Bed, Bath and Beyond 2007 Annual Report Download - page 3

BED BATH& BEYOND ANNUAL REPORT 2007
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To Our Fellow Shareholders: Continued from front cover
It is true that the current economic environment poses a number of challenges, and we are not immune. The economic
slowdown has had, and will continue to have, an effect on the general business climate and on our business. We have seen our
results affected most notably in those areas of the Country reported as being more significantly affected by recent housing and
mortgage issues, such as Arizona, California, Florida and Nevada.
However, we believe in times of economic challenge there are three types of companies: those who will not survive, those
who will tread water and will be left in a weakened state when things turn around, and those who will use their strengths to
improve their position in their market. We are counting on being among those who emerge stronger than ever. We believe,
through the efforts of our approximately 39,000 associates, we are well positioned to use this time of economic challenge to our
Company’s long term benefit.
Our culture of never being satisfied is now one of our Company’s greatest strengths in these difficult times. In addition, our
financial strength helps us to enhance our competitive position despite the challenges. While others fail, or are content to hang
on, our “never satisfied” culture and our financial wherewithal permit us to continue to test new merchandise initiatives
throughout our stores, and in doing so, strive to increase their productivity. Our bridal and gift registry business, as well as our
online sales activities, afford us an important opportunity to attract new shoppers to the Bed Bath & Beyond experience. We are
able to renovate or remodel a significant number of existing stores each year. We also opened and commenced operations of a
new state-of-the-art Christmas Tree Shops distribution center as well as a new e-service fulfillment center this last year, designed
to accommodate the growth in the operations of these areas of our business. We opened our first international store in Canada,
have signed or are in final documentation for approximately a dozen additional sites, and are actively negotiating another dozen
or so as we look to expand aggressively in Canada. We recently entered into a joint venture in Mexico, which currently operates
two stores in the Mexico City market and is well-positioned for future growth. We are adding associates in key areas throughout
our organization and are implementing new systems to support the continued growth of our business. All this permits us to
achieve our growth objectives, while at the same time we continue to exercise prudence in our expense management activities
without sacrificing the customer experience.
The fruits of these ongoing efforts are reflected in our accomplishments over the past year, some of which we just
mentioned. In terms of expansion, during fiscal 2007 we added 66 new Bed Bath & Beyond stores, bringing to 881 the number
of stores operating at fiscal year-end, located in 49 states, the District of Columbia and Puerto Rico, and including our first inter-
national store in Canada. Also, at fiscal year-end we operated 41 Christmas Tree Shops stores, 9 buybuy BABY stores and 40 stores
under the names Harmon and Harmon Face Values. With respect to our financial performance, here are some highlights from
fiscal 2007, our 37th year of operations, and our 16th as a public company:
• Net earnings for the fiscal year (fifty-two weeks) ended March 1, 2008 were $2.10 per diluted share ($562.8 million), compared to
fiscal 2006 (fifty-three weeks) net earnings of $2.09 per diluted share ($594.2 million), which included a non-recurring charge of
approximately $.07 per diluted share.
• Net sales for fiscal 2007 (fifty-two weeks) were approximately $7.049 billion, an increase of approximately 6.5% from the prior
year’s sales (fifty-three weeks) of $6.617 billion.
• Comparable store sales for fiscal 2007 increased by approximately 1.0%, on top of an increase of approximately 4.9% in fiscal
2006. All comparable store sales percentages are calculated based on an equivalent number of weeks for each annual period.
• We returned approximately $734 million in value to our shareholders during the fiscal year through our share repurchase
program. This included the completion of the $1 billion share repurchase program authorized in 2006. As of March 1, 2008,
the balance remaining of the share repurchase program authorized in September 2007 was approximately $967 million.
While times are challenging, we remain focused on our Company’s long-term goals and fully expect to benefit, over time,
from the opportunities afforded by the current macro-economic environment. We believe that periods such as this are what
separate companies, and we look forward to taking advantage of this opportunity to strengthen our infrastructure, gain market
share and distance ourselves from our competitors.