Welcome to Bed Bath & Beyond's Second Quarter of Fiscal 2011 Results Conference Call. [Operator Instructions] This conference is being recorded. A rebroadcast of the conference call will be available beginning on Wednesday, September 21, 2011, at 6:30 p.m. Eastern Time through 6:30 p.m. Eastern Time on Friday, September 23, 2011. To access the rebroadcast, you may dial 1 (888) 203-1112, with a passcode of 8400546. At this time, it is my pleasure to turn the conference over to Mr. Gene Castagna, Chief Financial Officer and Treasurer of Bed Bath & Beyond. Please go ahead, sir. Eugene A. Castagna: Thank you, and good afternoon. Welcome to Bed Bath & Beyond's Second Quarter of Fiscal 2011 Conference Call. Within the past hour, we issued a press release announcing Bed Bath & Beyond's results for the 3- and 6-month periods ended August 27, 2011. During this call, we will comment on some of the second quarter highlights and update our fiscal third quarter and 2011 fiscal year planning assumptions. Before proceeding, I will read the following statement, and I quote, "Bed Bath & Beyond's fiscal second 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 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 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 Warren Eisenberg, 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 Warren Eisenberg. Warren?

Thanks, Gene. Good afternoon. I'm pleased to report that our company's net earnings per diluted share increased approximately 33% in the fiscal second quarter to $0.93. We are pleased that we've been able to continue our strong performance in terms of earnings growth, cash flow generation and overall financial strength as we continue to challenge ourselves to improve in every aspect of our operation. During the second quarter, we opened 3 Bed Bath & Beyond stores, 7 buybuy BABY stores and 4 Christmas Tree Shops, as well as closed 1 Bed & Bath Beyond store. Additionally, we continue to relocate and renovate Bed Bath & Beyond stores. Consolidated store space at August 27, 2011, was approximately 35.6 million square feet, an increase of approximately 4% over last year's second quarter. Since the beginning of the fiscal third quarter of 2011, we've opened 3 additional Bed Bath & Beyond stores and 2 buybuy BABY stores. Including these stores, we currently operate 1,160 stores, including 989 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada; as well as 70 Christmas Tree Shops; 56 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 24 stores we've opened to date, we anticipate that the total number of new store openings will now be approximately 40 stores across all 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. As always, we 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 to -- or rightsize our stores in response to the 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 remain focused on increasing 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’s 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. The continued success of our company is due to the tremendous efforts of our associates and to our unique decentralized culture. This culture 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 the 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 will turn the call over to Steven Temares. Steve? Steven H. Temares: Thank you, Warren. Good afternoon, everyone, and thank you for participating in this conference call. We are pleased that our second quarter results exceeded our internal planning assumptions. We believe the dedication and talents of our associates and our 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 Warren said, we are also pleased that we've been able to continue our strong performance in terms of earnings growth, cash flow generation and overall financial strength. While consumer confidence and spending is impacted by the continuing economic challenges, including relatively high unemployment and commodity prices and a sluggish housing market, 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 merchandising 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 the growth and development of our business and through the ongoing efforts to cross merchandise and leverage our best practices throughout our organization, we expect over time to do more for and with our customers. Turning to our fiscal second quarter 2011 performance. As reported earlier today, our net earnings per diluted share were $0.93, an increase of approximately 33% when compared to the $0.70 per diluted share that we earned in last year's second quarter. For the fiscal first half, net earnings per diluted share were $1.65 compared with $1.22 last year, an increase of approximately 35%. Net sales for the fiscal second quarter were approximately $2.3 billion, approximately 8.3% higher than in the prior year. For the fiscal first half, net sales were approximately $4.4 billion, about 9% higher than last year. Second quarter comp store sales increased by approximately 5.6% compared with an increase of 7.4% last year. The increase in comp store sales for the fiscal second quarter of 2011 was due to increases in both the average transaction amount and the number of transactions. For the fiscal first half, comp store sales increased by approximately 6.3% compared with an increase of 7.9% last year. The increase in comp store sales for the fiscal first half of 2011 was primarily attributed to an increase in the number of transactions. Gross profit for the fiscal second quarter was approximately 41.1% of net sales compared to approximately 40.9% of net sales for the second quarter of fiscal 2010. Gross profit for the first half was approximately 40.9% of net sales compared to approximately 40.6% of net sales in the fiscal first half of 2010. These increases in the gross profit margin were primarily due to a reduction in markdowns and coupons 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 second quarter were approximately 25% of net sales as compared to approximately 27.1% of net sales in last year's fiscal second quarter, a decrease of approximately 210 basis points. Selling, general and administrative expenses for the fiscal first half were approximately 25.9% of net sales as compared to approximately 27.8% of net sales in the fiscal first half of 2010, which is a decrease of approximately 190 basis points. These decreases can be primarily attributed to lower payroll, occupancy and advertising expenses as a percentage of net sales, all of which benefited from the strong comp for both the second quarter and fiscal first half. In addition, advertising, as a percentage of net sales for both the second quarter and fiscal first half, benefited from a reduction in the mailing of advertising pieces. Reflecting the movements in gross profit margin and SG&A expenses, the operating profit margin for the fiscal second quarter was higher than in the same period a year ago by approximately 220 basis points. For the fiscal first half, the operating profit margin increased by approximately 200 basis points. Our provision for income taxes continues to fluctuate as taxable events occur and exposures are reevaluated. For the fiscal second quarter, our provision for income taxes was approximately 38% compared to approximately 38.9% for the comparable quarter last year, a decrease of approximately 90 basis points. For the fiscal first half, our provision for income taxes was approximately 37.8% compared to approximately 39% for the comparable period last year, a decrease of approximately 120 basis points. These provisions for the current quarter and first half of 2011 include a net after-tax benefit of $1.2 million and $5 million respectively, due to distinct tax events occurring during the periods. Our capital expenditures during the fiscal first half of 2011 are approximately $89.6 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 investments in our company to help position us for our long-term success. 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? Eugene A. Castagna: Thanks, Steve. Before I begin, I would like to note that we are deeply saddened by the loss of life and property for those who are affected by recent severe weather along the East Coast of the United States. As a result of these events, we experienced a short-term disruption in the operations of a number of our stores during the last few days of our fiscal second quarter and the early part of our fiscal third quarter. However, only 1 Christmas Tree Shop store will be closed for an extended period of time. Our actual results for the second quarter of fiscal 2011 and planning assumptions for the remainder of fiscal 2011 consider the impact of these events on our operations. As you heard from Warren and Steve, our results exceeded our planning assumptions and we earned $0.93 per diluted share in our fiscal second quarter and $1.65 per diluted share for the first 6 months of fiscal 2011. We were encouraged by our positive fiscal second quarter results and continue to be cautiously optimistic about the second half of fiscal 2011. The following are our major planning assumptions for the remainder of fiscal 2011: one, including the 24 stores opened so far this year, we anticipate that the total number of new store openings will now be approximately 40 stores across all of our concepts. Currently, we believe that fiscal 2011's 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 third and fourth quarters of fiscal 2011. Four, based on these comparable store sales assumptions, we are modeling consolidated net sales to increase by 5% to 7% in the third quarter and by 4% to 6% in the fourth quarter. Five, assuming these sales levels, in addition to planning the continuation of the shift and the mix of merchandise sold to lower margin categories, we are modeling our operating profit margin to slightly leverage for the fiscal third and fourth quarters. Six, the third and fourth quarter tax provisions are estimated in the mid- to high-30s percent range -- percentage range, with expected variability as taxable events occur. Seven, capital expenditures for fiscal 2011, principally for new stores, existing store refurbishment, information technology enhancements, including increased spending on our interactive platforms and other projects, continue to be planned at approximately $250 million, but may reach as high as $300 million, depending on the composition and ultimate timing of projects. Eight, depreciation for fiscal 2011 is now estimated to be in the range of approximately $180 million to $190 million. Nine, we expect to generate positive operating cash flow in fiscal 2011 and continue to fund operations entirely from internally generated sources. 10, we expect to continue our share repurchase program, which may be influenced by several factors, including business and market conditions and continue to model completion of the current authorization in early fiscal 2013. Based on these and the other planning assumptions, we are now modeling net earnings per diluted share to be in the range of approximately $0.82 to $0.87 for the fiscal third quarter of 2011. For all of fiscal 2011, we are modeling net earnings per diluted share to increase in the range of approximately 22% to 25%, up from the previous model of approximately 15% to 20%. Before concluding this afternoon's call, a few additional comments relative to our recently concluded fiscal second 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 $1.9 billion. This includes approximately $97.3 million of investments related to auction rate securities. These securities have an estimated temporary valuation adjustment of approximately $1.7 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 second quarter, we had approximately $8.5 million of redemptions of auction rate securities at par. 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 August 27, 2011, inventories at cost were approximately $2.1 billion or $59.51 per square foot. Inventory per square foot was higher than in the prior year, primarily to support increases in comp store sales and due to timing of receipts. Consolidated shareholders’ equity at August 27, 2011, was approximately $3.9 billion, which is net of share repurchases, including the approximately $287 million, representing approximately 5.2 million shares repurchased during the fiscal second quarter of 2011. As of August 27, 2011, the remaining balance of the current share repurchase program authorized in December 2010 was approximately $1.6 billion. As a reminder, our next conference call will be on Wednesday, December 21, 2011. During this call, we will review operating results for the third quarter and 9 months ending November 26, 2011, and will provide our initial planning assumptions for fiscal 2012, which will include the company's plans to relocate its offices from Farmingdale in Garden City New York to Union, New Jersey. This transition is being made to further improve the communication, coordination and execution across all of our concepts, activities and platforms and to better leverage internal and external resources to support our continuing growth of our company. We expect this transition to occur during the second half of 2012. If you have any questions, Ken Frankel and I will be in our offices this evening, September 21, 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.