Bed Bath & Beyond’s Earnings Trend

Shares of Bed Bath & Beyond ($BBBY) jumped as much as 5.4% this morning. Here’s a look at the company’s earnings trend along with their updated earnings forecast. Just by looking at the chart, you see that the upper-end of the forecast is still well within the recent trend.

Year-over-year net profit margins have now increased for nine-straight quarters. For the last four quarters, net margins are running at 9.3% which is closing in on the company’s peak of 10% reached in 2005.

Courtesy of Seeking Alpha, here’s part of yesterday’s earnings call where the company details its forecast for the rest of this year:

The following are our major planning assumptions for the remainder of fiscal 2011.

One, including the 12 stores open so far this year, we anticipate that the total number of new store openings will be approximately 40 to 45 stores across all of our concepts. Currently, we believe that fiscal 2011 store openings by concept will be substantially similar to fiscal 2010 with a slight shift to several more buybuy BABY stores and slightly fewer Bed Bath & Beyond stores. As the year progresses and we gain greater visibility, the total number of stores that we will open may be updated. We will continue to place Harmon Face Values health and beauty care offerings in stores across all of our concepts. As always, we remain flexible to take advantage of real estate opportunities that may arise.

Two, we expect to continue our program of expanding, renovating and/or relocating a number of our stores in fiscal 2011.

Three, we are modeling a 2 to 4 percentage increase in comparable store sales for the second quarter and full fiscal year.

Four, based on these comparable store sales assumptions, we are modeling consolidated net sales to increase by 5% to 7% in the second quarter and full year of fiscal 2011.

Five, assuming these sales levels, in addition to planning the continuation of the shift in the mix of merchandise sold to lower margin categories, we are modeling our operating profit to be in the range of flat to slightly leveraged for the fiscal second quarter and to be slightly leveraged for the full year.

Six, interest income is expected to be relatively flat versus fiscal 2010.

Seven, the second quarter and full year tax provision are estimated in the mid- to high-30s percent range with expected variability as taxable events occur.

Eight, capital expenditures for fiscal 2011, principally for new stores, existing store refurbishments, information technology enhancements, including increased spending on our interactive platforms and other projects, continue to be planned at approximately $250 million, which of course, remains subject to the timing of projects.

Nine, depreciation for fiscal 2011 is estimated to be approximately $190 million.

Ten, we expect to generate positive operating cash flow in fiscal 2011 and continue to fund operations entirely from internally generated sources.

Eleven, in the first quarter, we completed our $1 billion share repurchase program and, thereafter, began our $2 billion program authorized in December 2010, which we continue to model to be completed in approximately 2 years. Our share repurchase program may be influenced by several factors, including business and market conditions.

Based on these and the other planning assumptions, we are modeling net earnings per diluted share to be in the range of approximately $0.77 to $0.82 for the fiscal second quarter of 2011. For all of fiscal 2011, we are modeling net earnings per diluted share to increase by approximately 15% to 20%.

Posted by on June 23rd, 2011 at 10:15 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: