Out of the Gate: Bed Bath & Beyond rises

The Union, N.J., company's profit and revenue exceeded Wall Street's estimates. Analysts said Bed Bath & Beyond lured more customers into its stories with coupons, and they believe the company is effectively taking advantage of the struggles of its rival Linens 'n Things.

The stock gained $1.70, or 6 percent, to $30.27 in morning trading.

Deutsche Bank analyst Mike Baker said the company mailed out more coupons during the May quarter, and he noted that sales at its older stores improved slightly, rather than falling as he had expected. He said the company is being opportunistic, expanding into Canada and Mexico even though economic conditions are difficult.

The company's same-store sales, or sales at locations opened at least one year ago, rose 0.8 percent. Baker expected those sales, considered a key measurement of retailer health, to decrease by 2 percent.

Rival Linens 'n Things filed to reorganize under Chapter 11 bankruptcy protection in May and plans to dispose of 120 weak-performing stores.

Goldman Sachs analyst Matthew Fassler said Linens 'n Things' liquidation sales may have hurt Bed Bath & Beyond's sales in the first quarter, but the Linens' problems are a big positive for Bed Bath & Beyond in his view.

Bed Bath & Beyond's gains came as the broader market opened sharply lower Thursday as oil prices increased and Goldman Sachs downgraded the financial sector and three automotive stocks, including General Motors Corp.