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These terms and conditions govern your use of the website alphaminr.com and its related services.
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We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State of incorporation)
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(IRS Employer Identification No.)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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(Nasdaq Global Select Market)
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☒
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No
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☐
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☒
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No
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☐
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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Emerging growth company
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Yes
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No
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☒
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Class
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Outstanding at August 29, 2020
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Common Stock - $0.01 par value
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Certifications
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August 29, 2020
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February 29, 2020
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Assets
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Current assets:
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Cash and cash equivalents
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$
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$
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Short term investment securities
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Merchandise inventories
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Prepaid expenses and other current assets
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Assets held-for-sale
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Total current assets
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Long term investment securities
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Property and equipment, net
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Operating lease assets
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Other assets
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Total assets
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$
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$
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||||
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Liabilities and Shareholders' Equity
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses and other current liabilities
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Merchandise credit and gift card liabilities
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Current operating lease liabilities
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Liabilities related to assets held-for-sale
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Total current liabilities
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Other liabilities
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Operating lease liabilities
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Income taxes payable
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Long term debt
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Total liabilities
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||||
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Shareholders' equity:
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Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding
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Common stock - $0.01 par value; authorized - 900,000 shares; issued 343,676 and 343,683, respectively; outstanding 126,008 and 126,528 shares, respectively
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Additional paid-in capital
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Retained earnings
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Treasury stock, at cost; 217,668 and 217,155 shares, respectively
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(
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)
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(
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)
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Accumulated other comprehensive loss
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(
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)
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(
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)
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||||
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Total shareholders' equity
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||||
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Total liabilities and shareholders' equity
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$
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|
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$
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Three Months Ended
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Six Months Ended
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||||||||||||
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August 29, 2020
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August 31, 2019
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August 29, 2020
|
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August 31, 2019
|
||||||||
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||||||||
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Net sales
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$
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$
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$
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$
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||||||||
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Cost of sales
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||||||||
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Gross profit
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||||||||
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Selling, general and administrative expenses
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||||
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||||||||
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Goodwill and other impairments
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||||
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||||||||
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Restructuring and transformation initiative costs
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||||
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||||||||
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Gain on sale of business
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(
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)
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(
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)
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||||
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||||||||
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Operating profit (loss)
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(
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)
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(
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)
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(
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)
|
||||
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||||||||
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Interest expense, net
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||||
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||||||||
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Gain on extinguishment of debt
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(
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)
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(
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)
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||||
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|
||||||||
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Earnings (loss) before provision for income taxes
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(
|
)
|
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(
|
)
|
|
(
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
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Provision (benefit) for income taxes
|
|
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net earnings (loss)
|
$
|
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net earnings (loss) per share - Basic
|
$
|
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
Net earnings (loss) per share - Diluted
|
$
|
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares outstanding - Basic
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding - Diluted
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Dividends declared per share
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
August 29, 2020
|
|
August 31, 2019
|
|
August 29, 2020
|
|
August 31, 2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss)
|
$
|
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
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|
||||||||
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Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||
|
Change in temporary impairment of auction rate securities, net of taxes
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|
|
|
||||
|
Pension adjustment, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
(
|
)
|
||||
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Comprehensive income (loss)
|
$
|
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
Three Months Ended August 29, 2020
|
|||||||||||||||||||||
|
|
Common Stock
|
Additional Paid-
in Capital
|
Retained
Earnings
|
Treasury Stock
|
Accumulated Other
Comprehensive
Loss
|
Total
|
||||||||||||||||
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|
Shares
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Amount
|
Shares
|
Amount
|
||||||||||||||||||
|
Balance at May 30, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other comprehensive income, net of tax
|
|
|
|
|
|
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|
||||||||||||
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Dividend forfeited
|
|
|
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|
|
|
|
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|
||||||||||||
|
Forfeiture of restricted shares, net
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
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|
||||||||||
|
Payment and vesting of performance stock units
|
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|
|
|
|
|
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|
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|
||||||||||
|
Stock-based compensation expense, net
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|
|
|
|
|
|
|
|
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|
||||||||||||
|
Repurchase of common stock, including fees
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
|
Balance at August 29, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
Six Months Ended August 29, 2020
|
|||||||||||||||||||||
|
|
Common Stock
|
Additional Paid-
in Capital
|
Retained
Earnings
|
Treasury Stock
|
Accumulated Other
Comprehensive
Loss
|
Total
|
||||||||||||||||
|
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
|
Balance at February 29, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
Net loss
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Dividend forfeited
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Forfeiture of restricted shares, net
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
||||||||||
|
Payment and vesting of performance stock units
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||
|
Stock-based compensation expense, net
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Repurchase of common stock, including fees
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
|
Balance at August 29, 2020
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
Three Months Ended August 31, 2019
|
|||||||||||||||||||||
|
|
Common Stock
|
Additional Paid-
in Capital
|
Retained
Earnings
|
Treasury Stock
|
Accumulated Other
Comprehensive
Loss
|
Total
|
||||||||||||||||
|
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
|
Balance at June 1, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
Net loss
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Dividend declared
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Issuance of restricted shares, net
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||
|
Payment and vesting of performance stock units
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||
|
Stock-based compensation expense, net
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Repurchase of common stock, including fees
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
|
Balance at August 31, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
Six Months Ended August 31, 2019
|
|||||||||||||||||||||
|
|
Common Stock
|
Additional Paid-
in Capital
|
Retained
Earnings
|
Treasury Stock
|
Accumulated Other
Comprehensive
Loss
|
Total
|
||||||||||||||||
|
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
|
Balance at March 2, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
Net loss
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Effect of Adoption of ASU 2016-02
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Dividend declared
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||
|
Issuance of restricted shares, net
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||
|
Payment and vesting of performance stock units
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||
|
Stock-based compensation expense, net
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Repurchase of common stock, including fees
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
|
Balance at August 31, 2019
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
Six Months Ended
|
||||||
|
|
August 29, 2020
|
|
August 31, 2019
|
||||
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
||
|
Net loss
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
|
Depreciation and amortization
|
|
|
|
|
|
||
|
Goodwill and other impairments
|
|
|
|
|
|
||
|
Stock-based compensation
|
|
|
|
|
|
||
|
Deferred income taxes
|
|
|
|
(
|
)
|
||
|
Gain on sale of business
|
(
|
)
|
|
|
|
||
|
Gain on debt extinguishment
|
(
|
)
|
|
|
|
||
|
Other
|
(
|
)
|
|
(
|
)
|
||
|
Decrease (increase) in assets:
|
|
|
|
|
|
||
|
Merchandise inventories
|
|
|
|
|
|
||
|
Other current assets
|
|
|
|
(
|
)
|
||
|
Other assets
|
|
|
|
(
|
)
|
||
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
||
|
Accounts payable
|
|
|
|
|
|
||
|
Accrued expenses and other current liabilities
|
|
|
|
(
|
)
|
||
|
Merchandise credit and gift card liabilities
|
(
|
)
|
|
|
|
||
|
Income taxes payable
|
(
|
)
|
|
(
|
)
|
||
|
Operating lease assets and liabilities, net
|
|
|
|
|
|
||
|
Other liabilities
|
|
|
|
(
|
)
|
||
|
Net cash provided by operating activities
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
||
|
Purchases of held-to-maturity investment securities
|
|
|
|
(
|
)
|
||
|
Redemption of held-to-maturity investment securities
|
|
|
|
|
|
||
|
Net proceeds from sale of business
|
|
|
|
|
|
||
|
Capital expenditures
|
(
|
)
|
|
(
|
)
|
||
|
Net cash provided by investing activities
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
||
|
Payment of dividends
|
(
|
)
|
|
(
|
)
|
||
|
Repayments of long-term debt
|
(
|
)
|
|
|
|
||
|
Repurchase of common stock, including fees
|
(
|
)
|
|
(
|
)
|
||
|
Borrowing of long-term debt
|
|
|
|
|
|
||
|
Payment of deferred financing fees
|
(
|
)
|
|
|
|
||
|
Net cash used in financing activities
|
(
|
)
|
|
(
|
)
|
||
|
|
|
|
|
||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
|
|
(
|
)
|
||
|
|
|
|
|
||||
|
Net increase in cash, cash equivalents and restricted cash, including cash balances classified as assets held-for-sale
|
|
|
|
|
|
||
|
Change in cash balances classified as held-for-sale
|
|
|
|
|
|
||
|
Net increase in cash, cash equivalents and restricted cash
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
Cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||
|
Beginning of period
|
|
|
|
|
|
||
|
End of period
|
$
|
|
|
|
$
|
|
|
|
1)
|
Basis of Presentation
|
|
•
|
Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
|
•
|
Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
|
|
•
|
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
|
(in millions)
|
|
August 29, 2020
|
|
February 29, 2020
|
||||
|
Available-for-sale securities:
|
|
|
|
|
|
|
||
|
Long term
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
||||
|
Held-to-maturity securities:
|
|
|
|
|
||||
|
Short term
|
|
|
|
|
|
|
||
|
Total investment securities
|
|
$
|
|
|
|
$
|
|
|
|
(in thousands)
|
Statement of Operations Location
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 29,
2020 |
|
August 31,
2019 |
|
August 29,
2020 |
|
August 31,
2019 |
|||||||||||
|
Operating lease cost
|
Cost of sales and SG&A
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Finance lease cost:
|
|
|
|
|
|
|
|
|
|
||||||||
|
Depreciation of property
|
SG&A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest on lease liabilities
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Variable lease cost
|
Cost of sales and SG&A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sublease income
|
SG&A
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||
|
Total lease cost
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
(in thousands)
|
Consolidated Balance Sheet Location
|
|
August 29,
2020 |
|
February 29,
2020 |
||||
|
Assets
|
|
|
|
|
|
||||
|
Operating leases
|
Operating lease assets
|
|
$
|
|
|
|
$
|
|
|
|
Finance leases
|
Property and equipment, net
|
|
|
|
|
|
|
||
|
Total Lease assets
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
||||
|
Liabilities
|
|
|
|
|
|
||||
|
Current:
|
|
|
|
|
|
||||
|
Operating leases
|
Current operating lease liabilities
|
|
$
|
|
|
|
$
|
|
|
|
Finance leases
|
Accrued expenses and other current liabilities
|
|
|
|
|
|
|
||
|
Noncurrent:
|
|
|
|
|
|
||||
|
Operating leases
|
Operating lease liabilities
|
|
|
|
|
|
|
||
|
Finance leases
|
Other liabilities
|
|
|
|
|
|
|
||
|
Total lease liabilities
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
Fiscal Year:
|
|
|
|
|
||||
|
Remainder of 2020
|
|
$
|
|
|
|
$
|
|
|
|
2021
|
|
|
|
|
|
|
||
|
2022
|
|
|
|
|
|
|
||
|
2023
|
|
|
|
|
|
|
||
|
2024
|
|
|
|
|
|
|
||
|
2025
|
|
|
|
|
|
|
||
|
Thereafter
|
|
|
|
|
|
|
||
|
Total lease payments
|
|
$
|
|
|
|
$
|
|
|
|
Less imputed interest
|
|
(
|
)
|
|
(
|
)
|
||
|
Present value of lease liabilities
|
|
$
|
|
|
|
$
|
|
|
|
|
|
August 29, 2020
|
|
February 29, 2020
|
||
|
Weighted-average remaining lease term (in years)
|
|
|
|
|
||
|
Operating leases
|
|
|
|
|
|
|
|
Finance leases
|
|
|
|
|
|
|
|
Weighted-average discount rate
|
|
|
|
|
||
|
Operating leases
|
|
|
%
|
|
|
%
|
|
Finance leases
|
|
|
%
|
|
|
%
|
|
(in thousands)
|
|
Six Months Ended
|
|||||
|
August 29,
2020 |
|
August 31,
2019 |
|||||
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
|||
|
Operating cash flows from operating leases
|
|
$
|
|
|
|
|
|
|
Operating cash flows from finance leases
|
|
|
|
|
|
|
|
|
Operating lease assets obtained in exchange for new operating lease liabilities
|
|
|
|
|
|
|
|
|
(Shares in thousands)
|
Number of Restricted
Shares
|
|
Weighted Average
Grant-Date Fair
Value
|
|||
|
Unvested restricted stock, beginning of period
|
|
|
|
$
|
|
|
|
Granted
|
|
|
|
|
|
|
|
Vested
|
(
|
)
|
|
|
|
|
|
Forfeited
|
(
|
)
|
|
|
|
|
|
Unvested restricted stock, end of period
|
|
|
|
$
|
|
|
|
|
|
Six Months Ended
|
|
|
Monte Carlo Simulation Assumptions
|
|
August 29, 2020
|
|
|
Risk Free Interest Rate
|
|
|
%
|
|
Expected Dividend Yield
|
|
|
%
|
|
Expected Volatility
|
|
|
%
|
|
Expected Term
|
|
|
|
|
(Shares in thousands)
|
Number of Performance
Stock Units
|
|
Weighted Average
Grant-Date Fair
Value
|
|||
|
Unvested performance stock units, beginning of period
|
|
|
|
$
|
|
|
|
Granted
|
|
|
|
|
|
|
|
Vested
|
(
|
)
|
|
|
|
|
|
Forfeited or performance condition adjustments
|
(
|
)
|
|
|
|
|
|
Unvested performance stock units, end of period
|
|
|
|
$
|
|
|
|
(Shares in thousands)
|
|
Number of Restricted
Stock Units
|
|
Weighted Average
Grant-Date Fair
Value
|
|||
|
Unvested restricted stock units, beginning of period
|
|
|
|
|
$
|
|
|
|
Granted
|
|
|
|
|
|
|
|
|
Vested
|
|
(
|
)
|
|
|
|
|
|
Forfeited
|
|
|
|
|
|
|
|
|
Unvested restricted stock units, end of period
|
|
|
|
|
$
|
|
|
|
•
|
Approximately $100 million in annual savings from its previously disclosed store network optimization project which includes the closure of approximately 200 mostly Bed Bath & Beyond stores over the next two years. The Company continues to believe that its physical store channel is an asset for its transformation into a digital-first company, especially with new omni-fulfillment capabilities in Buy-Online-Pick-Up-In-Store (BOPIS) and Curbside Pickup;
|
|
•
|
Approximately $200 million in annual savings from product sourcing, through renegotiations with existing vendors; and
|
|
•
|
Approximately $100 to $150 million in annual selling, general and administrative expense savings from continued optimization of its corporate overhead cost structure and reductions in other discretionary expense. During the second quarter of fiscal 2020, the Company implemented a workforce reduction of approximately 2,800 roles from across its corporate headquarters and retail stores, designed to further reduce layers at the corporate level, significantly reposition field operations to better serve customers in a digital-first environment, and realign technology, supply chain and merchandising teams to support the Company's strategic growth initiatives.
|
|
•
|
Net sales for the
three months ended August 29, 2020
were
$2.688 billion
, a decrease of approximately
1.2%
as compared with the
three months ended August 31, 2019
. Net sales for the
six months ended August 29, 2020
were
$3.995 billion
, a decrease of approximately
24.5%
as compared with the
six months ended August 31, 2019
. As noted above, the majority of the Company's stores were closed beginning March 23, 2020, except for most stand-alone Baby and Harmon stores, which remained open during such period, subject to state and local regulations, through July 2020. Nearly all stores reopened as of July 2020.
|
|
▪
|
For the three and
six months ended August 29, 2020
, net sales consummated through digital channels increased approximately
88%
and
85%
, respectively, and net sales consummated in-store declined approximately
18.0%
and
46.0%
, respectively. Net sales consummated through digital channels represented approximately one third and approximately two fifths of the Company's net sales for the three and
six months ended August 29, 2020
, respectively.
|
|
▪
|
Comparable sales for the
three months ended August 29, 2020
increased by approximately 5.5%, compared to a decrease of approximately 6.7% for the
three months ended August 31, 2019
. As a result of the extended closure of the majority of the Company’s stores due to the COVID-19 pandemic and the Company’s policy of excluding extended store closures from its comparable sales calculation, the Company believes that comparable sales were not a meaningful metric for the first quarter of fiscal 2020 and, therefore, are not a meaningful metric for the
six months ended August 29, 2020
. Comparable sales for the six months ended August 31, 2019 decreased by approximately 6.6%.
|
|
•
|
Gross profit for the
three months ended August 29, 2020
was
$987.5 million
, or
36.7%
of net sales, compared with
$727.0 million
, or
26.7%
of net sales, for the
three months ended August 31, 2019
. Gross profit for the
six months ended August 29, 2020
was
$1.336 billion
, or
33.4%
of net sales, compared with
$1.614 billion
, or
30.5%
of net sales, for the
six months ended August 31, 2019
.
The Company's gross profit margin in the second quarter of fiscal 2020 includes a favorable adjustment to the incremental inventory reserve for future markdowns of approximately $23.0 million. The Company's gross profit margin in the prior year reflected an incremental reserve for future markdowns of approximately $194.0 million taken in the second quarter of fiscal 2019 related to the Company's transformation initiatives, which was an incremental charge to the actual markdowns recorded in the second quarter of fiscal 2019.
|
|
•
|
Selling, general and administrative expenses ("SG&A") for the
three months ended August 29, 2020
were
$850.2 million
, or
31.6%
of net sales, compared with
$880.9 million
, or
32.4%
of net sales, for the
three months ended August 31, 2019
. SG&A for the
six months ended August 29, 2020
were
$1.574 billion
, or
39.4%
of net sales, compared with
$1.774 billion
, or
33.5%
of net sales, for the
six months ended August 31, 2019
.
|
|
•
|
Goodwill and other impairments for the three and
six months ended August 29, 2020
were
$29.2 million
or
1.1%
of net sales, and
$114.4 million
or
2.9%
of net sales, respectively, compared with
$28.4 million
, or
1.0%
of net sales and
$429.6
or
8.1%
of net sales, respectively, for the
three and six months ended August 31, 2019
.
|
|
•
|
Restructuring and transformation initiative costs during the
three and six months ended August 29, 2020
were
$27.1 million
, primarily related to severance costs recorded in connection with the workforce reduction program described above, as well as other restructuring activities.
|
|
•
|
Gain on sale of business for the
three and six months ended August 29, 2020
was
$189.5 million
, which related to the Company's sale of its PMall business on August 3, 2020.
|
|
•
|
Interest expense, net for the
three and six months ended August 29, 2020
was
$23.4 million
and
$40.5 million
, respectively, compared with
$16.3 million
and
$32.2 million
, respectively, for the
three and six months ended August 31, 2019
.
|
|
•
|
Gain on extinguishment of debt for the
three and six months ended August 29, 2020
of
$77.0 million
related to partial repayment of senior unsecured notes in August 2020.
|
|
•
|
The effective tax rate for the
three and six months ended August 29, 2020
was
32.8%
and
45.2%
, respectively, as compared with
30.1%
and
17.9%
, respectively, for the
three and six months ended August 31, 2019
. For the
three and six months ended August 29, 2020
, the effective tax rate includes the impact of the gain on sale of PMall, partially offset by the impact of impairment charges for tradename and certain store-level assets, and other discrete tax items resulting in net after tax costs. The effective tax rate for the
six months ended August 29, 2020
also includes a
$43.0 million
benefit related to fiscal 2019 net operating loss carry-back under the CARES Act, as described above. For the three months and six months ended August 31, 2019, the effective tax rate reflects the impact of charges for goodwill and other impairments and severance costs, portions of which are non-deductible for tax purposes and other discrete items resulting in net after tax costs.
|
|
•
|
For the
three months ended August 29, 2020
, net earnings per diluted share was
$1.75
(
$217.9 million
), as compared with net loss per diluted share of
$(1.12)
(
$(138.8) million
) for
three months ended August 31, 2019
. Net earnings per diluted share for the
three months ended August 29, 2020
includes the net favorable impact of $1.25 per share related to the gain on sale of PMall, gain on extinguishment of debt and decrease in the incremental inventory reserve for future markdowns recorded in the prior year, partially offset by non-cash impairment charges for tradename and certain store-level assets and charges recorded in connection with the restructuring program and transformation initiatives. Net earnings per diluted share for the
three months ended August 31, 2019
includes an unfavorable impact of $1.46 per diluted share for the
three months ended August 31, 2019
from charges related to the first wave of the Company's transformation initiatives, including severance costs associated with the corporate workforce reduction and the decision to outsource certain functions, an incremental reserve for future markdowns, and non-cash store impairment charges.
|
|
•
|
On March 4, 2020, Joe Hartsig joined the Company as Executive Vice President, Chief Merchandising Officer of the Company and President of Harmon Stores Inc.;
|
|
•
|
On May 4, 2020, Gustavo Arnal joined the Company as Executive Vice President, Chief Financial Officer and Treasurer of the Company
;
|
|
•
|
On May 11, 2020,
Rafeh Masood joined the Company as Executive Vice President, Chief Digital Officer;
|
|
•
|
On
May 11,
2020,
Gregg Melnick assumed the role of Executive Vice President, Chief Stores Officer. Previously, Mr. Melnick served as the Company’s interim Chief Digital Officer;
|
|
•
|
On May 18, 2020, John Hartmann joined the Company as Chief Operating Officer of the Company and President, buybuy BABY;
|
|
•
|
On May 18, 2020, Arlene Hong joined the Company as Executive Vice President, Chief Legal Officer and Corporate Secretary;
|
|
•
|
On May 26, 2020, Cindy Davis joined the Company as Executive Vice President, Chief Brand Officer of the Company and President, Decorist; and
|
|
•
|
On July 28, 2020, the Company announced that Lynda Markoe will join the Company as Executive Vice President, Chief People and Culture Officer, in September 2020.
|
|
(a)
|
Disclosure Controls and Procedures
|
|
(b)
|
Changes in Internal Control over Financial Reporting
|
|
•
|
Potential failure of third parties on which the Company relies, including its suppliers, commercial banks, and other external business partners to meet their obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, or by travel restrictions and border closures;
|
|
•
|
Negative impact on the Company’s workforce. The spread of COVID-19, for example, has caused the Company to modify its business practices (including employee travel and work locations, cancellation of physical participation in meetings, events and conferences and a furlough of the majority of store associates and a portion of corporate associates, the majority of whom have returned as of August 29, 2020), and the Company may take further actions as may be required by government authorities or that the Company determines are in the best interests of its employees;
|
|
•
|
Significant changes in the political conditions in markets in which the Company distributes its products have occurred and are expected to continue at least during the pendency of the pandemic, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close its operating facilities, restrict its employees’ ability to travel or perform necessary business functions, or otherwise restrict the operations and purchasing behaviors of its business partners, suppliers or customers;
|
|
•
|
Potential impact on the Company’s ability to meet its obligations to business partners, including under its secured asset-based revolving credit facility (the "ABL Facility"), which contains a minimum fixed charge ratio, customary representations, warranties and affirmative covenants, and its current lease obligations. The Company has and continues to renegotiate payment terms for goods, services and rent. Similar to other retailers, the Company has also withheld portions of and/or delayed payments to certain of its business partners as the Company negotiates revisions to its payment terms, in order to further maintain liquidity given the temporary store closures. There can be no assurance that the Company will be able to successfully renegotiate payment terms with all such business partners, and the ultimate outcome of these activities including the responses of all business partners are not yet known;
|
|
•
|
Significant reductions in demand or significant volatility in demand for the Company’s products, which has been and may continue to be caused by, among other things, the temporary inability of consumers to shop at its stores or buy its products due to illness, quarantine or other travel restrictions, unemployment or other financial hardship, and shifts in demand away from one or more of the Company’s more discretionary or higher priced products to lower priced products; and
|
|
•
|
Disruptions in the financial markets may materially adversely affect the availability and cost of credit to the Company.
|
|
Period
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
|
|
Total Number of
Shares Purchased as Part of Publicly or Announced Plans Programs (1) |
|
Approximate Dollar
Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) |
||||||
|
May 31, 2020 - June 27, 2020
|
46,300
|
|
|
$
|
8.32
|
|
|
46,300
|
|
|
$
|
1,233,646,157
|
|
|
June 28, 2020 - July 25, 2020
|
3,300
|
|
|
$
|
8.15
|
|
|
3,300
|
|
|
$
|
1,233,619,255
|
|
|
July 26, 2020 - August 29, 2020
|
6,900
|
|
|
$
|
12.29
|
|
|
6,900
|
|
|
$
|
1,233,534,444
|
|
|
Total
|
56,500
|
|
$
|
8.80
|
|
|
56,500
|
|
$
|
1,233,534,444
|
|
||
|
Exhibit No.
|
Exhibit
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32**
|
|
|
|
|
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
104
|
The cover page of Bed Bath & Beyond Inc.’s Quarterly Report on Form 10-Q for the quarter ended August 29, 2020, formatted in Inline XBRL (included within Exhibit 101 attachments)
|
|
*
|
This is a management contract or compensatory plan or arrangement.
|
|
**
|
Filed herewith.
|
|
|
|
BED BATH & BEYOND INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date: October 1, 2020
|
|
By:
|
/s/ Gustavo Arnal
|
|
|
|
|
Gustavo Arnal
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
Suppliers
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|