Welcome to Bed Bath & Beyond's First Quarter Fiscal 2011 Results Conference Call. [Operator Instructions] This conference is being recorded. A rebroadcast of the conference call will be available beginning on Wednesday, June 22, 2011, at 6:30 p.m. Eastern Time through 6:30 p.m. Eastern Time on Friday, June 24, 2011. To access the rebroadcast, you may dial 1 (888) 203-1112 with a passcode ID of 8357218. At this time, it's my pleasure to turn the conference call over to Mr. Gene Castagna, Chief Financial Officer and Treasurer of Bed Bath & Beyond. Please go ahead, sir.

Thank you, and good afternoon. Welcome to Bed Bath & Beyond's First Quarter of Fiscal 2011 Conference Call. Within the past hour, we issued a press release announcing Bed Bath & Beyond's results for the 3-month period ended May 28, 2011. During this call, we will comment on some of the first quarter highlights and update our fiscal second quarter and full fiscal year 2011 planning assumptions. Before proceeding, I will read the following statement, and I quote: "Bed Bath & Beyond's fiscal first quarter 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, approximate, estimate, assume, continue, model, project, plan and similar words or phrases. The company’s actual results or future financial condition may differ materially from those expressed in any such forward-looking statement 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 10-K for the year ended February 26, 2011. 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. Len?

Good afternoon. I am pleased to report that our company's net earnings per diluted share increased approximately 38% in the fiscal first quarter to $0.72. We are pleased that we have been able to continue our strong performance in terms of earning growth, cash flow generation and overall financial strength as we continue to work to build a business that will stand the test of time. During the first quarter, we opened 3 Bed Bath & Beyond stores and 2 buybuy BABY stores, as well as closed 1 Bed Bath & Beyond store and 1 Harmon store. Additionally, we continue to relocate and renovate Bed Bath & Beyond stores. Consolidated store space at May 28, 2011, was approximately 35.2 million square feet, an increase of approximately 4% over last year's first quarter. Since the beginning of the fiscal second quarter of 2011, we have opened 1 additional Bed Bath & Beyond store, 5 buybuy BABY stores and 1 Christmas Tree Shop store. Including these stores, we currently operate 1,149 stores, including 985 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, as well as 67 Christmas Tree Shops, 52 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 2 stores in the Mexico City market under the name Home & More. During fiscal 2011, including the 12 stores we have opened to date, we anticipate that the total number of new store openings will be approximately 40 to 45 stores across all of our concepts. Currently, we believe that fiscal 2011 store openings by concept will be substantially similar to fiscal 2010 with a slight shift to several more buybuy BABY stores and slightly fewer Bed Bath & Beyond stores. As always, as the year progresses and we gain greater visibility, the total number of stores that we will open may be updated. 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 right-size our stores in response to changing market conditions. We continue to believe that throughout the United States and Canada, there is an opportunity to operate in excess of 1,300 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 place health and beauty care offerings in stores across all our concepts. We remain committed to and are excited about the continued growth of all our merchandise offerings. We continue to increase the productivity of our existing stores by evolving the merchandise offerings, as well as by expanding, renovating and/or relocating stores to enhance our customer shopping experience. Our ability to leverage the breadth and depth of our merchandise offerings, grow our bridal, baby and gift registries and continue the development of our interactive platforms has afforded us additional opportunities to attract new customers to Bed Bath & Beyond. The continued success of our company is due to the tremendous efforts of our associates and to our unique decentralized culture. This culture, which takes advantage of the knowledge, the 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 market demands and to changing economic conditions on a market-by-market basis. We continue to believe 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. We believe the dedication and talent 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 keys to producing the continued strong results we have experienced. As Len said, we are also pleased that we have been able to continue our strong performance in terms of earnings growth, cash flow generation and overall strength as we continue to work to build a business that will stand the test of time. While a number of economic challenges persist, including higher commodity prices, relatively high unemployment, a sluggish housing market and fragile consumer confidence, our fundamental business strategy remains unchanged to offer a broad assortment of merchandise at everyday low prices with superior customer service. As always, we will continue to work to enhance our customers' overall shopping experience, and we 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, compete for and increase our market share and, over the long term, continue to grow shareholder value. In taking this long term approach to building our Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY and Harmon Face Values concepts and through the ongoing efforts to cross merchandise and leverage our best practices across all our concepts, we expect, over time, to do more for and with our customers. Turning to our fiscal first quarter 2011 performance, as reported earlier today, our net earnings per diluted share were $0.72, an increase of approximately 38% when compared to the $0.52 per share that we earned in last year's first quarter. Net sales for the fiscal first quarter were approximately $2.1 billion, approximately 9.7% higher than in the prior year. First quarter comp store sales increased by approximately 7%, compared with an increase of 8.4% last year. Gross profit for the fiscal first quarter was approximately 40.6% of net sales, compared to approximately 40.3% of net sales for the first quarter of fiscal 2010. This increase in the gross profit margin resulted primarily from a reduction in markdowns as a percentage of net sales, partially offset by an increase in inventory acquisition costs and a shift in the mix of merchandise sold to lower margin categories. Selling, general and administrative expenses for the fiscal first quarter were approximately 26.9% of net sales as compared to approximately 28.6% of net sales in last year's fiscal first quarter, a decrease of approximately 170 basis points. This decrease can be primarily attributed to lower payroll and occupancy expenses as a percentage of net sales, as well as a relative decrease in advertising expenses as a result of a reduction in the mailing of advertising pieces. Payroll and occupancy expenses benefited from the approximate 7% increase in comparable store sales. Reflecting the movements 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 200 basis points. Our provision for income taxes continues to fluctuate as taxable events occur and exposures are reevaluated. For the fiscal first quarter, our provision for income taxes was approximately 37.6% compared to approximately 39.1% for the comparable quarter last year. This provision included a net after-tax benefit of approximately $3.8 million due to distinct tax events occurring during the quarter. Our capital spending during the fiscal first quarter 2011 was approximately $33 million, principally for new stores, existing store improvements, information technology enhancements and other projects important to our future. While we continue to review and prioritize our capital needs, we remain committed to making the required investment in our company to help position us for our long term success. Also in the first quarter of 2011, we completed our $1 billion share repurchase program and, thereafter, began our $2 billion program authorized in December 2010, which we continue to model to be completed in approximately 2 years. Our company's board of directors continues to review our capital structure on an ongoing basis. In addition to providing value to our shareholders through share repurchase programs, our strong operations should allow us to continue to invest in our infrastructure and maintain our flexibility to take advantage of opportunities as they may arise. We again want to thank our associates for their ongoing efforts which produced Bed Bath & Beyond's long term success. Through 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 merchandise categories that we offer. I'll now turn the call back to Gene. Gene?

Thanks, Steve. As you heard from Len and Steve, our results exceeded our planning assumptions, and we earned $0.72 per diluted share in our fiscal first quarter. We were encouraged by our positive fiscal first quarter results and continue to be cautiously optimistic about the remainder of our fiscal year. The following are our major planning assumptions for the remainder of fiscal 2011. One, including the 12 stores open so far this year, we anticipate that the total number of new store openings will be approximately 40 to 45 stores across all of our concepts. Currently, we believe that fiscal 2011 store openings by concept will be substantially similar to fiscal 2010 with a slight shift to several more buybuy BABY stores and slightly fewer Bed Bath & Beyond stores. As the year progresses and we gain greater visibility, the total number of stores that we will open may be updated. We will continue to place Harmon Face Values health and beauty care offerings in stores across all of our concepts. As always, we remain flexible to take advantage of real estate opportunities that may arise. Two, we expect to continue our program of expanding, renovating and/or relocating a number of our stores in fiscal 2011. Three, we are modeling a 2 to 4 percentage increase in comparable store sales for the second quarter and full fiscal year. Four, based on these comparable store sales assumptions, we are modeling consolidated net sales to increase by 5% to 7% in the second quarter and full year of fiscal 2011. Five, assuming these sales levels, in addition to planning the continuation of the shift in the mix of merchandise sold to lower margin categories, we are modeling our operating profit to be in the range of flat to slightly leveraged for the fiscal second quarter and to be slightly leveraged for the full year. Six, interest income is expected to be relatively flat versus fiscal 2010. Seven, the second quarter and full year tax provision are estimated in the mid- to high-30s percent range with expected variability as taxable events occur. Eight, capital expenditures for fiscal 2011, principally for new stores, existing store refurbishments, information technology enhancements, including increased spending on our interactive platforms and other projects, continue to be planned at approximately $250 million, which of course, remains subject to the timing of projects. Nine, depreciation for fiscal 2011 is estimated to be approximately $190 million. Ten, we expect to generate positive operating cash flow in fiscal 2011 and continue to fund operations entirely from internally generated sources. Eleven, in the first quarter, we completed our $1 billion share repurchase program and, thereafter, began our $2 billion program authorized in December 2010, which we continue to model to be completed in approximately 2 years. Our share repurchase program may be influenced by several factors, including business and market conditions. Based on these and the other planning assumptions, we are modeling net earnings per diluted share to be in the range of approximately $0.77 to $0.82 for the fiscal second quarter of 2011. For all of fiscal 2011, we are modeling net earnings per diluted share to increase by approximately 15% to 20%. Before concluding this afternoon's call, a few additional comments relative to our recently concluded fiscal first quarter. Our balance sheet and cash flows remain strong. We ended the fiscal second quarter with cash and cash equivalents and investment securities of approximately $2 billion at the end of the fiscal first quarter. This includes approximately $105.8 million of investments related to Auction Rate Securities. These securities have an estimated temporary valuation adjustment of approximately $2.7 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 $7.1 million of redemptions of Auction Rate Securities at par. Subsequent to the first quarter, we had approximately $4 million of Auction Rate Security redemptions at par, leaving a balance of approximately $101.8 million of these securities. 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 condition. As of May 28, 2011, inventories at cost were approximately $2.1 billion or $59.22 per square foot. Inventory per square foot was higher in the prior year, primarily to support increases in comp store sales and due to timing of receipts. Consolidated shareholders' equity at May 28, 2011 was approximately $3.9 billion, which is net of all share repurchases, including the approximately $245 million representing approximately 4.8 million shares repurchased during the fiscal first quarter of 2011. As a reminder, our next conference call to review operating results for the second quarter ending on August 27, 2011 will be on Wednesday, September 21, 2011. If you have any questions, Ken Frankel and I will be in our offices this evening, June 22, 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, and you may now disconnect.