Bed Bath & Beyond Books Profits

Shares of Bed Bath & Beyond rose Wednesday after the retailer posted fourth-quarter earnings that beat the First Call Corp. consensus estimate by 2 cents a share.

On that news, the bedroom and home furnishings retailer's (BBBY) stock rose 2 15/16, or 8 percent, to 37 7/16 on volume over 3 million shares.

The company said net income was $34.2 million, or 24 cents a share, compared to net income of $24.8 million, or 17 cents a share, in the year-ago period.

Sales for the quarter increased 37 percent to $419.2 million, while same-store sales rose 10.8 percent from last year.

"We saw a pick-up in business in all of our product lines," director of financial planning Ken Frankel told CBS MarketWatch. "It was an overall great quarter for us."

BancBoston Robertson Stephens analyst Lauren Cooks Levitan maintained a "buy" rating on the stock, citing the companies "dramatic" expansion potential to its small store base of 186 stores, a demonstrated track record of profitability and a strong balance sheet.

Bed Bath & Beyond said in a release that since the beginning of fiscal 1999, it has opened three superstores, bringing its retail base to 189 outlets. Including the new stores opened to date, the company said it plans to open 50 new superstores in the current year.

"The first quarter is off to a strong start following the robust sales trend of the fourth quarter," she said in a research note. "We believe Bed Bath & Beyond is on track to at least achieve our first-quarter earnings-per-share estimate of 11 cents vs. 9 cents."

The analyst also said the domestic retailer is positioned to benefit from trends that point to consumer interest in home spending, including positive housing construction trends, historically low mortgage rates, and increasing size and value of new homes.

Levitan also upwardly revised fiscal year 1999 and 2000 earnings-per-share estimates to 85 cents and $1.06 from 81 cents and $1.03, respectively.

Written By Cecily Fraser, CBS MarketWatch