Bed Bath Continues Growth

UNION, NJ-Bed Bath & Beyond will keep expanding, and executives say they expect the chain to eventually grow from its current portfolio of 731 stores to about 1,100 US units. They also said during their third-quarter conference call that the company is considering growth through acquisitions and international expansion.

Just over 80 new stores are planned for next year on top of the 83 planned by the end of the current fiscal year. The company opened 40 new units during its Q3, which ended Nov. 26, and 17 are planned for the fourth quarter.

The company also operates the 38-store Harmon Stores, a discount cosmetics and health chain, as well as 29 Christmas Tree Shops, a chain of gift stores in the Northeast. Four Harmons and three Christmas Tree Shops are planned for this year, and executives are planning “several” of each to open in 2006.

During its Q3, the company’s same-store sales rose 3.1% year-over-year, on net sales of about $1.5 billion, which increased 11%. Bed Bath & Beyond’s net earnings shot up 10.4%, to $134.6 million.

For the fourth quarter officials project an 11% to 13% increase in net sales and a 3% to 5% same-store sales rise. Sales per sf in the stores open a year are forecast to remain in the $160 to $185 range.

Touching on the holiday season, Steven Temares, the company’s president and chief executive officer, says that Bed Bath & Beyond is striving to protect gross margins. “This holiday season has produced an extreme promotional environment,” he says. “We have chosen to remain relatively restrained with our promotional activity.”