BED BATH & BEYOND INC. Overview
Bed Bath & Beyond Inc. and subsidiaries (the "Company", "we", "our", "us", or "ourselves") is an omni-channel retailer that makes it easy for our customers to feel at home. We sell a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operate under the namesBed Bath & Beyond , buybuy BABY ("BABY"), and Harmon, Harmon Face Values, or Face Values (collectively, "Harmon"). We also operate Decorist, an online interior design platform that provides personalized home design services. In addition, we are a partner in a joint venture, which operates retail stores inMexico under the nameBed Bath & Beyond . We account for our operations as one North American Retail reporting segment. We are driving a digital-first, omni-always growth strategy and optimizing our digital and physical store channels to provide our customers with a seamless omni-channel shopping experience. Digital purchases, including web and mobile, can be shipped to a customer from our distribution facilities, directly from vendors, or from a store. Store purchases are primarily fulfilled from that store's inventory or may also be shipped to a customer from one of our distribution facilities, from a vendor, or from another store. Customers can also choose to pick up orders using ourBuy Online Pickup In Store ("BOPIS") and contactless Curbside Pickup services, as well as return online purchases to a store. Customers can also make purchases through one of our customer contact centers and in-store throughThe Beyond Store , our proprietary web-based platform. These capabilities allow us to better serve our customers across various channels. Across our banners, we carry a wide variety of domestics and home furnishings merchandise. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products.
Business Transformation and Restructuring
Since 2019, we have undertaken significant changes to transform our business and adapt to the dynamic retail environment and the evolving needs of our customers in order to position ourselves for long-term success. As part of these changes, our management team has been focused on driving an omni-always, customer-inspired strategy to re-establish our authority in the Home, Baby, Beauty & Wellness markets. We have created a more focused portfolio through the divestiture of non-core assets and further strengthened our financial flexibility through key actions such as corporate restructurings and operating expense control to re-set our cost structure and support our ongoing business transformation. We are implementing a growth strategy that will harness the power of data and insights to engage customers across our four core banners (Bed Bath & Beyond , buybuy BABY, Harmon and Decorist) in an enterprise-wide plan to accelerate our omni-channel transformation. Our strategy is underpinned by five key pillars of strategic focus and investment: product, price, promise, place and people. Through this approach, we are becoming a digital-first, customer-focused omni-channel retailer with a more curated, inspirational and differentiated product collection across categories, and creating a more convenient and inspirational shopping experience. Subsequent to the end of the fiscal first quarter of 2022, onMay 31, 2022 , we launched our ninth new proprietary Owned Brand ("Owned Brands"), Everhome™ and during Fiscal 2021, we launched the following eight new proprietary Owned Brands: First Quarter Second Quarter Third Quarter Nestwell™ Our Table™ Studio 3B™ Haven™ Wild Sage™ H For Happy™ Simply Essential™ Squared Away™ The assortment for these Owned Brands includes thousands of new products across our key Destination Categories of Bed, Bath,Kitchen Food Prep ,Home Organization , and Indoor Decor. We also continue to redefine certain of our existing Owned Brands, such as Bee & Willow™ and Marmalade™, including new brand imagery and packaging as well as refined product assortment and presentation. We will continue to build on this strong foundation as we execute our three-year growth strategy to further elevate the shopping experience, modernize our operations and unlock strong and sustainable shareholder value. In connection with our restructuring and transformation initiatives, during the three months endedMay 28, 2022 , we recorded total expense of$23.1 million , including a benefit of$1.2 million in cost of sales associated with the reduction of the estimated costs recorded in Fiscal 2021 -23- -------------------------------------------------------------------------------- Table of Contents related to the transition of our product assortment to Owned Brands and, to a lesser extent, to redefine certain existing Owned Brands, as well as$24.3 million in restructuring and transformation initiative expenses for costs associated with our planned store closures as part of the fleet optimization plan and other transformation initiatives. At this point, we are unable to estimate the amount or range of amounts expected to be incurred in connection with future restructuring and transformation initiatives, including additional Owned Brand introductions and further store closures, and will provide such estimates as they become available.
Executive Summary
The following represents a summary of key financial results and related business developments for the periods indicated:
•Net sales for the three months ended
•Comparable sales* for the three months ended
* See "Results of Operations -
•During the first quarter of Fiscal 2022, we continued to execute against key initiatives under our transformation program, including:
•Product Initiatives. The following key product initiatives launched in the first quarter of Fiscal 2022:
•Our Bed Bath & Beyond banner kicked off Back-to-College season with its "Decision Day" campaign, helping college-bound students and their parents prepare for the transition to a campus residence with the products and services needed to create a comfortable, functional, personalized, and happy home away from home. •Our buybuy BABY banner expanded its assortment through an exclusive retail partnership with Primary, a leading direct to consumer gender-neutral children's clothing brand, and expanded its "buzzworthy brands" portfolio of parent-founded brands with the introduction of Ahimsa, Monica + Andy, Gro To, Ready.Set.Food!, Snuggle Me Organic and Waterful Baby Wipes products in select stores and buybuybaby.com. Both of these initiatives build on the "welcome to parenthood" initiative launched in Fiscal 2021. •Strategic Collaboration with The Kroger Co. As part of our strategic collaboration with The Kroger Co. announced inNovember 2021 , inApril 2022 , we announced the launch of our e-commerce collaboration with Kroger Co. to directly offer Kroger customers an extensive selection of the most sought-after goods for the Home & Baby products carried by theBed Bath & Beyond and buybuy BABY banners through Kroger.com. A small-scale physical store pilot at select Kroger Family of Companies stores is anticipated later in Fiscal 2022. •In connection with our restructuring and transformation initiatives, during the three months endedMay 28, 2022 , we recorded total expense of$23.1 million including a benefit of$1.2 million in cost of sales associated with the reduction of the estimated costs recorded in Fiscal 2021, and$24.3 million in restructuring and transformation initiative expenses in the consolidated statement of operations, as well as$26.7 million of impairments. •During Fiscal 2021, we announced plans to complete our$1 billion three-year repurchase plan by the end of Fiscal 2021, which was two years ahead of schedule and resulted in the repurchase of$950.0 million of shares under this plan as ofFebruary 26, 2022 . During the three months endedMay 28, 2022 , we completed this program, repurchasing approximately 2.3 million shares of our common stock under the share repurchase plan approved by our Board of Directors, at a total cost of approximately$40.4 million in the first quarter. •Net loss for the three months endedMay 28, 2022 was$357.7 million , or$4.49 per diluted share, compared with net loss of$50.9 million , or$0.48 per diluted share, for the three months endedMay 29, 2021 . Net loss for the three months endedMay 28, 2022 included a net unfavorable impact of$1.66 per diluted share associated with inventory markdown reserves and supply chain-related port fees, restructuring and other transformation initiatives, and non-cash impairments. Net loss for the three months endedMay 29, 2021 included a net unfavorable impact of$0.53 per diluted share associated with non-cash impairment charges, charges associated with restructuring program and transformation initiatives, loss on sale of business, and loss on extinguishment of debt, as well as the associated tax effects. -24-
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Impact of the COVID-19 Pandemic
The COVID-19 pandemic continues to cause ongoing disruptions to our business. As the COVID-19 pandemic evolves, national and local governments in regions in which we operate have enacted various measures, including travel restrictions, restrictions on events and gatherings, temporary closure of non-essential businesses, "social distancing" requirements, vaccine and mask mandates and various other requirements designed to slow the spread of COVID-19. While several of these measures have been eased, the extent, severity and overall duration of the COVID-19 pandemic, including its phases of resurgence and the introduction of new variants, some of which may be more transmissible or virulent, are unknown, and COVID-19 has had, and may continue to have, a material adverse effect, on our business. The full extent of the impact of the COVID-19 pandemic on our business, financial position, and results of operations will depend on future developments, many of which are outside of our control, including the duration and spread of the COVID-19 pandemic, the emergence of variant strains, the availability, adoption, and effectiveness of the COVID-19 vaccines and COVID-19 testing, and government actions, which are uncertain and cannot be predicted.
Further discussion of the risks and uncertainties posed by the COVID-19 pandemic is included in "Risk Factors" under Part I, Item 1A of our 2021 Form 10-K.
Results of Operations
Net Sales Three Months Ended (in millions) May 28, 2022 May 29, 2021 Change from Prior Year Net sales$ 1,463.4 $ 1,953.8 $ (490.4) (25.1) % Net sales for the three months endedMay 28, 2022 were$1.463 billion , a decrease of approximately$490.4 million , or approximately 25.1%, compared with net sales of$1.954 billion for the three months endedMay 29, 2021 . For the first quarter of Fiscal 2022, the decline in net sales reflects the impact of lower traffic, as well as of a lack of inventory availability in key product areas, as well as the effect of the closure of certain stores in Fiscal 2021 in connection with our store fleet optimization project. Sales consummated on a mobile device while physically in a store location and BOPIS orders are recorded as customer facing digital channel sales. Customer orders taken in-store by an associate throughThe Beyond Store , our proprietary, web-based platform, are recorded as in-store sales. Prior to implementation of BOPIS and contactless Curbside Pickup services, customer orders reserved online and picked up in a store were recorded as in-store sales. Sales originally consummated from customer facing digital channels and subsequently returned in-store are recorded as a reduction of in-store sales. Net sales consummated through digital channels represented approximately 40.0% of our sales for the three months endedMay 28, 2022 compared with approximately 38.0% of our sales for the three months endedMay 29, 2021 . Comparable sales* for the three months endedMay 28, 2022 decreased by approximately 23.0% compared to the three months endedMay 29, 2021 . Management attributes a portion of this decline to the impact of lower traffic due to macro-economic factors, such as steep inflation, and fluctuations in purchasing patterns of the consumer. Also contributing to the comparable sales decline was the lack of inventory availability in key product areas, due in part to supply chain challenges. * Comparable sales normally include sales consummated through all retail channels that have been operating for twelve full months following the opening period (typically six to eight weeks), excluding the impact of store fleet optimization program. We are an omni-channel retailer with capabilities that allow a customer to use more than one channel when making a purchase, including in-store, online, with a mobile device or through a customer contact center, and have it fulfilled, in most cases, either through in-store customer pickup or by direct shipment to the customer from one of our distribution facilities, stores or vendors. Sales of domestics merchandise and home furnishings accounted for approximately 35.3% and 64.7% of net sales, respectively, for the three months endedMay 28, 2022 and approximately 37.9% and 62.1% of net sales, respectively, for the three months endedMay 29, 2021 . -25-
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Gross Profit
Three Months Ended
(in millions) May 28, 2022 May 29, 2021 Change from Prior Year
Gross profit $ 349.3 $ 633.7 $ (284.4) (44.9) %
Gross margin 23.9 % 32.4 % (8.5) % (26.2) %
Gross profit for the three months ended May 28, 2022 was $349.3 million , or
23.9% of net sales, compared with $633.7 million , or 32.4% of net sales, for the
three months ended May 29, 2021 . Gross profit margin as a percentage of net
sales for the three months ended May 28, 2022 includes the impact of inventory
adjustments of $91.6 million associated with the markdown of inventory being
removed from our assortment in connection with clearance of certain Owned Brands
merchandise, and the impact of supply chain-related port fees. Gross profit for
the three months ended May 28, 2022 also includes the impact of higher freight
expenses, both for inbound product shipments and direct-to-customer fulfillment
and in part due to industry wide, global supply chain challenges, and order
cancellation fees also negatively impacted the gross margin in the three months
ended May 28, 2022 compared with the prior year, which offset the favorable
impacts of product mix from our new Owned Brands and a more normalized mix of
digital sales. Additionally, for the three months ended May 28, 2022 , gross
profit margin as a percentage of net sales was favorably impacted by the
implementation of new pricing strategies in the quarter in response to ongoing
inflationary pressures and global supply chain challenges.
Selling, General and Administrative Expenses
Three Months Ended
(in millions) May 28, 2022 May 29, 2021 Change from Prior Year
Selling, general and administrative expenses
("SG&A") $ 637.5 $ 658.8 $ (21.3) (3.2) %
SG&A as a percentage of net sales 43.6 % 33.7 % 9.9 % 29.4 %
SG&A for the three months ended May 28, 2022 was $637.5 million , or 43.6% of net
sales, compared with $658.8 million , or 33.7% of net sales, for the three months
ended May 29, 2021 . The decrease in SG&A for the three months ended May 28, 2022
compared with the three months ended May 29, 2021 was primarily attributable to
cost reductions resulting from our transformation initiatives, including
divestitures of non-core assets, and lower rent and occupancy expenses as a
result of our fleet optimization program, while the increase in SG&A as a
percentage of net sales for the three months ended May 28, 2022 was primarily
due to the impact of de-leveraging of SG&A due to the declines in net sales
noted above.
Impairments
Impairments for the three months endedMay 28, 2022 were$26.7 million , compared with$9.1 million during the comparable period last year. Impairment charges for the three months endedMay 28, 2022 andMay 29, 2021 included$23.8 million and$7.0 million , respectively, relating to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of$2.9 million and$2.1 million , respectively.
Restructuring and Transformation Initiative Expenses
During the three months endedMay 28, 2022 , restructuring and transformation initiative expenses were$24.3 million , which included costs recorded in connection with our technology transformation and business strategy and operating model transformation programs across core functions, including merchandising, supply chain, and finance. During the three months endedMay 29, 2021 , restructuring and transformation initiative expenses were$33.7 million , primarily related to costs recorded in connection with the store network optimization program as well as costs associated with other transformation initiatives (see "Restructuring and Transformation Initiative Expenses," Note 17 to the accompanying consolidated financial statements).
Loss on Sale of Businesses
During the three months ended
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Operating Loss
Three Months Ended
(in millions) May 28, 2022 May 29, 2021 Change from Prior Year
Operating Loss $ (339.2) $ (71.9) $ (267.3) 371.8 %
As a percentage of net sales (23.2) % (3.7) % (19.5) % 527.0 %
For the three months ended May 28, 2022 , operating loss was $339.2 million , or
23.2% of net sales, compared with an operating loss of $71.9 million , or 3.7% of
net sales, for the three months ended May 29, 2021 . Operating loss for the three
months ended May 28, 2022 included the impact of $91.6 million related to
inventory markdown reserves and supply chain-related port fees, $24.3 million
associated with restructuring and other transformation initiatives, and
$26.7 million for non-cash impairments (each as discussed above or below).
Interest Expense, net
Interest expense, net for the three months endedMay 28, 2022 was$16.4 million compared with$16.0 million for the three months endedMay 29, 2021 . Interest expense, net includes interest costs attributable to our revolving credit facilities and our senior unsecured notes.
Income Taxes
The effective tax rate for the three months endedMay 28, 2022 was (0.6)%, compared with 42.3% for the three months endedMay 29, 2021 . For the three months endedMay 28, 2022 , the effective tax rate reflects the impact of continuing to record a valuation allowance against the Company'sU.S. federal and state deferred tax assets (discussed below). For the three months endedMay 29, 2021 , the effective tax rate did not reflect a valuation allowance, and included the impact of charges for restructuring and transformation initiatives, as well as, a benefit of$15.6 million resulting from an adjustment to the estimated net operating loss incurred in Fiscal 2020 which was carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%. In assessing the recoverability of our deferred tax assets, we evaluated the available objective positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit the use of existing deferred tax assets in each taxpaying jurisdiction. For any deferred tax asset in excess of the amount for which it is more likely than not that we will realize a benefit, we established a valuation allowance. A valuation allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit carryforward amounts, against future taxable income. In the third quarter of Fiscal 2021, we concluded that, based on our evaluation of available objective positive and negative evidence, it was no longer more likely than not that our netU.S. federal and state deferred tax assets were recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included our cumulative taxable loss for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as, timing and the cost of our transformation initiatives and their expected associated benefits. Accordingly, in the third quarter of Fiscal 2021, we recorded a valuation allowance against substantially all of our netU.S. federal and state deferred tax assets. During the three months endedMay 28, 2022 , we concluded that it continues to not be more likely than not that our netU.S. federal and state deferred tax assets are recoverable, and have recorded a valuation allowance against any deferred tax assets generated in the quarter. As ofMay 28, 2022 , the total valuation allowance relative toU.S. federal and state deferred tax assets was$224.3 million . The amount of the deferred tax assets considered realizable, and the associated valuation allowance, could be adjusted in a future period if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. -27- -------------------------------------------------------------------------------- Table of Contents Potential volatility in the effective tax rate from year to year may occur as we are required each year to determine whether new information changes our assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.
Net Loss
As a result of the factors described above, net loss for the three months endedMay 28, 2022 was$357.7 million , or$4.49 per diluted share, compared with net loss of$50.9 million , or$0.48 per diluted share, for the three months endedMay 29, 2021 . Net loss for the three months endedMay 28, 2022 included a net unfavorable impact of$1.66 per diluted share associated with inventory markdown reserves and supply chain-related port fees, restructuring and other transformation initiatives, and non-cash impairments. Net loss for the three months endedMay 29, 2021 included a net unfavorable impact of$0.53 per diluted share associated with non-cash impairment charges, charges associated with restructuring program and transformation initiatives, loss on sale of business, and loss on extinguishment of debt (each as discussed above), as well as the associated tax effects.
Liquidity and Capital Resources
We ended the first quarter of Fiscal 2022 in a solid liquidity position, which we anticipate maintaining, to provide us the flexibility to fund our ongoing initiatives and act upon other opportunities that may arise. As ofMay 28, 2022 , we had approximately$107.5 million in cash and cash equivalents, a decrease of approximately$332.0 million as compared withFebruary 26, 2022 , driven by working capital investments in inventory, as well as$104.9 million in capital expenditures and$43.0 million in share repurchases, partially offset by borrowings under our ABL Facility of$200.0 million . We believe that existing and internally generated funds, along with capacity under our ABL Facility, will be sufficient to continue to finance our operations for the next twelve months. We have the ability to continue to borrow under our ABL Facility, subject to customary conditions, including no default, the accuracy of representations and warranties, and borrowing base availability. Subsequent to the end of the first quarter of Fiscal 2022, the Company borrowed an additional$200.0 million under the ABL Facility for a total of$400.0 million of borrowings. The ABL Facility matures onAugust 9, 2026 . Our ability to borrow under the ABL Facility is based upon a specified borrowing base consisting of a percentage of our eligible inventory and credit card receivables as defined in the ABL Facility, net of applicable reserves (see "Long-Term Debt," Note 12 to the accompanying consolidated financial statements).
Our liquidity may also continue to be negatively impacted by the uncertainty regarding COVID-19 and macro-economic factors, including the timing of any economic recession and/or recovery.
Capital Expenditures
Capital expenditures for three months endedMay 28, 2022 were$104.9 million , and for Fiscal 2022 are projected to be approximately$300.0 million . Our capital expenditures are related to digital and omni-channel capabilities, store remodels and investments in technology across a number of areas including supply chain, merchandising, and finance. We continue to review and prioritize our capital needs and remain committed to making the required investments in our infrastructure to help position us for continued growth and success. Key areas of investment include: continuing to improve the presentation and content as well as the functionality, general search and navigation across our customer facing digital channels; improving customer data integration and customer relations management capabilities; continuing to enhance service offerings to our customers; continuing to strengthen and deepen our information technology, analytics, marketing, e-commerce, merchandising and finance capabilities; and creating more flexible fulfillment options designed to improve our delivery capabilities and lower our shipping costs. These and other investments are expected to, among other things, provide a seamless and compelling customer experience across our omni-channel retail platform. Stock Repurchases During the three months endedMay 28, 2022 andMay 29, 2021 , we repurchased approximately 2.5 million and 5.2 million shares, respectively, of our common stock, at a total cost of approximately$43.0 million and$138.7 million , respectively, which included approximately 2.3 million and 4.9 million shares, respectively, at a total cost of approximately$40.4 million and$130.4 million , respectively, repurchased under our share repurchase programs as authorized by our Board of Directors. Additionally, during the three months endedMay 28, 2022 andMay 29, 2021 , we repurchased approximately 0.2 million and 0.3 million shares, respectively, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards, and performance stock unit awards at a total cost of approximately$2.6 million and$8.3 million , respectively. -28- -------------------------------------------------------------------------------- Table of Contents During Fiscal 2021, we announced that we intended to complete our$1 billion three-year share repurchase plan by the end of Fiscal 2021, two years ahead of schedule. During the three months endedMay 28, 2022 , we repurchased approximately 2.3 million shares of our common stock, completing this repurchase plan as ofMay 28, 2022 . InJanuary 2021 , we entered into an accelerated share repurchase agreement to repurchase an aggregate$150.0 million of our common stock, subject to market conditions. This resulted in the repurchase of 5.0 million shares in the fourth quarter of Fiscal 2020, and an additional 0.2 million shares received upon final settlement in the first quarter of Fiscal 2021. BetweenDecember 2004 andApril 2021 , our Board of Directors authorized, through several share repurchase programs, the repurchase of up to$12.950 billion of our shares of common stock. We also acquire shares of our common stock to cover employee related taxes withheld on vested restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization inDecember 2004 , the aggregate total of common stock repurchased is approximately 264.7 million shares for a total cost of approximately$11.7 billion . We had approximately$1.2 billion remaining of authorized share repurchases as ofMay 28, 2022 . Decisions regarding share repurchases are within the discretion of the Board of Directors, and are influenced by a number of factors, including the price of our common stock, general business and economic conditions, our financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in business strategy and other factors. Our share repurchase program could change, and could be influenced by several factors, including business and market conditions, such as the impact of the COVID-19 pandemic on our business operations or stock price. We review our alternatives with respect to our capital structure on an ongoing basis. Any future share repurchases will be subject to the determination of the Board of Directors, based on an evaluation of our earnings, financial condition and requirements, business conditions and other factors, including the restrictions on share repurchases under the secured asset-based revolving credit facility (see "Long-Term Debt," Note 12 to the accompanying consolidated financial statements).
Debt Repurchases
During the three months endedMay 29, 2021 , we purchased approximately$7.9 million aggregate principal amount of our outstanding 3.749% senior unsecured notes dueAugust 1, 2024 . There were no debt repurchases made during the three months endedMay 28, 2022 . Cash Flow
Fiscal 2022 compared with Fiscal 2021
Net cash used in operating activities for the three months endedMay 28, 2022 was$383.6 million , compared with net cash used in operating activities of$28.7 million in the corresponding period in Fiscal 2021. The year-over-year change in operating cash flow was primarily due to higher net loss, adjusted for non-cash expense, which included the impact of higher impairments in Fiscal 2021, as well as investments in inventory as a result of changing the timing of purchasing in response to the potential impact of global supply chain disruptions on timing of inventory receipts as well as lower than anticipated sales. Retail inventory, which includes inventory in our distribution facilities for direct to customer shipments, was approximately$1.760 billion atMay 28, 2022 , an increase of 2.0% compared with retail inventory atFebruary 26, 2022 . We continue to focus on our inventory optimization strategies while also responding to the potential impact of global supply chain disruptions on product availability. Net cash used in investing activities for the three months endedMay 28, 2022 was$104.9 million , compared with net cash used in investing activities of$103.5 million in the corresponding period of Fiscal 2021. For the three months endedMay 28, 2022 , net cash used in investing activities included$104.9 million of capital expenditures. For the three months endedMay 29, 2021 , net cash used in investing activities was comprised of$73.5 million of capital expenditures and$30.0 million of purchases of held-to-maturity investment securities. Net cash provided by financing activities for the three months endedMay 28, 2022 was$156.7 million , compared with net cash used in financing activities of$147.4 million in the corresponding period of Fiscal 2021. Net cash provided by financing activities in the three months endedMay 28, 2022 was comprised of$200.0 million of borrowings under the ABL Facility, offset by repurchases of common stock of$43.0 million , of which$40.4 million is related to our share repurchase program. Net cash used in financing activities in the three months endedMay 29, 2021 was comprised of repurchases of our common stock of$138.7 million , of which$130.4 million is related to the Company's share repurchase program, repayments of long-term debt of$8.2 million , and dividend payments of$0.6 million . -29-
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Seasonality
Our business is subject to seasonal influences. Generally, our sales volumes are higher in the calendar months of August, November and December, and lower in February.
Critical Accounting Policies
See "Critical Accounting Policies" under Item 7 of our Annual Report on Form 10-K for the fiscal year endedFebruary 26, 2022 ("2021 Form 10-K"), filed with theSecurities and Exchange Commission ("SEC").
Forward-Looking Statements
This Form 10-Q and Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934 including, but not limited to, our progress and anticipated progress towards our long-term objectives, as well as more generally the status of our future liquidity and financial condition and our outlook for our 2022 Fiscal year. 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, preliminary, and similar words and phrases, although the absence of those words does not necessarily mean that statements are not forward-looking. Our 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 recent supply chain disruptions, labor shortages, wage pressures, rising inflation and the ongoing military conflict betweenRussia andUkraine ; a challenging overall macroeconomic environment and a highly competitive retailing environment; risks associated with the ongoing COVID-19 pandemic and the governmental responses to it, including its impacts across our businesses on demand and operations, as well as on the operations of our suppliers and other business partners, and the effectiveness of our and governmental actions taken in response to these risks; changing consumer preferences, spending habits and demographics; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by us; challenges in executing our omni-channel and transformation strategy, including our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve; our ability to successfully execute our store fleet optimization strategies, including our ability to achieve anticipated cost savings and to not exceed anticipated costs; our ability to execute on any additional strategic transactions and realize the benefits of any acquisitions, partnerships, investments or divestitures; disruptions to our 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; damage to our reputation in any aspect of our operations; the cost of labor, merchandise, logistical costs and other costs and expenses; potential supply chain disruption due to trade restrictions or otherwise, 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; inflation and the related increases in costs of materials, labor and other costs; inefficient management of relationships and dependencies on third-party service providers; our ability to attract and retain qualified employees in all areas of the organization; unusual weather patterns and natural disasters, including the impact of climate change; uncertainty and disruptions in financial markets; volatility in the price of our common stock and its effect, and the effect of other factors, including the COVID-19 pandemic, on our capital allocation strategy; changes to statutory, regulatory and other legal requirements or deemed noncompliance with such requirements; changes to accounting rules, regulations and tax laws, or new interpretations of existing accounting standards or tax laws; new, or developments in existing, litigation, claims or assessments; and a failure of our business partners to adhere to appropriate laws, regulations or standards. Except as required by law, we do not undertake any obligation to update our forward-looking statements.
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