) to overweight from equal-weight.
Analyst Alan Rifkin believes Bed Bath & Beyond will announce the expansion of its Christmas Tree Shops (CTS) chain by year-end. He thinks management is very satisfied with Christmas Tree Shops's productivity, with estimated sales per square feet of $400, vs. $237 for company's namesake stores.
He notes management spent the past two years learning the operational side of Christmas Tree Shops. He believes the scalability of the model can drive Christmas Tree Shops's operating margin well above current 3% to 4% level, potentially above core Bed Bath & Beyond in the long term.
Rifkin sees the company next week posting 32 cents, vs. 27 cents first-quarter earnings per share on 4.5% higher same-store sales. He expects $1.90 fiscal 2006 (ending February) earnings per share, and $2.28 fiscal 2007 earnings per share.