Welcome to Bed Bath & Beyond's Second Quarter of Fiscal 2013 Results Conference Call. [Operator Instructions] This conference is being recorded. A rebroadcast of the conference call will be available beginning on Wednesday, September 25, 2013, at 6:30 p.m. Eastern Daylight Time through 6:30 p.m. Eastern Daylight Time on Friday, September 27, 2013. To access the rebroadcast, you may dial (888) 843-7419 with the passcode ID of 35678746. At this time, it's 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 2013 Conference Call. A short time ago, we issued a press release announcing Bed Bath & Beyond's results for the 3- and 6-month periods ended August 31, 2013. During this call, we will comment on some of the second quarter highlights and update our fiscal third quarter and 2013 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 position may differ materially from those expressed in any such forward-looking statements as a result of many factors. Please refer to Bed Bath & Beyond's SEC filings, including its Form 10-K for the year ended March 2, 2013. 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. Thanks, Gene, and good afternoon. We're pleased to report that our company's net earnings per diluted share increased approximately 18.4% in the fiscal second quarter to $1.16. These results continue our consistent performance in terms of earnings per share growth and overall financial strength. During the quarter, we launched new websites for Bed Bath & Beyond and buybuy BABY, as well as continued the integration of World Market and Linen Holdings, and made good progress on the other major initiatives that we mentioned last quarter. Steve will discuss these items in a few minutes. Our other second quarter activities included the opening of 1 Bed Bath & Beyond store, 1 Christmas Tree Shops store, 3 buybuy BABY stores and 1 Harmon Face Values store. Additionally, we continue to relocate and renovate stores across our concepts. At August 31, 2013, consolidated store space included the 266 World Market stores and net openings and closings for all our concepts was approximately 42.3 million square feet, an increase of approximately 2.2% over the end of last year's second quarter. Since the beginning of the fiscal third quarter of 2013, we've opened 2 Bed Bath & Beyond stores and 1 World Market store. Including these stores, we currently operate 1,487 stores, consisting of 1,011 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada; 267 stores under the names World Market, Cost Plus World Market or Cost Plus; 86 buybuy BABY stores; 74 stores under a combination of the names Christmas Tree Shops or andThat!; and 49 stores under the names Harmon or Harmon Face Values. Including the 17 additional stores we've opened so far, we continue to plan the number of store openings across all our concepts in fiscal '13 to be in the mid-30s. Additionally, we will continue our program of renovating or relocating stores when appropriate. We also remain flexible to take advantage of retail -- of real estate opportunities that might arise. The total number of stores that we expect to open this year will be updated on our next call. As always, we apply a stringent standard 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 or optimize our coverage within trade areas in response to changing market conditions. We believe that throughout the United States and Canada, there's an opportunity to operate in excess of 1,300 Bed Bath & Beyond stores, as well as grow our World Market, Christmas Tree Shops or andThat! and buybuy BABY concepts from coast to coast. Additionally, we continue to open Harmon Face Values stores and placed health and beauty care offerings in selected stores, as well as specialty food and beverage departments in selected Bed Bath & Beyond stores. We remain committed to and are excited about the continued growth of all our merchandise categories. Also, we are a partner in a joint venture which currently operates 3 Bed Bath & Beyond stores in the Mexico City market. The joint venture plans to open 2 additional Bed Bath & Beyond stores in Mexico during the remainder of fiscal '13. As we continuously said, the success of our company is due to the tremendous efforts of our associates and 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 the changing economic conditions on a market-by-market basis. We 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? Steven H. Temares: Thank you, Warren. Good afternoon, everyone, and thank you for participating in this conference call. As Warren said, we are pleased that we've been able to continue our consistent performance in terms of earnings per share growth and overall financial strength, as we -- excuse me, as well as with the integrations of both World Market and Linen Holdings. We are grateful for the dedication and talent of all our associates and our constant focus on improving the overall customer experience, while at the same time, creating a more productive and efficient company which are the keys to producing the strong results that we have experienced. On an ongoing basis, we continue to increase and differentiate our merchandise assortment to better serve our customers' needs and shopping preferences. We also continue to invest in all aspects of our company and work to enhance our customers' overall experience in-store, online and through mobile devices and social media, and we remain committed to being our customers' first choice for the merchandise categories we offer domestically, interactively and over the longer term, internationally. By offering a broad, deep and differentiated assortment of merchandise with superior customer service, we are confident that our company is well-positioned to grow profitably and increase our market share and shareholder value over time. As we said in our last quarter's conference call, this fiscal year, we are advancing several major initiatives which will require incremental capital investment, SG&A expense, including enhancing our omnichannel experience for our customers. During the quarter, we replaced both back end and customer facing systems for our buybuy BABY and Bed Bath & Beyond websites. Our new websites provide the foundation for ongoing improvements in this area. Also this year, we will continue to upgrade our mobile sites and apps, enhance network communications in our stores, as well as develop future point-of-sale improvements and grow and develop our IT, analytics, marketing and e-commerce groups to lead our omnichannel initiatives. In addition, we are in the process of building, equipping and staffing our new IT Data Center in North Carolina to enhance our disaster recovery capabilities and support our overall IT systems. And we will continue to retrofit energy-saving equipment in our stores to allow us to run them more efficiently. Turning to our fiscal second quarter of 2013 performance, we reported earlier today that our net earnings per diluted share were $1.16, an increase of approximately 18.4% when compared to $0.98 per diluted share in last year's fiscal second quarter. For the fiscal first half, net earnings per diluted share were $2.09, an increase of approximately 11.8% compared to the $1.87 earned last year. As a reminder, during our fiscal second quarter, we anniversary-ed the acquisitions of Linen Holdings and World Market, which were acquired on June 1, 2012, and June 29, 2012, respectively. Also, as Linen Holdings does not have retail outlets, it is excluded from our comparable store sales calculations. World Market was excluded from our comparable store sales calculations through the end of the fiscal first half, but we will be including it beginning with the fiscal third quarter of 2013. For the fiscal second quarter, comp store sales increased by approximately 3.7% compared with an increase of approximately 3.5% last year. For the fiscal first half, comp store sales increased by approximately 3.5% compared with an increase of approximately 3.3% last year. These increases in comp store sales for the fiscal second quarter and first half of 2013 were attributed to increases in both the number of transactions and the average transaction amount. Net sales for the fiscal second quarter were approximately $2.8 billion, approximately 8.9% higher than in the prior year. Of this increase, approximately 43% was the result of the inclusion of World Market, approximately 39% was attributable to the increase in comp store sales and the remaining 18% resulted primarily from new stores. Net sales for the fiscal first half of the year were approximately $5.4 billion, approximately 13% higher than in the fiscal first half of 2012. Of this increase, approximately 59% was the result of the inclusion of World Market and Linen Holdings; approximately 29% was attributable to the increase in comp store sales, and the remaining 12% resulted primarily from new stores. Gross profit for the fiscal second quarter was approximately 39.4% of net sales compared to approximately 39.8% of net sales for the second quarter of 2012. Gross profit for the fiscal first half was approximately 39.5% compared to approximately 39.9% of net sales for the fiscal first half of 2012. These decreases in the gross profit margin as a percentage of net sales were primarily attributed to increase in coupons, due to increases in both the redemptions and the average coupon amount, as well as the shift in the mix and merchandise sold to lower margin categories. The inclusion of World Market for the period prior to its 1-year anniversary in the quarter increased gross profit as a percentage of net sales by approximately 10 basis points for the second quarter of fiscal 2013. The inclusion of World Market and Linen Holdings for the period prior to each of their 1-year anniversaries in the first half did not have a material effect on a gross profit percentage for the first half of 2013. Selling, general and administrative expenses for the fiscal second quarter were approximately 25.6% of net sales as compared to approximately 25.7% of net sales in last year's fiscal second quarter, a decrease of approximately 10 basis points. This decrease can primarily be attributed to lower professional fees this year in light of last year's acquisitions and to lower store expenses, partially offset by higher advertising expenses as a percentage of net sales. The inclusion of World Market for the period prior to the 1-year anniversary in the quarter increased SG&A by approximately 30 basis points for the second quarter of 2013. For the fiscal first half, selling, general and administrative expenses were approximately 26.4% of net sales, an increase of approximately 60 basis points when compared to approximately 25.8% in net sales in the fiscal first half of 2012. This increase can primarily be attributed to higher payroll and payroll-related costs and advertising expenses as a percentage of net sales. The inclusion of World Market and Linen Holdings for the period prior to each of their 1-year anniversaries in the first half increased SG&A by approximately 70 basis points for the first half of 2013. Reflecting the movements in gross profit margin and SG&A expenses, the operating profit margin for the fiscal second quarter was 30 basis points lower than in the same period a year ago. For the fiscal first half, the operating profit margin decreased by approximately 100 basis points. Net interest for the fiscal second quarter and fiscal first half of 2013 includes approximately $2.2 million and $4.4 million, respectively, of World Market net interest expense, resulting substantially from the inclusion of sale leaseback obligations relating to its distribution facilities. Our provision for income taxes continues to fluctuate as taxable events occur and exposures are reevaluated. The fiscal second quarter, consistent with the model provided on our last conference call, our provision for income taxes was approximately 35.8% compared to approximately 38.6% for the comparable quarter last year, a decrease of approximately 280 basis points. The provision for the fiscal quarter included net after tax benefits of approximately $9.7 million this year and $0.7 million last year due to distinct tax events occurring during the quarters. For the fiscal first half, the provision for income taxes was approximately 36.5% compared to approximately 36.4% for the comparable period last year, an increase of approximately 10 basis points. The provision for the fiscal first half included net after tax benefits of approximately $12.3 million this year and $15.3 million last year due to distinct tax events occurring during these periods. Capital expenditures for the fiscal first half of 2013 were approximately $130 million, principally for new stores, existing store improvements, information technology enhancements and other projects important to our future, including the major initiatives that I previously mentioned. 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. Through our share repurchase program, during the second quarter we repurchased approximately 3.5 million shares for approximately $257 million. We are pleased that over the last 2 years, we have returned approximately 93% of our cash flows from operations to our shareholders through our share repurchase programs. While our company's Board of Directors continues to review our capital structure on an ongoing basis, our strong operations should allow us to continue to invest in our infrastructure and provide financial flexibility. As always, we want to thank our associates throughout our company for their ongoing efforts which produce 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, improving 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. As you heard from Warren and Steve, we earned $1.16 per diluted share in our fiscal second quarter. We are encouraged by our positive fiscal second quarter results, and we continue to be cautiously optimistic about the remainder of the year. As noted in our prior quarter's call, I would like to remind everyone of the following 3 items: First, I'm happy to announce the inclusion of World Market sales and earnings will be comparable beginning with the fiscal third quarter and for the remainder of the fiscal year. Second, since fiscal 2012 was a 53-week year, the net sales generated of approximately $184 million during the extra week in the fourth quarter last year and the related 5 -- the related approximate $0.05 earnings per share will not be repeated in the fiscal fourth quarter of 2013. And third, as we discussed on our last call, and which I will review in a moment, we have several items which make modeling sales in the third and fourth quarters more challenging than usual for the back half of the year. Although we believe the comp and net sales ranges we are providing to be reasonable, our estimates for the third and fourth quarters may be subject to higher volatility due to our reliance on several assumptions about how sales will be affected by the calendar shift and our promotional changes. As we discuss sales for the remainder of the year, please refer to the chart included in our fiscal first quarter of 2013 10-Q. That highlights the differences and the date ranges between the fiscal and the comparable store sales calendars on a quarter-by-quarter basis due to a shift caused by our 53rd week last year. Keeping these calendar differences in mind, our sales model for the remainder of the year is as follows: For the fiscal second half, based upon our fiscal calendar, which includes 1 fewer week compared to last year, we are modeling consolidated fiscal net sales to increase by approximately 0.5% to 2.5%. Excluding the effect of the 53rd week in last year's fourth quarter, which would be a 26-week to 26-week comparison, the model would result in consolidated fiscal net sales to increase by approximately 3.5% to 5.5%. Also for the fiscal second half, we are modeling comp store sales based upon the comparable store sales calendar, which compares 26 weeks both this year and last year to increase by 2% to 4%. For the third quarter, we are modeling fiscal net sales to increase by approximately 6% to 8%. In addition to an increase due to new stores, this increase includes planned changes in our promotional schedule and anticipates recovering lost sales due to the impact of Superstorm Sandy in the fiscal third quarter of 2012, which at that time, we estimated to be approximately 90 basis points in comp. Comparable store sales for the third quarter are modeled to increase by approximately 1% to 3%. This range reflects planned changes in our promotional schedule, anticipates recovering lost sales due to the impact of Superstorm Sandy in the fiscal third quarter of 2012 and includes an unfavorable comparison in the comp store sales calendar, which compares the 13 weeks ending the week of Thanksgiving in 2013 to the 13 weeks ended the first week after Thanksgiving in 2012. For the fourth quarter, we are modeling fiscal net sales to decrease by approximately 2% to 4% when comparing the 13 weeks of this year's fiscal fourth quarter to the 14 weeks of last year's fiscal fourth quarter. Excluding the effect of the 14th week in last year's fourth quarter, which would be a 13-week to 13-week comparison, we estimate fiscal net sales would increase by approximately 1% to 3%. In addition to an increase due to new stores, these estimates reflect both planned changes in our promotional schedule and 6 fewer pre-Christmas shopping days in this year's fiscal fourth quarter compared to last year. Comparable store sales for the fourth quarter are projected to increase by approximately 3.5% to 5.5%. This range includes planned changes in our promotional schedule and a favorable comparison in the comparable store sales calendar, including both 1 additional pre-Christmas shopping day during the period and a compressed holiday shopping period when compared to last year. That said, I would like to now provide our remaining assumptions for the remainder of fiscal 2013. One, depreciation for fiscal 2013 is expected to be approximately $220 million. Two, we are modeling operating profit margin as a percentage of net sales to be flat for the fiscal third and fourth quarters and to slightly deleverage for the full year. Three, net interest for our fiscal third and fourth quarters will each include approximately $2.2 million in World Market net interest expense, resulting substantially from the inclusion of sales leaseback obligations related to its distribution facilities. Four, the third quarter tax provision is estimated to be around 37.5%, while the fourth quarter and full year tax provisions are estimated to be around 37% with expected variability as distinct tax events occur. Five, including the 17 stores opened so far, we continued to model the number of store openings across all of our concepts in fiscal 2013 to be in the mid-30s. The total number of stores that we expect to open this year will be updated on our next call. Six, capital expenditures for fiscal 2013 continue to be planned at approximately $350 million, which of course, remains subject to the timing and composition of the projects. Projected capital expenditures, which include World Market and Linen Holdings for the full year, are primarily for new stores and existing store refurbishments, information technology enhancements, including the relaunching of our buybuy BABY and Bed Bath & Beyond websites, upgrading our mobile sites and apps, enhancing network communication in our stores, initiating work for future point-of-sale improvements and building, equipping and staffing our new IT Data Center to support our ongoing technology initiatives. Seven, we expect to generate positive operating cash flow and continue to fund operations entirely from internally generated sources. Eight, we plan to continue to repurchase shares under our current $2.5 billion repurchase program, which we anticipate completing by the end of fiscal 2015. Our share repurchase program may be influenced by several factors, including business and market conditions. Based on these and other planning assumptions, we are modeling net earnings per diluted share to be approximately $1.11 to $1.16 for the fiscal third quarter and $1.70 to $1.77 for the fiscal fourth quarter. For all of fiscal 2013, we are modeling net earnings per diluted share to be approximately $4.88 to $5.01. 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 $920 million. This includes approximately $51 million of investments related to auction rate securities. These securities have an estimated temporary valuation adjustment of approximately $3.5 million to reflect our current lack of liquidity. Since this valuation adjustment is deemed temporary, it did not affect the company's earnings. We will continue to monitor the market for these securities and will expense any permanent changes to the value of our remaining securities, if any, as they occur. As of August 31, 2013, retail inventories at cost, including World Market, were approximately $2.6 billion or $60.36 per square foot, an increase of approximately 3.7% on a per square foot basis over the end of last year's second quarter. Retail inventories continue to be tailored by store to meet the anticipated demands of our customers and are in good condition. Consolidated shareholders' equity at August 31, 2013, was approximately $4 billion, which is net of share repurchases, including the approximately $257 million, representing approximately 3.5 million shares repurchased during the fiscal second quarter of 2013. As of August 31, 2013, the remaining balance of the current share repurchase program authorized in December 2012 was approximately $1.8 billion. As a reminder, our next conference call to review operating results for the third quarter ending on November 30, 2013, will be on Wednesday, January 8, 2014. If you have any questions, Ken Frankel and I will be in our offices this evening, September 25, 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 for listening. You may now disconnect.