By Andria Cheng
Retail shares headed higher Wednesday, with Bed Bath &
Beyond Inc. leading the gainers, after the home-furnishings
retailer reported a smaller-than-expected fourth-quarter profit
decline. Discounter Family Dollar Stores Inc.'s shares also shot
upward after its profit outlook exceeded Wall Street
expectations.
Bed Bath & Beyond shares jumped 18% to $30.04. Analysts see
the company standing to benefit from the liquidation of former
rival Linens 'n Things.
Late Tuesday, Bed Bath & Beyond said net income fell 18% to
$141.4 million, or 55 cents a share, for the fourth quarter, which
ended Feb. 28, down from $172.9 million, or 66 cents, earned in the
same period a year earlier. Analysts had, on average, been looking
for a profit of 44 cents a share. Analyst Christopher Horvers at
J.P. Morgan Chase upgraded the stock to neutral from
underweight.
The S&P Retail Index rose 3.2% to 310.34, rising with the
broader markets, after Pulte Homes Inc.'s $1.3 billion stock deal
for rival Centex Corp. helped offset aluminum giant Alcoa Inc.'s
worse-than-forecast first quarter.
Discounter Family Dollar Stores shares jumped 4.8% to $34.23
after it said Wednesday that its second-quarter profit rose 33%,
aided by shoppers seeking bargains in the economic downturn. The
company also gave third-quarter and full-year profit forecasts that
exceeded Wall Street expectations.
Net income rose to $84.1 million, or 60 cents a share, from
$63.3 million, or 45 cents, a year earlier. Sales in the quarter
ended Feb. 28 rose 8.7% to $1.99 billion.
Comparable-store sales climbed 6.4% as the company increased
customer traffic and the amount shoppers spent on each average
transaction. The discounter, which operates more than 6,600 stores
in 44 states, said food and other consumable items led the demand
increase.
Clothing retailer Jos. A. Bank Clothiers Inc. shares jumped 13%.
The men's clothing retailer said that fiscal-year net income rose
to $58.4 million, or $3.17 a share, from $50.2 million, or $2.72 a
share, at the same point a year ago. Analysts had been expecting
earnings of $3.07 a share, according to data compiled by FactSet.
Net sales increased 15% to $695.9 million, from $604 million last
year. Comparable-store sales increased 8.9%.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com