Bed Bath & Beyond Inc. (BBBY) Q4 2009 Earnings Report, Transcript and Summary

Welcome to Bed Bath and Beyond’s fourth quarter of fiscal 2009 results conference call. (Operator Instructions) Now, at this time it is my pleasure to turn the conference over to Gene Castagna, Chief Financial Officer and Treasurer of Bed Bath and Beyond. Mr. Castagna please go ahead.

Thank you and good afternoon. Welcome to Bed Bath and Beyond’s fourth quarter fiscal 2009 conference call. Within the past hour we issued a press release announcing Bed Bath and Beyond’s results for the three and 12 month period ended February 27, 2010. During this call we will comment on some of the fourth quarter highlights and provide our fiscal 2010 planning assumptions. Before proceeding I will read the following statement, “Bed Bath and Beyond’s fiscal fourth quarter press release and comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities & Exchange Act of 1934 as amended. Many of these forward-looking statements can be identified by the use of words such as may, will, expect, anticipate, estimate, assume, project, plan and similar words and phrases. The company’s actual results or future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside of the company’s control. Please refer to Bed, Bath & Beyond’s SEC filings including its Form 10K for the year ended February 28, 2009. The company does not undertake any obligation to update its forward-looking statements.” Joining me on today’s call are Warren Eisenberg, Co-Chairman of Bed Bath and Beyond and Steven Temares, Chief Executive Officer and Member of the Board of Directors. I am now very pleased to introduce Warren Eisenberg. Warren?

Good afternoon. I am very pleased to report that our company’s net earnings per diluted share increased approximately 56% in the fiscal fourth quarter to $0.86 and approximately 40% in the fiscal year to $2.30. You will recall that last year’s fiscal fourth quarter was negatively impacted by challenging economic conditions as well as the completion of liquidation sales of a then major competitor. While the economy appears to be showing some signs of improvement we believe the consumer continues to face economic challenges and the pressures of the macroeconomic environment still remains. As such we remain cautiously optimistic as we begin fiscal 2010. During the fiscal fourth quarter we opened eight Bed Bath and Beyond stores, four Christmas Tree shops, three Harmon Face Value stores and three buybuy BABY stores bringing the total number of openings in fiscal 2009 to 67. Additionally, we closed one and relocated three Bed Bath and Beyond stores during the quarter. We continued to add fine china departments in additional Bed Bath and Beyond stores as well as place Harmon Face Value’s health and beauty care offerings in all of our concepts. Consolidated store space at February 27, 2010 was approximately 33.7 million square feet, an increase of approximately 5% over last year. Since the beginning of fiscal 2010 we have opened one Bed Bath and Beyond store and one buybuy BABY store. We currently operate 1,102 stores including 966 Bed Bath and Beyond stores in 49 states, the District of Columbia, Puerto Rico and Canada as well as 61 Christmas Tree shops, 30 buybuy BABY stores and 45 stores under the names Harmon or Harmon Face Value. In addition, we are a partner in a joint venture which operates two stores in the Mexico City market under the name Home & More. In…

Thank you Warren. Good afternoon everyone and thank you for participating in this conference call. Our fourth quarter results exceeded our internal planning assumptions. The dedication and talent of our associates and their constant focus on improving the overall customer shopping experience while at the same time creating a more productive and efficient company are the key to producing the continued outstanding results we have experienced. Although economic and consumer spending challenges persist, our fundamental business strategy has remained unchanged; to offer a broad assortment of merchandise at everyday low prices with superior customer service. We continue to systematically challenge the costs associated with running our company and although we have anniversaried many of the expense reduction initiatives that we instituted during the second half of last year, we continue to strive to find opportunities to lower our operating costs. Our balance sheet and overall financial health are extremely strong and we remain focused on building a business that spans the test of time. We continue to find ways to enhance our customers’ overall shopping experience and we remain committed to being our customers’ first choice for the merchandise categories we offer, domestically, interactively and over the longer term internationally. We are confident our company is well positioned to grow profitably, deliver superior shareholder value and to compete and increase our market share over time. Our capital spending for all of fiscal 2009 was approximately $154 million, lower than we had estimated in our January conference call due primarily to the timing and cost of certain store and warehouse construction projects and IT purchases. While we continue to review and prioritize our capital needs, we remain committed to making the required investments in our company to help position us for our long-term success, principally through new stores, existing store improvements,…

Thanks Steve. As you heard from Warren and Steve our results exceeded our planning assumptions and we earned $0.86 per diluted share in our fiscal fourth quarter and $2.30 per diluted share for all of fiscal 2009. We are encouraged by our positive fiscal fourth quarter results and remain cautiously optimistic about the coming year. The continued uncertainty in the macroeconomic environment makes it difficult to forecast future results. However, the following are our major planning assumptions for fiscal 2010. One, we anticipate opening approximately 60 stores across all of our concepts including approximately 30 Bed Bath and Beyond stores, approximately 10 Christmas Tree shops and approximately 20 buybuy BABY stores. We will continue to place Harmon Face Value’s health and beauty care offerings in all of our concepts and fine china departments within our Bed Bath and Beyond stores. Consistent with our historical experience we anticipate new store openings will occur throughout the year with the majority in our fiscal second half. We remain flexible to take advantage of real estate opportunities that may arise. Two, we expect to continue our program of expanding, renovating, remodeling and/or relocating a number of our stores in fiscal 2010. Three, for the first half of fiscal 2010 we are modeling a mid single digit percentage increase in comparable store sales. For the second half of fiscal 2010 considering the higher comparable store sales comparisons as well as less visibility into future economic conditions we are modeling a low single digit percent increase in comparable store sales. Four, based on these comparable store sales assumptions we are modeling consolidated net sales to increase by a high single digit percentage in the first half of fiscal 2010 and by a mid single digit percentage in the second half of fiscal 2010. Five, assuming these…

Ladies and gentlemen this concludes today’s conference call. Thank you for listening. You may now disconnect.