Bed, Bath & Beyond Buybacks Authorizes Another $2 Billion In Stock Repuchases

Tyler Durden's picture

It was only two weeks ago when Bed Bath and Beyond reported earnings that missed across the top and bottom line. And while the company has little control over contracting revenues, one reason it may have missed on the EPS (at $0.93 vs $0.95) was the "contraction" in buybacks. A contraction, incidentally, which we use loosely, because it followed a February quarter repurchase amount that blew out all historical buybacks out of the water at over half a billion as shown in the chart below.

The bigger problem is that with just $861 million left under its existing buyback authorization, this most popular pathway for New Normal "growth" would have been promptly shut for the company at the current pace of buying up its own stock as soon as two more quarters.

So what does Bed Bath and Beyond Buybacks do? Why it promptly authorized just the thing the central-planning doctor ordered: an authorization to buy even more shares back, some $2 billion worth to be precise.

From the just released press release:

Bed Bath & Beyond Inc. announced today that its Board of Directors has authorized a new $2.0 billion share repurchase program. The Company expects that the new share repurchase program will commence after the completion of its existing share repurchase program, which, as of May 31, 2014 had approximately $861 million remaining. The Company is currently planning that the new share repurchase program will be completed during fiscal 2016. Since 2004 through the fiscal first quarter of 2014, the Company has returned approximately $6.6 billion to its shareholders through share repurchases.


"Our Board authorized this new share repurchase program based upon its continued confidence in our Company's long-term growth potential, financial outlook and cash flow generation. We also believe this is an opportune time, and method, to return value to our shareholders. In addition to providing value to our shareholders through share repurchase programs, our strong operations should allow us to continue to invest in our infrastructure and maintain our ability to take advantage of opportunities as they may arise," said Steven Temares, Chief Executive Officer and Member of the Board of Directors.


The repurchases may be effected in the open market, through accelerated repurchase and other negotiated transactions, including through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. It is contemplated that funding for the new program would be from operating cash flow as well as various financing alternatives.

Well, the stock is about $20 off its all time highs of $80.82 set in late 2014, so yes: apparently the board, in its infinite valuation wisdom, is right in pushing for more repurchases. As for BBBY's stock repurchase history of $6.6 billion in the past decade, putting that number in context, over the same period, BBBY reported Net Income of $7.1 billion. In other words, some 93% of BBBY's Net Earnings ended up as stock buybacks. Just in case anyone is curious why revenue growth is slowing not only for the company but the entire S&P500...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Bryan's picture

What better way to look profitable than to reduce your stockholders' equity?

max2205's picture

They are geniuses. ..bullish since BAC downgraded

Thomas's picture

This share buyback program is not as crazy as it looks. They have a trailing p/e of 12 (if you believe it), and they have no (as in zero) debt. I could imagine going long this company if they take a serious beating in what I believe is a coming carnage.

rubiconsolutions's picture

For BBBY that's just money down the drain....


NoDebt's picture

From the WSJ, future article, October 2014:  FASB announces that share repurchases can now be categorized as CapEx.

From the article:  "Well, that's pretty much what they're doing anyway, so all we did was give them an accounting method to recognize that."

Problem: solved.

buzzsaw99's picture

BBBY = better than most. I wouldn't be surprised if it is taken private.

Jason T's picture

in essance, everytime you by something from BBBY, a good chunk of that money spent is heading to wall street furnding these buybacks.  

QQQBall's picture

Dude, get over the evil Wall Street is responsible for everything meme. The money goes to the company who is choosing to buy back stocks with their funds.

Seasmoke's picture

Lies, Fraud & Beyond. 

firstdivision's picture

Borrow money, buy stocks, profit.

oklaboy's picture

guess nobody thought ot give the 2B to the stockholders as dvidend? guess that is too difficult.

QQQBall's picture

Dividends are taxed; buybacks are not

JustObserving's picture

Everything is a fraud now in the land of the free as Paul Craig Roberts succinctly puts it today:

The corruption in present-day America is total. Psychologists and anthropologists serve war and torture. Economists serve globalism and US financial hegemony. Physicists and chemists serve the war industries. Physicists and computer geeks serve NSA. The media serves the government and the corporations. The political parties serve the six powerful private interest groups that rule the country.

No one serves truth and liberty.

I predict that within ten years truth and liberty will be forbidden words uttered only by “domestic extremists” who are a threat that must be exterminated without due process of law.

America has left us. We now have the tyranny of the Orwellian state that rules, not by the ballot box and Constitution, but by force and propaganda.

Ghordius's picture

how can you serve truth and liberty if you have no control over your vocabulary? the very words and concepts you need for the fight for truth (and liberty) have to be clear, concise and well-defined. and the word "globalist"... has none of those qualities

lordylord's picture

"how can you serve truth and liberty if you have no control over your vocabulary?"

Try to focus your small mind on the message.  Not the syntax, grammar, and vocabulary.  Everyone from a child to the illiterate to the well-educated can understand the message of liberty. 

Ghordius's picture

I don't mind the message. In fact, I like the message. but that word... I defy you to define it. It's not really more than a generic "them"

lordylord's picture

"America has left us. We now have the tyranny of the Orwellian state that rules, not by the ballot box and Constitution, but by force and propaganda."

This is obvious for about 1% of us.  The 99% are happy to have their heads up their asses.

yogibear's picture

It's the Federal Reserve's fiat Ponzi game. Nothing really productive, it's all about maxing financialization.

Print money, blow bubbles and transfer wealth. Reverse Robin Hood. Steal from the 99% to give to the 1%.

Mitch Comestein's picture

The cash flows of this co are huge.  I guess they are the exception in retail.  They have to do something with the money.

Its_the_economy_stupid's picture

bad day coming when that debt has to be refi-ed at who knows what rate. Ah, but no worries banking that executive bonus today.

tedstr's picture

Man thats one fugly chart.  Massive double top.  I was in a BBBY store last fall first time.  I have never seen a store so well stocked.  What does that say


orangegeek's picture

$2B is about 33.5M shares at $60


BBBY has 202M shares (declining for a few years) outstanding while the price continues to fall - google finance.


More buybacks this late in the cycle isn't going to help much - it just may hold the stock in a range for a while.

ejmoosa's picture

In the old days, companies would buy back shares when they were undervalued.  They would issue shares at market tops.  

In between they would eactually work to grow and expand their businesses....


I miss the good old days.


Ghordius's picture

yet companies buying back shares is a sign that they don't see other, better opportunities, including growing and expanding - FED effects or not, humungus off-shore cash mountains or not, wrong executive compensation plans or not

ejmoosa's picture

What better opportunities do you see other than borrowing near 0%, buying back shares, driving up EPS, and raking in big bonuses?

It's much easier than speaking out against the endless rules and regulations that are destroying the American economic engine.  Businesses fear speaking out against this anti business environment,  for they just might be targetted for a little extra scrutiny from the IRS, the EPA and other heavy handed government agencies.

RaceToTheBottom's picture

Check the executive comp plan.

That explains everything.

BobTheSlob's picture

BBandB is the poster child for what is wrong with American Retail. I was walking through one this weekend with the wife and my impression:
1) Prime expensive real estate location
2) Mounds and mounds of junk inventory that nobody wants

Stock buybacks are the least of their worries. We went in to buy a few barstools. And the choices:
1) 29 inch stool built for Chinese midget bars
2) flimsy cast metal stool that looked like a forgery of a real stool one might find in Ethan Allen
3) Half wood "rotating" stool that failed to rotate when you sat on it.
4) Contemporary fake "silver" finished (paint?) stool that looked like a milking stool for very large cows.

NO SALE...we walked out.

lordylord's picture

" I was walking through one this weekend with the wife"

OUCH!  Sorry to hear that.  Zero, a moment of silence for this man.  My suggestion if you are looking for a bar stool: if you have the space and the tools (or a friend with the tools), crack open a beer and make your own. 

U4 eee aaa's picture

Better yet:

If you are looking for a bar stool it is best to head down to the local pub. You can rent them by the glass there

Yes We Can. But Lets Not.'s picture

I wander into BB&B occasionally, pretty much never buy anything, am continually amazed at the big, big margins they get.

QQQBall's picture

+1 I used to walk through when the local store was open. Too expensive more my taste.

Bemused Observer's picture

I saw barstools this weekend at yard sales. Nice ones too, with leather seats and backs. Set of 4, she was asking 40 dollars. She'd have taken 30.

I looked at them because they were so nice I wish I HAD a home bar, or someplace to use them.

Just wondering what BBB was asking for their crappy ones...

Frostfan1's picture

I don't get all the whining and moaning here.  They don't have that many places left to expand.  They're already everywhere. They don't need any more big boxes and they don't spend on R&D.  Whether by dividend or stock, it's time for money to benefit the shareholders.  I know someone who works there as a manager.  Lots of hours but they're not leaving anytime soon for somewhere else.  This was the better retailer, recall.  Linens and Things was the second class competitor now out of business.

I Write Code's picture

Share buybacks, previously to 2008, had a horrible record, almost always a sign that management was lost and confused and corrupt.

Now in a ZIRP environment this is not necessarily the case, it can look like a riskless investment.  As ZH has pointed out everyone is doing it, to the point where I wonder if they have been *ordered* to do it by the Fed.

However for BBBY I'll make an exception, the company seems a throwback to that lost and confused category, I guess it's kind of a retail Disneyland for classic homemaker wives, but seriously do we have that many classic homemaker wives anymore, who can probably buy all the hard goods 30% off from Amazon and the soft goods 40% off from Target?

QQQBall's picture

Yields are low so this is a decent use of funds IMO sssuming th share price is not over-valued. They are not borrowing to fund the buybacks. Once the share count drops and the stock gets hit - with rates low this would be a LBO candidate?

Fix It Again Timmy's picture

Bed, Bath and Beyond INSANITY.....

Chuck Knoblauch's picture

The magic of fake EPS growth.

Manipulate the denominator.


U4 eee aaa's picture

They must have a ton of executive stock options at X strike price

Agent P's picture

BBBY stock....20% discount coupon not required.