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Bed Bath & Beyond Profit Tops Estimate; Outlook Weak


Home goods retailer Bed Bath & Beyond Inc. (BBBY) said Wednesday after the markets closed that its third quarter profit rose a modest 2% from last year, as higher costs and expenses dented a 15% sales growth.

However, the company's quarterly earnings per share came in above analysts' expectations, but its quarter sales fell shy of analysts' forecast.

At the same time, the company forecast fourth quarter and full year earnings below analysts' current consensus estimates.

The company also said that its Board of Directors has authorized a new $2.5 billion share repurchase program. The company currently plans to commence the new share repurchase program upon completion of the existing share repurchase program.

During the third quarter, the company repurchased about 3.1 million shares for about $191 million under its existing share repurchase program authorized in December 2010. As of November 24, the existing share repurchase program had remaining balance of about $223 million.

Bed Bath & Beyond shares are currently losing 3.45% in after hours trading after closing the day's regular trading session at $60.28, down 11 cents. The shares trade in a 52-week range of $55.58 to $75.84.

The Union, New Jersey-based company operates a chain of retail stores under the names of Bed Bath & Beyond, World Market, Cost Plus World Market, World Market Stores, Christmas Tree Shops, andThat!, Harmon, Harmon Face Values and buybuy BABY, selling a wide assortment of domestics merchandise and home furnishings.

As of November 24, the company had a total of 1,466 stores, including 1,003 Bed Bath & Beyond stores.

For the third quarter ended November 24, 2012, the company reported net income of $232.8 million or $1.03 per share, compared to $228.5 million or $0.95 per share for the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to earn $1.02 per share for the third quarter.

Net sales for the third quarter rose 15% to $2.70 billion from $2.34 billion in the same quarter last year. Twenty-one analysts had a consensus revenue estimate of $2.73 billion for the third quarter.

Same-store sales for quarter increased about 1.7%. The company estimates that the impact of Hurricane Sandy reduced its same-store sales percentage during the quarter by about 0.9%.

Looking forward, the company forecast fourth quarter earnings of $1.60 to $1.67 per share.

The company said it is modeling its fiscal 2012 earnings per share, consistent with prior estimates, to be $4.48 to $4.54.

Analysts currently expect the company to earn $1.75 per share for the fourth quarter and $4.62 per share for the fiscal year 2012.

by RTTNews Staff Writer

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