Bed Bath FY target tops estimates; shares soar

By Martinne Geller

NEW YORK (Reuters) - Bed Bath and Beyond Inc <BBBY.O> forecast earnings growth for the current year that would beat Wall Street estimates, following a holiday season that saw U.S. shoppers spend more on home goods, and its shares jumped 9 percent.

The outlook from the operator of the Bed Bath & Beyond stores -- which sell everything from toasters to shower curtains -- is a sign of recovering consumer spending, said Wall Street Strategies analyst Brian Sozzi.

During the downturn, "the consumer really refrained from replenishing or upgrading their kitchen utensils and their blankets," Sozzi said. "So with the environment improved, they're back in there, because that stuff only lasts for so long."

He said it also looked like Bed Bath might be gaining market share from rivals like Target Corp <TGT.N>, which reported weaker home goods sales.

Bed Bath said it expects earnings for the fiscal year ending next February to be 10 to 15 percent higher than the $3.07 per share it reported for the just-ended year. That comes out to a range of $3.38 to $3.53 per share. Analysts on average were expecting $3.33 per share, according to Thomson Reuters I/B/E/S.

The company said net income rose to $283.5 million, or $1.12 per share, in the fourth quarter, ended on February 26, from $226.0 million, or 86 cents per share, a year earlier.

Sales rose to $2.50 billion, from $2.24 billion a year earlier.

Analysts on average were expecting earnings of 97 cents per share on sales of $2.39 billion.

Same-store sales, a key gauge of retail health, rose 8.5 percent in the quarter, which included the year-end holiday shopping season.

Sales at home goods chains suffered during the housing downturn and recession, as consumers tightened their belts and spent only on basics. They are now showing more interest in spending on their homes as they spent more time at home.

Bed Bath's rival Williams Sonoma Inc <WSM.N> reported a higher-than-expected quarterly profit last month, while smaller rival Pier 1 Imports <PIR.N> is due to report results on Thursday.

Bed Bath forecast earnings of 58 cents to 61 cents per share for the current first quarter. Analysts on average were expecting 60 cents per share.

The company also said it expects net sales to rise at a mid-single-digit rate during the current first quarter and the full year, and is modeling same-store sales increases of 2 percent to 4 percent for the same periods.

The company also said it expects to open 45 new stores this year across all its store chains, which also include Christmas Tree Shops and buybuy Baby, and expects to continue renovating and relocating existing stores.

Bed Bath shares rose 9 percent to $53.85 in after-hours trading from their close at $49.39 on the Nasdaq.

(Additional reporting by Dhanya Skariachan; Editing by Steve Orlofsky, Gunna Dickson and Bernard Orr)