Union, NJ, June 19--Home goods retailer Bed Bath & Beyond Inc. on Wednesday said its first-quarter profit rose about 24 percent, beating its expectations as cost controls and a better sales mix helped lift profit margins.
The company's shares fell about 2 percent in after-hours trading after the company said it backed Wall Street's consensus estimates for its second-quarter and full year earnings, saying it preferred to remain conservative given a difficult retailing environment.
The Union, New Jersey company said net income in the first quarter ended May 31 rose to $57.5 million, or 19 cents per share, from $46.3 million, or 15 cents in the year-earlier period.
"They're terrific merchants," Lehman Brothers analyst Alan Rifkin said.
Analysts polled by research firm Thomson First Call forecast profit of 18 cents on average.
Sales rose about 15 percent to $893.9 million from $776.8 million a year ago.
Sales at stores open at least a year, a key measure of retail performance known as comparable sales, rose 4.4 percent compared with a 13.2 percent increase in the year-ago period.
The company managed to beat expectations despite bad spring weather, wavering consumer confidence and an Iraq war that some observers feared would keep consumers at home, Rifkin said.
"Looking at the numbers, you'd say they weren't hurt, but the numbers probably would've been even stronger if we hadn't had that impact" from the war, he said.
Gross profit improved to $367 million, or 41.1 percent of net sales, from $318.4 million, or 41 percent of net sales.
"Gross profit improvement resulted from a combination of factors, including mix of sales that occurred during the quarter," Chief Executive Steven Temares said on a conference call with analysts.
Selling, general and administrative expenses amounted to 31 percent of net sales, compared to 31.6 percent a year ago, helped by lower occupancy and payroll-related costs and lower costs associated with new store openings, Temares said.
In the conference call the company backed Wall Street's consensus forecasts for the second quarter and full year, saying it sees profit of 30 cents a share in the quarter and $1.21 a share for the year.
Chief Financial Officer Ronald Curwin said the company expects same-store sales growth of 3 percent to 5 percent and net sales growth in the mid-teens, for both the quarter and the year.
The company opened eight stores during the quarter, and has a total of 503 outlets in the United States and Puerto Rico. During fiscal 2003, the company plans to open a total of 80 to 90 new stores.
