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Bed Bath & Beyond Inc. Reports Operating Results (10-Q)

January 02, 2013 | About:
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10qk

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Bed Bath & Beyond Inc. (BBBY) filed Quarterly Report for the period ended 2012-11-24.

Bed Bath & Beyond, Inc. has a market cap of $12.81 billion; its shares were traded at around $56.06 with a P/E ratio of 13.5 and P/S ratio of 1.4. Bed Bath & Beyond, Inc. had an annual average earning growth of 15.5% over the past 10 years. GuruFocus rated Bed Bath & Beyond, Inc. the business predictability rank of 4.5-star.
This is the annual revenues and earnings per share of BBBY over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of BBBY.


Highlight of Business Operations:

As of November 24, 2012 and February 25, 2012, the Company’s available-for-sale investment securities represented approximately $51.0 million and approximately $83.9 million par value of auction rate securities, respectively, less temporary valuation adjustments of approximately $2.0 million and $3.7 million, respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive income (loss), net of a related tax benefit, and did not affect the Company’s net earnings. These securities at par are invested in preferred shares of closed end municipal bond funds, which are required, pursuant to the Investment Company Act of 1940, to maintain minimum asset coverage ratios of 200%. All of these available-for-sale investments carried triple-A credit ratings from one or more of the major credit rating agencies as of November 24, 2012 and February 25, 2012, and none of them are mortgage-backed debt obligations. As of November 24, 2012 and February 25, 2012, the Company’s available-for-sale investments have been in a continuous unrealized loss position for 12 months or more, however, the Company believes that the unrealized losses are temporary and reflect the investments’ current lack of liquidity. Due to their lack of liquidity, the Company classified approximately $49.0 million and $73.7 million of these investments as long term investment securities at November 24, 2012 and February 25, 2012, respectively. During the nine months ended November 24, 2012, approximately $8.5 million of these securities were redeemed at par and approximately $24.3 million were tendered at a price of approximately 95% of par value for which the Company incurred a realized loss of approximately $1.1 million which is included within interest expense, net in the consolidated statements of earnings for the three and nine months ended November 24, 2012.

· Selling, general and administrative expenses (“SG&A”) for the three months ended November 24, 2012 were $712.4 million, or 26.4% of net sales, compared with $601.7 million, or 25.7% of net sales, for the three months ended November 26, 2011. SG&A for the nine months ended November 24, 2012 were $1.954 billion, or 26.0% of net sales, compared with $1.750 billion, or 25.9% of net sales, for the nine months ended November 26, 2011.

· For the three months ended November 24, 2012, net earnings per diluted share were $1.03 ($232.8 million), an increase of approximately 8.4%, as compared with net earnings per diluted share of $0.95 ($228.5 million) for the three months ended November 26, 2011. For the nine months ended November 24, 2012, net earnings per diluted share were $2.89 ($663.9 million), an increase of approximately 11.2%, as compared with net earnings per diluted share of $2.60 ($638.5 million) for the nine months ended November 26, 2011. The increase in net earnings per diluted share for the three months ended November 24, 2012 is primarily the result of the impact of the Company’s repurchases of its common stock. The increase in net earnings per diluted share for the nine months ended is the result of the items referred to above, as well as the impact of the Company’s repurchases of its common stock.

Gross profit for the three months ended November 24, 2012 was $1.074 billion, or 39.8% of net sales, compared with $958.7 million, or 40.9% of net sales, for the three months ended November 26, 2011. Gross profit for the nine months ended November 24, 2012 was $2.994 billion, or 39.8% of net sales, compared with $2.767 billion, or 40.9% of net sales, for the nine months ended November 26, 2011. These decreases in the gross profit margin as a percentage of net sales for the three and nine months ended November 24, 2012 were primarily attributed to an increase in coupons, due to increases in both the redemptions and the average coupon amount, and a shift in the mix of merchandise sold to lower margin categories.

Operating profit for the three months ended November 24, 2012 was $361.6 million, or 13.4% of net sales, compared with $357.0 million, or 15.2% of net sales, during the comparable period last year. For the nine months ended November 24, 2012, operating profit was $1.040 billion, or 13.8% of net sales, compared with $1.018 billion, or 15.0% of net sales, during the first nine months of fiscal 2011. The change in operating profit as a percentage of net sales was the result of the change in the gross profit margin and SG&A as a percentage of net sales as described above.

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