Investors appear to be exiting shares of Bed Bath & Beyond (NASDAQ:BBBY) in droves, but the jury is still out on whether shoppers are following a similar path.

The Bed Bath debate continued yesterday after the company released a mixed bag of first-quarter results. On the bright side, total sales advanced a healthy 11.3% on a 1.6% same-store sales increase, and earnings per share improved almost 9% to beat analyst expectations.

However, comps grew nearly 5% just a year ago, and the company had to rely on share buybacks to boost the bottom line from a 4.2% net profit increase. Additionally, Bed Bath only beat quarterly projections because it ramped them down back at the beginning of June. As fellow Fool Timothy Otte pointed out, this could have been the first profit warning in the company's history.

CEO Steven H. Temares summed up the quarter by stating that the "overall retailing environment, especially sales of merchandise related to the home, is challenging," which served to send the shares down as much as 5% yesterday as builders like KB Home (NYSE:KBH), Beazer (NYSE:BZH), and DR Horton (NYSE:DHI) are seeing new-home sales plummet.

Based on recent trends, projections for the year could come down, but right now Bed Bath trades at a reasonable 16 times earnings and continues to throw off cash flow well in excess of what it spends to maintain existing stores and open new ones. That leaves room to repurchase shares and offset deteriorating profitability as higher gas prices and a difficult housing market lessen consumers' willingness to open their wallets.

It could be worse. Retailers such as Pier 1 Imports (NYSE:PIR), Sharper Image (NASDAQ:SHRP), and Finish Line (NASDAQ:FINL) are experiencing falling sales and losing tons of money. I don't expect Bed Bath to fall to such levels, but until it can regain at least a glimmer of its former fast-growing glory, I'll take a wait-and-see approach on its outlook.

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Bed Bath & Beyond is also an Inside Value selection. Sharper Image is a Hidden Gems Pay Dirt pick.

Fool contributor Ryan Fuhrmann is long shares of Bed Bath but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.