Bed, Bath and Beyond 2009 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2009 Bed, Bath and Beyond annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 68

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68

BED BATH & BEYOND 2009 ANNUAL REPORT
3
OVERVIEW
Bed Bath & Beyond Inc. and subsidiaries (the “Company”) is a chain of retail stores, operating under the names Bed Bath &
Beyond (“BBB”), Christmas Tree Shops (“CTS”), Harmon and Harmon Face Values (“Harmon”) and buybuy BABY. In addition, the
Company is a partner in a joint venture which operates two stores in the Mexico City market under the name “Home & More.”
The Company sells a wide assortment of domestics merchandise and home furnishings, which include food, giftware, health and
beauty care items and infant and toddler merchandise. The Company’s objective is to be a customer’s first choice for products and
services in the categories offered, in the markets in which the Company operates.
The Company’s strategy is to achieve this objective through excellent customer service, an extensive breadth and depth of
assortment, everyday low prices, introduction of new merchandising offerings and development of its infrastructure.
Operating in the highly competitive retail industry, the Company, along with other retail companies, is influenced by a number of
factors including, but not limited to, general economic conditions including the housing market, the overall macroeconomic
environment and related changes in the retailing environment, consumer preferences and spending habits, unusual weather
patterns, competition from existing and potential competitors, and the ability to find suitable locations at acceptable occupancy
costs to support the Company’s expansion program.
Although there appears to be some indication of improvement in economic conditions, the difficult conditions affecting the
overall macroeconomic environment continued to impact the retail sector in general. The Company believes that the uncertainty
in the macroeconomic environment and factors such as the high unemployment rate and issues specific to the housing industry,
including a reduction in home values, continued to negatively impact consumer confidence and the level of discretionary spend-
ing by consumers. The Company cannot predict whether, when or the manner in which these economic conditions will change.
In addition, during the difficult conditions affecting the overall macroeconomic environment, a number of businesses in the retail
industry have liquidated, including those within the Company’s sector of retailing. The Company believes that this industry con-
solidation will provide an opportunity to gain market share and to improve its competitive position over the long term; however,
the Company cannot, with any level of certainty, estimate the impact these liquidations will have on its future results of opera-
tions.
In light of the risks posed by the current macroeconomic environment, the Company continues to systematically review all
expenditures with the goal of prudently managing its business. At the same time, the Company remains committed to making the
required investments in its infrastructure to help position the Company for continued success. The Company continues to review
and prioritize its capital needs while continuing to make investments, principally for new stores, existing store improvements,
information technology enhancements, and other projects whose impact is considered important to its future.
During fiscal 2009, the Company experienced an approximate 4.4% increase in comparable store sales as compared with an
approximate 2.4% decrease in comparable store sales for fiscal 2008. Fiscal 2009 net sales and comparable store sales reflected
consumer acceptance of the Company’s merchandise offerings. Fiscal 2008 net sales and comparable store sales were negatively
affected by the economic slowdown, including issues specific to the housing industry and the liquidation sales of a number of
retailers, including a then significant competitor.
The following represents an overview of the Company’s financial performance for the periods indicated:
฀ •฀฀Net฀sales฀in฀scal฀2009฀increased฀approximately฀8.6%฀to฀$7.829฀billion;฀net฀sales฀in฀scal฀2008฀increased฀approximately฀
2.3% to $7.208 billion over net sales of $7.049 billion in fiscal 2007.
฀ •฀฀Comparable฀store฀sales฀for฀scal฀2009฀increased฀by฀approximately฀4.4%฀as฀compared฀with฀a฀decrease฀of฀approximately฀
2.4% in fiscal 2008 and an increase of approximately 1.0% in fiscal 2007.
A store is considered a comparable store when it has been open for twelve full months following its grand opening
period (typically four to six weeks). Stores relocated or expanded are excluded from comparable store sales if the
change in square footage would cause meaningful disparity in sales over the prior period. In the case of a store to be
closed, such store’s sales are not considered comparable once the store closing process has commenced.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS