Welcome to Bed Bath & Beyond's first quarter of fiscal 2010 results conference call. (Operator Instructions) A rebroadcast of the conference call will be available beginning on Wednesday June 23, 2010 at 6:30 p.m. Eastern Time through 6:30 p.m. Eastern Time on Friday, June 25, 2010. To access the rebroadcast, you may dial 1-888-203-1112 with the passcode ID of 5237546. Now at this time, it's my pleasure to turn the conference call over to Eugene Castagna, Chief Financial Officer and Treasurer of Bed Bath & Beyond.

Welcome to Bed Bath & Beyond's first quarter of fiscal 2010 conference call. Within the past hour, we issued a press release announcing Bed Bath & Beyond's results for the three month period ended May 29, 2010. During this call, we will comment on some of the first quarter highlights and update on fiscal second quarter and 2010 planning assumptions. Before proceeding I will read the following statement, and I quote: Bed Bath & Beyond's fiscal press release and comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities & Exchange Act of 1934 as amended. Many of these forward-looking statements can be identified by the use of words such as may, will, expect, anticipate, estimate, assume, project, plan and similar words and phrases. The company's actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors that may be outside the company's control. Please refer to Bed, Bath & Beyond's SEC filings including its Form 10K for the year ended February 27, 2010. The company does not undertake any obligation to update its forward-looking statements.” Joining me on today's call are Leonard Feinstein, Co-Chairman of Bed Bath & Beyond; and Steven Temares, Chief Executive Officer and Member of the Board of Directors. I'm now very pleased to introduce Leonard Feinstein.

I am pleased to report that our company's net earnings per diluted share increased approximately 53% in the fiscal first quarter to $0.52. While the economic environment appears to be showing some signs of stabilizing, it appears the consumer continues to face economic challenges, and the pressures of the macroeconomic environment still persist. As such, we remain cautiously optimistic as we continue fiscal 2010. During the fiscal first quarter, we opened two Bed Bath & Beyond and two buybuy BABY stores, as well as relocated and renovated a number of Bed Bath & Beyond stores. Consolidated store space at May 29, 2010 was approximately 33.9 million sq. feet, an increase of approximately 5% over last year's first quarter. Since the beginning of the fiscal second quarter of 2010, we have opened one additional Bed Bath & Beyond store. We currently operate 1,105 stores, including 968 Bed Bath & Beyond stores in 49 states, The District of Columbia, Puerto Rico, and Canada, as well as 61 Christmas Tree Shops, 31 buybuy BABY stores, and 45 stores under the names Harmon or Harmon Face Values. In addition, we are a partner in a joint venture which operates two stores in the Mexico City market under the name "Home & More. During fiscal 2010, including the five stores we have opened to-date we anticipate opening a total of approximately 55 to 60 stores across all of our concepts. We look forward to expanding into our 50th state, Hawaii, with a Bed Bath & Beyond store expected to open during the fiscal second quarter. We remain committed to, and are excited about the continued growth of all of our merchandize offerings. We continue to apply our stringent standards to growth as we evaluate new store sites as well as continue to review our existing locations and lease terms for opportunities to relocate and/or rightsize our stores in response to changing market conditions. As we have previously said, we believe throughout the United States and Canada there is an opportunity to operate in excess of 1300 Bed Bath & Beyond stores, as well as grow our Christmas Tree shops and buybuy BABY concepts from coast to coast. Additionally, we will continue to open Harmon Face Values stores and selectively place health and beauty care offerings in all our concepts. We continue to work to increase the productivity of our existing stores by evolving the merchandize offerings, as well as by expanding, renovating, remodeling and/or relocating stores to enhance our customers' shopping experience. Our ability to leverage the breadth and depth of our merchandize offering through our Bridal, Baby, and Gift registries and continued development of our online sales capabilities has afforded us additional opportunities to attract new customers to Bed Bath & Beyond. The success of our company is due in large part to the tremendous efforts of our associates and to our unique decentralized culture. This culture, which takes advantage of the knowledge, independence and the customer focus of our associates has always been the foundation of our long term performance, and allows us to respond more quickly to local market demand and the changing economic conditions on a market-by-market basis. We are confident that we have the people, the resources and the capability to achieve our near and long term goals. And now, I'll turn the call over to Steven Temares. Steve.

Thank you, Len. Good afternoon, everyone, and thank you for participating in this conference call. We are pleased that our first quarter results exceeded our internal planning assumptions. The dedication and talents of our associates and their constant focus on improving the overall customer shopping experience, while at the same time creating a more productive and efficient company are the key to producing the continued strong results we have experienced. As Len said, while it appears that the economic environment may be stabilizing, persistent high unemployment and uncertainty in the economy could continue to pressure the consumer and affect their spending. Although economic challenges persist, our fundamental business strategy has remained unchanged to offer a broader assortment of merchandise at everyday low prices with superior customer service. We continue to systematically challenge the costs associated with running our company, and although during the second half of last year, we anniversaried many of the more significant expense reduction initiatives that we instituted, we continue to strive to find opportunities to lower our operating costs. We also continue to work to enhance our customers' overall shopping experience and remain committed to being our customers first choice for the merchandise categories we offer, domestically, interactively, and over the longer term, internationally. We are confident that our company is well positioned to grow profitably, deliver superior shareholder value and to compete and increase our market share over time. As always, we remain focused on building a business that stands the test of time. In taking this long term approach to building our Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY and Harmon Face Value concepts and through the ongoing effort to cross-merchandise and leverage our best practices across each of our concepts, we expect over time to do more for and with our customers. Turning to our fiscal first quarter 2010 performance, as reported earlier today our net earnings per diluted share were $0.52, an increase of approximately 53% versus the $0.34 per share earned in last year's first quarter. Net sales for the fiscal first quarter were approximately $1.9 billion, approximately 13.5% higher than the corresponding fiscal 2009 period. First quarter comp store sales increased approximately 8.4% versus a decrease of approximately 1.6% last year. Gross profit for the fiscal first quarter was approximately 40.3% of net sales compared to approximately 39.4% of net sales for the fiscal first quarter of 2009. This increase of approximately 90 basis points resulted primarily from decreases in coupon redemptions and inventory acquisition costs as a percentage of net sales partially offset by a shift in the mix of merchandise sold to lower margin categories. Selling, general and administrative expenses for the fiscal first quarter were approximately 28.6% of net sales as compared to approximately 31% of net sales in last year's first quarter, a decrease of approximately 240 basis points. This decrease can be primarily attributed to lower advertising and occupancy expenses as a percentage of net sales. Advertising expense decreased due to a continued reduction in the distribution of advertising pieces. Occupancy, as with other costs, benefited from the 8.4% increase in comparable store sales. Reflecting the movement in gross profit margin and SG&A expenses, the operating profit margin for the fiscal first quarter was higher than in the same period a year ago by approximately 330 basis points. Our provision for income taxes continues to fluctuate as tax law events occur and exposures are reevaluated. For the fiscal first quarter, our provision for income taxes was approximately 39.1% compared to approximately 39.5% for the comparable quarter last year. Our capital spending during the fiscal first quarter 2010 was approximately $39 million, principally for new stores, existing store improvements, information technology enhancements and other projects whose impact is viewed as important to our future. While we continue to review and prioritize our capital needs, we remain committed to making the required investments in our company to help position us for our long term success. With our annual meeting of shareholders scheduled to take place on Tuesday, June 29, we encourage shareholders who have not yet voted to take advantage of electronic voting either via the internet or by telephone. We again want to thank our associates for their ongoing efforts, which produced Bed Bath & Beyond's long term success. Though their efforts, we look forward to meeting the challenges that lie ahead and to seizing the opportunities to satisfy our customers, and by doing so, continuing to improve our competitive position in the merchandize categories that we offer. I'll now turn the call back to Gene. Gene?

Thanks, Steve. As you heard from Steve, our results exceeded our planning assumptions and we earned $0.52 per diluted share in our fiscal first quarter. We remain encouraged by our positive fiscal first quarter results and continue to be cautiously optimistic about the remainder of the year. The continued uncertainty and the macroeconomic environment makes it difficult to forecast future results. However, the following are our major planning assumptions for fiscal 2010. One, we anticipate opening approximately 55 to 60 stores across all of our concepts. Consistent with our historical experience, we anticipate that new store openings will occur throughout the year, with the majority in our fiscal second half. We remain flexible to take advantage of real estate opportunities that may arise. Two, we expect to continue our program of expanding, renovating, remodeling and/or relocating a number of our stores in fiscal 2010. Three, for the second quarter of fiscal 2010, we are modeling a mid-single digit percentage increase in comparable store sales. As we said in our April conference call, for the second half of fiscal 2010, considering the higher comparable store sales comparisons as well as less visibility to future economic conditions, we are modeling a low-single digit percentage increase in comparable store sales. Four, based on results today and our comparable store sales assumptions, we are modeling consolidated net sales to increase by a high-single digit percentage in the second quarter of fiscal 2010 and consistent with our prior conference call by a mid-single digit percentage in the second half of fiscal 2010. Five, assuming these sales levels, we would expect leverage in our operating profit margin for both the fiscal second quarter and the full year. Six, interest income is expected to be relatively flat versus fiscal 2009. Seven, the second quarter and full year tax provision is estimated in the mid-to-high 30s percent range, with variability as taxable events occur. Eight, capital expenditures for fiscal 2010, principally for new stores, existing store refurbishment, information technology enhancements and other projects are currently planned at approximately $225 million. Nine, depreciation for fiscal 2010 is estimated to be approximately $180 million. Ten, we expect to generate positive cash flow in fiscal 2010 and to continue to fund operations entirely from internally generated sources. Eleven, subject to business and market conditions, we expect to continue our share repurchase program. Based on these and other planning assumptions, we are modeling diluted earnings per share in the fiscal second quarter to be in the range of approximately $0.59 to $0.63. For all of fiscal 2010, we're modeling diluted earnings per share to increase by approximately 15%. Before concluding this afternoon's (call), a few additional comments relative to our recently concluded fiscal first quarter. Our balance sheet remains strong and debt-free. We ended the fiscal first quarter with cash and cash equivalents and investment securities of approximately $1.8 billion. This includes approximately $150 million of investments related to auction rate securities. These securities have an estimated temporary valuation adjustment of approximately $3 million to reflect their current lack of liquidity. Since this valuation adjustment is deemed temporary, it did not affect the company's earnings. During the first quarter, we had approximately $31 million of redemptions of auction rate securities at par, of which $17 million related to the previously disclosed $43 million redemptions commitment we have with an investment firm. Of the remaining $26 million of this commitment, $17 million has been received so far in the second quarter, and the remaining $9 million is expected to be received on or about July 1, 2010. As we have said in the past, and as we have experienced to-date, we believe that given the high credit quality of these investments, we will ultimately recover at par all amounts invested in these securities. Inventories continue to be tailored by store to meet the anticipated demands of our customers and are in good shape. As of May 29, 2010 inventories were approximately $1.8 billion or $54.49 per square foot, an increase of approximately 3% on a per square foot basis versus last year. Consolidated shareholders equity at May 29, 2010 was approximately $3.8 billion, which is net of share repurchases, including approximately $85 million repurchased during the fiscal first quarter. As a reminder, our next conference call to review operating results for the second quarter ending on August 28, 2010 will be on Wednesday, September 22, 2010. If you have any questions, Ken, Fran and I will be in our offices this evening, June 23, to take your calls. As always, we appreciate your interest in Bed Bath & Beyond.

Ladies and gentlemen, this concludes today's conference call. Thank you all for listening. You may now disconnect.