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Bed Bath & Beyond (NASDAQ: BBBY) reported Q1 earnings on Wednesday, and Trey Thoelcke highlighted the numbers in this earnings-recap piece. Shares rose substantially in the after-hours trading session yesterday, jumping over 8%, and as I reviewed various earnings reports last night, I found myself drawn to the retailer's stock performance. I haven't been a huge fan of Bed Bath & Beyond as of late, so I figured I should take a look at the earnings release to see if there's anything here that would change my opinion.

Unfortunately, there isn't. Sales may have grown 6%, and expectations may have been beaten by $0.03, but net income still dropped over 20% to $0.30 per diluted share. Cash flow from operations declined 44% to $65.8 million. And same-store sales were very anemic, rising only 0.8%.

I choose, in this case, to focus on those figures. I also consider the fact that Bed Bath & Beyond does not pay a dividend, and that we are in an awful economic environment, both from a consumer and stock-market standpoint. This is not the stock I'd want to face the recession with, and I don't necessarily find it to be a big value right now. When it comes to retail, I am more likely to look at Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). I'd even consider a Home Depot (NYSE: HD) or a Lowe's (NYSE: LOW). All of these stocks pay dividends and have better brand equities and more attractive prospects. Bed Bath & Beyond certainly didn't deliver an earnings bomb, but I'm still not inclined to put money here.

Disclosure: I don't own any company mentioned; positions can change at any time.

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Lowe's (NYSE: LOW) shares are falling today after the Commerce Department reported that May home construction fell 3.3%, signaling continued weakness in the housing market and bad news for home improvement stores. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on LOW.

After hitting a one-year high of $32.53 in September, the stock hit a one-year low of $19.94 in January. This morning, LOW opened at $24.15. So far today the stock has hit a low of $23.45 and a high of $24.23. As of 12:20, LOW is trading at $23.62, down $0.43 (-1.8%). The chart for LOW looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $27.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in four months as long as LOW is below $27.50 at October expiration. Lowe's would have to rise by more than 16% before we would start to lose money. Learn more about this type of trade here.

LOW hasn't been above $27.50 since October and has shown resistance around $24 recently. This trade could be risky if the company's earnings (due out in late August) are a positive surprise, but even if that happens, this position could be protected by resistance LOW might find at its 200 day moving average, which is currently around $25 and falling.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in LOW.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Activision Inc. (NASDAQ: ATVI) beat Q4 expectations and raised its fiscal 2009 guidance.
• Air France-KLM swung to a loss in the fourth quarter and warned of tough times ahead.
• BJ's Wholesale Club (NYSE: BJ) Q1 earnings soared, beating expectations, and it raised its forecast.
• Canadian Solar Inc. (NASDAQ: CSIQ) beat Q1 estimates on robust demand and favorable exchange rates.
• Foot Locker Inc. (NYSE: FL) Q1 profit declined, hurt by an impairment charge and nearly flat sales.
• Gap Inc. (NYSE: GPS) beat Q1 earnings estimates by managing costs and inventory.
• Home Depot Inc. (NYSE: HD) Q1 earnings tumbled on a one-time charge and the housing slump.
• Intuit Inc. (NASDAQ: INTU) beat Q3 expectations and announced a share buyback program.
• Lenovo Group Ltd. (OTC: LNVGY) Q4 earnings more than doubled on strong global distribution.
• Lowe's Companies Inc. (NYSE: LOW) reported a so-so first quater in line with Wall Street expectations.
• NetEase.com Inc. (NASDAQ: NTES) Q1 earnings declined due to increased tax burden.
• Saks Inc. (NYSE: SKS) missed Q1 earnings estimates but beat revenue expectations.
• Solarfun Power Holdings Co. (NASDAQ: SOLF) Q1 revenue surged 529% from the previous quarter.
• Suntech Power Holdings Co. (NYSE: STP) Q1 revenues soared and earnings more than doubled.

Additional earnings highlights:
Hewlett-Packard, Target, Barnes & Noble, Campbell, Staples and others
Ford, Hormel, Limited Brands, Intuitive Surgical, PetSmart and others

Upcoming results to watch for include Borders (NYSE: BGP), Polo Ralph Lauren (NYSE: RL), TiVo (NASDAQ: TIVO), Big Lots (NYSE: BIG), Costco (NASDAQ: COST), Dell (NASDAQ: DELL), HJ Heinz (NYSE: HNZ), Sears (NASDAQ: SHLD), Lions Gate (NYSE: LGF), and Tiffany (NYSE: TIF).

Visit AOL Money & Finance for more earnings coverage.

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"Which is the better buy among the leading home retailing stocks -- Home Depot (NYSE: HD) or Lowe's (NYSE: LOW)?" asks Charles Payne.

In his Wall Street Strategies, the leading advisor -- and well-known panelist for Fox Business News -- explains, "The debate on which is a better investment, Home Depot or Lowe's, is now at a crossroads following the release of 1Q08 earnings results from each firm.

"As expected, both companies reported year on year earnings decreases as slowing home remodeling spend weighed on comparable store sales.

"Back in 2005-2007, Lowe's was hot the investment choice relative to Home Depot, with many citing its stronger operating margins and friendlier store shopping environment. Although Lowe's is still attracting higher income customers as a result of solid merchandise offerings and customer service, in our view one should crunch the numbers.

"When they do, it will become prevalent that Home Depot is the stronger investment in the niche at this time. The company has been ahead of the game with respect to Lowe's in drastically reducing capital expenditures and store operating outlays.

"Moreover, it has taken the fight back to its smaller rival in the area of customer service and product presentation. In our opinion, play the underdog card and look to invest in Home Depot in upcoming months given more attractive valuation."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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Sometimes one company cannot be discussed without another entering the conversation. The Home Depot (NYSE: HD) reported a 66% drop in first-quarter profit Tuesday, largely due to a one-time charge and continued weakness in the housing market. Only a few days ago, Lowe's Co. (NYSE: LOW) reported sizable losses too.

"Weakness in the housing market" -- in many places that is a gross understatement, since there is no market and they are giving houses away. There are places where home sales have stabilized, and based on April figures it appears that home construction was up when including apartment development. But there are still millions of single family homes and condominiums available at fire sale prices.

Atlanta-based Home Depot said it earned $356 million, or 21 cents a share, in the three months ending May 4, compared to a profit of $1.05 billion, or 53 cents a share, a year earlier. It announced earlier this month that it was putting the brakes on some of its expansion plans and said it would do what was previously unthinkable -- close 15 of its flagship stores. The move, to be completed by July, affects 1,300 employees

As is clear from Battle of the Brands: Home Depot vs. Lowe's, there is much contrast between the two companies but in the end they both address the same market and as long as that market is down their stock prices will find few prospects for growth.

Home Depot closed yesterday at $28.87, 30% off it's 52 week high of $41.19. It has been bouncing around between $25 and $30 a share for the past seven months. Given it's 3% dividend yield, I think it is worth putting on your watch list for a possible buy if it touches "bottom" again.

Lowe's hasn't done any better, closing yesterday at 24.25, 27% off its 52 week high. Lowe's has been below $20 a share and might be a buy if it sees that level again but the dividend yield for this expanding company is not nearly as generous at 0.72%. Even though an argument can and has been made that Lowe's is the better managed company with more growth potential, I still favor HD as an investment.

The dividend is important, in particular because it is only guesswork as to when the housing market will bounce back. In the meantime you are getting a healthy return from a stock that has been beaten down pretty well. The differences between the two companies will be overshadowed by macro economics in the initial stages of a recovery. After that, Lowe's management may make a difference.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of HD or LOW.

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Lowe's (NYSE: LOW) reported Q1 earnings on Monday, and I'm sure a lot of investors looked to this report to see if it indicated how the economy was doing. I hope not too many people were looking to link the economy with the company's numbers, however, because they weren't the greatest.

Top-line sales declined about 1% to $12 billion. Net income dropped 15% to 41 cents per share. Perhaps worst of all, same-store sales plummeted 8.4%. So, with flat revenues and a declining bottom line, was there anything positive about the earnings release? Yes. According to Briefing.com, Lowe's beat expectations by a penny (it did miss on the net-sales number, though). Also, the cash-flow statement shows that the retailer is doing fine in terms of the green. Lowe's generated $2.5 billion from operations this quarter versus $2.1 billion in last year's comparable period. So all is not lost.

But make no mistake, this is a tough environment for Lowe's and its enemy, Home Depot (NYSE: HD). However, if you think you want to get in Lowe's at some point, now could be the time, assuming you are a long-term thinker. The company's shares have bounced off their lows of the year and are still off from their highs. As we all know, the economy will get better at some point, and Lowe's will ultimately benefit. Both Lowe's and Home Depot are not that expensive, in my opinion, and both are probably worth some due diligence.

Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.

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• DJIA 13,026.69 (+39.89; +0.3%)
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• 52 WEEK LOWS
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Still in deal news, the Wall Street Journal reported that after failing to get the support of a majority of the company's shareholders for a deal and after the previous deadline has expired Friday, Electronic Arts (NASDAQ: ERTS) is likely to again extend the deadline for its hostile tender offer to acquire Take-Two Interactive Software (NASDAQ: TTWO).

Lowe's Companies Inc. (NYSE: LOW) shares are down over 3% in premarket trading after the home improvement retailer said its profit fell 17.9% and sales fell 8.4% as it faces a challenging sales environment amid a national housing slump. Lowe's 41 cents earnings per share is actually about the 40 cents estimated by analysts.

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Earlier this week, Jim Cramer pondered whether the U.S. economy had reached bottom, given such recent signs as stronger-than-expected retail sales and investor interest in homebuilders. In particular, he said he's looking at next week's quarterly results from Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector and for the potential market rally.

Lowe's is expected by analysts surveyed by Thomson Financial to report second-quarter earnings of 39 cents per share, down 18.8% from 48 cents per share in the same period in 2007, but up 28.2% from 28 cents per share in the previous quarter. The company has provided positive surprises in four of the past five quarters.

North Carolina-based Lowe's is the second-largest U.S. home improvement chain, behind rival Home Depot, and the second-largest appliance retailer after Sears (NYSE: SHLD). In the past year, the company's revenues were $48.2 billion and its net income totaled $2.8 billion. Its long-term EPS growth forecast is 12.7%, which is better than its industry average. The consensus recommendation of analysts remains to buy Lowe's.

The stock is up 9.9% since the beginning of the year, but has fallen 20.5% from a year ago. It trades at a P/E ratio of 13.38. Shares closed Friday at $24.89.

Home Depot is expected to report second-quarter earnings of 37 cents per share, down 22.9% from 48 cents per share in the year-ago period, as well as down 8.1% from 40 cents per share in the previous quarter. The company has tended to fall short of estimates recently, by nearly 7% in the first quarter.

Atlanta-based Home Depot is the largest U.S. home improvement chain, and the second-largest retailer in the U.S. after Wal-Mart (NYSE: WMT). In the past year, Home Depot's revenues were $77.3 billion and its net income totaled $4.5 billion. The company's long-range EPS growth forecast is 11.09%, better than the industry average but a little less than Lowe's. The consensus recommendation of analysts is still to buy Home Depot, but has been inching toward hold.

The share price is up 8.4% since the beginning of the year, but has fallen 24.2% from a year ago. It trades at a P/E ratio of 12.82. Shares closed Friday at $29.10.

Lowe's is scheduled to report earnings Monday morning, Home Depot on Tuesday morning.

For more news that could influence the results, see BloggingStocks' Lowe's coverage and Home Depot coverage.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Applied Materials Inc. (NASDAQ: AMAT) Q2 profits declined on a glut of flash memory chips.
• Bally Technologies Inc. (NYSE: BYI) beat Q3 expectations and offered full-year guidance.
• Barclay's (NYSE: BCS) reported a big Q1 loss on credit-related write-downs.
• Constant Contact Inc. (NASDAQ: CTCT) saw big increases in Q1 revenues and in its customer base.
• Deere & Co. (NYSE: DE) Q2 profits rose on international demand, but results just missed estimates.
• Fluor Corp.'s (NYSE: FLR) strong Q1 results are a signal for the energy sector, says Jim Cramer.
• Freddie Mac (NYSE: FRE) Q1 loss widened on the housing slump, but not as much as forecast.
• IndyMac Bancorp Inc. (NYSE: IMB) narrowed its loss but predicted it wouldn't see a profit in 2008.
• LDK Solar Co. Ltd. (NYSE: LDK) Q1 earnings topped forecasts and it raised its outlook.
• MBIA Inc. (NYSE: MBI) reported a larger-than-expected Q1 loss due to write-downs.
• Mindray Medical International Ltd. (NYSE: MR) beat Q1 expectations and raised its full-year guidance.
• Nuance Communications Inc. (NASDAQ: NUAN) Q2 earnings were in line with analysts' expectations.
• ON Semiconductor Corp. (NASDAQ: ONNN) beat Q1 expectations and raised its Q2 revenue forecast.
• RealNetworks Inc. (NASDAQ: RNWK) beat Q1 estimates and announced share buybacks and a spin off.
• Salary.com Inc. (NASDAQ: SLRY) missed Q1 forecasts, leading to analysts' downgrades.
• Sykes Enterprises Inc. (NASDAQ: SYKE) beat Q1 estimates and raised its Q2 and full-year forecast.
• Syniverse Holdings Inc. (NYSE: SVR) beat Q1 expectations on strength in "messaging and mobil data."
• Toll Brothers Inc. (NYSE: TOL) warned of lower Q2 profits and more "challenging times" ahead.
• Website Pros Inc. (NASDAQ: WSPI) reported flat earnings despite soaring revenues and operating income.

Also, after AIG's (NYSE: AIG) dismal results, International Lease Finance Corp. wants to be spun off from its parent. Analysts see JC Penney Inc. (NYSE: JCP), Kohl's Corp. (NYSE: KSS) and the rest of the retail sector rebounding in the latter half of the year. Jim Cramer ponders some suprising responses to so-so earnings reports, and looks ahead to Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector.

Other upcoming results to watch for include Campbell Soup (NYSE: CPB), Autozone (NYSE: AZO), Hewlett-Packard (NYSE: HPQ), Intuit (NASDAQ: INTU), Staples (NASDAQ: SPLS), Target (NYSE: TGT), Limited Brands (NYSE: LTD) The Gap (NYSE: GPS) and Barnes & Noble (NYSE: BKS).

Visit AOL Money & Finance for more earnings coverage.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• AnnTaylor Stores Corp. (NYSE: ANN) sees Q1 profits beating estimates but reaffirmed the full-year outlook.
• Blockbuster Inc. (NYSE: BBI) beat Q1 earnings expectations but fell short of revenue estimates.
• Electronic Arts Inc. (NASDAQ: ERTS) posted strong Q4 and full-year results on titles such as Rock Band.
• Fossil Inc. (NASDAQ: FOSL) forecast Q1 earnings just a penny below analysts' estimates.
• IMAX Corp. (NASDAQ: IMAX) doubled its Q1 loss and missed Wall Street's expectations.
• JC Penney Co. Inc. (NYSE: JCP) profits fell 50%, and it predicted trouble would continue through the year.
• Kohl's Corp. (NYSE: KSS) posted a smaller-than-estimated Q1 profit decline and cut its full-year outlook.
• Liz Claiborne Inc. (NYSE: LIZ) swung to a Q1 loss on restructuring but beat analysts' expectations.
• Lumber Liquidators Inc. (NYSE: LL) posted strong Q1 results despite the housing slump.
• Macy's (NYSE: M) beat low Q1 expectations despite weak same-store sales.
• Nissan Motor Corp. (NASDAQ: NSANY) Q4 profit surged but it warned of lower profits this year.
• Nordstrom Inc. (NYSE: JWN) posted smaller-than-estimated Q1 profit decline and cut its full-year outlook.
• Priceline.com Inc. (NASDAQ: PCLN) beat Q1 expectations due to increased bookings.
• Sirius Satellite Radio Inc. (NASDAQ: SIRI) posted a narrower Q1 loss in line with expectations.
• Sony Corp. (NYSE: SNE) swung to a Q4 profit but fell short of Wall Street estimates.
• Sprint Nextel Corp. (NYSE: S) beat low Q1 estimates as its loss widened on charges and lost subscribers.
• Tiffany & Co. (NYSE: TIF) projected beating Q1 earnings forecasts and raised its dividend.
• Wal-Mart Stores Inc. (NYSE: WMT) posted Q1 profits up on international growth and bargain shoppers.
• Whole Foods Market Inc. (NASDAQ: WFMI) Q2 profits fell due to the Wild Oats acquistion.
• XM Satellite Radio (NASDAQ: XMSR) reported a bigger-than-expected Q1 loss and a surge in subscribers.

Also, after AIG's (NYSE: AIG) dismal results, International Lease Finance Corp. wants to be spun off from its parent. Analysts see JC Penney, Kohl's and the rest of the retail sector rebounding in the latter half of the year. Jim Cramer ponders some suprising responses to so-so earnings reports, and looks ahead to Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector.

Other upcoming results to watch for include Campbell Soup (NYSE: CPB), Autozone (NYSE: AZO), Hewlett-Packard (NYSE: HPQ), Intuit (NASDAQ: INTU), Staples (NASDAQ: SPLS), Target (NYSE: TGT), Limited Brands (NYSE: LTD) The Gap (NYSE: GPS) and Barnes & Noble (NYSE: BKS).

Visit AOL Money & Finance for more earnings coverage.

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• Lowe's Companies (NYSE: LOW) to report Q1 earnings; conference call scheduled for 9:00am.
• Campbell Soup Company (NYSE: CPB) to report Q3 earnings; Conference call scheduled for 10:00am.

• Senate Judiciary Committee Hearing on Global Internet Freedom & Corporate Responsibilty at 10:00am. Appearing: Google, Inc. (NASDAQ: GOOG), Cisco Systems, Inc. (NASDAQ: CSCO) and Yahoo! Inc. (NASDAQ: YHOO).
• Medtronic, Inc. (NYSE: MDT) to report Q4 earnings; conference call scheduled for 8:00am.
• Hewlett-Packard Company (NYSE: HPQ) to report Q2 earnings; conference call scheduled for 5:00pm.

• Federal Reserve: FOMC Minutes for April Meeting Released at 2:00pm
  
• Senate Judiciary Committee Hearing on Exploring Skyrocketing Oil Prices at 10:00am.
• PetSmart, Inc. (NASDAQ: PETM) to report Q1 earnings; conference call scheduled for 4:30pm.

• Barnes & Noble, Inc. (NYSE: BKS) to report Q1 earnings; conference call scheduled for 10:00am.
• CA, Inc (NASDAQ: CA) to report Q4 earnings; conference call scheduled for 5:00pm.

• Cerner Corporation (NASDAQ: CERN) to hold shareholder meeting at 10:00am.

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Lowe's (NYSE:LOW) is expected to report Q1 EPS before the open on May 19. LOW June option implied volatility of 35 is below its 26-week average of 39 according to Track Data, suggesting decreasing price movement.

Home Depot (NYSE:HD) is expected to report Q1 before the market open on May 20. HD June option implied volatility of 32 is below its 26-week average of 36 according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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