If a company can increase its net margins in good times and bad, that's often a signal of superior pricing power, says Michael Kaye, an analyst with Standard & Poor's. Amid the ups and downs of the economy over the past five years, a handful of companies have shown their metal by boosting margins each year -- and still maintain a solid position for future profit growth.

Among Kaye's list of the pricing-powerful is Bed Bath & Beyond (BBBY). This retailer commands high profits on linens, cookware, housewares and home furnishings. With over 500 storefronts, Bed Bath & Beyond can attribute much of its success to an aggressive expansion plan -- management plans to open about 90 new stores this year alone. The company also recently acquired Christmas Tree Shops, a gift and houseware retailer with 23 stores in six states.

Along with cushy profit margins, Bed Bath & Beyond enjoys high turnover of products in its stores. Because of its strong market presence, Standard & Poor's says the retailer should continue to generate above-average earnings growth and capital gains for the next few years.

Other analysts agree. According to Thomson/First Call, Bed Bath & Beyond is expected to generate 21% growth in profits annually. Compared with the expectation for the overall retail sector to grow 14%, Bed Bath & Beyond looks attractive, trading at 27 times 2004 consensus earnings estimates of $1.42 per share.

--Erin Burt

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