NEW YORK (Reuters) - Bed Bath & Beyond (BBBY.O) beat quarterly profit estimates and gave a strong outlook for the period covering the holidays as U.S. consumers spent more on their homes, sending its shares up.
On Wednesday, the operator of the Bed Bath & Beyond, Christmas Tree Shops, Harmon and buybuy Baby chains also announced that its board has approved a new plan to buy back $2 billion in common shares.
The company sees fourth-quarter earnings of 91 cents to 95 cents a share. Analysts on average were expecting a profit of 93 cents a share, according to Thomson Reuters I/B/E/S.
The strong results and outlook coincided with a report from the National Association of Realtors that showed existing home sales rose 5.6 percent in November to a 4.68 million unit annual pace, the highest since June.
(Graphic r.reuters.com/duf43r )
Shares of Bed Bath rose 6 percent to $50.57 in after-market trading, after closing up 0.3 percent at $47.67 on Nasdaq.
Last week, rival Pier 1 Imports Inc (PIR.N) also reported strong results as the home goods chain’s targeted marketing, product changes and decision to stock more seasonal goods paid off.
Sales at home goods chains crumbled during the housing downturn and recession as consumers tightened their belts and spent only on essential items. They are now showing renewed interest to freshen up their homes.
Bed Bath, which sells items ranging from furniture to toasters, has gained from the bankruptcy of former rival Linens ‘n Things. Its efforts to cross-merchandise among the company’s different concepts have also helped it to win shoppers.
Net income rose to $188.6 million, or 74 cents a share, in the fiscal third quarter ended November 27, from $151.3 million or 58 cents a share, a year earlier.
Analysts, on average, were expecting a profit of 66 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose about 11.1 percent to $2.19 billion, beating the analysts’ average estimate of about $2.11 billion. Sales at stores open at least a year rose by about 7 percent.
Reporting by Dhanya Skariachan, editing by Matthew Lewis, Phil Berlowitz