Stock Analysis on Net

Bed Bath & Beyond Inc. (NASDAQ:BBBY)

This company has been moved to the archive! The financial data has not been updated since September 30, 2022.

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

Bed Bath & Beyond Inc., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Net operating profit after taxes (NOPAT)1 (301,295) 98,133 (522,990) (83,311) 735,312 935,216
Cost of capital2 8.92% 11.52% 7.31% 9.56% 9.25% 13.09%
Invested capital3 3,288,320 4,261,005 5,094,957 5,788,203 6,556,645 6,680,896
 
Economic profit4 (594,712) (392,782) (895,193) (636,647) 129,097 60,600

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -301,2958.92% × 3,288,320 = -594,712

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Bed Bath & Beyond Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Net Operating Profit after Taxes (NOPAT)

Bed Bath & Beyond Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Net earnings (loss) (559,623) (150,773) (613,816) (137,224) 424,858 685,108
Deferred income tax expense (benefit)1 127,310 149,306 (145,519) (104,101) 175,204 24,875
Increase (decrease) in accrual for severance and related costs2 (8,000) (55,700) 73,400
Increase (decrease) in equity equivalents3 119,310 93,606 (72,119) (104,101) 175,204 24,875
Interest expense, net 64,702 76,913 64,789 69,474 65,661 69,555
Interest expense, operating lease liability4 111,270 119,669 141,471 130,544 135,186 155,678
Adjusted interest expense, net 175,972 196,582 206,260 200,018 200,847 225,233
Tax benefit of interest expense, net5 (36,954) (41,282) (43,315) (42,004) (65,597)
Adjusted interest expense, net, after taxes6 139,018 155,300 162,945 158,014 135,250 225,233
Net operating profit after taxes (NOPAT) (301,295) 98,133 (522,990) (83,311) 735,312 935,216

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in accrual for severance and related costs.

3 Addition of increase (decrease) in equity equivalents to net earnings (loss).

4 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,854,508 × 6.00% = 111,270

5 2022 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 175,972 × 21.00% = 36,954

6 Addition of after taxes interest expense to net earnings (loss).

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Bed Bath & Beyond Inc. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Cash Operating Taxes

Bed Bath & Beyond Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Provision (benefit) for income taxes 86,967 (185,989) (151,037) (19,385) 270,802 380,547
Less: Deferred income tax expense (benefit) 127,310 149,306 (145,519) (104,101) 175,204 24,875
Add: Tax savings from interest expense, net 36,954 41,282 43,315 42,004 65,597
Cash operating taxes (3,389) (294,013) 37,797 126,720 161,195 355,672

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Bed Bath & Beyond Inc. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

Invested Capital

Bed Bath & Beyond Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Current finance lease liabilities 2,494 1,541
Noncurrent finance lease liabilities 35,447 102,412 3,800 4,500 5,100
Long term debt 1,179,776 1,190,363 1,488,400 1,487,934 1,492,078 1,491,603
Operating lease liability1 1,854,508 1,869,828 2,281,788 2,298,308 2,531,568 2,702,735
Total reported debt & leases 3,072,225 3,060,191 3,874,141 3,790,042 4,028,146 4,199,438
Shareholders’ equity 174,145 1,276,936 1,764,935 2,560,331 2,888,628 2,719,277
Net deferred tax (assets) liabilities2 136 (130,022) (276,528) (115,080) (11,025) (195,469)
Accrual for severance and related costs3 15,000 17,700 73,400
Equity equivalents4 15,136 (112,322) (203,128) (115,080) (11,025) (195,469)
Accumulated other comprehensive (income) loss, net of tax5 46,014 55,600 64,909 58,610 48,296 47,250
Adjusted shareholders’ equity 235,295 1,220,214 1,626,716 2,503,861 2,925,899 2,571,058
Investment securities6 (19,200) (19,400) (405,900) (505,700) (397,400) (89,600)
Invested capital 3,288,320 4,261,005 5,094,957 5,788,203 6,556,645 6,680,896

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of accrual for severance and related costs.

4 Addition of equity equivalents to shareholders’ equity.

5 Removal of accumulated other comprehensive income.

6 Subtraction of investment securities.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Bed Bath & Beyond Inc. invested capital decreased from 2020 to 2021 and from 2021 to 2022.

Cost of Capital

Bed Bath & Beyond Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 1,304,680 1,304,680 ÷ 4,153,129 = 0.31 0.31 × 18.72% = 5.88%
Long term debt and finance lease liabilities3 993,941 993,941 ÷ 4,153,129 = 0.24 0.24 × 4.89% × (1 – 21.00%) = 0.92%
Operating lease liability4 1,854,508 1,854,508 ÷ 4,153,129 = 0.45 0.45 × 6.00% × (1 – 21.00%) = 2.12%
Total: 4,153,129 1.00 8.92%

Based on: 10-K (reporting date: 2022-02-26).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 2,883,014 2,883,014 ÷ 5,870,842 = 0.49 0.49 × 18.72% = 9.19%
Long term debt and finance lease liabilities3 1,118,000 1,118,000 ÷ 5,870,842 = 0.19 0.19 × 4.76% × (1 – 21.00%) = 0.72%
Operating lease liability4 1,869,828 1,869,828 ÷ 5,870,842 = 0.32 0.32 × 6.40% × (1 – 21.00%) = 1.61%
Total: 5,870,842 1.00 11.52%

Based on: 10-K (reporting date: 2021-02-27).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 833,985 833,985 ÷ 4,345,726 = 0.19 0.19 × 18.72% = 3.59%
Long term debt and finance lease liabilities3 1,229,953 1,229,953 ÷ 4,345,726 = 0.28 0.28 × 5.10% × (1 – 21.00%) = 1.14%
Operating lease liability4 2,281,788 2,281,788 ÷ 4,345,726 = 0.53 0.53 × 6.20% × (1 – 21.00%) = 2.57%
Total: 4,345,726 1.00 7.31%

Based on: 10-K (reporting date: 2020-02-29).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 2,207,212 2,207,212 ÷ 5,997,254 = 0.37 0.37 × 18.72% = 6.89%
Long term debt and finance lease liabilities3 1,491,734 1,491,734 ÷ 5,997,254 = 0.25 0.25 × 4.83% × (1 – 21.00%) = 0.95%
Operating lease liability4 2,298,308 2,298,308 ÷ 5,997,254 = 0.38 0.38 × 5.68% × (1 – 21.00%) = 1.72%
Total: 5,997,254 1.00 9.56%

Based on: 10-K (reporting date: 2019-03-02).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 2,455,448 2,455,448 ÷ 6,483,594 = 0.38 0.38 × 18.72% = 7.09%
Long term debt and finance lease liabilities3 1,496,578 1,496,578 ÷ 6,483,594 = 0.23 0.23 × 4.83% × (1 – 32.66%) = 0.75%
Operating lease liability4 2,531,568 2,531,568 ÷ 6,483,594 = 0.39 0.39 × 5.34% × (1 – 32.66%) = 1.40%
Total: 6,483,594 1.00 9.25%

Based on: 10-K (reporting date: 2018-03-03).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 5,713,251 5,713,251 ÷ 9,912,689 = 0.58 0.58 × 18.72% = 10.79%
Long term debt and finance lease liabilities3 1,496,703 1,496,703 ÷ 9,912,689 = 0.15 0.15 × 4.83% × (1 – 0.00%) = 0.73%
Operating lease liability4 2,702,735 2,702,735 ÷ 9,912,689 = 0.27 0.27 × 5.76% × (1 – 0.00%) = 1.57%
Total: 9,912,689 1.00 13.09%

Based on: 10-K (reporting date: 2017-02-25).

1 US$ in thousands

2 Equity. See details »

3 Long term debt and finance lease liabilities. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Bed Bath & Beyond Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Selected Financial Data (US$ in thousands)
Economic profit1 (594,712) (392,782) (895,193) (636,647) 129,097 60,600
Invested capital2 3,288,320 4,261,005 5,094,957 5,788,203 6,556,645 6,680,896
Performance Ratio
Economic spread ratio3 -18.09% -9.22% -17.57% -11.00% 1.97% 0.91%
Benchmarks
Economic Spread Ratio, Competitors4
Amazon.com Inc. -15.63% 4.44% 1.80% -1.54%
Home Depot Inc. 25.39% 16.22% 23.31% 23.74%
Lowe’s Cos. Inc. 24.62% 12.11% 8.23% -1.30%
TJX Cos. Inc. 7.32% -9.61% 8.10% 7.37%

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -594,712 ÷ 3,288,320 = -18.09%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Bed Bath & Beyond Inc. economic spread ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Economic Profit Margin

Bed Bath & Beyond Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Feb 26, 2022 Feb 27, 2021 Feb 29, 2020 Mar 2, 2019 Mar 3, 2018 Feb 25, 2017
Selected Financial Data (US$ in thousands)
Economic profit1 (594,712) (392,782) (895,193) (636,647) 129,097 60,600
Net sales 7,867,778 9,233,028 11,158,580 12,028,797 12,349,301 12,215,757
Performance Ratio
Economic profit margin2 -7.56% -4.25% -8.02% -5.29% 1.05% 0.50%
Benchmarks
Economic Profit Margin, Competitors3
Amazon.com Inc. -8.16% 1.91% 0.70% -0.69%
Home Depot Inc. 8.07% 6.10% 7.73% 7.50%
Lowe’s Cos. Inc. 6.70% 3.84% 3.05% -0.45%
TJX Cos. Inc. 2.97% -6.69% 3.63% 3.29%

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -594,712 ÷ 7,867,778 = -7.56%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Bed Bath & Beyond Inc. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.