Bed Bath and Beyond 3Q15 Earnings Call Notes

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Bed Bath & Beyond’s (BBBY) CEO Steven Temares on Q3 2015 Results

Overall softness in the macro retail environment

“our performance in the third quarter reflects the recent retail trends we have been experiencing. As we said, on the one hand we experienced softer in-store transaction counts, and on the other hand sales from our customer facing digital channels demonstrated strong growth in excess of 25%. These mixed results were against the backdrop of the overall softness reported in the macro retail environment during the quarter.”

At least we’re generating cash flow

“While most pure-play retailers who primarily sell merchandise in home related categories are struggling with profitability and others rely on outside sources of capital to remain viable, our Company generates healthy cash flows and our strong balance sheet enables us to make strategic investments necessary to continue to create a best-in-class omni-channel platform to position us for long-term success.”

Susan E. Lattmann

Comps down 40 bps

“”Net sales for the third quarter were approximately $3 billion, about 30 basis points higher than net sales in the prior year period or approximately 70 basis points higher on a constant currency basis. Comparable sales for the third quarter decreased approximately 40 basis points or were relatively flat on a constant currency basis, reflecting an increase in the average transaction amount and a decrease in the number of transactions. As Steven said, sales from our customer facing digital channels demonstrated strong growth in excess of 25%, while our comparable sales through stores declined in the low single-digit percentage range.’

Gross profit margin down

“Gross profit for the third quarter was approximately 37.8% of net sales, compared to approximately 38.4% of net sales in the corresponding period a year ago. Gross profit as a percentage of net sales decreased primarily due to an increase in inventory acquisition costs.”