The company remains committed to investing in projects which is expected to enable it to expand its share of the home furnishing and other markets that it serves. By taking a long term approach to building the Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY and Harmon Face Value concepts and by making the necessary investments in infrastructure the company expects that all aspects of business will continue to contribute to the achievement of the goals in the years ahead.

Bed Bath & Beyond’s third quarter produced net earnings of 52 cents per share on an approximately 10.8% increase in net sales at a gain in same store sales of 0.8%.

Through a combination of superior customer service, merchandising initiatives, information technology enhancements and human resources development the company expects to continue its profitable growth domestically, interactively and internationally. The strong excess cash flow generation should also permit Bed Bath & Beyond to make additional share repurchases and to consider growth through strategic acquisitions.

The business environment remains challenging particularly in areas most affected by housing market issues.

Concerns about the economy, consumer spending, energy prices, housing and credit availability in particular persist. In last year’s fourth quarter the company reported earnings per share of 72 cents per share which included a 7 cents per share non recurring charge. Excluding this non recurring charge, earnings per share for the fourth quarter fiscal 2006 would have been reported at 79 cents per share.

Also affecting the comparability of the fourth quarter 2007 earnings is that last year’s fourth quarter includes 14 weeks of sales including the week after Thanksgiving versus this year’s fourth quarter that will have 13 weeks of sales excluding the week after Thanksgiving. The exclusion of the week after Thanksgiving in this year’s fourth quarter will have a negative impact on net sales of approximately $175 million when compared to the fourth quarter of last year.

Assuming a relatively flat comp stores sales percentage for the fiscal fourth quarter and concerting one less week of sales a year ago resulting from the current year calendar shift the company anticipates a 2% to 4% percentage decrease in net sales and the company would now estimate fourth quarter earnings in the range of from 64 cents to 67 cents per diluted share which would bring the full year’s earnings estimate in the range of from $2.08 to $2.11 per diluted share.

Other fiscal fourth quarter planning assumptions some of which have been previously mentioned are as follows:

One: The company expects to be operating approximately 880 to 885 Bed Bath & Beyond stores, 40 Christmas Tree Shops, 40 stores under the names Harmon and Harmon Face Value stores and nine buybuy BABY stores occupying approximately 30 million square feet of floor space at year end. Most of the fiscal fourth quarter new store openings are expected to occur in February 2008 in the last month of our fiscal year. The new Christmas Tree Shop’s new distribution center and an additional eService fulfillment center which will accommodate the steady growth in the online business are also expected to be substantially completed before the fiscal year end.

Two: The company is currently estimating the full year tax rate to be approximately 35.7% as compared to last year’s rate of 26.3%.

Three: Primarily as a result of lower cash balances due to the ongoing share repurchase program and also due to lower interest rates, the acquisition of buybuy BABY and an increase in capital spending among other factors interest income for all of fiscal 2007 is expected to be lower than last year at approximately $27 million.

Four: Capital expenditures for all of fiscal 2007 principally for new stores, existing stores refurbishment, information technology enhancement, the new Christmas Tree Shop’s new distribution center, the new eService fulfillment center and other infrastructure investments are presently being estimated at $360; depreciation at approximately $160 million.

Five: Year-end inventory per square foot is projected to be higher than last year reflecting the initialization of the Christmas Tree Shop’s distribution facility and the eService fulfillment center. Inventories were in a good position at the end of the fiscal third quarter and the company expects to end fiscal 2007 with inventories on plan and in good condition going into the spring selling season.

The company will be providing initial sales and earnings guidance for fiscal 2008 a 52 week year beginning on March 2, 2008 ending on February 28, 2009 during its fourth quarter call.

The following are some of the planning assumptions that will support the guidance in April:
- approximately 60 new Bed Bath & Beyond stores including additional stores in Canada are expected to be opened while several other Bed Bath & Beyond stores will be relocated and refurbished in fiscal 2008 in order to improve their productivity.
- The company also expects to open 12 new Christmas Tree Shop stores and several new buybuy BABY stores as well as open Harmon Face Value stores and roll out additional Harmon Face Value’s and fine china departments within Bed Bath & Beyond stores.

The company’s our expansion will continue to be entirely funded from internally generated sources.

- The company expects to commence its $1 billion share repurchase program as authorized in September by the board of directors.
- Including the effect from a lower cash balance principally due to share repurchases already completed and anticipated lower interest rates interest income is expected to be lower in fiscal 2007.
- The company expects continuing variability in its quarterly tax rate.
- Although the aggregate number of new store openings and store relocations for all of the company’s retail concepts will be roughly comparable to fiscal 2007 the company anticipates capital expenditures will be lower than in fiscal 2007. Included in this reduction will be lower capital expenditures related to distribution and online fulfillment facility.

The consolidated balance sheet as of December 1, 2007 was strong and flexible reflecting among other factors the additional share repurchases and increased capital expenditures as well as the all cash acquisition of buybuy BABY.

- The combined total cash and cash equivalents and investment securities was approximately $377 million.
- As of December 1, 2007 consolidated merchandise inventories were on plan at approximately $1.8 billion.
- Inventories continue to be tailored by store to meet the anticipated demands of customers and are in a good position.

Shareholders equity at December 1, 2007 which is net of share repurchases was approximately $2.5 billion.

Capital expenditures for the first nine months were approximately $257 million. Depreciation was approximately $116 million.