Bed Bath & Beyond Belief

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Home may be where the heart is, but the pocketbook can't be too far behind. Bed Bath & Beyond (Nasdaq: BBBY) posted fiscal fourth-quarter earnings of $0.47 a share. That was three cents better than Wall Street's targets, driven by a healthy 8.1% gain in comps.

This should not come as much of a surprise. The housing market is still hot, while folks taking advantage of low interest rates to refinance are earmarking the savings for dolling up their homesteads. Bed Bath & Beyond wins as shoppers arrive to pick up new pillow sheets for their beds, shower curtains for their baths, and whatever they might need to spruce up their beyond.

The stock hasn't been as hot as rival Linens 'n Things (NYSE: LIN), which has nearly doubled over the past year, but it's been a steady performer. And with earnings having surged 37% this past holiday quarter on a 24% uptick in sales, it's just as well that Bed Bath & Beyond hasn't blown through the roof. It makes the valuation argument that much easier to make.

The company closed out its fiscal year by earning $1.31 a share on $4.5 billion in net sales. So is Bed Bath & Beyond worth just over 30 times trailing earnings? Yes. The company has the pedigree, octane, and promise to justify continued appreciation. In fact, since going public a dozen years ago, it has posted higher earnings every single year. With 581 stores, the concept isn't even close to saturation domestically, and the world beyond awaits.

While a mixed bag of Restoration Hardware (Nasdaq: RSTO), Pier 1 Imports (NYSE: PIR), and Williams-Sonoma (NYSE: WSM) shows that the group doesn't always move in sync, Bed Bath & Beyond has managed to grow. Will it grow on you, too? Perhaps. Isn't it time you bought yourself a new loofah -- or, at the very least, figured out what one is used for?

Bed? Check. Bath? Check. Beyond? What will you do to spruce up your pad in 2004? Will a trip to our Home Center inspire you to take your home seriously? Are you a loofah lover? All this and more -- in the Building/Maintaining a Home discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz works a real mean toaster oven. He does not own shares in any companies mentioned in this story.