(Reuters) - Home furnishing retailer Bed Bath & Beyond Inc (BBBY.O) on Wednesday reported a better-than-expected quarterly profit and forecast earnings for 2019 above Wall Street estimates, sending its shares up 16 percent in extended trading.
Bed Bath & Beyond, which sells everything from bath towels and bed sheets to kitchen appliances and home furnishings, has been heavily investing in revamping its stores and digital platforms as well as its loyalty programs to ward off online retailers such as Amazon.com Inc (AMZN.O) and Wayfair Inc (W.N).
The company has also been spending on its decorative furnishing business, adding more assortments to its store and websites while developing its own brands that will be introduced over the next two years.
And the efforts seems to be paying off, with the retailer saying it is ahead of plans on its long-term goals of slowing down its declining operating profit and net earnings per share in fiscal 2018 and 2019 and growing them in 2020.
“As we are moving forward in 2019, we expect these initiatives to gain even more momentum and accelerate,” Chief Executive Officer Steven Temares said on a conference call with analysts.
The retailer forecast 2019 earnings per share to be about the same as fiscal 2018 at $2 per share, above analysts’ estimate of a profit of $1.57 per share.
“The company has shifted back ... focus on profit over sales. Whether this pays off longer-term remains to be seen,” Wedbush Securities analyst Seth Basham said.
The Union, New Jersey-based company’s net income fell 60 percent to $24.4 million, or 18 cents per share, in the third quarter ended Dec. 1.
Analysts on average had expected a profit of 17 cents per share, according to IBES data from Refinitiv.
Net sales rose to $3.03 billion from $2.95 billion.
However, total comparable sales dropped 1.8 percent, continuing their slide for the seventh straight quarter. Analysts had expected comparable sales to fall 0.29 percent.
The “Buy Buy Baby” brand owner’s shares, which had nearly halved in 2018, were up 16.3 percent at $14.26 in after-hours trading. Short interest in Bed Bath & Beyond has climbed to at least a five-year plus high, representing about a quarter of the company’s free float, according to Refinitiv data.
Reporting by Soundarya J in Bengaluru; Editing by Maju Samuel