Welcome to Bed Bath & Beyond's first quarter fiscal 2014 results conference call. [Operator instructions.] At this time, it’s my pleasure to turn the conference over to Ms. Sue Lattmann, Chief Financial Officer and Treasurer of Bed Bath & Beyond. Please go ahead.

Thank you, and good afternoon. Welcome to Bed Bath & Beyond's first quarter of fiscal 2014 conference call. A short time ago, we issued a press release announcing Bed Bath & Beyond's results for the three-month period ended May 31, 2014. During this call, we will comment on some of the first quarter highlights and update our second quarter and full fiscal year 2014 models. 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 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 1, 2014. 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, Sue, and good afternoon. Our press release, issued within the past hour, shows that our company earned $0.93 per diluted share in the fiscal first quarter, which is within our modeled range that was provided in our last conference call. While the overall retail environment has been challenging, we believe we are making the necessary investments for our company’s long-term success. During this first quarter, we opened two new Bed Bath & Beyond stores, one buybuy BABY store, one Cost Plus World Market store, and one andThat! store. Also, we continued 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 one Bed Bath store. On May 31, 2014, consolidated store space net of openings and closings for all our concepts was approximately 42.7 million square feet, an increase of approximately 1.2% over the end of last year’s first quarter. Since the beginning of the fiscal second quarter of 2014, we’ve opened one Bed Bath & Beyond store, one buybuy BABY store, and two Cost Plus World Market stores. Including these stores, we currently operate 1,504 stores, consisting of 1,016 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico, and Canada; 268 stores under the names World Market, Cost Plus World Market, or Cost Plus; 92 buybuy BABY stores; 78 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat!, or andThat!; and 50 stores under the names Harmon or Harmon Face Values. During 2014, we anticipate opening approximately 22 new stores company-wide with the potential of up to six additional stores before the end of the fiscal year. Additionally, we will continue our program of renovating or repositioning stores within markets when appropriate. As the year progresses, the total number of stores that we will open will be updated as we gain greater visibility. Also, we are partnering in a joint venture which opened one Bed Bath & Beyond store in the first quarter and currently operates 5 Bed Bath & Beyond stores in the Mexico City market. The joint venture is planning on opening an additional store by the end of the fiscal year. 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 Cost Plus World Market, Christmas Tree Shops andThat!, and buybuy BABY concepts from coast to coast. Additionally, we continue to place health and beauty care offerings in selected stores, as well as baby and specialty food and beverage departments in selected Bed Bath & Beyond stores. Although the number of these placements continues to evolve, there are currently in excess of 300 additional existing store locations into which one or a combination of these merchandise offerings may be placed over time. At the same time, we continue to make substantial capital investments in our online, mobile, and social media channels to enhance our customer’s overall experience. We remain committed to and are excited about the continued growth of all our merchandise categories and channels. As we have continually 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, 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 and channel demands and to changing economic conditions. We believe we have the people, the resources, and the capabilities to achieve our near and long term goals. And now, I’ll turn the call over to Steven Temares. Steve?

Thank you, Warren. Good afternoon everyone, and thank you for participating in this conference call. As Warren said, we continue to believe that the decisions and investments we are making today are positioning our company to thrive in an evolving retail landscape and to enhance shareholder value over time. We are pleased with the progress on our initiatives to date, and we are excited about the progress yet to come. As we have noted, this is a period of significant investment for our company, and although there are required capital investments and incremental expenses related to these initiatives, which will increase technology costs and depreciation as well as other expenses as a percentage of net sales in the short term, we are confident we are making the appropriate investments to provide a seamless customer experience across the in-store, online, and mobile shopping channels. We continue to move forward with our initiatives by continuing to add new functionality and assortment to our selling websites, mobile sites and apps; furthering development work necessary for a new and more robust point of sale system; continuing our deployment of systems and equipment to allow our stores to take advantage of new technologies and processes; continuing to strengthen our IT, analytics, marketing, and e-commerce groups; and opening an additional distribution facility for both direct to customer and store fulfillment. Through the investments we have made, and will continue to make, our customers can purchase products either in store, online, or through a mobile device. Also, we have the developing ability to have customer purchases picked up in store or shipped direct to the customer from our distribution facilities, stores, or vendors. In addition, we continue to increase, differentiate, and leverage our assortment across all channels, concepts, and countries in which we operate. For example, we recently introduced Craft by World Market, a line of limited addition, handcrafted goods made by artisans, crafters, and designers from around the world. We also strive to more efficiently and effectively understand our customer’s needs and communicate with them through our growing analytic capabilities and our developing omnichannel marketing approaches. We believe we are well-positioned to thrive in an omnichannel retail environment to grow profitably and increase our market share and shareholder value over time. In addition, we are pleased with the ongoing integration of our institutional business, Linen Holdings, and we look forward to the opportunities this business presents for future growth. Turning to our fiscal first quarter performance, we reported net earnings per diluted share of $0.93. Net sales for the fiscal first quarter were approximately $2.7 billion, approximately 1.7% higher than in the prior year. Of this increase, approximately 24% was attributable to the increase in comp sales and approximately 76% was primarily from new stores and Linen Holdings. First quarter comp sales increased by approximately 0.4% compared with an increase of 3.4% last year. The increase in comp sales for the fiscal first quarter was attributed to a slight increase in the average transaction amount, partially offset by a slight decrease in the number of transactions. Gross profit for the fiscal first quarter was approximately 38.8% of net sales compared to approximately 39.5% of net sales in the corresponding period a year ago. This decrease in the gross profit margin as a percentage of net sales was primarily attributed to an increase in coupon expense resulting from an increase in redemptions and a slight increase in the average coupon amount; an increase in net direct to customer shipping expense, which was impacted by our free shipping threshold; as well as a shift in the mix of merchandise sold to lower-margin categories. Selling, general, and administrative expenses for the fiscal first quarter were approximately 27.5% of net sales as compared to approximately 27.2% of net sales in last year’s fiscal first quarter, an increase of approximately 30 basis points. This percentage of net sales increase in SG&A can primarily be attributed to higher technology expenses and related depreciation. Reflecting the movement in gross profit margin and SG&A expenses, the operating profit margin for the fiscal first quarter ran to 110 basis points lower than in the same period a year ago. 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 37.4%, compared to approximately 37.3% for the comparable quarter last year, an increase of approximately 10 basis points. The provision for the fiscal quarter included net after-tax benefits of approximately $1.8 million this year and $2.6 million last year, due to distinct tax events occurring during the quarters. Capital expenditures for the fiscal first quarter were approximately $68 million, principally for information technology enhancements, new stores, existing store improvements, and other projects important to our future, including the 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. Our strong operations should allow us to continue to invest in our future and provide financial flexibility. Through our share repurchase program, during the fiscal first quarter, we repurchased approximately 4.2 million shares for approximately $273 million. We are pleased that over the last two years, we have returned approximately 90% of our cash flows from operations to our shareholders through our share repurchase programs. Our company’s Board of Directors continues to review our capital structure on an ongoing basis. As always, we want to thank our associates throughout our company for their ongoing efforts, which are largely responsible for Bed Bath & Beyond’s long term success. Through their efforts, and those of our valued merchandise and service providers, 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 Sue. Sue?

Thank you, Steve. As you heard from Warren and Steve, we are $0.93 per diluted share in our fiscal first quarter. Based upon our fiscal first quarter results, and despite the challenging retail environment, we continue to be cautiously optimistic about the balance of the current fiscal year. Turning to the remainder of fiscal 2014, our current model for the fiscal second quarter and full year include the following. One, for the fiscal second quarter, we are modeling comparable sales to increase in the range of 1% to 3%. For the full year, we are modeling comparable sales to increase by approximately 3%. Two, consolidated net sales are modeled to increase by approximately 2% to 4% for the second quarter and approximately 4% for the full year. Three, depreciation for fiscal 2014 is expected to be approximately $240 million. Four, assuming these sales levels, we are modeling deleverage for both gross profit and SG&A for the fiscal second quarter and full year. Contributing to the modeled gross profit deleverage are an assumed continuation in the shift of the mix of merchandise sold to lower-margin categories, an increase in coupon expense, and an increase in net direct to customer shipping expense. The model’s SG&A deleverage includes increases in technology expense and depreciation related to our ongoing investments. Five, our model reflects that our annual interest line will include approximately $9.2 million in interest expense, substantially resulting from the inclusion of sale leaseback obligations related to certain distribution centers. Six, the second quarter and full-year tax provisions are estimated to be in the mid to high 30s percentage range with expected variability as distinct tax events occur. Seven, we expect to generate positive operating cash flow. Eight, our model reflects continued repurchases of shares under our $2.5 billion repurchase plan, with an assumed completion during fiscal 2015. However, our repurchase program may change, and may be influenced by several factors, including business and market conditions. As Steven said, our board of directors continues to review our capital structure on an ongoing basis. Nine, we anticipate opening approximately 22 new stores company-wide, with the potential of up to 6 additional stores before the end of the fiscal year. As the year progresses, the total number of stores that we will open will be updated as we gain greater visibility. We also will continue to place health and beauty care offerings in selected stores across all our concepts, as well as baby and specialty food and beverage departments in selected Bed Bath & Beyond stores. As always, we remain flexible to take advantage of real estate opportunities that may arise. Ten, we expect to continue our program of renovating or repositioning stores within markets when appropriate. Eleven, capital expenditures for fiscal 2014 are planned to be approximately $350 million, which remain subject to the timing and composition of projects. Projected capital expenditures include the significant level of investment we will be making in our initiatives and primarily include the addition of new functionality to our selling websites, mobile sites, and apps; development work necessary for a new and more robust point of sale system; deploying systems and equipment to our stores; equipping our new IT data center; opening an additional distribution facility for direct to customer and store fulfilment; as well as new stores and existing store refurbishments. Based on these and other planning assumptions, we are modeling net earnings per diluted share to be approximately $1.08 to $1.16 for the fiscal second quarter of 2014. For all of fiscal 2014, we continue to model a mid-single digit percentage increase in net earnings per diluted share. 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 first quarter with cash and cash equivalents and investment securities of approximately $803 million, including approximately $47.7 million of investments related to auction rate securities. As of May 31, 2014, retail inventories at cost were approximately $2.7 billion, or $62.31 per square foot, an increase of approximately 4.7% on a per square foot basis over the end of last year’s first 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 as of May 31, 2014 was approximately $3.9 billion, which is net of share repurchases, including the approximately $273 million representing approximately 4.2 million shares repurchased during the fiscal first quarter of 2014. As of May 31, 2014, the remaining balance on the current share repurchase program authorized in December 2012 was approximately $861 million. As a reminder, our next conference call to review operating results for the second quarter, ending on August 30, 2014, will be on Tuesday, September 23, 2014. If you have any questions, Ken Frankel and I will be in our offices this evening, June 25, to take your calls. As always, we appreciate your interest in Bed Bath & Beyond.

Thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect. [No Q&A Session for this event].