After sliding all day long as investors awaited the news, shares of home furnishings retailer Bed Bath & Beyond (Nasdaq: BBBY) fell off a cliff when the company finally reported Q3 earnings after market-close. By the time after-hours trading was finished, the shares had fallen 8% for the day.

So I guess the numbers were bad, huh?
Actually, no. Sales came in just shy of $1.8 billion (and just ahead of projections), while profits of $0.52 per share hit analyst targets on the nose. Unfortunately, to reach analyst projections, Bed Bath had to once again rely on the same factors that got it over the hump last quarter. For the second time in a row, a combination of share buybacks (which concentrate net profits among fewer shares), and "one-time" tax benefits provided all of the company's per-share earnings growth. Back out either of these factors, and Bed Bath's profits headed the other way.

Guidance: Um, look down
But it gets worse. Peering into the fourth quarter, Bed Bath sees more trouble. Warning that comps will likely be flat this quarter, management predicted that the firm will earn just $0.64 to $0.67 per diluted share this quarter, versus Wall Street expectations of $0.77. Moreover, Bed Bath has nearly exhausted its stock buyback war chest, spending through the bulk of its recent $1 billion buyback authorization in record time. With less than $70 million left in the kitty, it'll be hard to keep the per-share numbers looking pretty next time around.

Valuation
So where does this leave us? On the down side, we've got a retailer struggling through a rough home-furnishings market. Its profits are slipping, and if you look at the cash flow statement, I think you'll see that operating cash flow isn't backing up the net profits very well at all.

But on the up side, assuming management has its fourth-quarter projections right, this year's earnings should come in around $2.10 per share. That gives the shares a current P/E ratio of about 13, which compares favorably to the P/Es sported by just about every rival in this space -- Target (NYSE: TGT), Wal-Mart (NYSE: WMT), Pier One (NYSE: PIR), Williams-Sonoma (NYSE: WSM), and Tuesday Morning (Nasdaq: TUES). And if you believe analyst estimates, once Bed Bath gets through its current rough patch, it should proceed to post 14% annual profits growth over the next five years.

I think a bull could find reasons to own this stock. But if you'd rather play bear and hibernate until more of this carnage has passed, hey, I can see the attractions there, too.

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Bed Bath & Beyond is a Stock Advisor and Inside Value pick. Ursine or bovine -- what animalistic spirits prevail among the friendly Fools at Motley Fool Stock Advisor? Grab yourself a free 30-day trial to the service and find out. Wal-Mart is an Inside Value recommendation, and the Fool owns shares of Bed Bath & Beyond.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.