Bed Bath & Beyond Inc. Conference Call Highlights

Bed Bath & Beyond Inc. BBBY reported its second quarter earnings on Tuesday. Shares of the company are up 7.4 percent.

Below are some key highlights from its conference call:

• Initial offering of $1.5 billion of senior unsecured notes.
• Implemented a $250 million revolving credit agreement.
• Received approval from our Board of Directors for an additional $2 billion share repurchase program, and entered into a $1.1 billion accelerated share repurchase agreement.
• Pleased that Standard & Poor's has raised our credit rating to A- from BBB+, which speaks to the strength of our company and our future prospects.
• We reported net earnings per diluted share of $1.17 compared to $1.16 per diluted share in last year's fiscal second quarter.
• Net sales for the fiscal second quarter were approximately $2.9 billion, approximately 4.3% higher than in the prior year net sales of approximately $2.8 billion.
• Second quarter comparable sales increased by approximately 3.4% compared with an increase of 3.7% last year.
• Gross profit for the fiscal second quarter was approximately 38.5% of net sales, compared to approximately 39.4% of net sales in the corresponding period a year ago.
• Selling, general and administrative expenses for the fiscal second quarter were approximately 26% of net sales.
• It is our intent to continue to optimize our store operations and markets by expanding, downsizing, renovating, opening, closing, and relocating stores.
• Our provision for income taxes for the fiscal second quarter was approximately 37.7%
• Turning to the balance sheet, during the second quarter we received $1.5 billion from the notes offering, of which $1.1 billion was subsequently used to fund our accelerated share repurchase program.
• We ended the second quarter with cash and cash equivalents and investment securities of approximately $1.4 billion.
• Capital expenditures for the first half of 2014 were approximately $156 million.
• Regarding our store count, through the end of the quarter and currently, we operate 1,506 stores

Guidance:

• One, for the fiscal third quarter we are modeling comparable sales to increase in the range of 2% to 3%.
• For the fourth quarter, we are modeling comparable sales to increase in the range of 4% to 5%.
• Consolidated net sales are modeled to increase by approximately 2.8% to 3.7% for the third quarter and approximately 4.5% to 5.5% for the fourth quarter. Depreciation for fiscal 2014 is expected to be approximately $240 million.
• Our model includes approximately $45 million in annual interest expense resulting from our debt issuance and approximately $8 million resulting from our sale-leaseback obligations related to certain distribution facilities.
• The third quarter tax provision is estimated to be in the mid-30s percentage range, while the fourth quarter tax provision is estimated to be in the mid to high 30s percentage range.
• We expect to continue generating positive operating cash flow.
• Nine, capital expenditures for fiscal 2014 are planned to be approximately $350 million.
• Modeling diluted weighted average shares outstanding to be approximately 184 million for the third quarter, 178 million for the fourth quarter, and 189 million for the full year.
• Based on these and other planning assumptions, we are modeling net earnings per diluted share to be approximately $1.17 to $1.21 for the third quarter and approximately $1.78 to $1.83 for the fourth quarter.
• Full-year modeled net earnings per diluted share to a range of $5.00 to $5.08.