Bed, Bath and Beyond 2012 Annual Report Download - page 7

OVERVIEW
Bed Bath & Beyond Inc. and subsidiaries (the ‘‘Company’’) operates a chain of 1,471 retail stores under the names Bed
Bath & Beyond (‘‘BBB’’), Christmas Tree Shops or andThat! (collectively, ‘‘CTS’’), Harmon or Harmon Face Values (collectively,
‘‘Harmon’’), buybuy BABY and World Market or Cost Plus World Market (collectively, ‘‘World Market’’). The Company includes
Linen Holdings, a distributor of a variety of textile products, amenities and other goods to institutional customers in the
hospitality, cruise line, food service, healthcare and other industries. (See ‘‘Acquisitions,’’ Note 2 in the consolidated financial
statements for the acquisitions of World Market and Linen Holdings). Additionally, the Company is a partner in a joint venture
which operates three retail stores in Mexico under the name Bed Bath & Beyond. The Company accounts for its operations as two
operating segments: North American Retail and Institutional Sales. The Institutional Sales operating segment, which is comprised
of Linen Holdings, does not meet the quantitative thresholds under U.S. generally accepted accounting principles and therefore is
not a reportable segment.
The Company sells a wide assortment of domestics merchandise and home furnishings. Domestics merchandise includes
categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as
kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and certain juvenile
products. 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, depth and
differentiated assortment, everyday low prices and introduction of new merchandising offerings, supported by the continuous
development and improvement 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, relatively high
unemployment and historically high commodity prices; the overall macroeconomic environment and related changes in the
retailing environment; consumer preferences and spending habits; unusual weather patterns and natural disasters;
competition from existing and potential competitors; evolving technology; and the ability to find suitable locations at
acceptable occupancy costs and other terms to support the Company’s expansion program. The Company cannot predict
whether, when or the manner in which these factors could affect the Company’s operating results.
The results of operations for the fiscal year ended March 2, 2013 include Linen Holdings since the date of acquisition on
June 1, 2012 and World Market since the date of acquisition on June 29, 2012.
The following represents an overview of the Company’s financial performance for the periods indicated:
• Net sales in fiscal 2012 (fifty-three weeks) increased approximately 14.9% to $10.915 billion; net sales in fiscal 2011
(fifty-two weeks) increased approximately 8.5% to $9.500 billion over net sales of $8.759 billion in fiscal 2010 (fifty-
two weeks).
• Comparable store sales for fiscal 2012 increased by approximately 2.7% as compared with an increase of
approximately 5.9% in fiscal 2011 and an increase of approximately 7.8% in fiscal 2010. Comparable store sales
percentages are calculated based on an equivalent number of weeks in each annual period.
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. Linen
Holdings is excluded from the comparable store sales calculations and will continue to be excluded on an ongoing
basis as long as it does not meet the above definition of comparable store sales. World Market is excluded from the
comparable store sales calculations for fiscal 2012, and will continue to be excluded from the comparable store sales
calculations until after the anniversary of the acquisition.
• Gross profit for fiscal 2012 was $4.389 billion or 40.2% of net sales compared with $3.931 billion or 41.4% of net
sales for fiscal 2011 and $3.623 billion or 41.4% of net sales for fiscal 2010.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BED BATH & BEYOND 2012 ANNUAL REPORT
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