Bed Bath & Beyond Eager to Grow
Cecile Corral -- Furniture Today, July 7, 2008
Bed Bath & Beyond opened its first international store in Ontario, Canada last December — and the $7.0 billion specialty retailer is ready for much more.
"We hope to expand aggressively in Canada, and to be the first choice for the home in Canada," said BBB co-chairman Warren Eisenberg during the company's first-quarter earnings call.
Added president and ceo Steven Temares, "We believe the Canadian market has outstanding growth potential for us."
In May, BBB followed the Canadian move with a foray into Mexico via a joint venture with privately held Home & More, which currently operates two stores in Mexico City.
How will future growth shape up? The plan for the current fiscal year is to open 50 to 55 new BBB stores in the United States and Canada. In addition, the 981-unit company has signed or is in the process of finalizing about 12 more sites in Canada and is in "active negotiations" for an additional dozen or so.
Still, Temares said the number of new BBB store openings is less than in prior years, as part of the company's tactic to "afford us flexibility to take advantage of real estate opportunity that might arise from further retail consolidation, if we so choose."
In results for the quarter ended May 31, BBB reported net earnings of $76.8 million or $.30 per diluted share, down sharply from $104.6 million or 38 cents per diluted share in the year-ago period. However, it beat analysts' expectations by several cents per share, and the day of the announcement BBB stock was trading about 6% higher — counter to the retail sector's general share price falloff of about 3%.
Quarterly net sales of $1.65 billion were up 6.1% from $1.55 billion one year ago; comps grew by 0.8%.
The company's other nameplates are slated for expansion, too. BBB will "accelerate our growth" of the Christmas Tree Shops by 12 stores and Buy Buy Baby by a less precise "several" new units this year; it will also open Harmon store concepts as departments within "a number of" BBB and Christmas Tree locations.
A new merchandising wrinkle in the works is the addition of fine china to "a number" of BBB stores.
Overall, BBB's long-term real estate goal remains to operate more than 1,300 stores, Eisenberg said.
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