Bed Bath & Beyond 3Q Profit Climbs Ahead of Wall Street on Improved Sales

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Bed Bath & Beyond (NASDAQ:BBBY) surged to a 52-week high after hours after reporting late Wednesday a much stronger-than-expected 24.6% gain in third-quarter profit, lifted by higher sales in stores that have been open at least one year.

The Union, NJ-based company posted net earnings of $188.6 million, or 74 cents a share, compared with $151.3 million, or 58 cents a share, in the same quarter last year, beating the Street’s view of 65 cents.

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Revenue for the retail chain, which sells domestic items such as bed linens and kitchen textiles, was $2.19 billion, up about 11% from $1.98 billion a year ago, trumping average analyst estimates polled by Thomson Reuters of $2.11 billion.

Comparable store sales helped drive the stronger results, up about 7%, building on an increase of 7.3% in the year-earlier period.

Also Wednesday, the company, which also operates Harmon and Christmas Tree Shops, announced a new $2 billion share repurchase program slated to commence in early fiscal 2011 after completion of the existing program. Last quarter, Bed Bath & Beyond, which said it plans to use cash on hand to make the purchases, bought back some $211 million worth of its shares.

The move is a reflection of the board’s “continued confidence” in the company's long-term growth potential, financial outlook and cash flow generation, Steven Temares, the company’s chief executive, said in a statement.

“In addition to providing value to our shareholders through share repurchase programs, our strong operations should allow us to continue to invest in our infrastructure and maintain our flexibility to take advantage of opportunities as they may arise,” he said.

Looking ahead, the company expects net earnings in the range of 91 cents to 95 cents a share for the fourth-quarter, with full-year earnings between $2.86 and $2.90 a share.

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