Bed Bath & Beyond Inc reported a quarterly profit on Tuesday that easily topped Wall Street estimates, as sales were not as bad as feared, helping to send shares of the home furnishings retailer up 13.7 percent in after-hours trading.

The company also said it was comfortable with analysts' estimates for the current quarter, and that Wall Street estimates for the full year appeared reasonable.

Net income for the fourth quarter ended on February 28 fell to $141.4 million, or 55 cents per share, from $172.9 million, or 66 cents per share, a year earlier.

Sales slipped 0.5 percent to $1.923 billion, as sales at stores open at least a year, a key retail measure, fell 4.3 percent. A company executive said on a conference call that the 4.3 percent drop was at the better end of the expected range.

Analysts on average were expecting earnings of 44 cents per share and revenue of $1.915 billion, according to Reuters Estimates. In January, the company forecast earnings of 40 to 46 cents per share.

The decline of the U.S. housing market and recession have eroded demand for home furnishings, affecting Bed Bath & Beyond and peers like Pier 1 Imports Inc
and Williams-Sonoma Inc .

Earlier on Tuesday, Pier 1 reported a wider-than-expected quarterly loss as markdowns ate into its margins. But the company's shares rose 11 cents, or 17 percent, after it gave an encouraging margin outlook for the current fiscal year.

LOOKING AHEAD

Bed Bath & Beyond, based in Union, New Jersey, has sought to battle the difficult environment in part by cutting costs and scaling back expansion. It has also worked to boost its online and gift registry businesses.

The company said it expects to open between 50 and 54 new stores this year under the Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY and Harmon Face Values names. That would be down from the 67 it opened last year. At the end of the fourth quarter, the company had 1,037 stores in North America.

Since the first quarter began, the company has opened one Bed Bath & Beyond store and one buybuy BABY store.

Bed Bath Chief Financial Officer Eugene Castagna said the company is expecting capital expenditures of about $250 million this year.

Castagna also said he does not expect the overall business climate to show any marked improvement this year.

As a result, the company is forecasting net sales to increase by a low single-digit percentage rate in the current first quarter and the full year, while same-store sales are expected to decline at a low single-digit percentage rate during the same periods.

Castagna said the company was comfortable with Wall Street expectations for first-quarter profit of 23 to 24 cents, and that Wall Street's expectation for a full-year profit of $1.50 per share appears reasonable.

Bed Bath & Beyond shares rose $3.50 to $29.01 after the bell, after closing at $25.51 on the Nasdaq.

(Reporting by Martinne Geller; editing by Carol Bishopric and Matthew Lewis)