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Bed Bath & Beyond falls on weak forecasts

NEW YORK (AP) -- Shares of Bed Bath & Beyond tumbled to their lowest point in more than a year on Thursday as its fiscal fourth-quarter and full-year earnings forecasts missed analysts' expectations.

THE SPARK: The company, which runs Cost Plus World Market, Christmas Tree Shops and its namesake stores, said Wednesday that fourth-quarter earnings will be $1.60 to $1.67 per share. Full-year earnings will range from $4.48 to $4.54 per share.

Analysts polled by FactSet expect fourth-quarter earnings of $1.75 per share and full-year earnings of $4.62 per share.

Bed Bath & Beyond also reported third-quarter earnings that beat Wall Street estimates, while revenue was basically in line.

THE ANALYSIS: Raymond James' Budd Bugatch said in a client note that he believes Bed Bath & Beyond's fourth-quarter earnings forecast came in below his estimate of $1.78 per share because of higher-than-expected selling, general and administrative expenses.

The analyst said that recent acquisitions and an improving online business provide opportunities for Bed Bath & Beyond going forward, and the stock price is still appealing.

"We continue to view the company as a best-of-breed retailer with an exceptional management team and expect the company's returns on capital to remain well in excess of its cost of capital," Bugatch wrote.

He reaffirmed a "Strong Buy" rating but lowered his stock price target to $85 from $90.

John Marrin of Jefferies said that the fourth-quarter outlook looks good to him. His estimate was $1.66 per share for the period before he raised his forecast last week to $1.72 per share. The analyst said that he still believes that Bed Bath & Beyond can hit his $1.72 per share estimate, but the consensus forecast of $1.75 per share may have to come down a few pennies.

Marrin also viewed the company's third-quarter results as solid. He kept his "Buy" rating and $72 price target.

SHARE ACTION: Bed Bath & Beyond Inc.'s shares fell $4.81, or 8 percent, to $55.47 in midday trading. The Union, N.J., company's stock dropped to $54.33 earlier in the session, the lowest level since October 2011.