|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 March 30, 2002
Commission File Number 1-12381
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Linens
n Things, Inc.
(Exact name of registrant as specified in charter) | 
| | --------------------------------------------------------------------------------------- | 

|Delaware

(State or Other Jurisdiction of Incorporation) |  | 22-3463939

(I.R.S. Employer Identification Number)
|---------------------------------------------------------------------- |  | -----------------------------------------------------------------

|6 Brighton Road, Clifton, New Jersey

(Address of principal executive offices) |  | 07015

(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:
Common Stock, $0.01 par value | Outstanding at May 6, 2002
40,666,228
| | ----------------------------------------------------------------------------------------------------------------- | -----------------------------------------------

---

|INDEX
|-----

|Part I.  Financial Information | Page No.
|------------------------------ | --------

| | Item 1. |  | Financial Statements | 
| | ------- |  | -------------------- | 

| |  |  | Consolidated Statements of Operations for the
Thirteen Weeks Ended March 30, 2002
and March 31, 2001 | 3
| |  |  | ---------------------------------------------------------------------------------------------------- | -

| |  |  | Consolidated Balance Sheets as of March 30, 2002,
December 29, 2001 and March 31, 2001 | 4
| |  |  | -------------------------------------------------------------------------------------- | -

| |  |  | Consolidated Statements of Cash Flows for the
Thirteen Weeks Ended March 30, 2002
and March 31, 2001 | 5
| |  |  | ---------------------------------------------------------------------------------------------------- | -

| |  |  | Notes to Consolidated Financial Statements | 6-9
| |  |  | ------------------------------------------ | ---

| |  |  | Independent Auditors Review Report | 10
| |  |  | ----------------------------------- | --

| | Item 2. |  | Managements Discussion and Analysis of
        Financial Condition and Results of Operations | 11-13
| | ------- |  | --------------------------------------------------------------------------------------------- | -----

| | Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk | 14
| | ------- |  | ---------------------------------------------------------- | --

|Part II.  Other Information | 
|--------------------------- | 

| | Item 6. |  | Exhibits and Reports on Form 8-K | 15
| | ------- |  | -------------------------------- | --

| |  |  | (a)  Exhibit Index | 15
| |  |  | ------------------ | --

| |  |  | (b)  Reports on Form 8-K | 15
| |  |  | ------------------------ | --

|PART  - I
FINANCIAL INFORMATION

Item 1.  
Financial Statements

LINENS N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                       | Thirteen Weeks Ended
|------------------------------------------------------ | --------------------
|
|                                                       |                     
|Net sales                                              |                     
|Cost of sales, including buying and distribution costs |                     
|                                                       |                     
|Gross profit                                           |                     
|Selling, general and administrative expenses           |                     
|                                                       |                     
|Operating profit                                       |                     
|Interest income                                        |                     
|Interest expense                                       |                     
|                                                       |                     
|Interest expense, net                                  |                     
|                                                       |                     
|Income before income taxes                             |                     
|Provision for income taxes                             |                     
|                                                       |                     
|Net income                                             |                     
|                                                       |                     
|Per share of common stock:                             |                     
|Basic                                                  |                     
|                                                       |                     
|Net income                                             |                     
|Weighted-average shares outstanding                    |                     
|Diluted                                                |                     
|                                                       |                     
|Net income                                             |                     
|Weighted-average shares outstanding                    |                     

See accompanying notes
to consolidated financial statements.

---

|LINENS N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
|--------------------------------------------------------------------------------------------------------

|                                                       | March 30,2002 | December 29,    2001 | March 31,     2001
|------------------------------------------------------ | ------------- | -------------------- | ------------------
|                                                       |               |                      |                   
|
|Assets                                                 |               |                      |                   
|Current assets:                                        |              
|Cash and cash equivalents                              |               | $   10,064           |                   
|Accounts receivable                                    |               | 31,115               |                   
|Inventories                                            |               | 549,700              |                   
|Prepaid expenses
and other current assets              |               | 13,366               |                   
|Current deferred taxes                                 |               | 23,384               |                   
|                                                       |               |                      |                   
|Total current assets                                   |               | 627,629              |                   
|Property and equipment, net                            |               | 327,813              |                   
|Goodwill, net                                          |               | 18,126               |                   
|Deferred charges and
 other noncurrent assets, net     |               | 11,221               |                   
|                                                       |               |                      |                   
|Total assets                                           |               | $ 984,789            |                   
|                                                       |               |                      |                   
|Liabilities and Shareholders Equity                   |              
|Current liabilities:                                   |              
|Accounts payable                                       |               | $ 237,765            |                   
|Accrued expenses
and other current liabilities         |               | 124,959              |                   
|Short-term borrowings                                  |               | 47,094               |                   
|                                                       |               |                      |                   
|Total current liabilities                              |               | 409,818              |                   
|Deferred income taxes and other long-term liabilities  |               | 70,538               |                   
|Shareholders equity:                                  |              
|                                                       |              
|authorized; none issued and outstanding                |               | --                   |                   
|Common stock, $0.01 par value;                         |              
|135,000,000 shares authorized; 40,923,574 shares       |               |                      |                   
|issued and 40,674,378 shares outstanding at March 30,  |               |                      |                   
|2002; 40,872,008 shares issued and 40,624,374 shares   |               |                      |                   
|outstanding at December 29, 2001; and 40,622,506       |               |                      |                   
|shares issued and 40,508,191 shares outstanding at     |               |                      |                   
|March 31, 2001                                         |               | 409                  |                   
|Additional paid-in capital                             |               | 246,350              |                   
|Retained earnings                                      |               | 265,075              |                   
|Accumulated other comprehensive loss                   |               | (412                 | )                 
|Treasury stock, at cost; 249,196 shares at March 30,   |               |                      |                   
|2002, 247,634 shares at December 29, 2001, and 114,315 |               |                      |                   
|shares at March 31, 2001                               |               | (6,989               | )                 
|                                                       |               |                      |                   
|Total shareholders equity                             |               | 504,433              |                   
|                                                       |               |                      |                   
|Total liabilities and shareholders equity             |               | $ 984,789            |                   
|                                                       |               |                      |                   

See accompanying notes
to consolidated financial statements.

---

|LINENS N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
|-------------------------------------------------------------------------------------------------------

|                                                         | Thirteen Weeks Ended
|-------------------------------------------------------- | --------------------
|
|                                                         |                     
|Cash flows                                               |                     
|from operating activities:                               |                     
|Net income                                               |                     
|Adjustments to reconcile net income to net               |                     
|cash provided by (used in) operating activities:         |                     
|Depreciation and amortization                            |                     
|Deferred income taxes                                    |                     
|Loss on disposal of assets                               |                     
|Federal  tax  benefit  from common  stock  issued  under |                     
|stock incentive plans                                    |                     
|Changes in assets and liabilities:                       |                     
|Decrease (increase) in accounts receivable               |                     
|Increase in inventories                                  |                     
|Decrease  (increase)  in  prepaid  expenses  and other   |                     
|current assets                                           |                     
|Increase in deferred charges and other                   |                     
|noncurrent assets                                        |                     
|Increase in accounts payable                             |                     
|Decrease in accrued expenses and other liabilities       |                     
|                                                         |                     
|Net cash provided by (used in) operating activities      |                     
|                                                         |                     
|Cash flows from                                          |                     
|investing activities:                                    |                     
|Additions to property and equipment                      |                     
|                                                         |                     
|Cash flows                                               |                     
|from financing activities:                               |                     
|Proceeds from common stock issued under stock incentive  |                     
|plans                                                    |                     
|Increase in short-term borrowings                        |                     
|Purchase of treasury stock                               |                     
|                                                         |                     
|Net cash provided by financing activities                |                     
|                                                         |                     
|Effect of exchange rate changes on cash and cash         |                     
|equivalents                                              |                     
|Net decrease in cash and cash equivalents                |                     
|Cash and cash equivalents at beginning of period         |                     
|                                                         |                     
|Cash and cash equivalents at end of period               |                     
|                                                         |                     

See accompanying notes
to consolidated financial statements.

---

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


1.     Basis of Presentation

The accompanying
consolidated financial statements, except for the December 29, 2001 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 March 30, 2002 and March 31, 2001 and the results of
operations and cash flows for the respective thirteen 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 fiscal year ended December 29,
2001, 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.

2.     Earnings Per Share

The calculation of basic and diluted earnings per share
(EPS) is as follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Period ended March 30,
2002(in thousands, except EPS)(Unaudited)
Thirteen week period

|                                        | Income | Shares | EPS
|--------------------------------------- | ------ | ------ | ---
|                                        |        |        |    
|Basic                                   |        | $5,140 |    
|Effect of outstanding stock option  and |       
|deferred stock grants                   |        | --     |    
|                                        |        |        |    
|Diluted                                 |        | $5,140 |    
|                                        |        |        |    

# Period ended March 30,
2001(in thousands, except EPS)(Unaudited)
Thirteen week period

|                                       | Income | Shares | EPS
|-------------------------------------- | ------ | ------ | ---
|                                       |        |        |    
|Basic                                  |        | $4,693 |    
|Effect of outstanding stock option and |       
|deferred stock grants                  |        | --     |    
|                                       |        |        |    
|Diluted                                |        | $4,693 |    
|                                       |        |        |    

|Options for which the
exercise price was greater than the average market price of common shares for
the period ended March 30, 2002 and March 31, 2001 were not included in the
computation of diluted earnings per share. These consisted of options totaling
1,401,000 shares and 33,250 shares for the thirteen weeks ended March 30, 2002
and March 31, 2001, respectively. Deferred stock grants excluded in the
computation of diluted earnings per share due to the application of the







LINENS N THINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, contd


treasury stock method
totaled 103 shares and 10,242 shares for the thirteen weeks ended March 30, 2002
and March 31, 2001, respectively.

3.     Short-Term Borrowing
Arrangements

The Company has available a
$150 million senior revolving credit facility agreement (the Credit
Agreement) with third party institutional lenders expiring October 20,
2003. The Credit Agreement also allows for up to $40 million of borrowings from
uncommitted lines of credit outside of the Credit Agreement. Interest on all
borrowings is determined based upon several alternative rates as stipulated in
the Credit Agreement, including a fixed margin above LIBOR rate. 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 of March 30, 2002, the Company was in
compliance with all material terms of the Credit Agreement. The Credit Agreement also
contains a covenant that limits the amount of cash dividends pursuant to which
the amount of cash dividends may not exceed on a cumulative basis the sum of $50
million plus 50% of the consolidated net income for each fiscal quarter,
commencing with the fiscal quarter ended September 30, 2000. The Company has
never paid cash dividends. As of March 30, 2002, the Company had $31.2 million
in borrowings under the Credit Agreement and $15.9 million in borrowings against
the uncommitted lines of credit at a weighted average interest rate of 2.8%. The
Company also had $22.9 million of letters of credit outstanding as of March 30,
2002, which were primarily used for merchandise purchases. The Company is not
obligated under any formal or informal compensating balance requirements.

4.     Comprehensive Income

Comprehensive income for
the thirteen weeks ended March 30, 2002 and March 31, 2001 is as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                        | Three Weeks Ended
|--------------------------------------- | -----------------
|
|                                        |                  
|
|
|Net Income                              |                  
|Other comprehensive income (loss) --    |                  
|Foreign currency translation adjustment |                  
|                                        |                  
|Comprehensive income                    |                  
|                                        |                  

|5.     Restructuring and
Asset Impairment Charge

During the fourth quarter
of fiscal 2001, the Company developed and committed to a strategic initiative
designed to improve store performance and profitability. This initiative calls
for the closing of 17 under-performing stores which did not meet the
Companys profit objectives. In connection with this initiative, the
Company recorded a pre-tax restructuring and asset impairment charge of $37.8
million ($23.7 million after-tax) in the fourth quarter of fiscal 2001. A
pre-tax reserve of $20.5 million was established for estimated lease commitments
for stores to be closed. This reserve is included in accrued expenses. The
reserve considers estimated sublease income. Because all of the stores were
leased the Company will not be responsible for the disposal of property other
than fixtures. A pre-tax reserve of $9.5 million was recorded as a reduction in
property and equipment for fixed asset impairments for these stores. The fixed
asset impairments represent fixtures and leasehold improvements. A pre-tax
reserve of $4.0 million was established for other estimated miscellaneous store
closing costs. Additionally, a pre-tax reserve of $3.8 million was recorded in
cost of sales for estimated inventory markdowns below cost for the stores to be
closed.






LINENS N THINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, contd


Certain components of the
restructuring and asset impairment charge are based upon estimates and may be
subject to change in future periods. As of March 30, 2002, two stores have been
closed and at least a majority of all such stores are expected to be closed by
the end of fiscal 2002.

The following is a summary
of activity of the reserve for the restructuring and asset impairments charge as
of March 30, 2002 ($ in millions):
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                     | Reserve Balance12/29/01 | 2002Activity | Reserve Balance3/30/02
|-------------------- | ----------------------- | ------------ | ----------------------
|                     |                         |              |                       
|Non-cash components: |                         | (Audited)    |                       
|Asset impairment     |                         | $     9.5    |                       
|Inventory markdowns  |                         | 3.8          |                       
|                     |                         |              |                       
|Sub-total            |                         | 13.3         |                       
|Cash components:     |                        
|Lease commitments    |                         | 20.5         |                       
|Other                |                         | 4.0          |                       
|                     |                         |              |                       
|Sub-total            |                         | 24.5         |                       
|                     |                         |              |                       
|Total                |                         | $    37.8    |                       
|                     |                         |              |                       

|The 2002 activity primarily
consists of markdowns on inventory sold below cost, the write-off of fixed
assets and settlements for lease obligations.

6.     Goodwill and Other
 Intangible Assets - Adoption of Statement 142

In fiscal 2002, the Company  adopted  Statement of Financial  Accounting  Standards  (SFAS)
 No. 142,  Goodwill and Other  Intangible Assets (SFAS No. 142).  Under SFAS No. 142,  goodwill  amortization  ceases upon adoption of the new standard and intangible  assets
with indefinite useful lives will no longer be amortized.  Had the application of the  non-amortization  provisions of SFAS No. 142 not
been  adopted,  net income  would have been  reduced by  approximately  $131,000  for the quarter  ended March 30,  2002.  SFAS No. 142
requires an initial goodwill  impairment  assessment upon adoption and annual impairment tests  thereafter.  The Company is required to
perform and complete the initial impairment test of goodwill by June 29, 2002.

Set forth below are the
Companys net income and net income per share as reported and
as if amortization expense related to goodwill had not been expensed in accordance with
the provisions of SFAS No. 142 ($ in thousands, except EPS):
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                 | For the thirteen weeks ended
|-------------------------------- | ----------------------------
|
|                                 |                             
|
|Reported net income:             |                             
|Add back:  Goodwill amortization |                             
|                                 |                             
|Adjusted net income              |                             
|                                 |                             
|Basic earnings per share:        |                             
|Reported net income              |                             
|Goodwill amortization            |                             
|                                 |                             
|Adjusted net income              |                             
|                                 |                             
|Diluted earnings per share:      |                             
|Reported net income              |                             
|Goodwill amortization*           |                             
|                                 |                             
|Adjusted net income              |                             
|                                 |                             

|*   Impact for 2001 is
less than $0.01 per share.
|-------------------------------------------------

---

|LINENS N THINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, contd


7.     Recent Accounting
Pronouncements

At a recent FASB Emerging
Issues Task Force (EITF) meeting, a consensus was reached with
respect to the issue of Accounting for Certain Sales Incentives,
including point of sale coupons, rebates and free merchandise. The consensus
included a conclusion that the value of such sales incentives that result in a
reduction of the price paid by the customer should be netted against sales and
not classified as a sales or marketing expense. In April 2001, the EITF delayed
the effective date for this consensus to 2002. The Company already includes such
sales incentives as a reduction of sales and records free merchandise in cost of
goods sold as required by the new EITF consensus.

In June 2001, the FASB
issued SFAS No. 143, Accounting for Asset Retirement Obligations
(SFAS No. 143). SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This statement requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred if a reasonable estimate of fair value can
be made. This statement is effective for the Company in fiscal 2003. The Company
is currently evaluating SFAS No. 143 but does not anticipate that the impact of the new pronouncement would have a material effect
on the Companys financial statements.

In August  2001,  the  Financial  Accounting  Standards
Board  issued  SFAS No. 144,  Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets (SFAS No. 144).  SFAS No. 144 supercedes  Statement No. 121,
Accounting for the Impairment of Long-Lived Assets
and for  Long-Lived  Assets to Be Disposed Of (SFAS No. 121),  but retains  many of its  fundamental  provisions.  SFAS No.144 also
expands the scope of discontinued  operations to include more disposal  transactions,  and will impact the presentation of future store
closings,  if any.  SFAS No. 144 was effective for the Company for the first  quarter of fiscal 2002.  The  implementation  of SFAS No.
144 did not have a  significant  impact on the Companys  financial  statements,  as the  impairment  assessment  under SFAS No. 144 is
predominately unchanged from SFAS No. 121.


8.     Reclassification

Certain reclassifications
were made to the fiscal 2001 consolidated financial statements in order to
conform to the fiscal 2002 presentation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|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 March 30, 2002 and March 31, 2001, and the related consolidated statements of
operations and cash flows for the thirteen weeks ended March 30, 2002 and March
31, 2001. 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
auditing standards generally accepted in the United States of America, 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
accounting principles generally accepted in the United States of America.

We have previously audited,
in accordance with auditing standards generally accepted in the United States of
America, the consolidated balance sheet of Linens n Things, Inc. and
Subsidiaries as of December 29, 2001 (presented herein) 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 January
30, 2002 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 29, 2001 is fairly presented, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.

KPMG LLP
New York, New York
April 17, 2002
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Item 2.     Managements
Discussion and Analysis of Financial Condition and Results of Operations

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.

Critical Accounting Policies

The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts and timing of revenues and of
expenses during the reporting period. The Companys management believes
the following critical accounting policies, among others, involve significant
estimates and judgments inherent in the preparation of the consolidated
financial statements.

Valuation of Inventory:
Inventories are valued using the lower of cost or market value, determined by
the retail inventory method (RIM). Under RIM, the valuation of
inventories at cost and the resulting gross margins are calculated by applying a
calculated cost-to-retail ratio to the retail value of inventories. RIM is an
averaging method that has been widely used in the retail industry due to its
practicality. Inherent in the RIM calculation are certain significant management
judgments and estimates including, among others, merchandise markon, markup,
markdowns and shrinkage based on historical experience between the dates of
physical inventories, which significantly impacts the ending inventory valuation
at cost.

Sales Returns: The Company
estimates future sales returns and, when material, records a provision in the
period that the related sales are recorded based on historical information.
Should actual returns differ from the Companys estimates, revisions to
estimated sales returns may be required.

Impairment of Assets: The
Company periodically evaluates long-lived assets and goodwill for indicators of
impairment. The Companys judgements regarding the existence of impairment
indicators are based on market conditions and operational performance. Future
events could cause the Company to conclude that impairment indicators exist and
that the value of long-lived assets and goodwill is impaired.

Store Closure Costs: The
Company records estimated store closure costs, such as fixed asset write-offs,
estimated lease commitment costs net of sublease income, markdowns for inventory
that will be sold below cost, and other miscellaneous store closing costs, in
the period in which management determines to close a store. Such estimates may
be subject to change should actual costs differ.


Results of Operations

Thirteen Weeks Ended March 30, 2002
Compared with Thirteen Weeks Ended March 31, 2001

Net sales for the thirteen
weeks ended March 30, 2002 increased 20.5% to $456.9 million, up from $379.2
million for the same period last year. The increase in net sales is primarily
the result of new store openings since March 31, 2001.  At March 30, 2002, the Company operated 348 stores, including
11 stores in Canada, as compared with 293 stores, including seven stores in
Canada, at March 31, 2001. Store square footage increased 19.2% to 12,208,000 at
March 30, 2002 compared with 10,238,000 at March 31, 2001. During the thirteen
weeks ended March 30, 2002, the Company opened seven stores and closed two
stores as compared with opening 11 stores and closing one store during the same
period last year.

Comparable store net sales
increased 2.6% for the thirteen weeks ended March 30, 2002 compared with a
decline of 1.8% for the same period last year. The increase in comparable store
net sales for the thirteen weeks ended March 30, 2002 is primarily attributed to
an increase in customer traffic. The Company believes its sales results reflect
the steady progress being made on its strategic operating initiatives, which
include improvements of in-stock inventory positions and improvements in the
Companys textile business. Sales also benefited from consistently good
performance of the Companys functional housewares business.

In addition to the cost of
inventory sold, the Company includes its buying and distribution expenses in its
cost of sales. Buying expenses include all direct and indirect costs to procure
merchandise. Distribution expenses include the cost of operating the
Companys distribution centers and freight expense related to transporting
merchandise. Gross profit for the thirteen weeks ended March 30, 2002 was $181.2
million, or 39.7% of net sales, compared with $150.7 million, or 39.7% of net
sales, for the same period last year. Gross profit as a percentage of net sales
was equivalent to the same period last year.  Gross profit was impacted by an
improvement in initial mark-on as
a result of product mix and the leveraging of the Companys buying power
offset in part by start-up costs related
to the Companys third distribution center, as well as higher markdowns
related to SKU management during the Companys clearance event in January 2002.

The Companys selling,
general and administrative (SG&A) expenses consist of store
selling expenses, occupancy costs, advertising expenses and corporate office
expenses. SG&A expenses for the thirteen weeks ended March 30, 2002 were
$172.2 million, or 37.7% of net sales, compared with $142.5 million, or 37.6% of
net sales, for the same period last year. The increase as a percentage of net
sales is attributable to a slight de-leveraging of occupancy costs, and as greater investment in
store payroll as a result of the Companys initiatives to improve
overall guest service levels. However, the increase was partially offset by the
leverage of corporate office expenses.

Operating profit for the
thirteen weeks ended March 30, 2002 was $9.0 million, or 2.0% of net sales,
compared with $8.2 million, or 2.2% of net sales, for the same period last year.

Net interest expense for
the thirteen weeks ended March 30, 2002 increased to $675,000 from $570,000
during the same period last year. The increase in interest expense was due to a
higher net average loan balance for the thirteen weeks ended March 30, 2002
compared with the same period last year, in order to fund the Companys
operations, offset in part by lower interest rates.

The Companys income
tax expense was $3.2 million for the thirteen weeks ended March 30, 2002,
compared with $2.9 million for the same period last year. The Companys
effective tax rate was 38.2% for both the thirteen weeks ended March 30, 2002
and March 31, 2001.

As a result of the factors
described above, net income for the thirteen weeks ended March 30, 2002 was $5.1
million, or $0.12 per share on a diluted basis, up from $4.7 million, or $0.11
per share on a diluted basis for the same period last year.
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|MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, contd


Liquidity and Capital Resources

The Companys capital
requirements are primarily for new store expenditures, new store inventory
purchases and seasonal working capital. These requirements have been funded
through a combination of internally generated cash flows from operations, credit
extended by suppliers and short-term borrowings.

The Company has available a
$150 million senior revolving credit facility agreement (the Credit
Agreement) with third party institutional lenders, expiring October 20,
2003. The Credit Agreement also allows for up to $40 million in borrowings from
uncommitted lines of credit outside of the Credit Agreement. As of March 30, 2002, the
Company was in compliance with all material terms of the Credit Agreement.  As of
March 30, 2002, the Company had $31.2 million in borrowings under the Credit
Agreement and $15.9 million in borrowings against the uncommitted lines of credit at a
weighted-average interest rate of 2.8%.  The Company also had $22.9 million
of letters of credit outstanding as of March 30, 2002, which were primarily used for merchandise
purchases.  The Company is not obligated under any formal or informal
compensating balance requirements.  See Note 3 to Financial Statements.

Net cash provided by
operating activities for the thirteen weeks ended March 30, 2002 was $2.0
million compared with net cash used in operating activities of $45.1 million for
the same period last year. The change in net cash flows from operating
activities was primarily attributed to the timing of inventory receipts within
the quarter which impacted the timing of vendor payments. Net cash provided by
operating activities is our principal source of liquidity and therefore a
decline in demand for the Companys product offerings could impact the
availability of funds for store expansion.

Net cash used in investing
activities for the thirteen weeks ended March 30, 2002 was $25.7 million,
compared with $18.6 million for the same period last year. The increase in net
cash used in investing activities was due primarily to capital expenditures
related to the Companys third distribution center which is expected to be
fully operational by the end of the second quarter 2002. The Company currently estimates capital
expenditures will be approximately $75 million to $80 million in fiscal 2002,
primarily for an estimated 50 new stores, store remodels, the third distribution
center and system enhancements.

Net cash provided by
financing activities for the thirteen weeks ended March 30, 2002 was $18.4
million compared with $28.6 million for the same period last year. The decrease
was primarily due to the improvement in cash flows provided by operating
activities which reduced the need for short-term borrowings, partially offset by
higher capital expenditures.

Management regularly
reviews and evaluates its liquidity and capital needs. The Company experiences
peak periods for its cash needs during the course of its fiscal year, with such
peak periods generally expected during the second quarter and fourth quarter of
the current fiscal year. As the Companys business continues to grow and
its current store expansion plan is implemented, such peak periods may require
increases in the amounts available under its credit facility from those
currently existing and/or other debt or equity funding. The Company currently
believes it would have access to necessary additional debt and/or capital
markets funding as such needs may require. Management currently believes that
the Companys cash flows from operations, credit extended by suppliers, its
existing credit facilities, uncommitted lines of credit, and such other or
additional debt or capital markets funding as it may seek to obtain, will be
sufficient to fund its currently expected capital expenditure, working capital
and non-acquisition business expansion requirements for at least the next 12 to
18 months.

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 and
expects this pattern will continue in the future. Consequently, comparisons
between quarters are not necessarily meaningful and the results for any quarter
are not necessarily indicative of future results.
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|MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, contd


Forward-Looking Statements

The foregoing contains
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. The statements are made a number of times and may
be identified by such forward-looking terminology as expect,
believe, may, will, could,
intend, plan, target and similar statements
or variations of such terms. All of our outlook information
constitutes forward-looking information. All such forward-looking statements are
based on our current expectations, assumptions, estimates and projections about
our Company and involve certain significant risks and uncertainties, including
levels of sales, store traffic, acceptance of product offerings and fashions,
the success of our new business concepts and seasonal concepts, the success of
our new store openings, competitive pressures from other home furnishings
retailers, the success of the Canadian expansion, availability of suitable
future store locations, schedule of store expansion and of planned closings, the
impact of the bankruptcies and consolidations in our industry, the impact on
consumer spending as a result of a slowing consumer economy and a highly
promotional retail environment. Actual results may differ materially from such
forward-looking statements. These and other important risk factors 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 all such factors.
In light of the uncertainty inherent in such forward-looking statements, you
should not consider their inclusion to be a representation that such
forward-looking matters will be achieved. The Company assumes no obligation for
updating any such forward-looking statements to reflect actual results, changes
in assumptions or changes in other factors affecting such forward-looking
statements.

Item 3.  Quantitative and Qualitative
Disclosures About Market Risk.

The Company continuously
evaluates the market risk associated with its financial instruments. Market
risks relating to the Companys operations result primarily from changes in
interest rates and foreign exchange rates. The Company does not engage in
financial transactions for trading or speculative purposes.

Interest Rate Risk:

The Companys
financial instruments include cash and cash equivalents and short-term
borrowings. The Companys obligations are short-term in nature and
generally have less than a 30-day commitment. The Company is exposed to interest
rate risks primarily through borrowings under the Credit Agreement. Interest on
all borrowings is based upon several alternative rates as stipulated in the
Credit Agreement, including a fixed margin above LIBOR rate. The Company
believes that its interest rate risk is minimal as a hypothetical 10% increase
or decrease in interest rates in the associated debts variable rate would
not materially affect the Companys results from operations or cash flows.
The Company does not use derivative financial instruments in its investment
portfolio.

Foreign Currency Risk:

The Company enters into
some purchase obligations outside of the United States, which are predominately
settled in U.S. dollars and therefore the Company has only minimal exposure to
foreign currency exchange risks. The Company does not hedge against foreign
currency risks and believes that foreign currency exchange risk is immaterial.

In addition, the Company
operated 11 stores in Canada as of March 30, 2002. The Company believes its
foreign currency translation risk is minimal, as a hypothetical 10%
strengthening or weakening of the U.S. dollar relative to the Canadian dollar
would not materially affect the Companys results from operations or cash
flow.

Since fiscal year end 2001,
there have been no material changes in market risk exposures.
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|PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)     EXHIBIT INDEX
|----------------------------------------------------------------------------------------------

| | ExhibitNumber |  | Description | 
| | ------------- |  | ----------- | 

| | 15 |  | Letter re unaudited interim financial information | 
| | -- |  | ------------------------------------------------- | 

|(b)     Reports on Form 8-K:
|----------------------------

| | The
Company filed a Current Report on Form 8-K dated March 27, 2002, concerning the
employment agreement with an executive officer and supplemental executive
retirement plan and split dollar and collateral assignment between the Company
and an executive officer.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dated:  May 14, 2002 |  | LINENS N THINGS, INC.(Registrant)By:      WILLIAM T. GILES
Name: William T. Giles
Title:   Senior Vice President, Chief Financial Officer
            (Duly authorized officer and principal financial officer)
|-------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# EXHIBIT INDEX

| | ExhibitNumber |  | Description | 
| | ------------- |  | ----------- | 

| | 15 |  | Letter re unaudited interim financial information | 
| | -- |  | ------------------------------------------------- |