Bed Bath & Beyond Surpasses

Bed Bath & Beyond Inc. (BBBY - Snapshot Report) recently reported better-than-expected second quarter 2009 results with a low single-digit growth in the top-line and a surprise double-digit rise in the bottom-line.

The company’s quarterly earnings of 52 cents a share surpassed the Zacks Consensus Estimate of 48 cents, and jumped 13.0% year on year from 46 cents reported in the prior-year quarter.

Results were favorably impacted by the uptick in sales as well as retailer’s effective cost management, which offset the slump in demand for home furnishings due to slowdown in the housing industry.

Consequently, operating profit climbed by 18.5% to $222 million, whereas operating margin expanded 150 basis points to 11.6%.

The houseware retailer continues to experience growth in the top-line due to the opening of new stores. After increasing 2.8% in the first quarter of 2009, net sales rose 3.3% in the quarter under review to $1,914.9 million from $1,853.9 million posted in the year-earlier quarter.

During the quarter, the company opened – nine Bed Bath & Beyond stores, three buybuy BABY stores and one Harmon Face Values store. The company also closed one Bed Bath & Beyond store.

Comparable store sales fell 0.6% in the second quarter of 2009 compared to 0.1% decline registered in the year ago quarter. However, the rate of decline decelerated from the first quarter of 2009, when comps dipped 1.6%.

Like Bed Bath & Beyond, the company’s peer groups, Williams-Sonoma Inc. (WSM - Snapshot Report) and Pier 1 Imports Inc. (PIR - Snapshot Report) have been also hit by the U.S. housing downturn, which has resulted in weak consumer demand for home furnishing items. Moreover, rising unemployment is also making things tough as cash-strapped consumers are prioritizing their purchases.