UNION, N.J., Sept. 24 /PRNewswire-FirstCall/ -- Bed Bath & Beyond Inc. today reported net earnings of $.46 per diluted share ($119.3 million) in the fiscal second quarter ended August 30, 2008, compared with net earnings of $.55 per diluted share ($147.0 million) in the same quarter a year ago. Net sales for the fiscal second quarter of 2008 were approximately $1.854 billion, an increase of approximately 4.9% from net sales of approximately $1.768 billion reported in the fiscal second quarter of 2007. Comparable store sales in the fiscal second quarter of 2008 decreased by approximately 0.1%, compared with an increase of approximately 2.2% in last year's fiscal second quarter.
For the fiscal first half ended August 30, 2008, the Company reported net earnings of $.76 per diluted share ($196.0 million) compared with net earnings of $.92 per diluted share ($251.7 million) in the corresponding period a year ago. Net sales for the fiscal first half of 2008 were approximately $3.502 billion, an increase of approximately 5.5% from net sales of approximately $3.321 billion in the corresponding period a year ago. Comparable store sales for the fiscal first half of 2008 increased by approximately 0.3%, compared with an increase of approximately 1.9% in last year's fiscal first half.
As of August 30, 2008, the Company had a total of 994 stores, including 903 Bed Bath & Beyond stores (13 of which were opened during the fiscal second quarter, including a second store in Canada) in 49 states, the District of Columbia, Puerto Rico and Canada, 41 Christmas Tree Shops stores, 10 buybuy BABY stores, and 40 stores under the names of Harmon or Harmon Face Values. Consolidated store space as of August 30, 2008 was approximately 30.8 million square feet. Since the beginning of the fiscal third quarter on August 31, 2008, 4 additional Bed Bath & Beyond stores and 1 additional Christmas Tree Shops store have been opened. In addition, through a joint venture, the Company operates 2 stores in Mexico under the name "Home & More."
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a chain of retail stores, operating under the names of Bed Bath & Beyond, Christmas Tree Shops, Harmon, Harmon Face Values and buybuy BABY. The Company sells a wide assortment of merchandise principally including domestics merchandise and home furnishings as well as food, giftware, health and beauty care items and infant and toddler merchandise. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard and Poor's 500 and Global 1200 Indices and the NASDAQ-100 Index. The Company is counted among the Fortune 500 and the Forbes 2000.
This press release may contain forward-looking statements. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, estimate, assume, continue, project, plan, and similar words and phrases. The Company's actual results and 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 the Company's control. Such factors include, without limitation: general economic conditions including the housing market and fuel costs; changes in the retailing environment and consumer preferences and spending habits; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; unusual weather patterns; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the cost of labor, merchandise and other costs and expenses; the ability to find suitable locations at acceptable occupancy costs to support the Company's expansion program; the impact of failed auctions for auction rate securities held by the Company; and matters arising out of or related to the Company's stock option grants and procedures and related matters, including the outcome of the informal inquiry commenced by the SEC, the possibility that the SEC may not agree with all of the special committee's findings and recommendations and may require additional or different remediation, any other proceedings which may be brought against the Company by the SEC or other governmental agencies, any tax implications relating to the Company's stock option grants, the outcome of a shareholder derivative action filed against certain of the Company's officers and directors and related matters, and the possibility of other private litigation relating to such stock option grants and related matters. The Company does not undertake any obligation to update its forward-looking statements.
(Tables Follow) BED BATH & BEYOND INC. AND SUBSIDIARIES Consolidated Statements of Earnings (in thousands, except per share data) (unaudited) Three Months Ended Six Months Ended August 30, September 1, August 30, September 1, 2008 2007 2008 2007 Net sales $1,853,892 $1,767,716 $3,502,383 $3,321,009 Cost of sales 1,114,571 1,035,558 2,107,062 1,942,742 Gross profit 739,321 732,158 1,395,321 1,378,267 Selling, general and administrative expenses 551,900 511,121 1,089,081 1,002,839 Operating profit 187,421 221,037 306,240 375,428 Interest income 2,946 6,717 7,476 16,607 Earnings before provision for income taxes 190,367 227,754 313,716 392,035 Provision for income taxes 71,099 80,746 117,671 140,380 Net earnings $ 119,268 $ 147,008 $ 196,045 $ 251,655 Net earnings per share - Basic $ 0.46 $0.55 $ 0.76 $ 0.93 Net earnings per share - Diluted $ 0.46 $ 0.55 $ 0.76 $ 0.92 Weighted average shares outstanding - Basic 256,726 266,069 256,680 269,817 Weighted average shares outstanding - Diluted 258,979 269,531 259,121 273,890 BED BATH & BEYOND INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, unaudited) August 30, September 1, 2008 2007 Assets Current assets: Cash and cash equivalents $ 288,556 $ 122,963 Short term investment securities 10,000 460,771 Merchandise inventories 1,810,313 1,602,677 Other current assets 282,771 288,621 Total current assets 2,391,640 2,475,032 Long term investment securities 286,946 32,152 Property and equipment, net 1,123,651 994,344 Other assets 330,104 316,203 $4,132,341 $3,817,731 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 654,626 $ 649,052 Accrued expenses and other current liabilities 255,422 255,904 Merchandise credit and gift card liabilities 170,331 151,557 Current income taxes payable 11,131 49,518 Total current liabilities 1,091,510 1,106,031 Deferred rent and other liabilities 205,644 175,107 Income taxes payable 77,449 115,926 Total liabilities 1,374,603 1,397,064 Total shareholders' equity 2,757,738 2,420,667 $4,132,341 $3,817,731 BED BATH & BEYOND INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands, unaudited) Six Months Ended August 30, September 1, 2008 2007 Cash Flows from Operating Activities: Net earnings $ 196,045 $ 251,655 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 87,138 75,177 Amortization of bond premium - 1,123 Stock-based compensation 21,604 20,562 Tax benefit from stock-based compensation 266 470 Deferred income taxes (17,565) (30,227) Other 155 - Increase in assets, net of effect of acquisition: Merchandise inventories (193,332) (82,369) Trading investment securities (1,740) (2,117) Other current assets (34,906) (31,180) Other assets (928) (312) Increase (decrease) in liabilities, net of effect of acquisition: Accounts payable 102,476 51,824 Accrued expenses and other current liabilities (2,907) 8,556 Merchandise credit and gift card liabilities (921) 4,280 Income taxes payable (61) 2,027 Deferred rent and other liabilities 12,725 8,437 Net cash provided by operating activities 168,049 277,906 Cash Flows from Investing Activities: Redemption of held-to-maturity investment securities - 188,669 Purchase of available-for-sale investment securities - (644,330) Redemption of available-for-sale investment securities 31,350 841,305 Capital expenditures (106,711) (153,296) Investment in unconsolidated joint venture, including fees (4,764) - Payment for acquisition, net of cash acquired - (85,893) Net cash (used in) provided by investing activities (80,125) 146,455 Cash Flows from Financing Activities: Proceeds from exercise of stock options 12,779 10,576 Excess tax benefit from stock-based compensation 4,394 2,971 Repurchase of common stock, including fees (40,625) (528,326) Net cash used in financing activities (23,452) (514,779) Net increase (decrease) in cash and cash equivalents 64,472 (90,418) Cash and cash equivalents: Beginning of period 224,084 213,381 End of period $ 288,556 $ 122,963
