Welcome to Bed Bath & Beyond's Third Quarter Fiscal 2013 Results Conference Call. [Operator Instructions] This conference is being recorded. A rebroadcast of the conference call will be available beginning on Wednesday, January 8, 2014, at 6:30 p.m. Eastern Time through 6:30 p.m. Eastern Time on Friday, January 10, 2014. To access the rebroadcast, you may dial (888) 843-7419, with the passcode ID of 36264087. 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 third quarter fiscal 2013 conference call. A short time ago, we issued a press release announcing Bed Bath & Beyond's results for the 3- and 9-month periods ended November 30, 2013. During this call, we will comment on some of the third quarter highlights, update our fiscal fourth quarter and full year model and provide some preliminary fiscal 2014 planning assumptions. Before proceeding, I will read the following statement, and I quote, "Bed Bath & Beyond's fiscal third quarter press release and comments made during this call may contain forward-looking statements within the meaning of Section 21E of the Securities and 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. 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 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?

Thanks, Gene, and good afternoon. We are pleased to report that our company's net earnings per diluted share increased approximately 8.7% in the fiscal third quarter to $1.12. These results continue our consistent performance in terms of earnings per share growth and overall financial strength. During the third quarter, we opened 5 new Bed Bath & Beyond stores, 2 stores under a combination of the names Christmas Tree Shops or andThat! and 3 World Market stores. Also, we continue to optimize our operations in a number of trade areas through renovating stores across our concepts and repositioning our stores in various markets, which also included the closing of 3 Bed Bath & Beyond stores during the quarter. At November 30, 2013, consolidated store space, net of openings and closings for all our concepts, was approximately 42.5 million square feet, an increase of approximately 1.4% over the end of last year's third quarter. At the end of the third quarter of 2013 and currently, we operate 1,491 stores, consisting of: 1,011 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada; 269 stores under the names World Market, Cost Plus World Market or Cost Plus; 86 buybuy BABY stores; 76 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 24 new stores we have opened so far, we are planning the number of store openings for fiscal 2013 to be approximately 33 stores across all our concepts. Additionally, we will continue our program of renovating or repositioning stores within markets when appropriate. We 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 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 place 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 the joint venture which currently operates 4 Bed Bath & Beyond stores in the Mexico City market, which includes 1 store opened since the beginning of the fiscal fourth quarter of 2013. As we have 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 to 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, Len. Good afternoon, everyone, and thank you for participating in this conference call. As Len 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. At the same time, as Gene will discuss shortly, our performance since the beginning of the fourth quarter has not met our initial projections. As we said in our prior call, our model would be subject to high volatility due to our calendar shift assumptions. Although we had a slight increase in comp store transactions during fiscal December, our assumptions included an even greater number of additional transactions than we experienced during this compressed holiday shopping period. Accordingly, we have revised our projections for the period. While we continue to model sound fourth quarter comp store sales, more importantly, we believe we continue to take the necessary steps to maintain our consistent long-term performance, including our focus on increasing and differentiating 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 in an omnichannel environment, 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. We continue to move forward with several major initiatives which will require incremental capital investments and SG&A expense on an ongoing basis, including enhancing our omnichannel experience for our customers by adding additional functionality to our recently relaunched buybuy BABY and Bed Bath & Beyond websites; initiating a selling component to our Christmas Tree Shops website; upgrading our mobile sites and apps; enhancing network communications in our stores as well as develop future points of sale improvements; and growing and developing our IT, analytics, marketing and e-commerce groups to lead our omnichannel initiatives. In addition, we have substantially completed the building of our new IT Data Center in North Carolina and are equipping and staffing the facility. This will enhance our disaster recovery capabilities and support our overall IT systems, and we will continue to retrofit energy savings equipment in our stores to allow us to run them more efficiently. Turning to our fiscal third quarter of 2013 performance, we reported earlier today that our net earnings per diluted share were $1.12, an increase of approximately 8.7% when compared to $1.03 per diluted share in last year's fiscal third quarter. For the fiscal 9 months, net earnings per diluted share were $3.20, an increase of approximately 10.7% compared to the $2.89 earned last year. Net sales for the fiscal third quarter were approximately $2.9 billion, approximately 6% higher than in the prior year. Of this increase, approximately 78% was attributable to the increase in comp store sales, and the remaining 22% resulted primarily from new stores. Net sales for the fiscal 9 months of the year were approximately $8.3 billion, approximately 10.5% higher than in the fiscal 9 months of 2012. Of this increase, approximately 46% was the result of the inclusion of World Market and Linen Holdings, approximately 40% was attributable to the increase in comp store sales and the remaining 14% resulted primarily from new stores. So the fiscal third quarter comp store sales increased by approximately 1.3%, in line with our prior model and compared to an increase of approximately 1.7% last year. As a reminder, World Market comp sales are included in the comp store sales calculation since the beginning of the fiscal third quarter. The increase in comp store sales for the fiscal third quarter was attributed to an increase in the average transaction amount, partially offset by a slight decrease in the number of transactions. For the fiscal 9 months this year and for the fiscal 9 months last year, comp store sales increased by approximately 2.7%. The increase in comp store sales for the fiscal 9 months of 2013 was attributed to an increase in the average transaction amount and a slight increase in the number of transactions. Gross profit for the fiscal third quarter was approximately 39.2% of net sales compared to approximately 39.8% of net sales for the third quarter of 2012. This decrease in the gross profit margin as a percentage of net sales was primarily attributed to an increase in inventory acquisition costs, an increase in coupons due to increases in both redemptions and the average coupon amount, as well as a shift in the mix of merchandise sold to lower margin categories, partially offset by a reduction in markdowns. Gross profit for the fiscal 9 months was approximately 39.4% of net sales compared to approximately 39.8% of net sales for the fiscal 9 months of 2012. This decrease in the gross profit margin as a percentage of net sales was primarily attributed to an increase in coupons due to increases in both redemptions and the average coupon amount, as well as the shift in the mix of merchandise sold to lower-margin categories. The inclusion of World Market and Linen Holdings for the periods prior to each of their one-year anniversaries did not have a material effect on our gross profit percentage for the fiscal 9 months of 2013. Selling, general and administrative expenses for the fiscal third quarter were approximately 26.1% of net sales as compared to approximately 26.4% of net sales in last year's fiscal third quarter, a decrease of approximately 30 basis points. This decrease can primarily be attributed to lower occupancy and payroll and payroll-related costs, partially offset by higher other store expenses, including depreciation as a percentage of net sales. For the fiscal 9 months, selling, general and administrative expenses were approximately 26.3% of net sales, an increase of approximately 30 basis points when compared to the approximately 26% of net sales in the fiscal 9 months 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 one-year anniversaries increased SG&A by approximately 40 basis points for the fiscal 9 months of 2013. Reflecting the movement in gross profit margin and SG&A expenses, the operating profit margin for the fiscal third quarter was 30 basis points lower than in the same period a year ago. For the fiscal 9 months, the operating profit margin decreased by approximately 70 basis points. Our provision for income taxes continues to fluctuate as taxable events occur and exposures are reevaluated. For the fiscal third quarter, our provision for income taxes was approximately 36.9% compared to approximately 35.1% for the comparable quarter last year, an increase of approximately 180 basis points. The provision for the fiscal quarter included net after tax benefits of approximately $4.9 million this year and $9.1 million last year due to distinct tax events occurring during the quarters. For the fiscal 9 months, the provision for income taxes was approximately 36.6% compared to approximately 35.9% for the comparable period last year, an increase of approximately 70 basis points. The provision for the fiscal 9 months included net after tax benefits of approximately $17.2 million this year and $24.3 million last year due to distinct tax events occurring during these periods. Capital expenditures for the fiscal 9 months of 2013 were approximately $229 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 third quarter, we repurchased approximately 2.3 million shares for approximately $171 million. We are pleased that over the last 2 years, we have returned approximately 86% 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, and as we begin the new year, we want to thank our associates throughout our company 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, 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 Len and Steve, we earned $1.12 per diluted share in our fiscal third quarter. We are pleased with our positive fiscal third quarter results, and we continue to be cautiously optimistic about the remainder of the year. As noted in our prior calls, I would like to remind everyone of the following 2 items. First, 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 approximate $0.05 earnings per share will not be repeated in the fiscal fourth quarter of 2013. Second, due to a shift caused by our 53rd week last year, there are differences in the date ranges between the fiscal and comparable store sales calendars on a quarter-by-quarter basis. Please refer to the chart included in our fiscal first and second quarters of 2013 10-Qs that highlights the differences in those date ranges. That said, I would like to now provide our remaining assumptions that support our revised model for the fourth quarter. One, based upon sales to date and our assumptions for the rest of the fourth quarter, comparable store sales are now modeled to increase by approximately 2% to 4% versus our previous model of 3.5% to 5.5%. For the fiscal second half, we are modeling comp store sales, which compares 26 weeks both this year and last year to increase by approximately 1.7% to 2.7% versus our previous model of 2% to 4%. Comparable store sales for the full year, consisting of 52 weeks, are modeled to increase by approximately 2.5% to 3.1%. Two, net sales are now modeled to decrease by approximately 3.9% to 5.7% 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 be in the range of a decrease of approximately 0.3% to an increase of approximately 1.6%. For the full year, net sales are modeled to increase by approximately 5.4% to 6% when comparing the 52 weeks of fiscal 2013 to the 53 weeks of fiscal 2012. Excluding the effect of the 53rd week in fiscal 2012, which would be a 52- to 52-week comparison, we estimate net sales would increase by approximately 7.2% to 7.8%. Three, depreciation for fiscal 2013 is modeled to be approximately $220 million. Four, for the fiscal fourth quarter, we are now modeling operating profit margin as a percentage of net sales to deleverage versus our previous fourth quarter operating profit margin model, which was planned to be flat due to the lower net sales estimate in addition to an increase in advertising expense, payroll and cost of sales as a percentage of net sales. For the full year, we are now modeling operating profit margin as a percentage of net sales to deleverage. Five, net interest for our fiscal fourth quarter, which -- will include approximately $2.2 million in World Market net interest expense, resulting substantially from the inclusion of sale leaseback obligations related to its distribution facilities. Six, the fourth quarter and full year tax provisions are estimated to be in the mid to high 30s percent range, with expected variability as distinct tax events occur. Seven, including the 24 stores opened so far, we are modeling the number of store openings for fiscal 2013 to be approximately 33 stores across all of our concepts. Eight, during the fiscal fourth quarter, we expect to continue our program of renovating and repositioning stores. Nine, capital expenditures for fiscal 2013, subject to the timing and composition of the projects, are now planned at approximately $340 million. 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 communications in our stores, continuing work for future point-of-sale improvements and building, equipping and staffing our new IT Data Center to enhance our disaster recovery capabilities and support our ongoing technology initiatives. Ten, we expect to generate positive operating cash flow and continue to fund operations entirely from internally generated sources. Eleven, 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 include business and market conditions. Based on these and other assumptions, including the change in the model of net sales, the previously mentioned change in the model of our operating profit margin and the modeled higher weighted average shares outstanding estimate as a result of actual and expected repurchase activity through the end of the quarter, we are now modeling net earnings per diluted share to be approximately $1.60 to $1.67 for the fiscal fourth quarter as compared to our previous model of $1.70 to $1.77. For all of fiscal 2013, we are now modeling net earnings per diluted share to be approximately $4.79 to $4.86 as compared to our previous model of $4.88 to $5.01. Turning to fiscal 2014. While we are in the progress of completing our annual budget, our preliminary planning assumptions include the following. One, we anticipate opening approximately 30 stores across all our concepts. We anticipate the mix of store openings to be relatively consistent with fiscal 2013. Two, we expect to continue our program of renovating or repositioning stores within markets when appropriate. Three, our operations will continue to be entirely funded from internally generated sources. Four, as previously discussed, we anticipate completing the current share repurchase program by the end of fiscal 2015. Five, we expect continuing variability in our quarterly tax rates. We will provide further information related to the fiscal first quarter and full year 2014 on our next quarterly conference call on April 9, 2014. Before concluding this afternoon's call, a few additional comments relative to our recently concluded fiscal third quarter. Our balance sheet and cash flows remain strong. We ended the fiscal third quarter with cash and cash equivalents and investment securities of approximately $781 million. This includes approximately $51 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. 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 November 30, 2013, retail inventories at cost were approximately $2.8 billion or $66.89 per square foot, an increase of approximately 2.1% on a per square foot basis over the end of last year's third 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 November 30, 2013 was approximately $4.1 billion, which is net of share repurchases, including the approximately $171 million, representing approximately 2.3 million shares repurchased during the fiscal third quarter of 2013. As of November 30, 2013, the remaining balance on the current share repurchase program authorized in December 2012 was approximately $1.7 billion. As a reminder, our next conference call to review operating results for the fourth quarter and year ending on March 1, 2014, will be on Wednesday, April 9, 2014. If you have any questions, Ken Frankel and I will be in our offices this evening, January 8, to take your calls. We would like to wish you a happy and healthy new year and 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.