Bed Bath & Beyond: Above and Beyond

(Analysts' commentary added.)

NEW YORK (TheStreet) -- Bed Bath & Beyond(BBBY Quote) went far beyond in the last quarter, reaping a 14% jump in profit, as the company cut costs and saw improving sales trends.

Nonetheless, the company was downgraded to neutral from outperform by a Credit Suisse analyst, sending shares down 3% to $37.90 before the bell.

During the quarter -- the second of the company's fiscal year -- Bed, Bath and Beyond earned $135.5 million, or 52 cents a share, up from $119.3 million, or 46 cents, in the year-ago period. Analysts had expected earnings of 48 cents a share.

Revenue for the company grew 3% to $1.92 billion from $1.85 billion, while its same-store sales slipped less than 1%.

Analyst Gary Balter of Credit Suisse said the downgrade had nothing to do with either earnings or management; he says he simply can't justify the stock price.

On Wednesday, shares of Bed Bath & Beyond hit a 52-week high of $40.23, up 52% since the beginning of the year.

Balter compared the stock price to that of Lowe's(LOW Quote), Dick's Sporting Goods(DKS Quote) and O'Reilly Automotive(ORLY Quote), which he also says are too high.

But Balter did say that he expects the company to continue to deliver a strong performance going forward, and increased his price target to $41 from $35.

Bed Bath & beyond indicated that it expects flat to positive same-store sales in the second-half of the year.

Last week Pier 1(PIR Quote) reported a smaller loss in its second-quarter, as it, too, cut corners and began to see shoppers returning to stores.