UPDATE 3-Bed Bath optimistic as shoppers return

* Q3 EPS 58 cents vs Street view 43 cents

* Sales up 10.8 percent

* Sees full-year EPS above analyst estimates

* Shares up 8 pct in after-hours trading (Adds comments from conference call, analyst; background)

By Dhanya Skariachan

NEW YORK, Jan 6 (Reuters) - Bed Bath & Beyond Inc (BBBY.O) reported a higher-than-expected quarterly profit on Wednesday in a sign that demand for home furnishings is improving, and forecast full-year results that beat Wall Street expectations.

Shares rose about 8 percent in after-hours trading.

The results echo strong performance from other U.S. furniture and home goods companies Williams-Sonoma (WSM.N) and Pier 1 Imports Inc (PIR.N). [ID:nN17169989] [ID:nN19161113]

"We are seeing some pent-up demand for home goods being unleashed due to improving economic conditions along with improvement in the housing market," Barclays analyst Michael Lasser said by phone.

Lasser has an "equal-weight" rating on the stock.

The chain retailer, whose stores include Bed Bath & Beyond, Christmas Tree Shops and buybuy Baby, also benefited from the exit of former rival Linens 'n Things, which liquidated in late 2008 after it failed to find a buyer.

The recession and the collapse of the U.S. housing market hurt many home goods retailers as customers stayed home.

Bed Bath & Beyond has also kept a tight lid on costs by managing staffing levels and negotiating lower rents.

It also has a wider appeal than some rivals, with its namesake stores selling an array of products from furniture and luggage to electronics and appliances.

Net earnings rose about 73 percent to $151.3 million, or 58 cents a share, in the fiscal third quarter ended Nov. 28, from $87.7 million, or 34 cents a share, a year earlier.

Analysts on average were expecting a profit of 43 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 10.8 percent to $1.98 billion. Sales at stores open at least a year, a retail measure known as same-store sales, rose 7.3 percent.

On a conference call, the company said it was "cautiously optimistic" about the rest of the year. Bed Bath & Beyond expects to earn $2.11 to $2.15 a share in the period, above analyst expectations of $1.91 a share.

In September, its executives said Wall Street estimates calling for a profit of $1.79 a share for the full year were "reasonable."

Shares were up 8 percent at $42.40 in trading after the bell. They had closed at $39.23 on the Nasdaq. (Reporting by Dhanya Skariachan. Editing by Robert MacMillan, Leslie Gevirtz)