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Specialty retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY) announced its financial results for the first quarter of fiscal 2011

Street analysts had a week to ponder on the news. In the subsequent paragraphs, we cover the recent earnings announcement, analysts’ estimate revisions as well as the Zacks Rank and long-term recommendation for the stock.

Earnings Review

Bed Bath & Beyond reported better-than-expected first-quarter 2011 results on the heels of high single-digit growth in sales and higher margins. Earnings rose approximately 38% to 72 cents per share from the year-ago quarter earnings of 52 cents a share, handily beating its earnings guidance range of 58 cents to 61 cents per share. Bed Bath & Beyond also outpaced the Zacks Consensus Estimate of 62 cents a share. The company has reported nine consecutive quarters of improving trends.

(Read our full coverage on this earnings report: Bed Bath Beats Estimates Yet Again)

Agreement of Estimate Revisions

The company’s out performance in first-quarter 2011 has led 12 out of 20 analysts to revise their estimates in the upward direction over the past one week, with just 1 downward estimate revision for the second quarter of fiscal 2011. For fiscal 2011, 18 out of 23 analysts have revised their estimates in the upward direction while none moved in the opposite direction in the last 7 days.

Magnitude of Estimate Revisions

As a result of upward movement in estimates witnessed over the past one week, the Zacks Consensus Estimate for the second quarter of fiscal 2011 nched up by 1 cent to 83 cents a share. For fiscal 2011, the estimate moved up by 13 cents to $3.67 per share.

Our Recommendation

Currently, Bed Bath & Beyond holds a Zacks #2 Rank, implying a short-term 'Buy' rating on the stock. However, in the long term, we have a 'Neutral' recommendation on the stock.

Bed Bath & Beyond represents a strong brand with solid growth opportunities. Industry consolidation, cross merchandising opportunities, future growth potential for newer concepts, and strong balance sheet and cash flow should continue to augur well for the company. Further, Bed Bath & Beyond is well positioned to benefit from the recent positive housing turnover trends, which should facilitate sales of home furnishing retailers in fiscal 2011.

Bed Bath & Beyond, however, operates in a highly fragmented industry and faces competition from larger retailers, such as Target Corporation (NYSE:TGT) and Wal-Mart Stores Inc. (NYSE:WMT) as well as from departmental and specialty stores. Despite its strong fundamentals, Bed Bath may find it difficult to execute and implement new business strategies which, in turn, will impact its operations adversely.

Source: Earnings Scorecard: Bed Bath & Beyond