Bed Bath & Beyond Inc. Launches $225 Million Accelerated Share Repurchase Program

Rhea-AI Summary

Bed Bath & Beyond announced a $675 million share repurchase program over three years, including an accelerated share repurchase (ASR) of $225 million. The ASR reflects the company's commitment to maximizing shareholder value, supported by existing cash from monetizing non-core assets. This strategic move follows the suspension of the prior repurchase program due to COVID-19. CEO Mark Tritton emphasized a robust business position and confidence in future growth plans. The ASR's final settlement is expected by February 27, 2021.

Positive

• Launch of $675 million share repurchase program aimed at enhancing shareholder value.
• Initial commitment of $225 million under ASR shows strong cash position.
• Funding of buybacks from monetization of non-core assets indicates improved liquidity.
• Management's focus on strategic investments and disciplined capital allocation reflects future growth potential.

Negative

• None.

UNION, N.J., Oct. 28, 2020 /PRNewswire/ -- Bed Bath & Beyond Inc. (NASDAQ: BBBY) announced today a share repurchase program totaling up to $675 million over the next three years.  As part of the program, the Company has entered into an accelerated share repurchase agreement (ASR) to repurchase an aggregate of $225 million of Bed Bath & Beyond's common stock.

"We're focused on maximizing value for our shareholders and the ASR reflects our commitment to returning capital as part of a balanced approach to drive shareholder value creation and sustainable growth for the business.  Our decision to resume our share buyback program coupled with our actions to date to pay down debt, sell non-core assets and increase liquidity, reflect the strength of our business and financial position, capacity for strategic investments, disciplined approach to capital allocation and our confidence in our growth plan," said President and Chief Executive Officer Mark Tritton.

Under the terms of the ASR, the purchase price per share will be determined based on the daily volume-weighted average stock price over the term of the ASR, less an agreed discount and subject to adjustments.  The final number of shares repurchased under the ASR will be determined based on such purchase price.  The final settlement of the transaction is expected to occur no later than the end of the Company's fiscal 2020 fourth quarter ending on February 27, 2021.  JPMorgan Chase Bank, National Association acted as sole counterparty to the ASR agreement.

Bed Bath & Beyond is funding the share repurchases under the ASR with existing cash resources primarily generated from the monetization of some non-core assets.  In addition to the accelerated share buyback that will occur in fiscal 2020, the Company expects to return up to $150 million per year in share repurchases over the next three years for a total share repurchase program of up to $675 million.  In March of 2020, the Company suspended its previously authorized share repurchase program as part of the decisive actions taken to proactively manage the unprecedented financial and operational impacts of COVID-19.  Since that time, the Company has continued to prioritize investments that would allow it to rebuild and grow, while reducing its cost structure and enhancing its financial flexibility.

2020 Virtual Investor Day

Today, Bed Bath & Beyond Inc. will host a Virtual Investor Day during which, among other things, it will discuss the ASR within the context of its capital allocation priorities that include investing for growth and transformation, ensuring financial resilience and returning cash to shareholders.  

The live webcast of the Company's Investor Day presentation is scheduled to begin at 9:00am EDT today, October 28, 2020, and can be accessed at  https://2020virtualinvestorday.bedbathandbeyond.com/investor-day-2020.  A replay of the Investor Day presentation will be available on the Company's investor relations website after the meeting.

About the Company 

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is an omnichannel retailer that makes it easy for our customers to feel at home. The Company sells a wide assortment of merchandise in the Home, Baby, Beauty and Wellness markets. Additionally, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

Forward Looking Statements

This press release contains forward-looking statements, including, but not limited to, the Company's progress and anticipated progress towards its long-term objectives, plans with respect to potential asset sales, as well as more generally the status of its future liquidity and financial condition. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, approximate, estimate, assume, continue, model, project, plan, goal, and similar words and phrases, although the absence of those words does not necessarily mean that statements are not forward-looking. The Company's actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation: general economic conditions including the housing market, a challenging overall macroeconomic environment and related changes in the retailing environment; risks associated with COVID-19 and the governmental responses to it, including its impacts across the Company's businesses on demand and operations, as well as on the operations of the Company's suppliers and other business partners, and the effectiveness of the Company's actions taken in response to these risks; consumer preferences, spending habits and adoption of new technologies; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; civil disturbances and terrorist acts; unusual weather patterns and natural disasters; competition from existing and potential competitors across all channels; pricing pressures; liquidity; the ability to achieve anticipated cost savings, and to not exceed anticipated costs, associated with organizational changes and investments, including the Company's strategic restructuring program; the ability to attract and retain qualified employees in all areas of the organization; the cost of labor, merchandise and other costs and expenses; potential supply chain disruption due to trade restrictions, and other factors such as natural disasters, pandemics, including the COVID-19 pandemic, political instability, labor disturbances, product recalls, financial or operational instability of suppliers or carriers, and other items; the ability to find suitable locations at acceptable occupancy costs and other terms to support the Company's plans for new stores; the ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets it serves; the ability to assess and implement technologies in support of the Company's development of its omnichannel capabilities; the ability to effectively and timely adjust the Company's plans in the face of the rapidly changing retail and economic environment, including in response to the COVID-19 pandemic; uncertainty in financial markets; volatility in the price of the Company's common stock and its effect, and the effect of other factors, including the COVID-19 pandemic, on the Company's capital allocation strategy; risks associated with the ability to achieve a successful outcome for its business concepts and to otherwise achieve its business strategies; the impact of intangible asset and other impairments; disruptions to the Company's information technology systems including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; reputational risk arising from challenges to the Company's or a third party product or service supplier's compliance with various laws, regulations or standards, including those related to labor, health, safety, privacy or the environment; reputational risk arising from third-party merchandise or service vendor performance in direct home delivery or assembly of product for customers; changes to statutory, regulatory and legal requirements, including without limitation proposed changes affecting international trade; changes to, or new, tax laws or interpretation of existing tax laws; new, or developments in existing, litigation, claims or assessments; changes to, or new, accounting standards; foreign currency exchange rate fluctuations; and the other factors summarized in the Company's reports filed with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update its forward-looking statements.

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SOURCE Bed Bath & Beyond Inc.

FAQ

What is the total amount of the share repurchase program announced by Bed Bath & Beyond?

The total share repurchase program is up to $675 million over the next three years.

When is the accelerated share repurchase agreement expected to settle?

The final settlement of the ASR is expected by February 27, 2021.

How much will Bed Bath & Beyond repurchase in shares during the initial phase of the program?

The initial phase includes an accelerated share repurchase of $225 million.

Why did Bed Bath & Beyond resume its share buyback program?

The company aims to maximize shareholder value and reflects confidence in its growth strategy.

How is Bed Bath & Beyond funding the share repurchases?

The repurchases are being funded through existing cash resources from monetization of non-core assets.