Bed Bath & Beyond Posts 32% Jump in Earnings

Updated from 5:03 p.m. EST

Bed Bath & Beyond (BBBY Quote) posted a 32% gain in earnings per share in the third quarter, but the company warned analysts not to expect an encore in the current period.

In its quarter ended Nov. 29, the home-products retailer earned $100.5 million, or 33 cents a share, compared to $75.1 million, or 25 cents a share, in the year-ago period. The company's sales rose 25.5% to $1.17 billion on the year.

The retailer's results topped Wall Street's estimates. Analysts polled by Thomson First Call were expecting Bed Bath & Beyond to earn 31 cents a share on sales of $1.16 billion.

The company raised its full-year guidance from $1.25 to $1.27 a share, topping analysts' projections of $1.26 a share. But if the company's outperformance in the third quarter is taken away, the guidance implies that Bed Bath & Beyond officials see the company's fourth-quarter earnings falling a penny short of analysts' estimates of 44 cents a share.

Company officials did say, however, that they are comfortable with Wall Street's projections of $1.51 per share in earnings in fiscal 2004.

Investors shrugged off the company's fourth-quarter outlook, which came after the close Wednesday. In after-hours trading, the company's stock rose $1.04, or 2.6%, to $41. Bed Bath & Beyond shares closed regular trading up 96 cents, or 2.5%, at $39.96.

In its just-completed quarter, the company's bottom line benefited from cost controls as well as robust results at its older stores.

The company's same-store sales, which compare results at outlets open for more than one year, increased 6.4% in the quarter. During the same period last year, Bed Bath & Beyond's same-store sales increased 8%.

Meanwhile, the company recorded a 19-basis-point increase in its gross profit margins as a portion of sales. Gross margin represents the difference between what a company charges customers for its products and its direct costs of selling those products, including occupancy and vendor expenses. In the third quarter, Bed Bath & Beyond posted a gross margin of about $487 million, or 41.45% of sales.