Analyst cuts Bed Bath & Beyond target, estimates

CHICAGO - An analyst cut the price target and earnings estimates for Bed Bath & Beyond Inc. on Tuesday, saying the bedding and home decor store is being affected by slowing sector sales and the ongoing liquidation of its competitor Linens 'N Things.

Friedman, Billings, Ramsey analyst Stephen Chick maintained his "Underperform" rating on the retailer, but lowered his price target to $22.75, from $27.

He also lowered his 2008 earnings estimate to $1.65 per share, down from $1.74 per share and his 2009 forecast to $1.70, down from $1.79.

Chick said last month's report from retailer Williams-Sonoma Inc. shows sharp declines in that company's same-store sales — a a trend he believes will be evident in the overall sector when the federal government reports advance retail sales data Nov. 14.

Meanwhile, the Union, N.J.-based chain will see sales pressure as Linens 'N Things liquidates nearly $1 billion in inventory by the end of the year, he said.

"All in, we foresee downward pressure to sales and earnings for (Bed Bath & Beyond) that will not necessarily be directly recoverable in 2009," he told investors.

Analysts surveyed by Thomson Reuters expect Bed Bath & Beyond to earn $1.77 per share when it reports full year earning in February and $1.95 the following year.

Bed Bath & Beyond shares fell 18 cents to $25.01 in midday trading Tuesday.

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