#1BED BATH & BEYOND Fiscal 2018 First Quarter Earnings Call June 27, 2018 buybuy BED BATH & BABY BEYOND Christmas Tree Shops That! COST PLUS WORLD MARKET. Of a FACE VALUES C Kind ONE KINGS LANE snuggles commable pokon Personalization CHER P **** MALL.COM WHAAMS THE YOU decorist T-Y GROUP HARBOR LINEN#2#3Our Mission To be trusted by our customers as the expert for the home and heart-felt life events by continuing to build and deliver a strong foundation of differentiated products, services, and solutions while driving operational excellence. Present a meaningfully differentiated and complete product assortment for the home, of the right quality, and at the right price over 45,000 items lett we help po M Strategic Focus Provide services and solutions that enhance the usage and enjoyment of our offerings DURLANDS Cerb Serving Customers Across Heart-Felt Life Events To deliver a convenient, engaging, and inspiring shopping experience that is intelligently personalized over time rock YOUR REGISTRY the wedding registry NEDBACHA BETONIER BED BATH & BEYOND BACK TO COLLEGE To drive change across the organization in order to further establish operational excellence and create future growth BED BATH & BEYOND YOUR MOVE BED BATH & BEYOND 3#4Our Vision for 2020 We remain on track with our annual and 3-year goals, while we continue to evolve our foundational structure 1. In Fiscal 2018: Grow comp sales 2. In Fiscal 2018 and 2019: Moderate the declines in operating profit and net earnings per diluted share 3. By Fiscal 2020: Grow net earnings per diluted share BED BATH & BEYOND 4#5#6#7Assortment Key Focus Areas: • Expansive Online Assortment, Differentiated Over Time Quality, Value & Competitive Pricing Convenient & Easy Shopping / Delivery Experience Increase Customer Awareness • · Accelerate Growth of Decorative Furnishings The Trusted Expert for Whole Home Decorating · Supported by an Agile, Cross-Functional Team Decorative Furnishings (DF) Results (1Q 18 vs. 1Q 17): Strong DF sales growth (BBB/bbB-US/Canada) Significantly higher AOV for DF than overall AOV for BBB and bbB websites (BBB/bbB - US only) BED BATH & BEYOND 7#8Assortment Progress Update: Added >78,000 Decorative Furnishings SKUS* (FY 17); added 24,000 more in 1Q 2018 . . Accelerate Growth of Decorative Furnishings Expansive Online Assortment ● Increasing the productivity of the assortment using web performance data to edit existing assortment and identify opportunity Developing proprietary brands for launch in FY2019 * Online expansion for bedbathandbeyond.com (U.S.) WTOND NINNORNAL GIVER 17P GAL PRODUCTS TREMESLORAS CANEUE WEDDING & OFI REGISTRY LIVING ROOM SHOP THE ROOM BEDROOM BED BATH & BEYOND 8#9C Key Focus Areas of Pilot: Raise awareness Build a scalable framework to: show furniture in our stores and support the associate and customer through their shopping journey Assortment . Accelerate Growth of Decorative Furnishings In-Store Pilot (Spring 2018) Progress Update: Vignettes and featured item displays rolled out in 78 BBB stores Associate training conducted; testing tablets to better assist customers to 'find more beyond the store' Conducting customer awareness survey (pre and post launch) • Early Results: Decorative Furnishings orders placed in-store and shipped directly to the customer grew 10.4% over the last 4 weeks vs. 3.6% in stores not participating in pilot. BED BATH & BEYOND 9#10Experiences * Next Generation Store Optimize Store Productivity Key Focus Areas: Leveraging Real Estate Portfolio: Numerous near-term renewals provide opportunity to update existing selected. stores Evolving and/or New Assortment: to increase shopping trips, transactions and transaction value o Scarcity product: Seasonal, Decorative Furnishings Treasure Hunt, and Deep Value o Commodity product: Food & Beverage, and Health & Beauty Care Making Stores More Efficient treasure TGU discover hot BED BATH & 10 BEYOND#11Progress Update: . . Experiences . Next Generation Store Store Remodels Underway 4 remodels completed o Plymouth Meeting, PA (March) o Mount Vernon, NY (April) o Summerlin, NV (May) o Lubbock, TX (June) Iterate quickly after each remodel for continuous improvement and enhance merchandising and customer experience Plan to remodel another 15 stores by late Fall 2018 Another 20 stores to be remodeled by end of Spring 2019 blink hot THE FIR grab it! BED BATH & 11 BEYOND#12Experiences · Next Generation Store Favorable Customer Response Early Results: Strong transaction growth in these stores Significant growth in transactions that include new and/or evolving merchandise assortment Core Department: o Space reduced by ~10% in these stores; o Sales outperforming rest of BBB stores Walens hot Hezel 160156 BED BATH & BEYOND 12#13(in millions) Operational Excellence $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 Inventory Optimization Inventory Initiatives Driving Benefits Fiscal Year End 2016 2017 Retail inventories (at cost) reduced - $170 million (in millions) $3,000 $2,800 $2,600 $2,400 $2,200 $2,000 First Quarter 2017 2018 Retail inventories (at cost) reduced -$300 million BED BATH & BEYOND 13#14. Key Focus Area: Tailor timing, content and design of messaging to each customer, depending on their attributes, context, and behaviors - Experiences Progress Update: · . Marketing Personalization Driving Incremental Revenue & Optimizing Customer Experience Supported by an agile, cross-functional team Launched first "Personalization Lab" in April 2018 Launched >20 email tests in <2 months Speed & throughput of our personalized marketing capabilities have grown 10X Scrum master Business lead(s) Channel Tech Analytics Creative Email lead Site lead Campaign manager Front end developer Back end developer EDW engineer Hadoop engineer Marketing analyst 000 Quant analyst Digital designer Copywriter UX designer Д Д-Д BED BATH & BEYOND 14#15Experiences · Marketing Personalization Driving Incremental Revenue & Optimizing Customer Experience Early Results: Customer engagement has grown -15-20% on all marketing personalization tests Identified incremental revenue from marketing personalization initiative Identified enhanced technology tools to support marketing personalization - to be implemented over the next 12-18 months BED BATH & BEYOND 15#16Q1 2018 Financials BED BATH & 16 BEYOND#17Q1 2018 P&L Summary (amounts in millions, except comp %, and per share data) Comp Sales % (a) Net Sales Gross Profit SG&A Expenses Operating Profit Net Earnings EPS - Diluted WAS - Diluted June 2, 2018 % of Sales (0.6) $2,754 965 884 81 44 Three Months Ended $0.32 137 100.0 35.0 32.1 2.9 1.6 May 27, 2017 % of Sales $2,742 1,000 853 147 75 $0.53 142 (2.0) 100.0 36.5 31.1 5.4 2.7 Change (1.5) (1.0) (2.5) (1.1) (b) (c) (a) Comp sales are determined using the same calendar weeks as fiscal 2018; therefore the Q1 comp sales % compares the periods of March 4, 2018 - June 2, 2018 to March 5, 2017 - June 3, 2017. (b) Due to increases in coupon expense and net direct-to-customer shipping expense (c) Due to increases in payroll and payroll-related expenses, including severance costs incurred during the quarter, technology-related expenses, including related depreciation, and management consulting expenses BED BATH & BEYOND 17#18#19