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Bed Bath & Beyond Inc. Reports Net Earnings for Fiscal First Quarter
Jun 27 2007

Net Earnings for Quarter Increase to $.38 per Share; Quarterly Net Sales Increase by 11.3%; Quarterly Comparable Store Sales Increase by 1.6%

UNION, N.J., June 27 /PRNewswire-FirstCall/ -- Bed Bath & Beyond Inc. today reported net earnings of $.38 per diluted share in the fiscal first quarter ended June 2, 2007. In the fiscal first quarter of 2006 the Company reported net earnings of $.35 per diluted share. Net sales for the fiscal first quarter of 2007 were approximately $1.553 billion, an increase of approximately 11.3% from net sales of $1.396 billion reported in the fiscal first quarter of 2006. Comparable store sales for the fiscal first quarter of 2007 increased by approximately 1.6%, on top of an increase of approximately 4.9% in last year's fiscal first quarter.

As of June 2, 2007, the Company operated a total of 903 stores, including 821 Bed Bath & Beyond stores (6 of which were opened during the fiscal first quarter), in 48 states, the District of Columbia and Puerto Rico. In addition, as of that date, Christmas Tree Shops operated 35 stores in 9 states (one of which was opened during the fiscal first quarter), buybuy BABY operated 8 stores in 4 states, and Harmon Stores operated 39 stores in 3 states. Consolidated store space as of June 2, 2007 was approximately 28.3 million square feet. Since the beginning of the fiscal second quarter on June 3, 2007, 2 additional Bed Bath & Beyond stores have opened.

Steven H. Temares, Chief Executive Officer and Member of the Board of Directors of Bed Bath & Beyond Inc. stated, "While we continue to see that the overall retailing environment, especially sales of merchandise related to the home, is challenging, we have taken a long-term approach to our business and work to continue to distance ourselves from our competitors by remaining focused on being our customers' first choice for the products we offer, domestically, interactively, and over the long-term, internationally. Consistent with this, we were very pleased to have recently executed a lease for our first international store, located in Richmond Hill, Ontario, north of Toronto."

Also during the fiscal first quarter of 2007, the Company repurchased approximately 7.0 million shares of its common stock for an aggregate price of approximately $287 million. At the end of the fiscal first quarter, the Company had repurchased approximately 14.5 million shares for an aggregate price of approximately $587 million under the $1 billion share repurchase program authorized in December 2006.

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a nationwide chain of retail stores, operating under the names of Bed Bath & Beyond, Christmas Tree Shops, Harmon and buybuy BABY. The Company sells a wide assortment of merchandise principally including domestics merchandise and home furnishings as well as food, giftware, health and beauty care items and infant and toddler merchandise. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard & Poor's 500 and Global 1200 Indices and the NASDAQ-100 Index. The Company is counted among the Fortune 500 and the Forbes 2000.

This press release may contain forward-looking statements. Many of these forward-looking statements can be identified by use of words such as may, will, expect, anticipate, estimate, assume, continue, 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. Such factors include, without limitation: changes in the retailing environment and consumer preferences and spending habits; demographics and other macro-economic factors that may impact the level of spending for the types of merchandise sold by the Company; general economic conditions; unusual weather patterns; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the cost of labor, merchandise and other costs and expenses; the ability to find suitable locations at acceptable occupancy costs to support the Company's expansion program; and matters arising out of or related to the Company's stock option grants and procedures and related matters, including the outcome of the informal inquiry commenced by the SEC, the possibility that the SEC may not agree with all of the special committee's findings and recommendations and may require additional or different remediation, any other proceedings which may be brought against the Company by the SEC or other governmental agencies, any matters arising out of the inquiry commenced by the US Attorney for the District of New Jersey relating to the Company's stock option grants, any tax implications relating to the Company's stock option grants, the outcome of the shareholder derivative actions filed against certain of the Company's officers and directors, and the possibility of other private litigation relating to such stock option grants and related matters. The Company does not undertake any obligation to update its forward-looking statements.

                     Consolidated Statements of Earnings
                    (in thousands, except per share data)

                                                Three Months Ended

                                                June 2,         May 27,
                                                 2007            2006

    Net sales                              $  1,553,293    $  1,395,963
    Cost of sales                               907,184         805,865
      Gross profit                              646,109         590,098
    Selling, general and
     administrative expenses                    491,718         441,348
      Operating profit                          154,391         148,750
    Interest income                               9,890           9,659
      Earnings before provision
       for income taxes                         164,281         158,409
    Provision for income taxes                   59,634          57,978
      Net earnings                         $    104,647    $    100,431

    Net earnings per share - Basic         $       0.38    $       0.36
    Net earnings per share - Diluted       $       0.38    $       0.35

    Weighted average shares
     outstanding - Basic                        273,564         280,202
    Weighted average shares
     outstanding - Diluted                      278,249         285,153

                           Consolidated Balance Sheets
                            (in thousands, unaudited)

                                               June 2,          May 27,
                                                2007            2006 (1)

    Current assets:
     Cash and cash equivalents             $    183,131     $    87,795
     Short term investment securities           512,022         554,472
     Merchandise inventories                  1,558,478       1,391,048
     Other current assets                       274,795         135,302

      Total current assets                    2,528,426       2,168,617

     Long term investment securities             74,937         413,424
     Property and equipment, net                954,620         765,101
     Other assets                               310,657         201,628

                                           $  3,868,640     $ 3,548,770

    Liabilities and Shareholders' Equity

    Current liabilities:
     Accounts payable                      $    608,982     $   551,244
     Accrued expenses and other
      current liabilities                       244,612         240,584
     Merchandise credit and
      gift card liabilities                     151,547         120,043
     Income taxes payable                       192,331         133,437

      Total current liabilities               1,197,472       1,045,308

    Deferred rent and other liabilities         170,203         153,315

      Total liabilities                       1,367,675       1,198,623

    Total shareholders' equity                2,500,965       2,350,147

                                           $  3,868,640     $ 3,548,770

    (1) Restated for the implementation of Staff Accounting Bulletin No. 108.

                      Consolidated Statements of Cash Flows
                            (in thousands, unaudited)

                                                    Three Months Ended

                                                   June 2,        May 27,
                                                    2007           2006

    Cash Flows from Operating Activities:

     Net earnings                              $   104,647   $   100,431
     Adjustments to reconcile
      net earnings to net cash
      provided by operating activities:
       Depreciation                                 37,339        30,775
       Amortization of bond premium                    671         1,037
       Stock-based compensation                     10,022        12,977
       Excess tax benefit from
        stock-based compensation                       545         1,204
       Deferred income taxes                       (15,551)      (10,425)
       (Increase) decrease in assets,
        net of effect of acquisition:
           Merchandise inventories                 (38,169)      (89,328)
           Trading investment securities            (1,418)         (754)
           Other current assets                    (26,782)      (14,503)
           Other assets                                 13            (6)
       Increase (decrease) in liabilities,
        net of effect of acquisition:
           Accounts payable                         12,180        38,419
           Accrued expenses and other
            current liabilities                     (2,736)       (8,555)
           Merchandise credit and
            gift card liabilities                    4,270         6,529
           Income taxes payable                     28,913         6,660
           Deferred rent and other liabilities       3,674         7,583

    Net cash provided by operating activities      117,618        82,044

     Cash Flows from Investing Activities:

     Purchase of held-to-maturity
      investment securities                              -       (97,194)
     Redemption of held-to-maturity
      investment securities                         94,665        55,715
     Purchase of available-for-sale
      investment securities                       (315,780)     (396,175)
     Redemption of available-for-sale
      investment securities                        512,475       267,450
     Capital expenditures                          (76,523)      (78,722)
     Payment for acquisition,
      net of cash acquired                         (85,893)            -

    Net cash provided by (used in)
     investing activities                          128,944      (248,926)

    Cash Flows from Financing Activities:

     Proceeds from exercise of stock options         9,720         6,229
     Excess tax benefit from
      stock-based compensation                       2,683         1,508
     Repurchase of common stock,
      including fees                              (289,215)         (757)

     Net cash (used in) provided by
      financing activities                        (276,812)        6,980

     Net decrease in cash and cash equivalents     (30,250)     (159,902)

    Cash and cash equivalents:
     Beginning of period                           213,381       247,697
     End of period                            $    183,131    $   87,795

SOURCE Bed Bath & Beyond

Investors, Ronald Curwin
1-908-688-0888, ext. 4550
Kenneth C. Frankel
1-908-688-0888, ext. 4554
Lisa S. Kaplowitz
1-908-688-0888, ext. 4083
Paula J. Marbach
1-908-688-0888, ext. 4552
all of Bed Bath & Beyond
Web site: