Shares of Bed Bath & Beyond, Inc. (NASDAQ: BBBY) touched a new life-time high of $55.17 on Thursday. The company reported a 25 percent growth in fourth quarter earnings, which came in ahead of its expectations as well as Street view.

The Union, New Jersey-based retailer posted earnings of $283.5 million or $1.12 a share, up from $226 million or $0.86 a share last year. While reporting its third quarter results, the company had expected to report earnings of $0.91 to $0.95 a share in the fourth quarter.

Sales for the quarter grew 11.6 percent to $2.5 billion. Analysts had expected profit of $0.97 a share on revenue of $2.39 billion. Comparable store sales grew about 8.5 percent, compared to about 11.5 percent growth last year.

During the quarter, the company opened six Bed Bath & Beyond stores, five buybuy BABY stores and one Harmon Face Values store. Since the beginning of the first quarter of fiscal year 2011, two additional Bed Bath & Beyond stores have been opened. In addition, the company is a partner in a joint venture which operates two stores in the Mexico City market under the name Home & More.

As of February 26, 2011, Bed Bath had a total of 1,139 stores, including 982 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 66 Christmas Tree Shops stores, 45 buybuy BABY stores and 46 stores under the names of Harmon or Harmon Face Values.

Looking ahead, Bed Bath & Beyond expects first quarter earnings of $0.58 to $0.61 a share, while Street predicts $0.60 a share. For the fiscal year ending next February, the company estimates earnings to grow by about 10 percent to 15 percent that implies $3.38 to $3.53 a share, while analysts project earnings of $3.33 a share.

For the first quarter and the full year, the company projects sales growth at a mid-single-digit rate, and same-store sales growth of 2 percent to 4 percent.

Following the results, FBR Capital Markets raised its price target on shares of Bed Bath & Beyond to $57 from $45, while maintaining its market perform rating. The brokerage also increased its 2011 EPS estimate to $3.58 from $3.27, and its 2012 estimate to $4.05 from $3.64.

The company called out lower coupon expense (consistent) and a 'reduction in markdowns', which is relatively new (since 4Q09). BBBY concurrently removed former language regarding 'higher inventory acquisition costs', which had caused gross margins to contract last quarter. In essence, BBBY is able to pass along higher costs and take price, in our view. The company has said that it will selectively raise prices, based upon competition and the value proposition, said Stephen Chick, an analyst at FBR Capital.

Credit Suisse raised its price target on shares of BBBY to $57 from $53, while maintaining its neutral rating. The brokerage increased its 2011 EPS estimate to $3.53 from $3.29 and its 2012 estimate to $4.00 from $3.74.

We are raising our estimates and our price target to reflect these strong results but also on an expectation that the tougher compares are actually behind them. A more aggressive share buyback or dividend distribution we believe would be the lever to move this stock into the $60's, and we have shown in the past that BBBY stock has more potential upside from an aggressive buyback than any other large or midsize name in our coverage. The company's current conservative balance sheet management, we believe, keeps a cap on the near term upside, said G. Balter, an analyst at Credit Suisse.

Bed Bath & Beyond stock gapped open sharply higher April 7 at $54.03 compared to previous day's close of $49.39. The stock touched a new all-time high of $55.17 on Thursday.

The stock closed Thursday's regular trading up 10.45 percent at $54.55 on the NASDAQ Stock Market with a volume of 12.12 million shares, while in the after-hours the stock slid 0.13 percent to $54.48. The stock traded between $26.50 and $55.17 during the past 52 weeks.

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