Bed Bath & Beyond Buys Christmas Tree Shops, Raises 2003 Outlook

Bed Bath & Beyond ( BBBY) said it bought Christmas Tree Shops, a privately held retail chain, for approximately $200 million.

"We view Christmas Tree Shops' merchandise offerings and their knowledge base as extremely complementary to Bed Bath & Beyond's," said Steven Temares, the company's president and chief executive, in a statement released Thursday announcing the deal.

Christmas Tree Shops posted net sales of around $370 million in its most recently completed fiscal year, according to the release. Bed Bath & Beyond purchased the company in an all-cash transaction that it believes will add to its earnings in the second half of 2003. The company revised its earnings projection for fiscal 2003 from $1.20 per share to $1.23 per share.

After reporting that its first-quarter profit rose 24% on Wednesday, Bed Bath & Beyond shares tumbled 2% in after-hours trading that day on news that the company backed off Wall Street's consensus estimates for its second-quarter and full-year earnings.

On Thursday, its shares sank 4.4%, or $1.86, to $40.57 in Nasdaq trading.

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