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Bed Bath & Beyond Rises After Profit Forecast Tops Estimates

April 7 (Bloomberg) -- Bed Bath & Beyond Inc., the New Jersey-based seller of linens, towels and cookware, rose the most in almost two years after projecting full-year earnings that beat analysts’ estimates.

Profit will increase 10 percent to 15 percent in the year through February 2012, the Union, New Jersey-based retailer said yesterday in a statement. That translates to per-share earnings of as much as $3.53, exceeding analysts’ expectations of $3.48, the average of 14 estimates in a Bloomberg survey.

Bed Bath & Beyond, which operates more than 1,100 stores in North America, increased sales by 12 percent in the fourth quarter, twice as fast as expenses grew, amid high unemployment and declining home prices. Fewer markdowns as a percentage of sales helped boost profitability, Chief Executive Officer Steven Temares told analysts yesterday on a conference call.

“Bed Bath & Beyond is clearly winning in the marketplace,” Colin McGranahan, an analyst at Sanford C. Bernstein & Co. in New York, said today in a note to clients. He rates the shares “outperform” and said the retailer is “now operating a more productive, more profitable business than ever.”

The retailer jumped $5.16, or 10 percent, to $54.55 at 4 p.m. on the Nasdaq Stock Market, the biggest gain since April 2009. The shares have gained 11 percent this year.

Bed Bath & Beyond said sales at stores open more than a year rose 8.5 percent in the fourth quarter.

It also reported quarterly earnings of $1.12 a share, a 30 percent increase from a year earlier. Analysts had projected earnings of 97 cents, according to an average of estimates compiled by Bloomberg.

To contact the reporter on this story: Chris Burritt in New York at cburritt@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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