Bed, Bath and Beyond 2013 Annual Report Download - page 7

OVERVIEW
Bed Bath & Beyond Inc. and subsidiaries (the ‘‘Company’’) is a retailer which operates under the names Bed Bath & Beyond
(‘‘BBB’’), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, ‘‘CTS’’), Harmon or Harmon Face
Values (collectively, ‘‘Harmon’’), buybuy BABY (‘‘Baby’’) and World Market, Cost Plus World Market and Cost Plus (collectively,
‘‘Cost Plus World Market’’). Customers can purchase products from the Company either in store, online or through a mobile
device. The Company has the developing ability to fulfill customer purchases by in store customer pick up or by direct
shipment to the customer from the Company’s distribution facilities, stores or vendors. The Company also operates Linen
Holdings, a provider 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 Cost Plus World Market and Linen Holdings). Additionally, the Company is a partner in a joint venture
which operates four 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,
channels and countries 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 in an omnichannel retail environment and the
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.
For fiscal 2013, the results of operations include Linen Holdings and Cost Plus World Market from the beginning of the fiscal
year. For fiscal 2012, the results of operations include Linen Holdings since the date of acquisition on June 1, 2012 and Cost
Plus 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 2013 (fifty-two weeks) increased approximately 5.4% to $11.504 billion; net sales in fiscal 2012
(fifty-three weeks) increased approximately 14.9% to $10.915 billion over net sales of $9.500 billion in fiscal 2011
(fifty-two weeks).
• Comparable sales for fiscal 2013 increased by approximately 2.4% as compared with an increase of approximately
2.7% in fiscal 2012 and an increase of approximately 5.9% in fiscal 2011. Comparable sales percentages are
calculated based on an equivalent number of weeks for each annual period.
Comparable sales include sales for stores and websites which have been operating for twelve full months following
the opening period (typically four to six weeks). Stores relocated or expanded are excluded from comparable 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 sales calculations and will continue to be excluded on an ongoing basis as
it represents non-retail activity. Cost Plus World Market was excluded from the comparable sales calculations through
the end of the fiscal first half of 2013, and is included beginning with the fiscal third quarter of 2013.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BED BATH & BEYOND 2013 ANNUAL REPORT
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