Bed Bath & Beyond Inc reported a second-quarter profit that rose more than analysts expected as cost cuts helped offset weak demand for home furnishings.

But shares fell 2.6 percent after the retailer refrained from raising its profit outlook for the remainder of the year, even though it beat expectations in the second quarter and saw a surprise rise in first-quarter profit.

Net income for the fiscal second quarter ended August 29 rose to $135.5 million, or 52 cents per share, from $119.3 million, or 46 cents per share, a year earlier, the company said on Wednesday.

Analysts on average were expecting earnings of 48 cents per share, according to Reuters Estimates.

Sales rose 3.3 percent to $1.92 billion as the company opened more stores, but sales at stores open at least a year, a key retail measure known as same-store sales, fell 0.6 percent.

Bed Bath & Beyond and peers like Pier 1 Imports Inc
and Williams-Sonoma Inc have seen sales fall as the weak U.S. housing market erodes demand for the home furnishings they sell. Former rival Linens 'n Things closed its doors after filing for bankruptcy protection last year.

Bed Bath & Beyond has seen its margins improve since the demise of Linens 'n Things eliminated the need for it to match that struggling retailer's aggressive couponing.

Executives said on a conference call that Wall Street estimates calling for a profit of 38 cents a share in the third quarter and $1.79 a share for the full year appeared reasonable.

The company also expects relatively flat to slightly positive consolidated same-store sales in the third and fourth quarters.

The retail chain also operates stores under the Christmas Tree Shops, Harmon, Harmon Face Values and buybuy Baby names.

Shares of Bed Bath & Beyond fell to $38 in extended trade from their Nasdaq close of $39.02.

(Reporting by Lisa Baertlein; editing by Carol Bishopric and Matthew Lewis)