Bed Bath & Beyond Net Rises 25 Percent in Third Quarter
December 23, 2010,
UNION, N.J.--Bed Bath & Beyond reported another strong performance in its third quarter, with net income rising 25 percent to $188.6 million.
Improving sales and the company's wary eye on expenses helped produce the healthier bottom line. Net sales for the quarter, which ended on Nov. 27, rose 11 percent to $2.2 billion. While selling, general and administrative expenses increased 4.3 percent, they declined 174 basis points as a percentage of sales to 27 percent.
In yesterday's conference call to financial analysts discussing the third quarter (with the transcript provided by the Seeking Alpha Web site), Steven Temares, Bed Bath & Beyond's chief executive officer, said lower payroll, occupancy and advertising costs helped keep SG&A in check. At the same time, increases in inventory acquisition costs and a shift in merchandise mix to lower-margin products slimmed Bed Bath's gross margin by 26 basis points, to 40.9 percent.
During the call, both Temares and Co-Chairman Leonard Feinstein said they are "cautiously optimistic about the fiscal year's final quarter. Feinstein said the economic environment is more stable at this time, but that high unemployment continues to present challenges to consumers.
In terms of store count, Feinstein said the number of new Bed Bath & Beyonds, Christmas Tree Shops, buybuy Babys, Harmons and Harmon Face Values would probably reach the low 40s for all of this fiscal year. Eventually, he added, there is the opportunity for the number of Bed Bath & Beyonds alone, in the United States and Canada, to top 1,300.