UPDATE 3-Bed Bath & Beyond profit tops view, shares rise

Tue Apr 7, 2009 6:19pm EDT

 * Q4 EPS 55 cents tops Wall Street view of 44 cents
 * Q4 sales down 0.5 pct to $1.92 bln
 * Says comfortable w/ Wall St view on Q1 and full year
 * Shares up 13.7 pct after the bell
 (Recasts, adds outlook)
 By Martinne Geller
 NEW YORK, April 7 (Reuters) - Bed Bath & Beyond Inc (BBBY.O)
reported a quarterly profit on Tuesday that easily topped Wall
Street estimates, as sales were not as bad as feared, helping to
send shares of the home furnishings retailer up 13.7 percent in
after-hours trading.
 The company also said it was comfortable with analysts'
estimates for the current quarter, and that Wall Street
estimates for the full year "appeared reasonable."
 Net income for the fourth quarter ended on Feb. 28 fell to
$141.4 million, or 55 cents per share, from $172.9 million, or
66 cents per share, a year earlier.
 Sales slipped 0.5 percent to $1.923 billion, as sales at
stores open at least a year, a key retail measure, fell 4.3
percent. A company executive said on a conference call that the
4.3 percent drop was at the better end of the expected range.
 Analysts on average were expecting earnings of 44 cents per
share and revenue of $1.915 billion, according to Reuters
Estimates. In January, the company forecast earnings of 40 to 46
cents per share.
 The decline of the U.S. housing market and recession have
eroded demand for home furnishings, affecting Bed Bath & Beyond
and peers like Pier 1 Imports Inc (PIR.N) and Williams-Sonoma
Inc (WSM.N).
 Earlier on Tuesday, Pier 1 reported a wider-than-expected
quarterly loss as markdowns ate into its margins. But the
company's shares rose 11 cents, or 17 percent, after it gave an
encouraging margin outlook for the current fiscal year.
 Bed Bath & Beyond, based in Union, New Jersey, has sought to
battle the difficult environment in part by cutting costs and
scaling back expansion. It has also worked to boost its online
and gift registry businesses.
 The company said it expects to open between 50 and 54 new
stores this year under the Bed Bath & Beyond, Christmas Tree
Shops, buybuy BABY and Harmon Face Values names. That would be
down from the 67 it opened last year. At the end of the fourth
quarter, the company had 1,037 stores in North America.
 Since the first quarter began, the company has opened one
Bed Bath & Beyond store and one buybuy BABY store.
 Bed Bath Chief Financial Officer Eugene Castagna said the
company is expecting capital expenditures of about $250 million
this year.
 Castagna also said he does not expect the overall business
climate to show any marked improvement this year.
 As a result, the company is forecasting net sales to
increase by a low single-digit percentage rate in the current
first quarter and the full year, while same-store sales are
expected to decline at a low single-digit percentage rate during
the same periods.
 Castagna said the company "was comfortable" with Wall Street
expectations for first-quarter profit of 23 to 24 cents, and
that Wall Street's expectation for a full-year profit of $1.50
per share "appears reasonable."
 Bed Bath & Beyond shares rose $3.50 to $29.01 after the
bell, after closing at $25.51 on the Nasdaq.
 (Reporting by Martinne Geller; editing by Carol Bishopric and
Matthew Lewis)