Bed Bath & Beyond CEO Discusses Q3 2010 Results - Earnings Call Transcript

Bed Bath & Beyond CEO Discusses Q3 2010 Results - Earnings Call Transcript
By Seeking Alpha ,

Bed Bath & Beyond Inc. (BBBY)

Q3 2010 Earnings Call Transcript

December 22, 2010 5:00 pm ET

Executives

Gene Castagna – CFO, Treasurer, and President of buybuy BABY, Inc.

Leonard Feinstein – Co-Chairman

Steven Temares – CEO

Presentation

Operator

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Welcome to Bed Bath & Beyond's third quarter of fiscal 2010 results conference call. All participants are in a listen-only mode for the duration of the call. This call is being recorded. A rebroadcast of this conference call will be available beginning on Wednesday, December 22, 2010 at 6:30 pm Eastern through 6:30 pm Eastern on Friday, December 24, 2010. To access the rebroadcast, you may dial 1-888-203-1112 with the passcode ID of 62890006.

Now, at this time it's my pleasure to turn the conference call over to Gene Castagna, Chief Financial Officer and Treasurer of Bed Bath & Beyond. Mr. Castagna, please go ahead.

Gene Castagna

Thank you and good afternoon. Welcome to Bed Bath & Beyond's third quarter of fiscal 2010 conference call. Within the past hour, we issued a press release announcing Bed Bath & Beyond's results for the three and nine-month periods ended November 27, 2010. During this call, we will comment on some of the third quarter highlights, update our fourth quarter and full year planning assumptions and provide some preliminary fiscal 2011 planning assumptions.

Before proceeding, I will read the following statement, Bed Bath & Beyond's fiscal third quarter press release and comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 as amended. Many of these forward-looking statements can be identified by the use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, 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. Please refer to Bed Bath & Beyond's SEC filings, including its Form 10-K for the year ended February 27, 2010. The Company does not undertake any obligation to update its forward-looking statements.

Joining me on today's call are Leonard Feinstein, Co-Chairman of Bed Bath & Beyond; and Steven Temares, Chief Executive Officer and Member of the Board of Directors.

I’m now very pleased to introduce Leonard Feinstein. Len?

Leonard Feinstein

Good afternoon. I am pleased to report that our Company's net earnings per diluted share increased approximately 28% in the fiscal third quarter to $0.74. While the economic environment appears to have stabilized and is perhaps improving, it looks as if the consumer continues to face challenges resulting from the macroeconomic environment, such as historically high unemployment rates. However, we are cautiously optimistic about the remainder of fiscal 2010.

During the third quarter, we opened 5 Bed Bath & Beyond stores, 7 buybuy BABY stores and 5 Christmas Tree Shop stores as well as relocated, expanded and renovated several Bed Bath & Beyond stores.

Consolidated store space at November 27, 2010, was approximately 34.7 million square feet, an increase of approximately 4% over last year's third quarter.

Since the beginning of the fiscal fourth quarter of 2010, we have opened 2 additional Bed Bath & Beyond stores and 2 buybuy BABY stores. Including these openings, we currently operate 1,131 stores including 978 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, as well as 66 Christmas Tree Shops, 42 buybuy BABY stores and 45 stores under the names Harmon or Harmon Face Values.

In addition, we are a partner in the joint venture, which operates two stores in the Mexico City market under the name Home & More.

During fiscal 2010, including the 32 stores we have opened to-date we anticipate that the total number of new store openings will be in the low 40s across all of our concepts. As the year has progressed, this revised number primarily reflects greater visibility into the number of stores that we'll now open in fiscal 2011 versus the fourth quarter of 2010.

As we have said in the past, our shift in store openings from late in the fiscal year into the next fiscal year has little impact on our current year earnings and long-term profitability.

We continue to apply our stringent standards to growth as we evaluate new store sites as well as continue to review our existing locations and lease terms for opportunities to relocate and/or right size our stores in response to changing market conditions.

As we have previously said, we believe that throughout the United States and Canada, there is an opportunity to operate in excess of 1,300 Bed Bath & Beyond stores, as well as grow our Christmas Tree Shops and buybuy BABY concepts from coast to coast.

Additionally, we will continue to open Harmon Face Value stores and selectively place health and beauty care offerings in all our concepts. We remain committed to and are excited about the continued growth of all our merchandise offerings.

We continue to work to increase the productivity of our existing stores by evolving the merchandise offerings as well as by expanding, renovating, remodeling and/or relocating stores to enhance our customer shopping experience.

Our ability to leverage the breadth and depth of our merchandise offerings, grow our bridal, baby and gift registries, and continue the development of our interactive platforms has afforded us additional opportunities to attract new customers to Bed Bath & Beyond.

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