SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended June 27, 1998

                         Commission File Number 1-12381


                             Linens 'n Things, Inc.
             (Exact name of registrant as specified in its charter)


         Delaware                                         22-3463939
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)



 6 Brighton Road, Clifton, New Jersey                             07015
(Address of principal executive offices)                        (Zip Code)


                                 (973) 778-1300
              (Registrant's telephone number, including area code)



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                 Yes   X          No



Number of shares outstanding of the issuer's Common Stock:

              Class                            Outstanding at July 15, 1998

 Common Stock, $0.01 par value                  38,968,078

<PAGE>
                                      INDEX

<TABLE>
<CAPTION>
Part I. - Financial Information                                          Page No.
                                                                         --------

     <S>                                                                  <C>
     Consolidated Statements of Operations for the
       Thirteen Weeks and Twenty-Six Weeks
       Ended June 27,1998 and June 28, 1997                                    3

     Consolidated Balance Sheets as of June 27, 1998,
       December 31, 1997 and June 28, 1997                                     4

     Consolidated Statements of Cash Flows for the
        Twenty-Six Weeks Ended June 27, 1998 and June 28, 1997                 5

     Notes to Consolidated Financial Statements                              6-7

     Independent Auditors' Review Report                                       8

     Management's Discussion and Analysis of
        Financial Condition and Results of Operations                       9-12


Part II. - Other Information                                                  13

     Item 6 - Exhibits and Reports on Form 8-K                                13

     Exhibit Index                                                            13


</TABLE>

<PAGE>


<TABLE>
<CAPTION>

                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)


                                                                 Thirteen Weeks Ended              Twenty-Six Weeks Ended
                                                           --------------------------------- ------------------------------------
                                                              June 27,         June 28,              June 27,        June 28,
                                                                1998             1997                  1998            1997
                                                           ---------------- ----------------     ----------------- --------------
                                                                      (unaudited)                         (unaudited)
<S>                                                         <C>               <C>                   <C>              <C>     
Net sales                                                   $     222,094     $    185,723          $    440,131     $   365,634

Cost of sales, including buying and warehousing costs             133,218          113,204               267,925         224,800
                                                           ---------------- ----------------     ----------------- --------------

Gross profit                                                       88,876           72,519                172,206        140,834

Selling, general and administrative expenses                       84,179           70,204                165,312        137,575
                                                           ---------------- ----------------     ----------------- --------------

Operating profit                                                    4,697            2,315                  6,894          3,259

Interest expense (income), net                                        103              609                  (100)            945
                                                           ---------------- ----------------     ----------------- --------------

Income before provision for income taxes                            4,594            1,706                  6,994          2,314

Provision for income taxes                                          1,768              716                  2,693            972
                                                           ---------------- ----------------     ----------------- --------------

Net income                                                   $      2,826    $         990         $        4,301   $      1,342
                                                           ================ ================     ================= ==============

Per share of common stock:

Basic
   Net income                                                $        0.07   $         0.03       $          0.11  $        0.03

   Weighted average shares outstanding                              38,885           38,536                38,824         38,536

Diluted
   Net income                                                $        0.07   $         0.03       $          0.11  $        0.03

   Weighted average shares outstanding                              40,500           39,394                40,354         39,296

</TABLE>
          See accompanying notes to consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>
                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
            As of June 27, 1998, December 31, 1997 and June 28, 1997
                      (in thousands, except share amounts)

                                                                      June 27,            December 31,           June 28,
                                                                        1998                  1997                 1997
                                                                  ------------------    -----------------    -----------------
                                                                     (Unaudited)                               (Unaudited)
<S>                                                                <C>                  <C>                    <C>            
Assets
    Current assets:
      Cash and cash equivalents                                    $          4,858     $         39,882       $        3,148
      Accounts receivable, net                                               17,559               13,764               12,776
      Inventories                                                           271,265              223,188              208,376
      Prepaid expenses and other current assets                              15,848               13,058                9,064
                                                                  ------------------    -----------------    -----------------
    Total current assets                                                    309,530              289,892              233,364

    Property and equipment, net                                             158,101              154,480              144,211
    Goodwill, net                                                            21,101               21,526               21,951
    Deferred charges and other noncurrent assets, net                         6,207                6,201                5,953
                                                                  ------------------    -----------------    -----------------

Total assets                                                       $        494,939      $       472,099         $    405,479
                                                                  ==================    =================    =================

Liabilities and Shareholders' Equity 
    Current liabilities:
      Accounts payable                                             $        119,888     $         98,418         $     73,271
      Accrued expenses and other current liabilities                         55,291               68,099               46,065
      Short-term debt                                                            --                   --                  840
                                                                  ------------------    -----------------    -----------------
    Total current liabilities                                               175,179              166,517              120,176

    Long-term note                                                               --                   --               10,000
    Deferred income taxes and other long-term liabilities                    32,903               25,547               20,722

    Shareholders' equity:
      Preferred stock, $.01 par value;
         1,000,000 shares authorized;
         none issued and outstanding                                             --                   --                   --

      Common stock, $.01 par value;
        60,000,000 shares authorized;
        38,898,106 issued and outstanding at
        June 27, 1998, 38,633,840 at December 31, 
        1997 and 38,536,916 at June 28, 1997                                    389                  386                  385
      Additional paid-in capital                                            208,093              204,514              203,509
      Retained earnings                                                      79,436               75,135               50,687
      Treasury stock, at cost; 69,868 shares  at June 27,
      1998                                                                   (1,061)                  --                   --
                                                                  ------------------    -----------------    -----------------
Total shareholders' equity                                                  286,857              280,035              254,581

Total liabilities and shareholders' equity                           $      494,939      $       472,099         $    405,479
                                                                  ==================    =================    =================
</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>
                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)




                                                                          Twenty-Six Weeks Ended
                                                                 -----------------------------------------
                                                                      June 27,              June 28,
                                                                        1998                  1997
                                                                 -------------------    ------------------
                                                                               (Unaudited)
<S>                                                                   <C>                   <C>
Cash flows from operating activities:
Net income                                                            $      4,301          $      1,342
   Adjustments to reconcile net income to net
   cash used in operating activities:
     Depreciation and amortization                                           10,218                8,627
     Deferred income taxes                                                      209                 1,452
     Loss on disposal of assets                                                 517                   697
     Changes in assets and liabilities:
       (Increase) decrease in accounts receivable                           (3,795)                4,608
       Increase in inventories                                             (48,077)               (6,242)
       (Increase) decrease in prepaid expenses
               and other current assets                                     (2,151)                 1,550
         Increase in deferred charges                                         (354)                    --
       Increase (decrease) in accounts payable                                4,536               (2,605)
       Increase (decrease) in accrued expenses
            and other liabilities                                             1,580               (4,560)
                                                                 -------------------    ------------------
   Net cash (used in) provided by operating activities                     (33,016)                 4,869
                                                                 -------------------    ------------------

Cash flows from investing activities:
   Additions to property and equipment                                     (13,584)              (14,274)
                                                                 -------------------    ------------------

Cash flows from financing activities:
   Proceeds from issuance of short-term debt                                     --                   840
   Proceeds from common stock issued under
         stock incentive plans                                                3,582                   --
   Increase in treasury stock                                               (1,061)                   --
   Increase (decrease) in book overdrafts                                     9,055              (15,201)
                                                                 -------------------    ------------------
   Net cash provided by (used in) financing activities                       11,576              (14,361)
                                                                 -------------------    ------------------

   Net decrease in cash and cash equivalents                               (35,024)              (23,766)
   Cash and cash equivalents at beginning of year                            39,882               26,914
                                                                 -------------------    ------------------

Cash and cash equivalents at end of period                        $          4,858      $          3,148
                                                                 ===================    ==================


</TABLE>
          See accompanying notes to consolidated financial statements.


<PAGE>



                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation

The accompanying consolidated financial statements,  except for the December 31,
1997  consolidated  balance sheet, are unaudited.  In the opinion of management,
the  accompanying  consolidated  financial  statements  contain all  adjustments
(consisting of only normal recurring  accruals)  necessary to present fairly the
financial  position of the Company as of June  27,1998 and June  28,1997 and the
results of operations  for the  respective  thirteen and  twenty-six  weeks then
ended  and cash  flows for the  twenty-six  weeks  then  ended.  Because  of the
seasonality  of the  specialty  retailing  business,  operating  results  of the
Company on a quarterly basis may not be indicative of operating  results for the
full year.

These consolidated  financial  statements should be read in conjunction with the
Company's audited Consolidated  Financial Statements for the year ended December
31, 1997,  included in the  Company's  Annual Report on Form 10-K filed with the
Securities and Exchange Commission.  All significant  intercompany  accounts and
transactions have been eliminated.

The December 31, 1997 consolidated  balance sheet amounts have been derived from
the Company's audited consolidated balance sheet amounts.

2.  Short-Term Borrowing Arrangements

The Company has  available a three-year,  $90 million  senior  revolving  credit
facility  agreement,  as amended  (the  "Credit  Agreement")  with  third  party
institutional  lenders  expiring March 31, 2001. The amount of borrowings can be
increased up to $125 million provided certain terms and conditions  contained in
the Credit  Agreement are met. The Credit Agreement  contains certain  financial
covenants, including those relating to the maintenance of a minimum tangible net
worth, a minimum fixed charge coverage ratio,  and a maximum  leverage ratio, as
defined in the Credit Agreement.  Interest on all borrowings is determined based
upon several alternative rates as stipulated in the Credit Agreement. As of June
27, 1998,  the Company was in  compliance  with all terms and  conditions of the
Credit  Agreement.  The Credit  Agreement  also  allows for up to $25 million in
borrowings from uncommitted lines of credit outside of the Credit Agreement.  As
of June 27, 1998,  the Company had no borrowings  under the Credit  Agreement or
against the uncommitted lines of credit.

3.  Long-Term Note

In conjunction with the initial public offering, the Company issued a four-year,
$13.5  million  subordinated  note (the  "Note") to CVS.  The Note  provided for
forgiveness by CVS, at varying  amounts,  based upon the proceeds from any sales
by CVS of the  Company's  common  stock  together  with the market  value of any
common stock that CVS  continued to own at December 31, 1997.  In May 1997,  CVS
sold 6,267,658 of its remaining  shares of Common Stock,  on a pre-split  basis,
representing  substantially all of its holdings (at December 31, 1997, CVS owned
no shares  of the  Company's  common  stock).  As a result  of the net  proceeds
received,  $3.5 million of the Note was forgiven  and  contributed  as equity by
CVS.  In July 1997,  the  Company  prepaid the  remaining  $10.0  million to CVS
utilizing  cash  flows  from  operations.  The  Note  contained  no  pre-payment
penalties.

4.  Recent Accounting Pronouncement

Effective  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 128,  "Earnings per Share" which  requires a
dual  presentation of earnings per share--basic and diluted.  Basic earnings per
share has been computed by dividing net income by the weighted average number of
shares  outstanding  of 38,885,000  and  38,536,000 for the thirteen weeks ended
June 27, 1998 and June 28, 1997,  respectively and 38,824,000 and 38,536,000 for
the  twenty-six  weeks  ended  June 27,  1998 and June 28,  1997,  respectively.
Diluted  earnings  per share has been  computed  by  dividing  net income by the
weighted average number of shares outstanding  including the dilutive effects of
stock options and deferred stock grants. The weighted average shares outstanding
for the diluted  earnings per share  calculation  were 40,500,000 and 39,394,000
for the thirteen weeks ended June 27, 1998 and June 28, 1997,  respectively  and
40,354,000 and 39,296,000 for the twenty-six  weeks ended June 27, 1998 and June
28, 1997, respectively.

<PAGE>


                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont.'d


5.  Stockholders' Equity

On April 14, 1998, the Board of Directors of the Company  approved a two-for-one
split of its common  stock to be effected in the form of a stock  dividend.  The
stock  dividend was one  additional  share of common stock for each  outstanding
share of common  stock and was  distributed  on May 7, 1998 to  shareholders  of
record on April 24, 1998.  Unless  otherwise  stated,  all  references to common
shares outstanding and earnings per share in the financial statements,  notes to
consolidated financial statements,  and management's  discussion and analysis of
financial condition and results of operations are on a post-split basis.

Additions to treasury stock represent a contribution of restricted shares of the
Company's common stock to the deferred compensation plan (see Note 6 below).

6.  Deferred Compensation Plan

The Company has a deferred  compensation plan (the "Plan") established to enable
key  employees  of  the  Company,   as  designated  by  the  Company,  to  defer
compensation,  including stock and stock  denominated  awards.  Participation is
voluntary  and  participants  can  elect  to  make  contributions  to the  Plan.
Participants are 100% vested in their own deferrals to the Plan at all times. At
June 27,  1998 the  liability  under  the  Plan,  which  is  reflected  in other
long-term liabilities, was $5.2 million.

7.  The Year 2000 Issue

The Company conducted a comprehensive review of its computer systems to identify
the  systems  that  could be  affected  by the Year  2000  ("Y2K")  problem  and
developed a plan to resolve the issue. The Y2K problem is the result of computer
programs  being  written  using  two  digits  rather  than  four to  define  the
applicable year. Any of the Company's programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations.  Management presently
believes that the Company has substantially completed its Y2K conversion for the
majority of its computer systems which are now Y2K compliant. However, there can
be no  assurance  that the  systems of other  companies  on which the  Company's
systems  rely also will be timely  converted or that any such failure to convert
by another company would not have an adverse effect on the Company's  systems or
operations.


<PAGE>


                       Independent Auditors' Review Report


The Board of Directors and Shareholders
Linens 'n Things, Inc.:

We have reviewed the consolidated  balance sheets of Linens 'n Things,  Inc. and
Subsidiaries as of June 27, 1998 and June 28, 1997, and the related consolidated
statements of operations for the thirteen and twenty-six week periods then ended
and the related  consolidated  statements of cash flows for the twenty-six  week
periods  ended June 27, 1998 and June 28,  1997.  These  consolidated  financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information  consists  principally of applying  analytical  review procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the consolidated  financial  statements referred to above for them to
be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  consolidated  balance  sheet of  Linens  'n  Things,  Inc.  and
Subsidiaries as of December 31, 1997 and the related consolidated  statements of
operations,  shareholders'  equity,  and cash flows for the year then ended (not
presented  herein);  and in our report dated  February 4, 1998,  we expressed an
unqualified opinion on those consolidated financial statements.  In our opinion,
the information set forth in the accompanying  consolidated  balance sheet as of
December 31, 1997, is fairly presented, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.


KPMG PEAT MARWICK LLP



New York, New York
July 14, 1998


<PAGE>


                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following  discussion and analysis  should be read in  conjunction  with the
Consolidated Financial Statements of the Company and the notes thereto appearing
elsewhere in this document.

Results of Operations

Thirteen  Weeks Ended June 27, 1998 Compared with Thirteen  Weeks Ended June 28,
1997

Net sales  increased  19.6% to $222.1  million for the thirteen weeks ended June
27,  1998,  up from $185.7  million for the same period in 1997,  primarily as a
result of new store  openings  since June 28,  1997.  During  1998,  the Company
shifted the timing of its semi-annual  clearance event, normally held in June to
the Fall  season.  In spite of this  shift,  comparable  store net sales for the
thirteen  weeks ended June 27, 1998 were  consistent  with last year at 6.0% for
the entire chain. However, comparable store net sales would have been positively
impacted for the thirteen  weeks ended June 27, 1998 had the Company not shifted
its  clearance  event.  Comparable  store net sales  continued to remain  strong
across most major geographic regions, particularly in the Northeast.

During the  thirteen  weeks  ended  June 27,  1998,  the  Company  opened  eight
superstores and closed four stores,  as compared with opening seven  superstores
and closing four stores  during the same period in 1997.  At June 27, 1998,  the
Company operated 178 stores, of which 163 were superstores, as compared with 168
stores,  of which 138 were  superstores,  at June 28, 1997. Store square footage
increased  approximately  17% to  5,787,000  at  June  27,  1998  compared  with
4,964,000 at June 28, 1997.

For the thirteen  weeks ended June 27, 1998,  net sales of "things"  merchandise
increased  approximately  30% over the same  period in 1997,  while net sales of
"linens" merchandise  increased  approximately 15% over the same period in 1997.
This is consistent  with the Company's  strategy to increase the  penetration of
"things"  merchandise.  The increase in net sales of "things" merchandise is the
result of the  continued  maturation  of this  business  as well as the  overall
expansion of the product categories in existing stores.

Gross profit for the thirteen  weeks ended June 27, 1998 was $88.9  million,  or
40.0% of net sales,  compared with $72.5 million, or 39.0% of net sales, for the
same period in 1997. The increase in gross profit was due to improvements in the
selling mix as well as lower  markdowns due to the shift in the clearance  event
from the second quarter to the Fall season.  These  improvements  were partially
offset by a slight increase in logistics expense as a percentage of net sales.

Selling,  general and  administrative  expenses  ("SG&A") for the thirteen weeks
ended June 27, 1998 were $84.2  million,  or 37.9% of net sales,  compared  with
$70.2 million, or 37.8% of net sales, for the same period in 1997. This increase
as a  percentage  of net  sales is  primarily  a  function  of the  shift in the
clearance event which impacted expenses by reducing sales leverage. In addition,
although  advertising  expenses were reduced by shifting the clearance  event to
the Fall season,  this savings was offset by additional  selling  expense as the
Company  continues to improve guest service levels through  increased  staffing.
Management  believes the  improvement  in guest service has  contributed  to the
strong comparable store net sales performance. In addition, the Company incurred
$500,000 of costs in the second quarter  relating to the  implementation  of the
tax planning  initiatives  designed to reduce the Company's  effective tax rate,
which was previously announced on February 4, 1998.

Operating  profit for the thirteen  weeks ended June 27, 1998  increased to $4.7
million, or 2.1% of net sales, compared with $2.3 million, or 1.2% of net sales,
for the same period in 1997.


<PAGE>


                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The Company incurred net interest expense of approximately  $103,000  (including
commitment fees in connection with the Credit  Agreement) for the thirteen weeks
ended June 27, 1998 compared with approximately  $609,000 for the same period in
1997.  The savings in interest  expense  compared to the same period in 1997 was
primarily  due to the  fact  that the  Company  was in a net  average  borrowing
position of $1.3 million for the thirteen  weeks ended June 27, 1998 as compared
with $25.0 million for the same period in 1997. Also contributing to the savings
were lower fees from renegotiation of the $90 million Credit Agreement which was
amended  effective March 31, 1998. The reduction in net average  borrowings is a
result  of the  elimination  of the $13.5  million  note to CVS  ($10.0  million
payment and $3.5 million  forgiveness  from CVS), as well as improved  operating
performance. See "Liquidity and Capital Resources."

The Company's  income tax expense for the thirteen weeks ended June 27, 1998 was
$1.8 million as compared with $0.7 million for the same period in 1997.  Through
tax planning  initiatives,  the Company expects to reduce its effective tax rate
to  approximately  38.5% for the year ending December 31, 1998, as compared with
42.0% for the year ended  December 31, 1997. The effect of this reduction in tax
rate is expected to be maintained going forward.

Net income for the thirteen  weeks ended June 27, 1998 increased to $2.8 million
or $0.07 per share,  compared with  $990,000,  or $0.03 per share,  for the same
period in 1997.  Both per share  amounts  are  adjusted  for the stock  split as
indicated in Note 5 to the consolidated financial statements.

Twenty-Six  Weeks Ended June 27, 1998 Compared with Twenty-Six  Weeks Ended June
28,1997

Net sales increased 20.4% to $440.1 million for the twenty-six  weeks ended June
27, 1998 as compared with $365.6 million for the same period in 1997,  primarily
as a result of new store  openings  since June 28,  1997.  Comparable  store net
sales for the twenty-six weeks ended June 27, 1998 increased 6.7% for the entire
chain as compared with 5.9% for the same period in 1997.  During the  twenty-six
weeks ended June 27, 1998, the Company opened eleven superstores and closed nine
stores,  as compared with having opened eight superstores and closed nine stores
during the same period in 1997.

For the twenty-six weeks ended June 27, 1998, net sales of "things"  merchandise
increased  approximately  25% over the same  period in 1997,  while net sales of
"linens" merchandise  increased  approximately 15% over the same period in 1997.
This is consistent  with the Company's  strategy to increase the  penetration of
"things"  merchandise.  The increase in net sales of "things" merchandise is the
result of the  continued  maturation  of this  business,  as well as the overall
expansion of the product categories in existing stores.

Gross profit for the twenty-six weeks ended June 27, 1998 was $172.2 million, or
39.1% of net sales, compared with $140.8 million, or 38.5% of net sales, for the
same period in 1997. The increase in gross profit was due to improvements in the
selling mix as well as lower  markdowns due to the shift in the clearance  event
from the second quarter to the fall season.  These  improvements  were partially
offset by a slight  increase in logistics  expense as a percentage of net sales.
Gross margin for both  "linens" and "things"  merchandise  increased  consistent
with the Company's consolidated results.

SG&A expenses for the twenty-six  weeks ended June 27, 1998 were $165.3 million,
or 37.6% of net sales,  compared with $137.6 million, or 37.6% of net sales, for
the same period in 1997.  The SG&A expense rate for the  twenty-six  weeks ended
June 27, 1998 was impacted by the shift in the  clearance  event which  impacted
expenses by reducing  sales  leverage.  In addition,  the Company  incurred $1.0
million  of  expenses  relating  to  the  implementation  of  the  tax  planning
initiatives  designed to reduce the  effective  tax rate,  which was  previously
announced on February 4, 1998.


<PAGE>


                     LINENS `N THINGS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Operating  profit for the twenty-six weeks ended June 27, 1998 increased to $6.9
million,  or 1.6% of net sales,  as compared with $3.3  million,  or 0.9% of net
sales, for the same period in 1997.

Net interest  income (net of commitment  fees in connection with the $90 million
Credit Agreement) for the twenty-six weeks ended June 27, 1998 was approximately
$100,000 compared with net interest expense of approximately $945,000 during the
same period in 1997. The savings in interest expense compared to the same period
in 1997 was  primarily  due to the fact that the  Company  was in a net  average
investment  position of $12.4 million during the  twenty-six  week period ending
June 27, 1998 as compared with a net average borrowing position of $16.6 million
for the same period in 1997.  Also  contributing  to the savings were lower fees
from  renegotiation  of the $90  million  Credit  Agreement  which  was  amended
effective March 31, 1998. The reduction in net average borrowings is a result of
the elimination of the $13.5 million note to CVS ($10.0 million payment and $3.5
million  forgiveness from CVS), as well as improved operating  performance.  See
"Liquidity and Capital Resources."

The Company's  income tax expense for the  twenty-six  weeks ended June 27, 1998
was $2.7 million compared with $972,000 for the same period in 1997. Through tax
planning  initiatives,  the Company  expects to reduce its effective tax rate to
approximately  38.5% for the year ending  December  31, 1998,  as compared  with
42.0% for the year ended  December 31, 1997. The effect of this reduction in tax
rate is expected to be maintained going forward.

Net income for the  twenty-six  weeks ended June 27, 1998 was $4.3  million,  or
$0.11 per share,  compared with $1.3 million,  or $0.03 per share,  for the same
period in 1997.

Liquidity and Capital Resources

The Company's capital requirements are primarily  investments in new stores, new
store  inventory  purchases and seasonal  working  capital,  as well as a second
distribution  center which is currently planned to open in the second quarter of
1999.  These  requirements  are  funded  through  a  combination  of  internally
generated  cash from  operations,  credit  extended by suppliers and  short-term
borrowings.

The Company has available a $90 million three year revolving credit facility, as
amended,  expiring  March 31,  2001,  which can be  increased up to $125 million
provided certain terms and conditions contained in the Credit Agreement are met.
This agreement allows for up to $25 million in borrowings from uncommitted lines
of credit.  Management  currently  believes that the  Company's  cash flows from
operations,  credit extended by suppliers, the revolving credit facility and the
uncommitted  lines of credit will be  sufficient to handle  anticipated  capital
expenditures and working capital requirements in the foreseeable future.

Net cash used in operating  activities for the  twenty-six  weeks ended June 27,
1998 was $33.0 million  compared with net cash provided by operating  activities
of $4.9  million for the same period in 1997.  This change is primarily a result
of an increase in inventory  levels of $48.1 million,  an increase of 30%, which
was due to the shift in the  clearance  event to the Fall season,  as well as an
increase in the number of stores and store inventory  levels in order to support
the comparable  store net sales growth.  This increase was offset by an increase
in accounts  payable over last year which was due to increased  inventory levels
and the timing of vendor payments.

Net cash used in investing activities during the twenty-six weeks ended June 27,
1998 was $13.6 million  compared with $14.3 million for the same period in 1997.
This  decrease  from the same period in 1997 is  associated  with the timing and
number of the Company's new store openings.

Net cash provided by financing activities during the twenty-six weeks ended June
27, 1998 was $11.6 million  compared with net cash used in financing  activities
of $14.4  million  for the same  period in 1997.  Net cash  provided  during the
twenty-six  weeks ended June 27, 1998 was primarily the result of the timing and
settlement of vendor payments as well as the proceeds received from common stock
issued under stock incentive  plans.  Net cash used during the twenty-six  weeks
ended June 28, 1997 was primarily the result of the timing of the  settlement of
vendor payments.


<PAGE>


                     LINENS `N THINGS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Inflation

The Company does not believe  that its  operating  results have been  materially
affected  by  inflation  during  the  preceding  three  years.  There  can be no
assurance, however, that the Company's operating results will not be affected by
inflation in the future.

Seasonality

The  Company's   business  is  subject  to  substantial   seasonal   variations.
Historically,  the Company has realized a  significant  portion of its net sales
and net income for the year during the third and fourth quarters.  The Company's
quarterly results of operations may also fluctuate  significantly as a result of
a variety of other  factors,  including  the timing of new store  openings.  The
Company believes this is the general pattern  associated with its segment of the
retail industry. Consequently,  comparisons between quarters are not necessarily
meaningful  and the results for any quarter are not  necessarily  indicative  of
future results.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains  forward-looking  statements  within
the  meaning  of The  Private  Securities  Litigation  Reform  Act of 1995.  The
statements  are  made a number  of  times  throughout  the  document  and may be
identified by forward-looking terminology as "expect," "believe," "may," "will,"
"intend" or similar statements or variations of such terms. Such forward-looking
statements involve certain material risks and uncertainties  including levels of
sales, store traffic, acceptance of product offerings and fashions,  competitive
pressures from other superstore retailers and from department stores which carry
other products  including certain designer products not carried by the Company's
stores,  availability  of suitable  future store locations and schedule of store
expansion plans. These and other important factors that may cause actual results
to differ  materially from such  forward-looking  statements are included in the
"Risk Factors"  section of the Company's  Registration  Statement on Form S-1 as
filed with the  Securities  and Exchange  Commission on May 29, 1997, and may be
contained  in  subsequent   reports  filed  with  the  Securities  and  Exchange
Commission.  You are urged to consider  such  factors.  The  Company  assumes no
obligation for updating any such forward-looking statements.


<PAGE>


 PART II - OTHER INFORMATION


Item 6 - Exhibits and Reports on Form 8-K


(a)      EXHIBIT INDEX

Exhibit
Number    Description
-------   -----------

11       Computation of Net Income Per Common Share

15       Letter re unaudited interim financial information

27       Financial Data Schedule (filed electronically with SEC only)



 (b)     Reports on Form 8-K:

         The  Company  filed a report on Form 8-K dated  April 14, 1998 (date of
         earliest event reported) reporting that the Board of Directors approved
         a two-for-one split of the Company's common stock to be effected in the
         form of a stock dividend.

         Additionally,  the  Company  filed a report on Form 8-K dated March 31,
         1998 (date of  earliest  event  reported)  reporting  that the  Company
         entered  into a  credit  agreement  with  The  Bank of New York and BNY
         Capital  Markets,  Inc.  which amends and restates its previous  credit
         agreement dated as of November 20, 1996.


<PAGE>

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                               LINENS 'N THINGS, INC.
                                                     (Registrant)


                                              WILLIAM T. GILES
                                          By:-----------------------------------
                                              William T. Giles
                                              Chief Financial Officer
                                              (Duly authorized officer and
                                               principal financial officer)
Date:   July 22, 1998


<PAGE>


<TABLE>
<CAPTION>

                                                                                                                   EXHIBIT 11
                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                   COMPUTATION OF NET INCOME PER COMMON SHARE
                      (in thousands, except per share data)


                                                                 For the Thirteen Weeks Ended      For the Twenty-Six Weeks Ended
                                                                -------------------------------- -----------------------------------
                                                                  June 27,           June 28,         June 27,           June 28,
                                                                     1998              1997              1998              1997
                                                                --------------     -------------     ------------      -------------
                                                                          (Unaudited)                         (Unaudited)
<S>                                                             <C>                     <C>              <C>                 <C>    
Basic

    Weighted-average number of shares outstanding                      38,885            38,536           38,824             38,536
                                                                ==============     =============     ============      =============

    Net income applicable to common shares                            $ 2,826          $    990          $ 4,301            $ 1,342
                                                                ==============     =============     ============      =============

    Per-share amounts
        Net income per share                                            $0.07             $0.03            $0.11              $0.03
                                                                ==============     =============     ============      =============

Diluted

    Weighted-average number of shares outstanding                      40,500            39,394           40,354             39,296
                                                                ==============     =============     ============      =============

    Net income applicable to common shares                            $ 2,826          $    990          $ 4,301            $ 1,342
                                                                ==============     =============     ============      =============

    Per-share amounts
        Net income per share                                            $0.07             $0.03            $0.11              $0.03
                                                                ==============     =============     ============      =============

</TABLE>