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updated: 7/7/2014 12:44 PM

Bed Bath & Beyond plans $2 billion buyback amid stock slump

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Bloomberg News

Bed Bath & Beyond Inc., facing a stock slump after delivering a disappointing forecast last month, plans to buy back $2 billion in shares during the next fiscal year.

The new repurchases will follow its existing program, which had about $861 million remaining as of May 31, Bed Bath & Beyond said today in a statement. The latest buyback will be completed in fiscal 2016, which begins around the end of February.

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The move shows the board's confidence in the company's "long-term growth potential, financial outlook and cash flow generation," Chief Executive Officer Steven Temares said in the statement. "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."

Bed Bath & Beyond, which owns the Buybuy Baby and Cost Plus World Market stores in addition to its flagship chain, is contending with e-commerce competition from Amazon.com Inc. and other online rivals. Foot traffic at shopping centers also has slowed, crimping sales and profit. Net income in the quarter ended May 31 fell 7.6 percent to $187.1 million, or 93 cents a share. Analysts had estimated 95 cents.

Shares of the company, which operates about 1,500 home- goods and baby-product stores, fell 0.4 percent to $59.10 as of 9:35 a.m. in New York. The stock had declined 26 percent this year before today.

On June 26, the shares tumbled the most in six months, dragged down by a second-quarter earnings forecast that missed estimates. The Union, New Jersey-based company expects profit of $1.08 to $1.16 a share in the period, which ends in August. Analysts had predicted $1.20 on average.

Over the past decade, Bed Bath & Beyond has returned about $6.6 billion to its shareholders through stock buybacks.

To contact the reporter on this story: Nick Turner in New York at nturner7bloomberg.net To contact the editors responsible for this story: Nick Turner at nturner7bloomberg.net Niamh Ring

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