(By Balachander) Bed Bath & Beyond Inc. (NASDAQ:BBBY) shares fell 4.20 percent in extended trading after the retailer of home products posted second-quarter earnings that trailed market expectations.
The Union, New Jersey-based company forecasts earnings per share (EPS) of $0.99 to $1.04, while consensus estimates call in for EPS of $1.02 for the third quarter ending November.
Bed Bath, which agreed to acquire smaller rival Cost Plus Inc. (NASDAQ:CPWM) earlier this year, continues to model fiscal 2012 earnings per share growth in the range of high single to low double digits.
The company reported second-quarter EPS of 98 cents, up 5.4 percent from same period of last year, yet missed Wall Street projections of $1.02 a share. Sales rose 12 percent to about $2.59 billion, beating consensus estimate of a growth of 9.80 percent.
Net earnings fell 2.2 percent to $224.3 million as selling, general and administrative expenses jumped 15 percent.
Comparable store sales grew roughly 3.5 percent in the second quarter ended August, versus 5.6 percent gain in the year-ago period.
The company is acquiring Cost Plus, a retailer of casual home furnishings, for $22 per share or about $495 million. Oakland, California-based Cost Plus, with 2011 sales of $964 million, operates more than 259 stores in 30 states under the names "World Market" and "Cost Plus World Market."
On Tuesday, BBBY shares were downgraded to "Perform" from "Outperform" by Oppenheimer & Co. Inc. on concerns that drivers of upside is waning for the home fashion retailer near term. The brokerage has a price target of $80 on the stock.
BBBY shares, which have been trading in the 52-week range between $53.15 and $75.84, ended Wednesday's regular trading at $68.79.