Bed Bath & Beyond (BBBY)

BED BATH & BEYOND INC. REPORTS NET EARNINGS
FOR FISCAL SECOND QUARTER

·                  Net Earnings for Quarter Increase to $.51 per diluted share

·                  Quarterly Net Sales Increase by 12.3%

·                  Quarterly Comparable Store Sales Increase by 4.8%

·                  Independent Review of Option Grants and Procedures

UNION, New Jersey, September 20, 2006 — Bed Bath & Beyond Inc. today reported net earnings of $.51 per diluted share ($145.5 million) in the fiscal second quarter ended August 26, 2006.  In the fiscal second quarter of 2005, the Company reported net earnings of $.47 per diluted share ($141.4 million).  Net sales for the fiscal second quarter of 2006 were approximately $1.607 billion, an increase of approximately 12.3% from net sales of approximately $1.431 billion reported in the fiscal second quarter of 2005.  Comparable store sales in the fiscal second quarter of 2006 grew by approximately 4.8%, compared with an increase of approximately 4.5% in last year’s fiscal second quarter.

For the fiscal first half ended August 26, 2006, the Company reported net earnings of $.86 per diluted share ($246.0 million).  In the fiscal first half of 2005, the Company reported net earnings of $.80 per diluted share ($240.3 million).  Net sales for the fiscal first half of 2006 were approximately $3.003 billion, an increase of approximately 12.2% from net sales of approximately $2.676 billion in the corresponding period a year ago.  Comparable store sales for the fiscal first half of 2006 increased by approximately 4.8%, compared with an increase of approximately 4.4% in last year’s fiscal first half.

The fiscal second quarter and fiscal first half of 2006 results included incremental stock-based compensation expense resulting from the early adoption, at the beginning of the fiscal third quarter of 2005, of Statement of Financial Accounting Standards 123(R).

The Company also announced an independent committee of its Board of Directors is carrying out a review of the Company’s stock option grants and procedures.  The independent committee’s review was initiated voluntarily by the Company and is being conducted with the assistance of independent legal counsel and outside accounting experts selected by the committee.  The independent committee’s review is not complete.  The Company expects to report further with respect to the review in its Form 10-Q for the quarter ended August 26, 2006, which the Company expects to file on a timely basis on or before October 5, 2006.

As of August 26, 2006, the Company operated a total of 831 stores, including 762 Bed Bath & Beyond stores (11 of which were opened during the fiscal second quarter) in 46 states, the District of Columbia and Puerto Rico.  In addition, as of that date, Christmas Tree Shops, Inc. operated 31 stores in 8 states (one of which was opened during the fiscal second quarter) and Harmon Stores, Inc. operated 38 stores in 3 states.  Consolidated store space as of August 26, 2006 was approximately 26.2 million square feet.  Since the beginning of the fiscal third quarter, on August 27, 2006, 7 Bed Bath & Beyond stores have been opened, bringing to 769 the total number of Bed Bath & Beyond stores presently in operation.

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