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A bumpy ride for Bed Bath & Beyond

April 11, 2013: 2:32 PM ET

Investors found reason to jump into Bed Bath & Beyond after the retailer posted a spike in sales.

Bed Bath & Beyond got a boost Thursday after the home goods retailer reported stronger-than-expected revenue.

While earnings were in line with forecasts, investors cheered the sales figures. Net sales rose nearly 25%, while same store sales -- a key metric of consumer spending -- nudged up 2.5%

Shares of Bed Bath & Beyond (BBBY) rallied more than 4% Thursday before pulling back.

Some of the retreat could be due to the low same store sales figures. But UBS analysts point out that it was a tough quarter all around for consumer spending and raised their price target on the stock to $68 from $64.

"The notable takeaway for the skeptics was that the company's gross margin declined at an accelerating rate despite an easier comparison," analyst wrote in the report.

Still, they kept a neutral rating on the stock so there is a case to be made for being cautious.

StockTwits traders were mostly in Bed Bath & Beyond's corner.

$BBBY beating on Revenues is VERY interesting for retail as a whole. Not many companies beat on Revs last quarter. Something to watch Bullish

$BBBY profit increases from $594M to $990M with 0 long term debt Bullish

Not too shabby for a company that's faced stiff competition from the likes of Amazon (AMZN). A recent study said shoppers will stroll through Bed Bath & Beyond's aisles to get a "feel" for the products they want, only to turn around and buy them online.

Bed Bath inventory management remains impressive - up only 19% vs 24% sales growth.$BBBY has a laser focus on cash flow generation

With those kinds of sales figures, it seems as though the retailer must be doing something (or a number of things) right.

$AAPL Even with a miss $BBBY up 2.6% bc of larger BUYBACKS, listening Cook?

Haha. Good one RocketBaxter. And very good question, given how eventful last month's Apple shareholder meeting was.

buybacks are an amazing tool, nice. $BBBY

That's a good point. Bed Bath & Beyond has done a fair amount of buying back its own stock -- a healthy sign. It bought back $305 million during the latest quarter, and has $2.4 billion left under its current authorization.

But as UBS analysts point out, the retailer may want to consider joining the dividend party.

"The company would be well-served by having a more balanced approach," wrote the analysts, and I have to agree. Keeping anything balanced usually pays off in the long run.

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