On Sept. 26, home furnishings retailer Bed Bath & Beyond
- Same-store sales improved just 2.2% over the year-ago period, but there are many ways to skin a growing cat. This company does it by building lots of new stores. Eleven stores opened in the quarter, bringing the total to 914 locations under four different names.
- The company remains debt free and plans to fund its fourth repurchase program since 2004 with present and expected future free cash flows.
- Higher inventory acquisition costs, a change in the mix of merchandise sold, and higher postage and paper costs all contributed to the falling margins.
- Bed Bath & Beyond sports a three-star rating (out of five) here at the Motley Fool CAPS community. The company's rating falls between competitor Target
(NYSE:TGT) , which garners four stars, and Williams-Sonoma(NYSE:WSM) , which has only two stars.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2008 |
Q2 2007 |
Change |
|
|---|---|---|---|
|
Sales |
$1,768 |
$1,607 |
10.0% |
|
Net Profit |
$147 |
$146 |
1.0% |
|
EPS |
$0.55 |
$0.51 |
7.8% |
|
Diluted Shares |
269.5 |
284.7 |
(5.3%) |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2008 |
Q2 2007 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
41.4% |
42.2% |
(0.8) |
|
Operating Margin |
12.5% |
13.7% |
(1.2) |
|
Net Margin |
8.3% |
9.1% |
(0.7) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$584 |
$817 |
(28.6%) |
|
Inventory |
$1,603 |
$1,422 |
12.7% |
|
Liabilities |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$649 |
$592 |
9.6% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2008 |
Q2 2007 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$160 |
$152 |
5.7% |
|
Capital Expenditures |
$76.8 |
$57.0 |
34.6% |
|
Free Cash Flow |
$83.5 |
$94.6 |
(11.8%) |
|
$109 |
$120 |
(9.2%) |
Free cash flow is a Fool's best friend.
Bed Bath & Beyond is a Motley Fool Inside Value selection and also a Motley Fool Stock Advisor pick. Try either service free for 30 days.
