Besides killing an alliteration, I've always wondered why Bed Bath & Beyond (NASDAQ:BBBY) didn't change its name to Bed Bath & Kitchen. The "Beyond" clearly doesn't refer to car parts or Garbage Pail Kid cards. Whatever it's supposed to mean, Bed Bath & Beyond has failed to sell much of it. The company announced its first-quarter results after the bell on Wednesday, and on Thursday investors were running from the stock. By midday, shares were down 8% on weak earnings and a middling forecast for the rest of the year.

Bed Bath & Beyond has been unable to successfully carve out its own little niche, and its sales are being poached by the likes of more specialized Williams-Sonoma (NYSE:WSM). Maybe it should look into carrying those car parts.

Bed Bath & Beyond's unimpressive quarter
It's important to note that things could have gone worse. Bed Bath & Beyond managed to pull in the earnings per share that it forecast, though the $0.93 it garnered was at the low end of its range. That hasn't caused management to pull back from its annual earnings estimate, but the Street was hoping for more.

Comparable sales grew 0.4% for the quarter, which is a better result than some retailers managed in the first quarter. On the other hand, it's nothing close to the success that Williams-Sonoma saw in its first quarter. The company's eponymous brand grew comparable sales by 6%. On the other hand, it seems clear that Bed Bath & Beyond is still winning the small war against other big-box chains like Target, which had a 0.3% fall in comparable sales in its first quarter.

In short, Bed Bath & Beyond could be doing worse, but that doesn't make it a good situation. Williams-Sonoma has managed to make its customer focus and specialization a selling point, cutting back on the need for promotions and supporting sales of full-priced items.

The future of Bed Bath & Beyond
It's not just that sales are a bit slow at Bed Bath & Beyond. Gross margin fell slightly in the first quarter as well, down 0.7 percentage points to 38.8%. Bed Bath & Beyond needs to find a way to generate additional sales without having to dip further into the promotional well. One step toward that end is the renovation program that the company has undertaken to make its stores more presentable.

Bed Bath & Beyond is in a good position to have a bounce, but it needs to get its feet underneath it first. The small sales increase this quarter is actually a step in the wrong direction, as sales had been rising at a faster pace over the last fiscal year. With renovated storefronts and less reliance on coupons, Bed Bath & Beyond may find itself in a new position of strength. That's still a ways off, though, and for now, the business looks mediocre at best.