LONDON, UK / ACCESSWIRE / July 6, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Bed Bath & Beyond Inc. (NASDAQ: BBBY), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=BBBY, following the Company's announcement of its first quarter fiscal 2017 financial results on June 23, 2017. The home goods retailer posted a y-o-y increase in sales. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the first quarter of fiscal 2017 ended May 27, 2017, Bed Bath & Beyond reported net sales of $2.74 billion, an increase of approximately 0.1% compared to sales of $2.74 billion in Q1 FY16, primarily due to an increase of 2.1% in non-comparable sales, including PMall, One Kings Lane, and new stores, largely offset by a 2% decrease in comparable sales. Bed Bath & Beyond's revenue number fell below analysts' expectations of $2.80 billion. The Company's comparable sales from customer-facing digital channels reported strong growth in excess of 20%, while comparable sales from stores declined in the mid-single-digit percentage range during the reported quarter.
Bed Bath & Beyond's gross margin for Q1 2017 was approximately 36.5% compared to approximately 37.4% of net sales in Q1 2016, primarily due to an increase in net direct-to-customer shipping expense as a result, in part, of the Bed Bath & Beyond free shipping threshold being at $29 for the full quarter this year while it was at $49 for about half of the first quarter last year; and secondly, an increase in coupon expense resulting from an increase in redemptions, partially offset by a decrease in the average coupon amount. The inclusion of One Kings Lane reduced total company gross margin as a percentage of net sales by approximately 4 basis points, while the inclusion of PMall improved total company gross margin by 16 basis points.
Bed Bath & Beyond's SG&A totaled approximately 31.1% of net sales in Q1 2017 compared to approximately 29.6% of net sales in Q1 2016. The increase in SG&A as a percentage of net sales was primarily attributable to increases in advertising expenses, payroll and payroll-related expenses, and technology-related expenses, including related depreciation. The Company's net interest expense was approximately $16.6 million in the reported quarter compared to $16.3 million in the prior year's same period.
Bed Bath & Beyond's income tax rate for Q1 2017 was approximately 42.3% compared to approximately 37.7% in Q1 2016. The reported quarter included the adoption of the new share-based payment accounting standard, which increased the tax rate by 5.9%; increased income tax by $7.6 million; and decreased net earnings per diluted share by approximately $0.05.
For Q1 2017, Bed Bath & Beyond reported net earnings of $75.3 million, or $0.53 per diluted share, compared with net earnings of $122.6 million, or $0.80 per diluted share, for Q1 2016. On an adjusted basis, the Company's net earnings per diluted share were $0.58 per share, also missing Wall Street's expectations of $0.66 per share.
Cash Matters
Bed Bath & Beyond ended Q1 2017 with approximately $565 million in cash and cash equivalents and investment securities. The Company's retail inventories for the reported quarter remained at approximately $2.9 billion at a cost almost flat on a y-o-y basis, including the inventory balances from One Kings Lane and PMall, which were acquired during Q2 and Q3 of 2016, respectively.
Bed Bath & Beyond's capital expenditures for the reported quarter were approximately $81 million with more than 40% related to technology projects, including investments in the Company's digital capabilities and the development and deployment of new systems and equipment in its stores. During Q1 2017, the Company opened 1 store and closed 1 store.
Capital Allocation
Bed Bath & Beyond's Board of Directors declared a quarterly dividend of $0.15 per share to be paid on October 17, 2017, to shareholders of record at the close of business on September 15, 2017.
During Q1 2017, the Company repurchased approximately $127 million of its common stock, representing approximately 3.3 million shares, under its existing $2.5 billion share repurchase program. As of May 27, 2017, the program had a remaining balance of approximately $1.6 billion.
Stock Performance
At the close of trading session on Wednesday, July 05, 2017, Bed Bath & Beyond's stock price slipped 1.12% to end the day at $30.80. A total volume of 2.86 million shares was exchanged during the session. The Company's shares are trading at a PE ratio of 7.11 and have a dividend yield of 1.95%. At Wednesday's closing price, the stock's net capitalization stands at $4.45 billion.
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