Bed Bath & Beyond Inc. (NASDAQ:BBBY) Q2 2018 Earnings Conference Call Transcript

Sep 26, 2018 • 05:00 pm ET

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Bed Bath & Beyond Inc. (NASDAQ:BBBY) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Welcome to the Bed Bath & Beyond fiscal 2018 second quarter earnings call. All participants will be in a listen-only mode until the Q&A portion of the call. Today's conference call is being recorded. A rebroadcast of this conference call will be available beginning on Wednesday, September 26th, 2018 at 8:00 p.m. Eastern time through 8:00 p.m. Eastern time on Friday, September 28th, 2018. To access the rebroadcast, you may dial 888-843-7419 with a passcode ID of 47547438.

At this time, I'd like to turn the conference over to Janet Barth, VP, IR. Please go ahead.

Executive
Janet Barth

Thank you Adrienne and good afternoon everyone. Before we begin, I want to remind you that our fiscal 2018 second quarter earnings release and slide presentation can be found in the IR section of our website at www.bedbathandbeyond.com and as exhibits to a Form 8-K we filed just ahead of this call. Feel free to access these materials now while I continue with our introduction.

Joining me on our call today are Steven Temares, Bed Bath & Beyond's CEO and member of the Board of Directors, Robyn D'Elia, our CFO and Treasurer, Gene Castagna, President and COO, and Sue Lattmann, our Chief Administrative Officer.

(Forward-Looking Cautionary Statements) Here are some highlights from our second quarter results, which reflect our ongoing transformation and our continued focus on being trusted by our customers as the expert for the home and heartfelt life events. Our second quarter net sales were flat to the prior year and comparable sales declined approximately 0.6%, including strong sales from our customer-facing digital channels and a mid-single-digit percentage decline in sales from our stores.

Net earnings per diluted share were $0.36, in line with our model. We continued to grow our cash and investments and ended the quarter with a balance of approximately $1.1 billion, about double the amount of cash and investments we had at the end of the fiscal 2017 second quarter. We have made adjustments to our fiscal 2018 modeling assumptions to reflect a number of factors.

These include ongoing learnings from many of our initiatives as we transform our company, as well as a bias to prioritize long-term profitability improvement over near-term sales growth, the continuation of trends we've been experiencing, the impact from growth and enrollment in our BEYOND+ and College Savings Pass program, the gains from a recent building sale, fiscal back half management consulting fees, the estimated impact from both Hurricane Florence, and the imposition of tariffs on our imports from China.

We thoroughly estimate that our comparable sales for the full year will be relatively flat to last year and that our net earnings per diluted share will be at the low end of our previously modeled range at about $2. In connection with our Vision 2020 financial goals, while we have slightly modified the near-term comp sales goals, we remain on track to moderate the declines in operating profit and net earnings per diluted share this year and next and to grow our net