For the fourth quarter ended February 25, a period when the digital operations that have been subject of heavy investment helped compensate for relative store weakness, Bed Bath & Beyond posted net earnings of $268.7 million, or $1.84 per diluted share, versus $303.5 million, or $1.91 per diluted share, for the fiscal 2015 fourth quarter.
Earnings per diluted share in the year-prior quarter included a six cents per diluted share net benefit for non-recurring items, Bed Bath & Beyond reported. In the just-completed quarter, the retailer’s diluted earnings per share beat a Zacks Investment Research analyst average estimate of $1.77.
Net sales increased 3.4% from the year-earlier quarter, reaching $3.53 billion. Comparable sales increased by 0.4% in the quarter year over year. Comps from customer-facing digital channels grew in excess of 20%, while comparable sales from stores declined in the low single-digit percentage range versus the quarter in the year before. Operating profit was $429.9 million versus $498.6 million in the quarter a year previous.
For the fiscal full year, Bed Bath & Beyond posted net earnings of $685.1 million, or $4.58 per diluted share, versus $841.5 million, or $5.10 per diluted share, in the period a year prior.
Net sales grew 0.9% to $12.22 billion. Comparable sales decreased by 0.6% versus fiscal 2015, with comps from customer-facing digital channels again gaining more than 20% and those from stores slipping in the low single-digit percentage range year over year. Operating profit was $1.14 billion versus $1.41 billion in the fiscal year before.
Bed Bath & Beyond CEO Steven Temares said, “During fiscal 2016, we made significant investments to evolve our company and advance our mission to be trusted by our customers as the expert for the home and ‘heart-related’ life events by continuing to build and deliver a strong foundation of differentiated products and services and solutions for customers, while driving operational excellence.”
In a conference call, the company said shipping-related moves, including promotions and a lower purchase-price threshold for free delivery, as well as higher coupon expenses, hit gross margin. SG&A expenses gained in part due to spending on technology as Bed Bath & Beyond continues to invest in digital operations but also due to costs arising from the integration of acquisitions such as that of One Kings Lane.
Temares said in the conference call that the company would continue investing to evolve the Bed Bath & Beyond business in line with the strategy of supporting consumers as they pass through life events over time, with a focus on registries, design services, college and campus operations and new mover services.