News Release

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Bed Bath & Beyond Inc. Reports Net Earnings Increase of 23.5% in Fiscal Second Quarter
Sep 22 2004
     * Net Earnings Per Share of $.39 for Quarter

     * Quarterly Net Sales Increase by 14.6%

     * Comparable Quarterly Store Sales Increase by 4.8%

UNION, N.J., Sept. 22 /PRNewswire-FirstCall/ -- Bed Bath & Beyond Inc. today reported net earnings of $120.0 million ($.39 per share) in the fiscal second quarter ended August 28, 2004, an increase of approximately 23.5% from the $97.2 million ($.32 per share) earned in the fiscal second quarter of 2003. Net sales for the fiscal second quarter of 2004 were approximately $1.3 billion, an increase of approximately 14.6% from net sales of approximately $1.1 billion in the fiscal second quarter of 2003. Comparable store sales in the fiscal second quarter of 2004 grew by approximately 4.8%, compared with an increase of approximately 5.9% in last year's fiscal second quarter.

For the fiscal first half ended August 28, 2004, net earnings increased 30.6% to $202.1 million ($.66 per share) from $154.7 million ($.51 per share) earned in the comparable period of the prior year. Net sales for the fiscal first half of 2004 rose 18.4% to approximately $2.4 billion from approximately $2.0 billion in the corresponding period of the prior year. Comparable store sales for the fiscal first half of 2004 increased by approximately 4.9%, compared with an increase of approximately 5.2% in the comparable period a year ago.

As of August 28, 2004, the Company operated a total of 661 stores, including 606 Bed Bath & Beyond stores (of which 14 were opened during the fiscal second quarter) in 44 states and Puerto Rico. In addition, as of that date, Christmas Tree Shops, Inc. (acquired in fiscal 2003) operated 24 stores in 6 states, and Harmon Stores, Inc. (acquired in fiscal 2002) operated 31 stores in 3 states. Consolidated total square feet of store space as of August 28, 2004 was approximately 21.3 million square feet.

During the remainder of fiscal 2004 (which ends on February 26, 2005) the Company plans to open approximately 54 Bed Bath & Beyond stores, in both new and existing markets, 2 Christmas Tree Shops and approximately 4 Harmon Stores.

Bed Bath & Beyond Inc. is a nationwide chain of retail stores. The Company's Bed Bath & Beyond stores sell better quality domestics merchandise and home furnishings. The Company's Christmas Tree Shops and Harmon Stores sell giftware and household items and health and beauty care items, respectively. Shares of Bed Bath & Beyond Inc. are traded on NASDAQ under the symbol "BBBY" and are included in the Standard & Poor's 500 Index and the NASDAQ-100 Index. The Company is counted among the Fortune 500, the Forbes 500 and the Business Week 50.

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: general economic conditions, changes in the retailing environment and consumer spending habits; demographics and other macroeconomic factors that may impact the level of spending for the types of merchandise sold by the Company; unusual weather patterns; competition from existing and potential competitors; competition from other channels of distribution; pricing pressures; the ability to find suitable locations at reasonable occupancy costs to support the Company's expansion program; and the cost of labor, merchandise and other costs and expenses. The Company does not undertake any obligation to update its forward-looking statements.


                   BED BATH & BEYOND INC. AND SUBSIDIARIES
                     Consolidated Statements of Earnings
                    (in thousands, except per share data)
                                 (unaudited)

                            Three Months Ended           Six Months Ended

                           August 28,   August 30,   August 28,   August 30,
                                2004         2003         2004         2003

    Net sales             $1,273,960   $1,111,445   $2,374,877   $2,005,313

    Cost of sales            743,131      652,300    1,387,274    1,178,988

      Gross profit           530,829      459,145      987,603      826,325

    Selling, general and
     administrative
     expenses                341,721      303,278      669,788      580,008

      Operating profit       189,108      155,867      317,815      246,317

    Interest income            3,676        2,195        6,774        5,254

      Earnings before
       provision for
       income taxes          192,784      158,062      324,589      251,571

    Provision for income
     taxes                    72,776       60,854      122,532       96,855

      Net earnings          $120,008      $97,208     $202,057     $154,716

    Net earnings per
     share - Basic             $0.40        $0.33        $0.67        $0.52
    Net earnings per
     share - Diluted           $0.39        $0.32        $0.66        $0.51

    Weighted average shares
     outstanding - Basic     300,778      295,811      300,598      295,387
    Weighted average shares
     outstanding - Diluted   306,495      304,172      306,539      303,605


                   BED BATH & BEYOND INC. AND SUBSIDIARIES
                         Consolidated Balance Sheets
                          (in thousands, unaudited)

                                                   August 28,     August 30,
                                                        2004           2003
    Assets

    Current assets:
       Cash and cash equivalents                    $846,350       $617,381
       Short term investment securities              105,498         65,269
       Merchandise inventories                     1,052,813        958,778
       Other current assets                          108,443         78,410

           Total current assets                    2,113,104      1,719,838

    Long term investment securities                  305,832        119,847
    Property and equipment, net                      534,795        477,213
    Goodwill                                         147,559        145,932
    Other assets                                      21,559         26,115

                                                  $3,122,849     $2,488,945

    Liabilities and Shareholders' Equity

    Current liabilities:
       Accounts payable                             $428,393       $386,335
       Accrued expenses and other current
        liabilities                                  256,482        274,786
       Merchandise credit and gift card
        liabilities                                   69,098         50,198
       Income taxes payable                           50,469         55,049

           Total current liabilities                 804,442        766,368

    Deferred rent and other liabilities              110,877         79,992

           Total liabilities                         915,319        846,360

    Total shareholders' equity                     2,207,530      1,642,585

                                                  $3,122,849     $2,488,945


                   BED BATH & BEYOND INC. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                          (in thousands, unaudited)

                                                         Six Months Ended

                                                     August 28,     August 30,
                                                          2004           2003

    Cash Flows from Operating Activities:

    Net earnings                                      $202,057       $154,716
    Adjustments to reconcile net earnings to
     net cash provided by operating activities:
      Depreciation and amortization                     46,168         40,257
      Amortization of bond premium                         585            649
      Tax benefit from exercise of stock options         5,947         18,634
      Deferred income taxes                              1,070          4,037
      (Increase) decrease in assets, net of effect
       of acquisition:
            Merchandise inventories                    (40,479)        26,498
            Other current assets                       (14,842)       (10,002)
            Other assets                                   (85)        (6,946)
      Increase (decrease) in liabilities, net of
       effect of acquisition:
            Accounts payable                            29,743          7,026
            Accrued expenses and other current
             liabilities                               (10,798)        12,789
            Merchandise credit and gift card
             liabilities                                 5,910          6,016
            Income taxes payable                        16,624        (16,789)
            Deferred rent and other liabilities          1,736         10,545

      Net cash provided by operating activities        243,636        247,430

    Cash Flows from Investing Activities:

      Purchase of investment securities               (247,355)      (130,975)
      Redemption of investment securities               87,808        194,770
      Payment for acquisition, net of cash acquired         --       (175,487)
      Capital expenditures                             (64,793)       (30,126)

      Net cash used in investing activities           (224,340)      (141,818)

    Cash Flows from Financing Activities:

      Proceeds from exercise of stock options            8,706         17,314
      Payment of deferred purchase price for
       acquisition                                      (6,667)            --
      Prepayment of acquired debt                           --        (21,215)

      Net cash provided by (used in) financing
       activities                                        2,039         (3,901)

      Net increase in cash and cash equivalents         21,335        101,711

    Cash and cash equivalents:
      Beginning of period                              825,015        515,670
      End of period                                   $846,350       $617,381

SOURCE Bed Bath & Beyond Inc.

CONTACT:
Investor Contacts: Ronald Curwin, Chief Financial Officer and Treasurer,
+1-908-688-0888, Ext. 4550, or
Kenneth C. Frankel, Director of Financial Planning,
+1-908-688-0888, Ext. 4554, or
Paula J. Marbach, Investor Relations,
+1-908-810-8813, Ext. 4552, all of Bed Bath & Beyond Inc.
Web site: http://www.bedbath.com
(BBBY)