PORTIONS OF COMPANY'S 2002 ANNUAL REPORT

EX-13 3 y87046exv13.htm PORTIONS OF COMPANY'S 2002 ANNUAL REPORT PORTIONS OF COMPANY'S 2002 ANNUAL REPORT

PORTIONS OF ANNUAL REPORT ON FORM 10-K

ITEM 15 (a)(3)

Exhibit 13

BED BATH & BEYOND INC.

Fiscal Year Ended March 1, 2003

Selected Financial Data (in thousands, except per share and selected operating data)


	FISCAL YEAR ENDED ⁽¹⁾

	March 1,			March 2,			March 3,			February 26,			February 27,			February 28,
	2003			2002			2001			2000			1999			1998

STATEMENT OF EARNINGS DATA
Net sales	$	3,665,164		$	2,927,962		$	2,396,655		$	1,857,505		$	1,382,345		$	1,057,135
Gross profit		1,518,547			1,207,566			986,459			766,801			576,125			441,016
Operating profit		480,057			346,100			272,838			209,340			158,052			118,914
Net earnings		302,179			219,599			171,922			131,229			97,346			73,142
Net earnings per share – Diluted ⁽²⁾	$	1.00		$	.74		$	.59		$	.46		$	.34		$	.26
SELECTED OPERATING DATA
Number of Bed Bath & Beyond stores open (at period end)		490			396			311			241			186			141
Total square feet of Bed Bath & Beyond store space (at period end)		17,255,000			14,724,000			12,204,000			9,815,000			7,688,000			5,767,000
Percentage increase in comparable store net sales		7.9	%		7.1	%		5.0	%		9.2	%		7.6	%		6.4	%
BALANCE SHEET DATA (AT PERIOD END)
Working capital	$	914,220		$	715,439		$	532,524		$	360,585		$	267,557		$	188,293
Total assets		2,188,842			1,647,517			1,195,725			865,800			633,148			458,330
Long-term debt		—			—			—			—			—			—
Shareholders’ equity	$	1,451,921		$	1,094,350		$	817,018		$	559,045		$	411,087		$	295,397

[Additional columns below]

[Continued from above table, first column(s) repeated]

FISCAL YEAR ENDED ⁽¹⁾

March 1, February 25, February 26, February 27, February 28,

1997 1996 1995 1994 1993

STATEMENT OF EARNINGS DATA

Net sales
$ 816,912 $ 597,352 $ 437,807 $ 304,571 $ 216,411

Gross profit
341,168 250,036 183,819 127,972 90,528

Operating profit
90,607 67,585 51,685 36,906 26,660

Net earnings
55,015 39,459 30,013 21,887 15,960

Net earnings per share – Diluted ⁽²⁾
$ .20 $ .14 $ .11 $ .08 $ .06

SELECTED OPERATING DATA

Number of Bed Bath & Beyond stores open (at period end)
108 80 61 45 38

Total square feet of Bed Bath & Beyond store space (at period end)
4,347,000 3,214,000 2,339,000 1,512,000 1,128,000

Percentage increase in comparable store net sales
6.1 % 3.8 % 12.0 % 10.6 % 7.2 %

BALANCE SHEET DATA (AT PERIOD END)

Working capital
$ 127,333 $ 91,331 $ 74,390 $ 56,001 $ 34,842

Total assets
329,925 235,810 176,678 121,468 76,654

Long-term debt
— 5,000 16,800 13,300 —

Shareholders’ equity
$ 214,361 $ 151,446 $ 108,939 $ 77,305 $ 54,643

(1) Each fiscal year represents 52 weeks, except for fiscal 2000 (ended March 3, 2001) which represents 53 weeks and fiscal 1996 (ended March 1, 1997) which represents 52 weeks and 6 days.

(2) Net earnings per share amounts for fiscal 2000 and prior have been adjusted for two-for-one stock splits of the Company’s common stock (each of which was effected in the form of a 100% stock dividend), which were distributed in fiscal 2000, 1998, 1996 and 1993. The Company has not declared any cash dividends in any of the fiscal years noted above.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated (i) selected statement of earnings data of the Company expressed as a percentage of net sales and (ii) the percentage change in dollar amounts from the prior year in selected statement of earnings data:


	FISCAL YEAR ENDED

				PERCENTAGE						PERCENTAGE CHANGE
				OF NET SALES						FROM PRIOR YEAR

	MARCH 1,			MARCH 2,			MARCH 3,			MARCH 1,			MARCH 2,
	2003			2002			2001			2003			2002

Net sales		100.0	%		100.0	%		100.0	%		25.2	%		22.2	%
Cost of sales		58.6			58.8			58.8			24.8			22.0
Gross profit		41.4			41.2			41.2			25.8			22.4
Selling, general and administrative expenses		28.3			29.4			29.8			20.5			20.7
Operating profit		13.1			11.8			11.4			38.7			26.9
Earnings before provision for income taxes		13.4			12.2			11.8			37.6			26.7
Net earnings		8.2			7.5			7.2			37.6			27.7

FISCAL 2002 COMPARED WITH FISCAL 2001

In fiscal 2002, the Company expanded Bed Bath & Beyond (“BBB”) store space by 17.2%, from 14,724,000 square feet at fiscal year end 2001 to 17,255,000 square feet at fiscal year end 2002. The 2,531,000 square feet increase was primarily the result of opening 95 new BBB stores offset by the closing of one small store.

Net sales in fiscal 2002 increased $737.2 million to $3.665 billion, representing an increase of 25.2% over the $2.928 billion net sales in fiscal 2001. Approximately 68% of the increase was attributable to new store net sales and the balance to an increase in comparable store net sales and the acquisition of Harmon Stores, Inc. (“Harmon”) in March 2002.

Approximately 55% and 45% of net sales in fiscal 2002 were attributable to sales of domestics merchandise and home furnishings, respectively. The Company estimates that bed linens accounted for approximately 19% of net sales during fiscal 2002 and fiscal 2001. No other individual product category accounted for 10% or more of net sales during either fiscal year.

Gross profit in fiscal 2002 was $1.519 billion or 41.4% of net sales, compared with $1.208 billion or 41.2% of net sales a year ago. The increase in gross profit as a percentage of net sales was primarily attributable to an improved markup on the mix of product purchased, partially offset by a relative increase in markdowns recorded in fiscal 2002 as compared to fiscal 2001.

Comparable store sales for fiscal 2002 increased by approximately 7.9%, compared with an increase of approximately 7.1% in fiscal 2001. The increase in comparable store net sales relative to fiscal 2001 reflected a number of factors, including but not limited to, the continued consumer acceptance of the Company’s merchandise offerings, a strong focus on customer service and the continued success of the Company’s advertising program.

Selling, general and administrative expenses (“SG&A”) were $1.038 billion or 28.3% of net sales in fiscal 2002 compared to $861.5 million or 29.4% of net sales in fiscal 2001. The decrease in SG&A as a percentage of net sales primarily reflects a decrease in occupancy costs and costs associated with new store openings, partially offset by an increase in payroll and payroll related items. Store opening and expansion costs are charged to earnings as incurred.

Interest income increased to $11.3 million in fiscal 2002 compared to $11.0 million in fiscal 2001 due to an increase in invested cash partially offset by a decrease in the average investment rate.

The effective tax rate was 38.5% for both fiscal 2002 and fiscal 2001 due to the weighted average effective tax rate remaining consistent in the states and territory in which the Company currently conducts business.

FISCAL 2001 COMPARED WITH FISCAL 2000

In fiscal 2001 (52 weeks), the Company expanded store space by 20.6%, from 12,204,000 square feet at fiscal year end 2000 (53 weeks) to 14,724,000 square feet at fiscal year end 2001. The 2,520,000 square feet increase was the result of opening 85 new stores.

BED BATH & BEYOND ANNUAL REPORT 2002

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)

Net sales in fiscal 2001 increased $531.3 million to $2.928 billion, representing an increase of 22.2% over the $2.397 billion net sales in fiscal 2000. Approximately 73% of the increase was attributable to new store net sales and the balance to an increase in comparable store net sales.

Approximately 54% and 46% of net sales in fiscal 2001 were attributable to sales of domestics merchandise and home furnishings, respectively. The Company estimates that bed linens accounted for approximately 19% of net sales during fiscal 2001 and 21% of net sales during fiscal 2000. No other individual product category accounted for 10% or more of net sales during either fiscal year.

Gross profit in fiscal 2001 was $1.208 billion or 41.2% of net sales, compared with $986.5 million or 41.2% of net sales in fiscal 2000. Gross profit, as a percentage of net sales, remained consistent due to the similar product mix in fiscal 2001 and fiscal 2000.

Comparable store sales for fiscal 2001 (52 weeks vs. 52 weeks) increased by approximately 7.1%, compared with an increase of approximately 5.0% in fiscal 2000. The increase in comparable store net sales relative to fiscal 2000 reflected a number of factors, including but not limited to, the continued consumer acceptance of the Company’s merchandise offerings, a strong focus on customer service and the continued success of the Company’s advertising program.

SG&A was $861.5 million or 29.4% of net sales in fiscal 2001 compared to $713.6 million or 29.8% of net sales in fiscal 2000. The decrease in SG&A as a percentage of net sales primarily reflected a relative decrease in payroll and payroll related items primarily due to an increase in store productivity. Store opening and expansion costs were charged to earnings as incurred.

Interest income increased to $11.0 million in fiscal 2001 compared to $9.0 million in fiscal 2000 due to an increase in invested cash partially offset by a decrease in the average investment rate.

The effective tax rate decreased to 38.5% for fiscal 2001 compared with 39.0% for fiscal 2000 due to a decrease in the amount provided for state and local taxes resulting primarily from the composition of states and territory in which the Company currently conducts business.

EXPANSION PROGRAM

The Company is engaged in an ongoing expansion program involving the opening of new stores in both new and existing markets and the expansion or relocation of existing stores. In the eleven year period from the beginning of fiscal 1992 to the end of fiscal 2002, the chain has grown from 34 to 490 BBB stores. Total BBB stores’ square footage grew from 917,000 square feet at the beginning of fiscal 1992 to 17,255,000 square feet at the end of fiscal 2002. There were 29 Harmon stores with 197,000 square feet at the end of fiscal 2002.

The Company intends to continue its expansion program and currently anticipates that in fiscal 2003 it will open between 80 and 90 new BBB stores (see details under “Liquidity and Capital Resources” below). The Company believes that a predominant portion of any increase in its net sales in fiscal 2003 will continue to be attributable to new store net sales. Accordingly, the continued growth of the Company is dependent, in large part, upon the Company’s ability to execute its expansion program successfully, of which there can be no assurance.

LIQUIDITY AND CAPITAL RESOURCES

The Company has been able to finance its operations, including its expansion program, through internally generated funds. Net cash provided by operating activities in fiscal 2002 was $419.3 million, compared with $338.0 million in fiscal 2001. The change in net cash provided by operating activities was primarily attributable to an increase in net income.

Net cash used in investing activities in fiscal 2002 was $357.4 million, compared with $173.5 million in fiscal 2001. The change in net cash used in purchases of investing activities is primarily attributable to an increase in investment securities and the acquisition of Harmon.

Net cash provided by financing activities in fiscal 2002 was $24.2 million, compared with $25.8 million in fiscal 2001. The change in net cash provided by financing activities is attributable to a decrease in proceeds from the exercise of stock options compared to the prior year.

BED BATH & BEYOND ANNUAL REPORT 2002

During fiscal 2002, the Company increased its uncommitted line of credit from $50 million to $75 million. The current uncommitted line of credit, which expires in September 2003, is intended to be used for letters of credit in the ordinary course of business. During fiscal 2002 and 2001, the Company had no direct borrowings under the uncommitted line of credit. The Company believes that during fiscal 2003, internally generated funds will be sufficient to fund its operations, including its expansion program.

The Company has contractual obligations consisting of all operating leases for buildings, office and other facilities and equipment which are payable as follows as of March 1, 2003:

LESS THAN 1

AFTER 5

(in 000's)

TOTAL

YEAR

1-3 YEARS

4-5 YEARS

YEARS

Operating Leases

2,358,770

230,974

711,956

442,894

972,946

As of May 2, 2003, the Company has leased sites for 60 new BBB stores planned for opening in fiscal 2003, including seven new stores already opened in Mira Mesa, California; St. Augustine, Florida; Coeur d’Alene, Idaho; Dubuque, Iowa; Wilton (Saratoga), New York; Chattanooga, Tennessee; and Tyler, Texas.

Approximate aggregate costs for the 60 leased stores planned for opening in fiscal 2003 are estimated at $79.4 million for merchandise inventories, $32.5 million for furniture and fixtures and leasehold improvements and $10.9 million for store opening expenses (which will be expensed as incurred). In addition to the 60 locations already leased, the Company expects to open approximately 20 to 30 additional locations during fiscal 2003.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations.” The standard requires entities to record the fair value of a liability for an asset retirement obligation. SFAS No. 143 is effective for the Company in fiscal 2003. The Company does not believe that the adoption of SFAS No. 143 will have a material impact on the Company’s consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” Among other items, SFAS No. 145 updates and clarifies existing accounting pronouncements related to reporting gains and losses from the extinguishment of debt and certain lease modifications that have economic effects similar to sale-leaseback transactions. SFAS No. 145 is effective for the Company in fiscal 2003. The Company does not believe that the adoption of SFAS No. 145 will have a material impact on the Company’s consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness of Others” (“FIN No. 45”). FIN No. 45 elaborates on the disclosures for interim and annual reports regarding obligations under certain guarantees issued by a guarantor. Under FIN No. 45, the guarantor is required to recognize a liability for the fair value of the obligation undertaken in issuing the guarantee at the inception of a guarantee. The recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements for FIN No. 45 are effective for interim and annual financial statements issued after December 15, 2002. The Company does not believe that the adoption of FIN No. 45 will have a material impact on the Company’s consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on other assumptions that it believes to be relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. In particular, judgment is used in areas such as the provision for sales returns, inventory valuation using the retail inventory method, impairment of assets, vendor allowances and accruals for self insurance, litigation and store relocations and closings. Actual results could differ from these estimates.

Sales Returns: Sales returns, which are reserved for based on historical experience, are provided for in the period that the related sales are recorded.

Inventory Valuation: Merchandise inventories are stated at the lower of cost or market, using the retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories. At any one time, inventories include items that have been marked down to the Company’s best estimate of their fair market value. Actual markdowns required could differ from this estimate.

BED BATH & BEYOND ANNUAL REPORT 2002

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)

Impairment of Assets: The Company periodically reviews long-lived assets for impairment by comparing the carrying value of the assets with their estimated future undiscounted cash flows. If it is determined that an impairment loss has occurred, the loss would be recognized during that period. The impairment loss is calculated as the difference between asset carrying values and the present value of the estimated net cash flows. The Company does not believe that any material impairment currently exists related to its long-lived assets.

Vendor Allowances: The Company receives various types of allowances from our merchandise vendors, which are based on negotiated terms. These allowances are recorded when earned as a reduction of cost of sales or as a reduction of other costs in accordance with the provisions of the FASB’s Emerging Issues Task Force Issue No. 02-16 “Accounting by a Customer (Including a Resale) for Certain Consideration Received from a Vendor.”

Self Insurance: The Company uses self insurance for a number of risks including worker’s compensation, general liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees). Liabilities associated with these risks are estimated in part by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions.

Litigation: The Company records an estimated liability related to various claims and legal actions arising in the ordinary course of business which is based on available information and advice from outside counsel, where appropriate. As additional information becomes available, the Company reassesses the potential liability related to its pending litigation and revises its estimates as appropriate.

Store Opening, Expansion, Relocation and Closing Costs: Store opening, expansion, relocation and closing costs are charged to earnings as incurred. Prior to the adoption of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which was effective for any exit or disposal activity initiated after December 31, 2002, costs related to store relocations and closings were provided for in the period in which management approved the relocation or closing of a store.

ACQUISITION

On March 5, 2002, the Company acquired Harmon, a health and beauty care retailer, which did not have a material effect on its consolidated results of operations or financial condition in fiscal 2002.

FORWARD LOOKING STATEMENTS

This Annual Report and, in particular, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Shareholder Letter, contain forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. 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.

SEASONALITY

The Company exhibits less seasonality than many other retail businesses, although sales levels are generally higher in August, November and December, and generally lower in February and March.

BED BATH & BEYOND ANNUAL REPORT 2002

Consolidated Balance Sheets
Bed Bath & Beyond Inc. and Subsidiaries

March 1,

March 2,

(in thousands, except per share data)

2003

2002

ASSETS

Current assets:

Cash and cash equivalents

515,670

429,496

Short term investment securities

100,927

—

Merchandise inventories

915,671

753,972

Other current assets

62,123

43,249

Total current assets

1,594,391

1,226,717

Long term investment securities

148,005

51,909

Property and equipment, net

423,907

361,741

Other assets

22,539

7,150

2,188,842

1,647,517

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

362,965

270,917

Accrued expenses and other current liabilities

246,198

190,923

Income taxes payable

71,008

49,438

Total current liabilities

680,171

511,278

Deferred rent and other liabilities

56,750

41,889

Total liabilities

736,921

553,167

Commitments and contingencies (notes 3, 7 and 9)

Shareholders’ equity:

Preferred stock – $0.01 par value; authorized – 1,000 shares; no shares issued or outstanding

—

Common stock – $0.01 par value; authorized – 900,000 shares; issued and outstanding – March 1, 2003, 294,430 shares and March 2, 2002, 291,441 shares

2,944

2,914

Additional paid–in capital

294,034

238,672

Retained earnings

1,154,943

852,764

Total shareholders’ equity

1,451,921

1,094,350

2,188,842

1,647,517

See accompanying Notes to Consolidated Financial Statements.

BED BATH & BEYOND ANNUAL REPORT 2002

Consolidated Statements of Earnings
Bed Bath & Beyond Inc. and Subsidiaries


		FISCAL YEAR ENDED

		March 1,		March 2,		March 3,
(in thousands, except per share data)		2003		2002		2001

Net sales		$	3,665,164	$	2,927,962	$	2,396,655
Cost of sales			2,146,617		1,720,396		1,410,196

	Gross profit		1,518,547		1,207,566		986,459
Selling, general and administrative expenses			1,038,490		861,466		713,621

	Operating profit		480,057		346,100		272,838
Interest income			11,291		10,972		9,001

	Earnings before provision for income taxes		491,348		357,072		281,839
Provision for income taxes			189,169		137,473		109,917

	Net earnings	$	302,179	$	219,599	$	171,922

Net earnings per share – Basic		$	1.03	$	0.76	$	0.61
Net earnings per share – Diluted		$	1.00	$	0.74	$	0.59
Weighted average shares outstanding – Basic			292,927		289,877		283,925
Weighted average shares outstanding – Diluted			301,147		298,667		292,876

Consolidated Statements of Shareholders’ Equity

Bed Bath & Beyond Inc. and Subsidiaries


	COMMON STOCK				ADDITIONAL
					PAID-IN		RETAINED
(in thousands)	SHARES		AMOUNT		CAPITAL		EARNINGS		TOTAL

Balance at February 26, 2000		280,812	$	2,808	$	94,994	$	461,243	$	559,045
Net earnings								171,922		171,922
Shares sold under employee stock option plans		7,078		71		85,980				86,051

Balance at March 3, 2001		287,890		2,879		180,974		633,165		817,018
Net earnings								219,599		219,599
Shares sold under employee stock option plans		3,551		35		57,698				57,733

Balance at March 2, 2002		291,441		2,914		238,672		852,764		1,094,350
Net earnings								302,179		302,179
Shares sold under employee stock option plans		2,989		30		55,362				55,392

Balance at March 1, 2003		294,430	$	2,944	$	294,034	$	1,154,943	$	1,451,921

See accompanying Notes to Consolidated Financial Statements.

BED BATH & BEYOND ANNUAL REPORT 2002

Consolidated Statements of Cash Flows

Bed Bath & Beyond Inc. and Subsidiaries


				FISCAL YEAR ENDED

				March 1,			March 2,			March 3,
(in thousands)				2003			2002			2001

Cash Flows from Operating Activities:
	Net earnings			$	302,179		$	219,599		$	171,922
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization			74,825			62,547			46,650
		Amortization of bond premium			985			—			—
		Tax benefit from exercise of stock options			31,176			31,980			48,295
		Deferred income taxes			(13,291	)		1,733			(3,939	)
		(Increase) decrease in assets, net of effect of acquisition:
			Merchandise inventories		(145,789	)		(147,268	)		(136,271	)
			Other current assets		(7,927	)		644			2,627
			Other assets		190			206			(1,124	)
		Increase (decrease) in liabilities, net of effect of acquisition:
			Accounts payable		86,144			78,516			47,287
			Accrued expenses and other current liabilities		52,891			62,123			20,721
			Income taxes payable		20,378			17,450			(1,602	)
			Deferred rent and other liabilities		17,556			10,426			3,370

	Net cash provided by operating activities				419,317			337,956			197,936

Cash Flows from Investing Activities:
	Purchase of investment securities				(368,008	)		(51,909	)		—
	Redemption of investment securities				170,000			—			—
	Acquisition, net of cash acquired				(24,097	)		—			—
	Capital expenditures				(135,254	)		(121,632	)		(140,395	)

	Net cash used in investing activities				(357,359	)		(173,541	)		(140,395	)

Cash Flows from Financing Activities:
	Proceeds from exercise of stock options				24,216			25,753			37,756

	Net cash provided by financing activities				24,216			25,753			37,756

	Net increase in cash and cash equivalents				86,174			190,168			95,297
Cash and cash equivalents:
	Beginning of period				429,496			239,328			144,031

	End of period			$	515,670		$	429,496		$	239,328

See accompanying Notes to Consolidated Financial Statements.

BED BATH & BEYOND ANNUAL REPORT 2002

Notes to Consolidated Financial Statements

Bed Bath & Beyond Inc. and Subsidiaries

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

A. NATURE OF OPERATIONS

Bed Bath & Beyond Inc. (the “Company”) is a nationwide chain of stores selling predominantly better quality domestics merchandise and home furnishings. As the Company operates in the retail industry, its results of operations are affected by general economic conditions and consumer spending habits.

B. PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned.

All significant intercompany balances and transactions have been eliminated in consolidation.

C. FISCAL YEAR

The Company’s fiscal year is comprised of the 52 or 53 week period ending on the Saturday nearest February 28. Accordingly, fiscal 2002 and 2001 represented 52 weeks and ended on March 1, 2003 and March 2, 2002, respectively; and fiscal 2000 represented 53 weeks and ended March 3, 2001.

D. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

During fiscal 2002, the Company adopted the following pronouncements:

Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations.” SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, and establishes specific criteria for the recognition of goodwill separate from other intangible assets. The Company adopted SFAS No. 141 in fiscal 2002. The adoption of SFAS No. 141 did not have a material impact on the Company’s consolidated financial statements.

SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 discontinued the amortization of goodwill and other intangible assets with indefinite useful lives and requires periodic goodwill impairment testing. The Company’s only goodwill arose from the March 2002 acquisition of Harmon Stores, Inc. (“Harmon”). The Company did not amortize any goodwill recognized as a result of the acquisition of Harmon (see Note 13 - Acquisition) and performed impairment testing as of the Company’s fiscal year end date. The Company adopted SFAS No. 142 in fiscal 2002. The adoption of SFAS No. 142 did not have a material impact on the Company’s consolidated financial statements.

SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” while retaining many of the fundamental provisions covered by that statement. SFAS No. 144 differs fundamentally from SFAS No. 121 in that goodwill and other intangible assets, that are not amortized, are excluded from the scope of SFAS No. 144. SFAS No. 144 also expands the scope of discontinued operations to include more types of disposal transactions. The Company adopted SFAS No. 144 in fiscal 2002. The adoption of SFAS No. 144 did not have a material impact on the Company’s consolidated financial statements.

SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement requires companies to recognize costs associated with exit or disposal activities when they are incurred. The provisions of SFAS No. 146 were effective for any exit or disposal activities initiated after December 31, 2002. The Company adopted SFAS No. 146 in fiscal 2002. The adoption of SFAS No. 146 did not have a material impact on the Company’s consolidated financial statements.

SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.” SFAS No. 148 is an amendment of SFAS No. 123, “Accounting for Stock-Based Compensation,” and provides alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, the statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method used. For the fiscal years ended 2002, 2001 and 2000, the Company accounted for stock options using the intrinsic value method prescribed under Accounting Principles Board (“APB”) No. 25, and accordingly, the Company did not recognize compensation expense for stock options. The Company continues to account for stock-based compensation using APB No. 25 and has not adopted the recognition provisions of SFAS No. 123, as amended by SFAS No. 148. However, the Company has adopted the disclosure provisions for the current fiscal year and has included this information in Note 1(T.) – Stock-Based Compensation.

In November 2002, the Emerging Issues Task Force (EITF) of the FASB reached a consensus on EITF 02-16, “Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor.” EITF 02-16 addresses the accounting treatment for vendor allowances. As clarified by the EITF in January 2003, this issue is effective for arrangements with vendors initiated on or after January 1, 2003. The provisions of this consensus are consistent with the Company’s existing accounting policy and the application of EITF 02-16 is not expected to have a material impact on the Company’s consolidated financial statements.

BED BATH & BEYOND ANNUAL REPORT 2002

E. CASH AND CASH EQUIVALENTS

The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents.

F. INVENTORY VALUATION

Merchandise inventories are stated at the lower of cost or market, using the retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventories. At any one time, inventories include items that have been marked down to the Company’s best estimate of their fair market value. Actual markdowns required could differ from this estimate.

G. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets (forty years for building; five to ten years for furniture, fixtures and equipment; and three to five years for computer equipment). Leasehold improvements are amortized using the straight-line method over the lesser of their estimated useful life or the life of the lease.

The cost of maintenance and repairs is charged to earnings as incurred; significant renewals and betterments are capitalized. Maintenance and repairs amounted to $34.7 million, $34.3 million and $28.4 million for fiscal 2002, 2001 and 2000, respectively.

H. IMPAIRMENT OF LONG-LIVED ASSETS

The Company periodically reviews long-lived assets for impairment by comparing the carrying value of the assets with their estimated future undiscounted cash flows. If it is determined that an impairment loss has occurred, the loss would be recognized during that period. The impairment loss is calculated as the difference between asset carrying values and the present value of the estimated net cash flows. The Company does not believe that any material impairment currently exists related to its long-lived assets.

I. INVESTMENT SECURITIES

Investment securities consist of U.S. Government Agency debt securities. Because the Company has the ability and intent to hold the securities until maturity, it classifies its securities as held-to-maturity. These investment securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity securities as an adjustment to interest using the effective interest method. Dividend and interest income are recognized when earned.

J. DEFERRED RENT

The Company accounts for scheduled rent increases contained in its leases on a straight-line basis over the noncancelable lease term. Deferred rent amounted to $29.1 million and $26.5 million as of March 1, 2003 and March 2, 2002, respectively.

K. SELF INSURANCE

The Company uses self insurance for a number of risks including worker’s compensation, general liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees). Liabilities associated with these risks are estimated in part by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions.

L. LITIGATION

The Company records an estimated liability related to various claims and legal actions arising in the ordinary course of business which is based on available information and advice from outside counsel, where appropriate. As additional information becomes available, the Company reassesses the potential liability related to its pending litigation and revises its estimates as appropriate.

M. REVENUE RECOGNITION

Sales are recognized upon purchase by customers at our retail stores or when shipped for products purchased from our websites. The value of point of sale coupons and point of sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Revenues from gift cards, gift certificates and store credits are recognized when redeemed. Sales returns, which are reserved for based on historical experience, are provided for in the period that the related sales are recorded.

N. VENDOR ALLOWANCES

The Company receives various types of allowances from our merchandise vendors, which are based on negotiated terms. These allowances are recorded when earned as a reduction of cost of sales or as a reduction of other costs in accordance with the provisions of EITF 02-16.

BED BATH & BEYOND ANNUAL REPORT 2002

Notes to Consolidated Financial Statements
(Continued)

O. COST OF SALES

Cost of sales includes the cost of merchandise; certain buying, occupancy and indirect costs; shipping and handling costs and free merchandise incentives.

P. STORE OPENING, EXPANSION, RELOCATION AND CLOSING COSTS

Store opening, expansion, relocation and closing costs are charged to earnings as incurred. Prior to the adoption of SFAS No. 146, which was effective for any exit or disposal activity initiated after December 31, 2002, costs related to store relocations and closings were provided for in the period in which management approved the relocation or closing of a store.

Q. ADVERTISING COSTS

Expenses associated with store advertising are charged to earnings as incurred. Net advertising costs amounted to $58.8 million, $46.1 million and $37.0 million for fiscal 2002, 2001 and 2000, respectively.

R. INCOME TAXES

The Company files a consolidated Federal income tax return. Separate income tax returns are filed with each state and territory in which the Company conducts business.

The Company accounts for its income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

S. EARNINGS PER SHARE

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share has been computed by dividing net earnings by the weighted average number of shares outstanding including the dilutive effect of stock options.

Options for which the exercise price was greater than the average market price of common shares as of the fiscal years ended 2002, 2001 and 2000 were not included in the computation of diluted earnings per share as the effect would be anti-dilutive. These consisted of options totaling 158,925 shares, 22,275 shares and 115,925 shares, respectively.

T. STOCK-BASED COMPENSATION

As permitted under SFAS No. 123, and subsequently amended by SFAS No. 148, the Company has elected not to adopt the fair value based method of accounting for its stock-based compensation plans, but continues to apply the provisions of APB No. 25. The Company has complied with the disclosure requirements of SFAS No. 123.

Accordingly, no compensation cost has been recognized in connection with the stock option plans. Set forth below are the Company’s net earnings and net earnings per share “as reported,” and as if compensation cost had been recognized (“pro-forma”) in accordance with the fair value provisions of SFAS No. 123:


		FISCAL YEAR

(in thousands)		2002			2001			2000

NET EARNINGS:
	As reported	$	302,179		$	219,599		$	171,922
	Deduct: Total stock-based employee compensation expense determined under fair value based method, net of related tax effects		(25,443	)		(19,590	)		(17,382	)

	Pro-forma	$	276,736		$	200,009		$	154,540
NET EARNINGS PER SHARE:
Basic:
	As reported	$	1.03		$	0.76		$	0.61
	Pro-forma	$	0.94		$	0.69		$	0.54
Diluted:
	As reported	$	1.00		$	0.74		$	0.59
	Pro-forma	$	0.92		$	0.67		$	0.53

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


	FISCAL YEAR

	2002			2001			2000

Dividend yield		—			—			—
Expected volatility		45.00	%		45.00	%		45.00	%
Risk free interest rates		4.72	%		4.80	%		6.58	%
Expected lives (years)		7			7			7
Weighted average fair value of options granted during the year	$	17.15		$	12.77		$	7.25

BED BATH & BEYOND ANNUAL REPORT 2002

U. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, accrued expenses and other current liabilities, and other long term liabilities. The Company’s investment securities consist of held-to-maturity debt securities which are stated at amortized cost, adjusted for amortization of premium to maturity. The book value of all other financial instruments are representative of their fair values with the exception of investment securities (see Note 4 – Investment Securities).

V. USE OF ESTIMATES

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:


	March 1,			March 2,
(in thousands)	2003			2002

Land and building	$	6,875		$	5,173
Furniture, fixtures and equipment		321,507			271,399
Leasehold improvements		268,493			205,310
Computer equipment		122,896			100,898

		719,771			582,780
Less: Accumulated depreciation and amortization		(295,864	)		(221,039	)

	$	423,907		$	361,741

3. LINE OF CREDIT

During fiscal 2002, the Company increased its uncommitted line of credit from $50 million to $75 million. The current uncommitted line of credit, which expires in September 2003, is intended to be used for letters of credit in the ordinary course of business. During fiscal 2002 and 2001, the Company had no direct borrowings under the uncommitted line of credit. As of March 1, 2003 and March 2, 2002, there were approximately $8.5 million and $5.8 million in outstanding letters of credit, respectively.

4. INVESTMENT SECURITIES

The Company’s investment securities consist of held-to-maturity U.S. Government Agency debt securities, which are stated at amortized cost, adjusted for amortization of premium to maturity. The Company intends to hold the securities to maturity and has classified the investments as such. The following table summarizes the Company’s investment securities:

March 1,

March 2,

(in thousands)

2003

2002

AMORTIZED

FAIR

AMORTIZED

FAIR

COST

VALUE

COST

VALUE

U.S. Government Agency debt securities:

Short term

100.9

101.8

—

Long term

148.0

148.4

51.9

Total investment securities

248.9

250.2

51.9

The securities with maturity dates within one year are classified as short term investment securities and those with maturity dates beyond one year are classified as long term investment securities. The maturity dates of long term investment securities extend to January 2005 based on the current contractual maturities. Actual maturities could differ from contractual maturities because borrowers have the right to call certain obligations.

BED BATH & BEYOND ANNUAL REPORT 2002

Notes to Consolidated Financial Statements

(Continued)

5. PROVISION FOR INCOME TAXES

The components of the provision for income taxes are as follows:


		FISCAL YEAR

(in thousands)		2002			2001		2000

Current:
	Federal	$	184,055		$	123,787	$	102,178
	State and local		18,405			11,953		11,678

			202,460			135,740		113,856

Deferred:
	Federal		(12,083	)		1,188		(3,535	)
	State and local		(1,208	)		545		(404	)

			(13,291	)		1,733		(3,939	)

		$	189,169		$	137,473	$	109,917

At March 1, 2003 and March 2, 2002, included in other current assets and in deferred rent and other liabilities is a net current deferred income tax asset of $50.2 million and $39.6 million and a net noncurrent deferred income tax liability of $5.4 million and $8.1 million, respectively. These amounts represent the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities consist of the following:


		MARCH 1,			MARCH 2,
(in thousands)		2003			2002

Deferred Tax Assets:
	Inventories	$	18,134		$	14,827
	Deferred rent		11,207			10,193
	Insurance		18,063			7,306
	Other		22,578			20,300
Deferred Tax Liability:
	Depreciation		(25,186	)		(21,122	)

		$	44,796		$	31,504

For fiscal 2002 and 2001, the effective tax rate is comprised of the Federal statutory income tax rate of 35.00% and the State income tax rate, net of Federal benefit, of 3.50%. For fiscal 2000, the effective tax rate was comprised of the Federal statutory income tax rate of 35.00% and the state income tax rate, net of Federal benefit, of 4.00%.

6. TRANSACTIONS AND BALANCES WITH RELATED PARTIES

A. The Company has an interest in certain life insurance policies on the lives of its Co-Chairmen. The beneficiaries of these policies are related to the aforementioned individuals. The Company’s interest in these policies is equivalent to the net premiums paid by the Company. At March 1, 2003 and March 2, 2002, other assets (noncurrent) include $5.4 million and $5.0 million, respectively, representing the Company’s interest in the life insurance policies.

B. The Company obtained certain payroll services from a related party through August 2001. In fiscal 2002, the Company paid no such fees. The Company paid fees for such services of $203,000 and $366,000 for fiscal 2001 and 2000, respectively.

C. The Company made charitable contributions to the Mitzi and Warren Eisenberg Family Foundation, Inc. (the “Eisenberg Foundation”) and the Feinstein Family Foundation, Inc. (the “Feinstein Foundation”) in the aggregate amounts of $913,000, $761,000 and $634,000 for fiscal 2002, 2001, and 2000, respectively. The Eisenberg Foundation and the Feinstein Foundation are each not-for-profit corporations of which Messrs. Eisenberg and Feinstein, the Co-Chairmen of the Company, and their family members are the trustees and officers.

D. The Company leased warehouse space from a related party and paid occupancy costs of $461,000 in fiscal 2002.

7. LEASES

The Company leases retail stores, as well as warehouses, office facilities and equipment, under agreements expiring at various dates through 2022. Certain leases provide for contingent rents (which are based upon store sales exceeding stipulated amounts and are immaterial in fiscal 2002, 2001 and 2000), scheduled rent increases and renewal options generally ranging from five to fifteen years. The Company is obligated under a majority of the leases to pay for taxes, insurance and common area maintenance charges.

As of March 1, 2003, future minimum lease payments under noncancelable operating leases are as follows:


Fiscal Year	(in thousands)	Amount

2003		$	230,974
2004			239,274
2005			238,294
2006			234,388
2007			225,483
Thereafter			1,190,357

Total future minimum lease payments		$	2,358,770

Expenses for all operating leases were $219.8 million, $178.7 million and $142.6 million for fiscal 2002, 2001 and 2000, respectively.

BED BATH & BEYOND ANNUAL REPORT 2002

8. EMPLOYEE BENEFIT PLANS

The Company has two defined contribution 401(k) savings plans (the “Bed Bath & Beyond Plan” and the “Harmon Plan”) covering all eligible Bed Bath & Beyond and Harmon employees, respectively. Participants may defer annual pretax compensation subject to statutory and Plan limitations. The Company has an option to contribute an amount as determined by the Board of Directors to either Plan. In addition, each participant in the Bed Bath & Beyond Plan may elect to make voluntary, non-tax deductible contributions in excess of the pre-tax compensation limit up to 15% of compensation. As of March 1, 2003, the Company has not made a material contribution to either Plan.

9. COMMITMENTS AND CONTINGENCIES

The Company maintains employment agreements with its Co-Chairmen, which extend through 2007. The agreements provide for a base salary (which may be increased by the Board of Directors), termination payments, post-retirement benefits and other terms and conditions of employment.

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

10. SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of $151.8 million, $89.8 million and $68.0 million in fiscal 2002, 2001 and 2000, respectively.

11. STOCK OPTION PLANS

Options to purchase shares of the Company’s common stock have been granted to employees under various stock option plans, which plans aggregated 64.4 million shares of common stock, subject to adjustment under certain circumstances. Option grants, which are issued at market value on the date of grant, generally become exercisable in five equal installments beginning one to three years after the date of grant, and in all events, expire ten years after the date of grant. All option grants are non-qualified.

The following table summarizes stock option transactions:


	NUMBER OF			WEIGHTED-AVERAGE
	SHARES			EXERCISE PRICE

Outstanding at February 26, 2000		26,224,000		$	8.65
Options granted		6,149,700			12.73
Options exercised		(7,078,153	)		5.33
Options canceled		(1,123,562	)		12.02

Outstanding at March 3, 2001		24,171,985			10.51
Options granted		3,439,800			23.73
Options exercised		(3,550,917	)		7.25
Options canceled		(943,860	)		14.41

Outstanding at March 2, 2002		23,117,008			12.80
Options granted		4,335,000			31.95
Options exercised		(2,989,255	)		8.09
Options canceled		(626,008	)		20.45

Outstanding at March 1, 2003		23,836,745		$	16.66

Options exercisable:
At March 3, 2001		4,904,297		$	7.12
At March 2, 2002		6,155,914		$	9.30
At March 1, 2003		8,404,205		$	11.20

The stock option committees determine the number of shares and the option price per share for all options issued under the stock option plans.

The following tables summarize information pertaining to stock options outstanding and exercisable at March 1, 2003:


OPTIONS OUTSTANDING

				WEIGHTED-AVERAGE		WEIGHTED-
RANGE OF		NUMBER		REMAINING		AVERAGE
EXERCISE PRICES		OUTSTANDING		CONTRACTUAL LIFE		EXERCISE PRICE

$	2.04 to 10.69		4,029,310		3.69	$	5.84
	10.97 to 11.47		4,649,850		6.99		11.46
	11.83 to 14.77		5,160,637		5.79		13.16
	14.86 to 23.78		5,635,508		7.38		20.20
	23.84 to 36.24		4,361,440		9.07		31.78

$	2.04 to 36.24		23,836,745		6.65	$	16.66


OPTIONS EXERCISABLE

RANGE OF		NUMBER		WEIGHTED-AVERAGE
EXERCISE PRICES		EXERCISABLE		EXERCISE PRICE

$	2.04 to 10.69		3,080,590	$	5.70
	10.97 to 11.47		1,200,010		11.45
	11.83 to 14.77		3,051,637		13.74
	14.86 to 23.78		1,011,948		18.95
	23.84 to 36.24		60,020		29.38

$	2.04 to 36.24		8,404,205	$	11.20

BED BATH & BEYOND ANNUAL REPORT 2002

15

Notes to Consolidated Financial Statements

(Continued)

12. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)


(in thousands, except per share data)	FISCAL 2002 QUARTER ENDED								FISCAL 2001 QUARTER ENDED

	June 1,		August 31,		November 30,		March 1,		June 2,		September 1,		December 1,		March 2,
	2002		2002		2002		2003		2001		2001		2001		2002

Net sales	$	776,798	$	903,044	$	936,030	$	1,049,292	$	575,833	$	713,636	$	759,438	$	879,055
Gross profit		318,362		370,335		386,224		443,626		234,959		291,342		311,030		370,235
Operating profit		72,701		119,687		119,228		168,441		45,602		84,672		83,749		132,077
Earnings before provision for income taxes		75,283		122,697		122,133		171,235		48,792		87,730		86,120		134,430
Provision for income taxes		28,984		47,238		47,021		65,926		18,785		33,776		33,156		51,756
Net earnings	$	46,299	$	75,459	$	75,112	$	105,309	$	30,007	$	53,954	$	52,964	$	82,674
EPS – Basic (1)	$	0.16	$	0.26	$	0.26	$	0.36	$	0.10	$	0.19	$	0.18	$	0.28
EPS – Diluted (1)	$	0.15	$	0.25	$	0.25	$	0.35	$	0.10	$	0.18	$	0.18	$	0.28

(1) Net earnings per share (“EPS”) amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year.

13. ACQUISITION

On March 5, 2002, the Company acquired Harmon, a health and beauty care retailer, which did not have a material effect on its consolidated results of operations or financial condition in fiscal 2002.

Independent Auditors’ Report

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF BED BATH & BEYOND INC.:

We have audited the accompanying consolidated balance sheets of Bed Bath & Beyond Inc. and subsidiaries as of March 1, 2003 and March 2, 2002, and the related consolidated statements of earnings, shareholders’ equity and cash flows for each of the fiscal years in the three-year period ended March 1, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bed Bath & Beyond Inc. and subsidiaries as of March 1, 2003 and March 2, 2002, and the results of their operations and their cash flows for each of the fiscal years in the three-year period ended March 1, 2003 in conformity with accounting principles generally accepted in the United States of America.

(-S-KPMG LLP)

New York, New York
March 27, 2003

BED BATH & BEYOND ANNUAL REPORT 2002


	FISCAL YEAR ENDED ⁽¹⁾

	March 1,			February 25,			February 26,			February 27,			February 28,
	1997			1996			1995			1994			1993

STATEMENT OF EARNINGS DATA
Net sales	$	816,912		$	597,352		$	437,807		$	304,571		$	216,411
Gross profit		341,168			250,036			183,819			127,972			90,528
Operating profit		90,607			67,585			51,685			36,906			26,660
Net earnings		55,015			39,459			30,013			21,887			15,960
Net earnings per share – Diluted ⁽²⁾	$	.20		$	.14		$	.11		$	.08		$	.06
SELECTED OPERATING DATA
Number of Bed Bath & Beyond stores open (at period end)		108			80			61			45			38
Total square feet of Bed Bath & Beyond store space (at period end)		4,347,000			3,214,000			2,339,000			1,512,000			1,128,000
Percentage increase in comparable store net sales		6.1	%		3.8	%		12.0	%		10.6	%		7.2	%
BALANCE SHEET DATA (AT PERIOD END)
Working capital	$	127,333		$	91,331		$	74,390		$	56,001		$	34,842
Total assets		329,925			235,810			176,678			121,468			76,654
Long-term debt		—			5,000			16,800			13,300			—
Shareholders’ equity	$	214,361		$	151,446		$	108,939		$	77,305		$	54,643

(1)		Each fiscal year represents 52 weeks, except for fiscal 2000 (ended March 3, 2001) which represents 53 weeks and fiscal 1996 (ended March 1, 1997) which represents 52 weeks and 6 days.

(2)		Net earnings per share amounts for fiscal 2000 and prior have been adjusted for two-for-one stock splits of the Company’s common stock (each of which was effected in the form of a 100% stock dividend), which were distributed in fiscal 2000, 1998, 1996 and 1993. The Company has not declared any cash dividends in any of the fiscal years noted above.