UPDATE 1-Bed Bath & Beyond lowers third-quarter outlook

(Adds fiscal 2008 update expected Jan. 7, extra pre-Christmas shopping days vs 2007)

SAN FRANCISCO, Dec 2 (Reuters) - Bed Bath & Beyond Inc (BBBY.O) cut its third-quarter earnings outlook on Tuesday, citing lower expected sales and more promotions, but the home goods retailer did not change its fiscal 2008 view.

Bed Bath & Beyond shares fell nearly 2 percent after climbing 7.5 percent in regular trading to close at $19.67 on Nasdaq.

Net earnings for the quarter ended Nov. 29 are now expected to range from 31 cents to 35 cents versus the 41 cents to 47 cents the company forecast in September.

"The overall macroeconomic climate remains challenging, which, combined with liquidation sales of a major competitor, negatively impacted our fiscal third quarter," said Chief Executive Steven Temares in a statement.

Net sales for the quarter are now expected to decline 0.7 percent, the company said.

Same-store sales, a key gauge of retail performance, are expected to fall 5.6 percent instead of the flat to low single-digit decline previously anticipated.

Analysts, on average, had been expecting third-quarter earnings of 40 cents a share on sales of $1.84 billion, or a 2.5 percent sales increase from the year-ago period.

Rival Linens 'n Things, which filed for bankruptcy protection in May, has been holding liquidation sales in recent months to clear out merchandise.

Additionally, competitors like Pier 1 Imports Inc (PIR.N) and Williams-Sonoma Inc (WSM.N) have marked down goods amid the ongoing housing slump and the worsening economy that has hurt sales and profits at retailers selling goods for the home.

Bed Bath & Beyond did not alter its 2008 outlook in the statement, but said it would update its guidance on Jan. 7, when it delivers quarterly results.

The company said fiscal fourth quarter sales may benefit slightly from having two extra pre-Christmas shopping days than last year.

In September the company said net earnings would fall in the low double-digit to mid-teens percentage range from $2.10 a share posted in fiscal 2007.

The Union, New Jersey-based company, which operates about 994 stores in North America, plans to report third-quarter results on Jan 7.

Shares of Bed Bath & Beyond fell 1.6 percent, or 32 cents, to $19.35 in after-hours trading. (Reporting by Alexandria Sage; editing by Richard Chang)