Out of the Gate: Bed Bath & Beyond Falls

Bed Bath & Beyond's shares were off 54 cents, or 1.8 percent, to $28.93. The company said in its conference call late Wednesday that it also saw an increase in coupon redemptions and a higher percentage of sales of hardline goods, which hurt results.

PiperJaffray analyst Neely N.J. Tamminga said this was consistent with her view that textiles (or softlines) have been challenging across the industry, noting increased levels of merchandise markdowns in bedding and related textiles at company locations. She reiterated her "Sell" rating on the company.

Morgan Keegan analyst Laura A. Champine expects the company to "struggle through the year, as demand trends should remain weak while margins compress due to heavy promotions and an inflated advertising budget that management deems necessary to compete with rivals and drive traffic." She reiterated her "Underperform" rating, saying investors should sell the stock, "as the company is clearly not immune to the hideous industry environment."

Late Wednesday, Bed Bath said its first-quarter profit would fall well below Wall Street estimates. It projected 26 cents to 30 cents per share, compared with analyst estimates of 36 cents. Analysts polled by Thomson Financial predict first quarter earnings of 36 cents per share.

For 2008, the company expects its earnings per share growth to fall from a low double-digit to a mid-teens percentage from the $2.10 reported in 2007.