Bed, Bath and Beyond 2008 Annual Report Download - page 3

BED BATH & BEYOND 2008 ANNUAL REPORT
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To Our Fellow Shareholders: Continued from front cover
Since our Company was founded in 1971, long before we became a public company in 1992, we have always taken
adisciplined approach to expense control while maintaining our focus on our customers and how we can improve their
overall shopping experience. In these challenging times, we have intensified our efforts to control and reduce expenses.
For example, we continue to systematically review the scope and frequency of services we receive from third parties, as
well as reduce costs associated with running our corporate offices.
At the same time, while the competitive environment for the merchandise categories we offer continues to
consolidate, our financial strength affords us the ability to attract new customers and do more for and with our current
customers. We continue to test new merchandise initiatives throughout our stores, expand our bridal, baby and gift
registry businesses and enhance our online shopping capabilities, as well as expand, relocate, renovate or remodel
existing stores, and we remain committed to making the required investments in our Company’s infrastructure to help
position us for our continued success.
While other companies in our sector have significantly cut back on expansion, closed stores or have gone out of
business entirely, our Company continues to grow. During fiscal 2008 we added 67 new stores consisting of 49 Bed Bath
&Beyond stores throughout the United States and Canada, 11 Christmas Tree Shops stores, six buybuy BABY stores and
one Harmon Face Values store. Wealso added additional Harmon Face Values and Fine Tabletop and Giftware depart-
ments in existing stores. At fiscal year end we operated 1,037 stores consisting of 930 Bed Bath & Beyond stores in
49 states, the District of Columbia, Puerto Rico and Canada; 52 Christmas Tree Shops stores, 15 buybuy BABY stores
and 40 stores under the name of Harmon or Harmon Face Values. In addition, through a joint venture we operate two
stores in the Mexico City market under the name “Home & More.”
Our financial performance, while never satisfactory to us, continues to significantly outpace, on a comparative
basis, the performance reported by others. Some highlights from fiscal 2008, our 38th year of operations and 17th as a
public company are as follows:
•Net earnings for the fiscal year ended February 28, 2009 were $1.64 per diluted share, compared with net earnings
per diluted shareof $2.10 for the prior year.
•Net sales for fiscal 2008 wereapproximately $7.2 billion, an increase of approximately 2.3% from the prior year’ssales
of $7.0 billion.
•Comparable store sales for fiscal 2008 decreased by approximately 2.4%.
•Capital spending for the year was approximately $216 million as compared to approximately $358 million last year
when a new distribution center and e-service fulfillment center werebuilt.
•Over $350 million in Free Cash Flow was generated.
Although net sales for 2008 werenegatively affected by the economic slowdown, including issues related to the
housing industry, and liquidation sales held by a number of retailers, including a significant competitor of ours, we
remain focused on our Company’s long-term goals. Over time, we fully expect to benefit from the opportunities
afforded by the current macroeconomic environment. In the years ahead, we expect to be able to point to 2008 as
ayear in which we made the appropriate investments to strengthen our infrastructure and gain market share and
in so doing, further widened the gap between ourselves and our competitors.
Our results again demonstrate what can be achieved through the talents and dedication of our associates.
As we move through the current fiscal year, we will continue to focus on the things we can control, including contin-
uing to strengthen our relationships with our vendor, service and landlord partners. With their help and support we
are confident that we will continue to overcome any economic challenges we face in the upcoming year.