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$BBBY said its BoD reviews its capital structure on a regular basis and its cash flow remains strong. In terms of priorities for use of cash, the company first looks at investing it back into the business and then at acquisition. There is the dividend program and any excess cash could be used for share repurchases.
During 3Q17, $BBBY opened 14 stores and closed 6 stores. The company has opened 20 new stores to-date with the potential of two or more openings before 2017-end and plans to close approx. 15 stores all of which would result in a net reduction of five Bed Bath & Beyond stores.
During 3Q17, $BBBY’s comp sales reflected a decrease in the number of transactions in stores partially offset by an increase in the average transaction amount. Comp sales from customer-facing digital channels continued to have strong growth in 3Q17, while comp sales from stores declined in the low single-digit percentage range.
Retail store chain $BBBY reported 1.7% decline in net sales to $2.9Bil in 2Q17. Net income fell to $94.23MM, or $0.67 per share, compared to $167.33MM, or $1.11 per share a year ago. Meanwhile, comparable sales fell 2.6% during the quarter.
$BBBY accelerated realignment of store management structure. Due to the timing of these changes, the pre-tax cost savings for the remainder of FY17 are estimated to be about $7MM. The company expects to incur pre-tax cash restructuring charges of about $17MM in FY17, primarily for severance and related costs.
$BBBY initiated in about half of its U.S. stores and about a dozen U.S. buybuy BABY stores, a limited realignment of its store management organization, primarily resulting in a reduction of about 880 Department and Assistant Store Manager positions. These are estimated to generate future annual pre-tax cost savings of about $16MM.
$BBBY accelerated the realignment of its store management structure to support its customer-focused initiatives and omnichannel growth. These actions are part of the company's continuous efforts to improve and capitalize on the opportunities presented by the evolving retail landscape.
$BBBY said the investments made over the last few years were necessary. From a profits perspective, as the world evolves, these investments have not produced growing earnings but they are sustaining the company’s relative position in the landscape. $BBBY added that without these investments, it would not exist today.
$BBBY saw strong growth in its customer-facing-digital channels in 1Q17. However, the company experienced increased softness in transactions in stores, as well as higher net-direct-to-customer shipping expense, coupon expense, and advertising costs. It remains to be seen whether these challenges were more pronounced in, or unique to, 1Q17.
In 1Q17, $BBBY’s comparable sales fell by approx. 2%. This reflected decrease in number of transactions in stores, partially offset by an increase in average transaction amount. Comparable sales from customer-facing digital channels had strong growth in excess of 20%, while comp sales from stores declined in the mid-single-digit percentage range.
$BBBY is not updating its full-year 2017 modeling assumptions provided on April 5, 2017. After 2Q17, the company believes it will have better visibility to the full-year and, if necessary, will update its full-year modeling assumptions at that time.