Home is where the profits are

Fourth-quarter sales at Bed Bath & Beyond grew 11.6% to $2.5 billion while profits grew 25% to $283 million for the period ended Feb. 26. On a per share basis, profits increased 30% to $1.12 in the fourth quarter, far surpassing the 97 cents consensus estimate of analysts. Equally impressive was the company’s 8.5% same-store sales increase as it occurred on top of a prior-year fourth-quarter comp increase of 11.5%.

The fourth-quarter showing propelled Bed Bath & Beyond to full-year sales of nearly $8.76 billion, an 11.9% increase from the prior year and profits of $791 million, an increase of nearly 32%. Full -year earnings per share increased 33% to $3.07 and full -year same-store sales grew 7.8% on top of a prior year increase of 4.4%.

At year end, the company operated a total of 1,139 stores, consisting of 982 Bed Bath & Beyond stores, 66 Christmas Tree Shops stores, 45 buybuy BABY stores and 46 stores under the names of Harmon or Harmon Face Values. In addition, the company is a partner in a joint venture which operates two Home & More stores in Mexico City.

This year, an additional 45 new stores are planned, and during a conference call company co-chairman Warren Eisenberg reaffirmed the belief that the United States and Canada can ultimately support in excess of 1,300 Bed Bath & Beyond stores and regional concepts, such as Christmas Tree Shops and buybuy BABY, have nationwide potential. In addition, the company expects to open more Harmon Face Value stores and selectively place health and beauty care offerings in all of its concepts.

New-store growth coupled with first-quarter and full-year same-store-sales growth expectations in the range of 2-4% have the company projecting that first-quarter earnings will be approximately 58 cents to 61 cents and for the full year earnings will increase by 10% to 15%.

“While a number of economic challenges persists, including higher commodity prices, relatively high unemployment, a sluggish housing market and fragile consumer confidence, our fundamental business strategy remains unchanged: to offer a broad assortment of merchandise at everyday low prices with superior customer service,” said Steve Temares, CEO of Bed Bath & Beyond.