- The consolidated merchandise inventories at September 1, 2007, were on plan at approximately $1.6 billion. Inventories continue to be tailored by store to meet the anticipated demands of the customers and are in excellent condition going into the important selling periods which lie ahead. Inventories may increase slightly in the fiscal fourth quarter, reflecting the launches of the Christmas Tree Shops distribution facility and the e-service fulfillment center.

- Shareholders equity at September 1, 2007, which is net of share repurchases, was approximately $2.4 billion.

- Capital expenditures for the six months increased by about 13% from a year ago to approximately $153 million. Depreciation grew to approximately $75 million.

- The tax rate this quarter was approximately 35.5%. The tax rate included an approximately net $5.8 million benefit, primarily due to the recognition of a favorable discrete state tax item, partially offset by an increase in tax contingency reserves related to ongoing income tax audits.

Third Quarter Guidance

The company expects to achieve either flat or a low single digit percentage increase in net earnings per share in the fiscal third quarter, when compared with net earnings of 50 cents per share reported in the corresponding quarter of fiscal 2006.

The guidance with respect to the fourth quarter remains essentially unchanged.

In last year’s fourth quarter, the company reported earnings of 72 cents per share, which included a 7 cents per share non-recurring charge, as well as the benefit of an additional week of net sales of approximately $105 million. Excluding this non-recurring charge, earnings per share for the fourth quarter of fiscal 2006 would have been 79 cents per share.

Using this 79 cents, not the 72 cents per share as reported, if the first half same-store sales trend were to continue, and considering one less week of sales than a year ago, the company would expect earnings per share in this year’s fiscal fourth quarter to decrease by a low- to mid-single digit percentage from last year’s 79 cents per share.

If same-store sales were to be consistent with historical guidance of 3% to 5%, the company would expect the year-over-year change in earnings per share, considering last year’s fourth quarter included one additional week, to range from a low single digit percentage decrease to a low single percentage increase when compared to last year’s 79 cents per share.

Other Key Planning Assumptions for Fiscal 2007:

For all of fiscal 2007, subject to the possible February to March shift in store openings mentioned by Warren, the company expects to open approximately 70 new Bed Bath & Beyond stores and relocate several existing stores.

Sixteen new Bed Bath & Beyond stores were opened during the fiscal first half.

1. The remaining new Bed Bath & Beyond stores opening are likely to be divided about equally between the third and fourth fiscal quarters. Three of the four Christmas Tree Shops stores and one Harmon store are expected to open before the end of the fiscal third quarter, with one new Christmas Tree Shops store and its new distribution center expected to open in the fourth quarter, along with two new buybuy BABY stores. An additional e-service fulfillment center, which will accommodate the steady growth in the online business, will also open in New Jersey before the fiscal year-end.

2. Based on the provisions of FIN-48, as applied to the expected component and seasonality of the company’s current estimated taxable income for the year, and the actual tax rate experienced for the fiscal second quarter, as a result of certain tax developments that occurred this quarter, at this time the management is estimating the full-year tax rate to be in the range from 36.2% to 36.5%, as compared to the prior full-year estimated range of 37.2% to 37.5%, and the actual experience for the fiscal first half of 35.8%. The company continues to expect variability in the quarterly tax rates, of as much as 200 to 300 basis points, as taxable events occur and tax exposures are determined.

3. As a result of the ongoing share repurchase programs, the acquisition of buybuy BABY, changes in interest rates and increased capital spending among other factors, interest income for all of fiscal 2007 is expected to decline.

4. Capital expenditures for all of fiscal 2007, principally for new stores, existing stores refurbishment, information technology enhancements, the new Christmas Tree Shops distribution center, the new e-service fulfillment center, and other infrastructure investments are presently being estimated at $375 million; deprecation at approximately $150 million.

There is no Question and Answer session held in conjunction with the second quarter fiscal 2008 earnings call conducted by Bed Bath & Beyond, Inc. (BBBY: chart) on September 26th, 2007.