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Looking Beyond Bed Bath & Beyond Inc. (BBBY)’s Earnings

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Look beyond Bed Bath & Beyond Inc. (NASDAQ:BBBY)’s fiscal 2013 first-quarter earnings and you’ll see steady growth anchored by a strong market position. Revenue increased 17.8%, comparable-store sales rose 3.4%, and the company expects performance to be robust for the remainder of the year.

Bed Bath & Beyond Inc. (NASDAQ:BBBY)

The company, a chain of retail stores operating under flagship brands including Christmas Tree Shops, Harmon and buybuy Baby stores, recently posted mixed results. Earnings per share came in at $0.93, missing projected estimates of $1.68 by $0.75. Revenue came in at $2.6 billion, slightly better than expectations, and up 17.8% year-over-year. The 2.1% slip in earnings came as the home-furnishing retailer recorded an increase in expenses and a smaller tax benefit.

Looking forward, the company is upbeat. It continues to expand across the United States and remains focused on improving customer service and the retail experience both in stores and online.

“These results continue our consistent performance in terms of earnings-per-share growth and overall financial strength,” Leonard Joseph Feinstein, co-founder and co-chairman said on a conference call. “During the quarter, we continued the integration of World Market and Linen Holdings and made good progress on our major initiatives that we mentioned last quarter.”

Benefiting from a Goldilocks syndrome

Competition is indeed stiff and expanding in the housewares markets. But analysts maintain Bed Bath & Beyond Inc. (NASDAQ:BBBY) had found its niche and say the company benefits from the Goldilocks syndrome.

Washington state-based Trutina Financial’s Patty Edwards says rivals like Crate & Barrel are too expensive, while less-pricey Target Corporation (NYSE:TGT) has less options.

“[At Bed Bath & Beyond Inc. (NASDAQ:BBBY)] you can buy a $20 towel or you can buy a $2 towel. And you can do all of that in one spot,” Edwards explained.

Meanwhile, online giant, Inc. (NASDAQ:AMZN), which has mastered the art of selling books and electronics, could use some pointers when it comes to selling housewares. Although it does offer a large collection of home goods, it’s not the first stop for shoppers looking for such items., Inc. (NASDAQ:AMZN) continues to impress with robust revenue and earnings thanks to growing sales of digital content, cloud-computing services and gains in its main retail business. In addition, it is venturing into media, entertainment and fine art. Late last year it rolled out wine sales and has been touting upscale fashion in a move into higher end markets.

After hitting a year-to-date low of $245.75 in early May, shares are up nearly 13%. Short-term option activity reveals traders are betting on more upside.

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