other industries. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard and Poor's 500 and Global 1200 Indices and the NASDAQ-100 Index. The Company is counted among the Fortune 500 and the Forbes 2000.

The Company operates websites at bedbathandbeyond.com, worldmarket.com, buybuybaby.com, christmastreeshops.com, harmondiscount.com, and ofakind.com. As of August 29, 2015, the Company had a total of 1,520 stores, including 1,023 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 270 stores under the names of World Market, Cost Plus World Market or Cost Plus, 99 buybuy BABY stores, 78 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 50 stores under the names Harmon or Harmon Face Values. During the fiscal second quarter, the Company opened two Bed Bath & Beyond stores, three buybuy BABY stores and one Cost Plus World Market store. In addition, the Company is a partner in a joint venture which operates six stores in Mexico under the name Bed Bath & Beyond.

Forward Looking Statements

This press release may contain forward-looking statements. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, and similar words and phrases. The Company's actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation: general economic conditions including the housing market, a challenging overall macroeconomic environment and related changes in the retailing environment; consumer preferences, spending habits and adoption of new technologies; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; civil disturbances and terrorist acts; unusual weather patterns and natural disasters; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; liquidity; the ability to attract and retain qualified employees in all areas of the organization; the cost of labor, merchandise and other costs and expenses; potential supply chain disruption due to political instability, labor disturbances and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company's growth; the ability to assess and implement technologies in support of the Company's development of its omnichannel capabilities; uncertainty in financial markets; disruptions to the Company's information technology systems including but not limited to security breaches of systems protecting consumer and employee information; reputational risk arising from challenges to the Company's or a third party supplier's compliance with various laws, regulations or standards, including those related to labor, health, safety, privacy or the environment; reputational risk arising from third-party merchandise or service vendor performance in direct home delivery or assembly of product for customers; changes to statutory, regulatory and legal requirements; new, or developments in existing, litigation, claims or assessments; changes to, or new, tax laws or interpretation of existing tax laws; changes to, or new, accounting standards including, without limitation, changes to lease accounting standards; foreign currency exchange rate fluctuations; and the integration of acquired businesses. The Company does not undertake any obligation to update its forward-looking statements.



                                                                                        BED BATH & BEYOND INC. AND SUBSIDIARIES

                                                                                          Consolidated Statements of Earnings

                                                                                         (in thousands, except per share data)

                                                                                                       (unaudited)


                                                                                    Three Months Ended                                  Six Months Ended
                                                                                   ------------------                                  ----------------


                                                                                        August 29,                                   August 30,               August 29,                     August 30,

                                                                                                  2015                                      2014                              2015                    2014
                                                                                                  ----                                      ----                              ----                    ----



     Net sales                                                                              $2,995,469                                             $2,944,905                                  $5,733,964                      $5,601,603


     Cost of sales                                                                           1,854,519                                              1,810,860                                   3,548,881                       3,436,673



                                            Gross profit                                                                   1,140,950                                    1,134,045                          2,185,083                      2,164,930


      Selling, general and administrative
      expenses                                                             790,756                                                       765,304                                   1,561,620                         1,495,488



                                            Operating profit                                                                 350,194                                      368,741                            623,463                        669,442


     Interest expense, net                                                                      25,053                                                  9,528                                      44,954                          11,622



                                             Earnings before provision for
                                             income taxes                                      325,141                                                359,213                                     578,509                         657,820


     Provision for income taxes                                            123,463                                                       135,260                                     218,380                           246,815



                                            Net earnings                                                                    $201,678                                     $223,953                           $360,129                       $411,005
                                                                                                                            ========                                     ========                           ========                       ========


     Net earnings per share - Basic                                          $1.22                                                         $1.18                                       $2.16                             $2.11

     Net earnings per share - Diluted                                        $1.21                                                         $1.17                                       $2.13                             $2.09


      Weighted average shares outstanding -
      Basic                                                                165,024                                                       189,625                                     166,898                           194,622

      Weighted average shares outstanding -
      Diluted                                                              166,633                                                       191,496                                     168,883                           196,796



                                                                                               BED BATH & BEYOND INC. AND SUBSIDIARIES

                                                                                                     Consolidated Balance Sheets

                                                                                                      (in thousands, unaudited)


                                                                                                                                                             August 29,                                   August 30,

                                                                                                                                                                   2015                                          2014
                                                                                                                                                                   ----                                          ----


     Assets


     Current assets:

      Cash and cash equivalents                                                                                                                                $667,563                                               $1,226,627

      Short term investment securities                                                                                                              28,905                                                     59,999

      Merchandise inventories                                                                                                                                 2,875,417                                                2,758,726

      Other current assets                                                                                                                                      426,007                                                  406,607
                                                                                                                                                                -------                                                  -------


             Total current assets                                                                                                                             3,997,892                                                4,451,959
                                                                                                                                                              ---------                                                ---------


     Long term investment securities                                                                                                                             70,501                                                   92,383

     Property and equipment, net                                                                                                                              1,669,951                                                1,576,912

     Goodwill                                                                                                                                                                                    487,139                            486,279

     Other assets                                                                                                                                                                                425,823                            426,727



                                                                                                                                                                                              $6,651,306                         $7,034,260
                                                                                                                                                                                              ==========                         ==========


     Liabilities and Shareholders' Equity


     Current liabilities:

     Accounts payable                                                                                                                                        $1,196,798                                               $1,258,568

     Accrued expenses and other current liabilities                                                                                                428,464                                                    407,178

     Merchandise credit and gift card liabilities                                                                                                  317,247                                                    294,658

     Current income taxes payable                                                                                                                   60,690                                                     46,494
                                                                                                                                                    ------                                                     ------


            Total current liabilities                                                                                                                         2,003,199                                                2,006,898
                                                                                                                                                              ---------                                                ---------


     Deferred rent and other liabilities                                                                                                                        492,780                                                  487,425

     Income taxes payable                                                                                                                                        87,059                                                  100,758

     Long term debt                                                                                                                                                                            1,500,000                          1,500,000



            Total liabilities                                                                                                                                 4,083,038                                                4,095,081
                                                                                                                                                              ---------                                                ---------


     Shareholders' equity:

     Preferred stock - $0.01 par value; authorized - 1,000

       shares; no shares issued or outstanding                                                                                                                      -                                                       -


      Common stock -$0.01 par value; authorized -900,000
      shares;

       issued 337,560 and 335,904 shares, respectively;

       outstanding 166,892 and 185,239 shares, respectively                                                                      3,376                                                              3,359

     Additional paid-in capital                                                                                                                               1,849,677                                                1,560,126

     Retained earnings                                                                                                                                        9,913,505                                                9,006,907

      Treasury stock, at cost; 170,668 and 150,665 shares,
      respectively                                                                                                         (9,147,228)                                                       (7,620,595)

     Accumulated other comprehensive loss                                                                                                         (51,062)                                                  (10,618)
                                                                                                                                                   -------                                                    -------


     Total shareholders' equity                                                                                                                               2,568,268                                                2,939,179



                                                                                                                                                                                              $6,651,306                         $7,034,260
                                                                                                                                                                                              ==========                         ==========


                                Certain reclassifications have been made to the fiscal 2014 consolidated balance sheet to conform to the fiscal 2015 consolidated balance sheet presentation.



                                                                                                               BED BATH & BEYOND INC. AND SUBSIDIARIES

                                                                                                                Consolidated Statements of Cash Flows

                                                                                                                      (in thousands, unaudited)


                                                                                                                                                                                                 Six Months Ended
                                                                                                                                                                                                ----------------


                                                                                                                                                                                                    August 29,                August 30,

                                                                                                                                                                                                             2015                    2014
                                                                                                                                                                                                             ----                    ----



     Cash Flows from Operating Activities:


     Net earnings                                                                                                                                                                                        $360,129                           $411,005

     Adjustments to reconcile net earnings to net cash

                                                          provided by operating activities:

                                                          Depreciation and amortization                                                                                               127,113                                     117,471

                                                          Stock-based compensation                                                                                                     33,859                                      33,760

                                                           Excess tax benefit from stock-based
                                                           compensation                                                                                                  (10,331)                                    (8,081)

                                                          Deferred income taxes                                                                                                                          (10,798)                          (26,086)

                                                          Other                                                                                                                                                        1,169                         (756)

                                                          Increase in assets:

                                                               Merchandise inventories                                                                                              (147,486)                                   (178,592)

                                                               Trading investment securities                                                                              (2,134)                                    (5,209)

                                                               Other current assets                                                                                                  (56,272)                                   (28,839)

                                                               Other assets                                                                                                                               (6,782)                           (2,174)

                                                          Increase in liabilities:

                                                               Accounts payable                                                                                                                            81,421                            195,364

                                                               Accrued expenses and other current
                                                                liabilities                                                                                                18,115                                      21,196

                                                               Merchandise credit and gift card liabilities                                                                11,356                                      10,373

                                                               Income taxes payable                                                                                                     1,174                                       1,865

                                                               Deferred rent and other liabilities                                                                          8,800                                       3,683
                                                                                                                                                                            -----                                       -----


     Net cash provided by operating activities                                                                                                         409,333                                             544,980
                                                                                                                                                       -------                                             -------


     Cash Flows from Investing Activities:


     Purchase of held-to-maturity investment securities                                                                                               (16,873)                                           (84,367)

      Redemption of held-to-maturity investment
      securities                                                                                                                                       126,875                                             513,750

     Capital expenditures                                                                                                                                                           (160,805)                                   (155,300)
                                                                                                                                                                                     --------                                    --------


      Net cash (used in) provided by investing
      activities                                                                                                                                      (50,803)                                            274,083
                                                                                                                                                       -------                                             -------


     Cash Flows from Financing Activities:


     Proceeds from exercise of stock options                                                                                                             7,879                                               9,704

     Proceeds from issuance of senior unsecured notes                                                                                                        -                                          1,500,000

     Payment of deferred financing costs                                                                                                                                                  -                                   (10,157)

     Prepayment under share repurchase agreement                                                                                                             -                                          (165,000)

     Excess tax benefit from stock-based compensation                                                                                                   10,331                                               8,081

     Repurchase of common stock, including fees                                                                                                      (579,296)                                        (1,303,260)
                                                                                                                                                      --------                                          ----------


      Net cash (used in) provided by financing
      activities                                                                                                                                     (561,086)                                             39,368
                                                                                                                                                      --------                                              ------


      Effect of exchange rate changes on cash and cash
      equivalents                                                                                                           (5,455)                                                     1,680
                                                                                                                             ------                                                      -----


      Net (decrease) increase in cash and cash
      equivalents                                                                                                                                    (208,011)                                            860,111


     Cash and cash equivalents:

     Beginning of period                                                                                                                                                              875,574                                     366,516
                                                                                                                                                                                      -------                                     -------

     End of period                                                                                                                                                                                       $667,563                         $1,226,627
                                                                                                                                                                                                         ========                         ==========


                                                Certain reclassifications have been made to the fiscal 2014 consolidated statement of cash flows to conform to the fiscal 2015 consolidated cash flows presentation.

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SOURCE Bed Bath & Beyond