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 September 27, 1997

                         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 October 30, 1997
         -----------------------------    -------------------------------
         Common Stock, $0.01 par value                19,308,637


<PAGE>


                                      INDEX


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


     Consolidated Statements of Operations for the
        Thirteen Weeks and Thirty-Nine Weeks
          Ended September 27, 1997 and September 28, 1996                    3

     Consolidated Balance Sheets as of
        September 27, 1997, December 31, 1996 and 
          September 28, 1996                                                 4

     Consolidated Statements of Cash Flows for the
        Thirty-Nine Weeks Ended September 27, 1997 and 
          September 28, 1996                                                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 4 - Submission of Matters to a Vote of Security Holders           13

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

     Exhibit Index                                                          13


<PAGE>


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


<TABLE>
<CAPTION>
                                                          Thirteen Weeks Ended               Thirty-Nine Weeks Ended
                                                         --------------------------       -----------------------------
                                                        September 27,  September 28,      September 27,   September 28,
                                                           1997           1996               1997             1996
                                                        ------------   ------------       ------------    -------------
                                                                (Unaudited)                        (Unaudited)
<S>                                                     <C>             <C>                <C>            <C>          
Net sales                                                  $225,239     $180,438           $590,873       $ 466,254
Cost of sales, including buying and warehousing costs       135,993      111,280            360,792         290,345
                                                         -----------  -----------        -----------     ------------
Gross profit                                                 89,246       69,158            230,081         175,909

Selling, general and administrative expenses                 76,229       59,879            213,808         166,615
                                                         -----------  -----------        -----------     ------------

Operating profit                                             13,017        9,279             16,273           9,294

Interest expense, net                                            26          644                972           4,464
                                                         -----------  -----------        -----------     ------------

Income before provision for income taxes                     12,991        8,635             15,301           4,830

Provision for income taxes                                    5,459        3,669              6,429           2,061
                                                         -----------  -----------        -----------     ------------

Net income                                                $   7,532    $   4,966          $   8,872       $   2,769
                                                         ===========  ===========        ===========     ============

Per share of common stock:

Net income                                                    $0.38        $0.26              $0.45           $0.14
                                                         -----------  -----------        -----------     ------------

Weighted average shares outstanding                          19,913       19,268             19,792           19,268

</TABLE>


          See accompanying notes to consolidated financial statements.


<PAGE>


                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
       As of September 27, 1997, December 31, 1996 and September 28, 1996
                      (in thousands, except share amounts)


<TABLE>
<CAPTION>
                                                           September 27,        December 31,       September 28,
                                                                 1997               1996             1996
                                                           ------------         -----------         ------------ 
                                                           (Unaudited)                             (Unaudited)
<S>                                                          <C>                   <C>               <C> 
Assets
Current assets:
  Cash and cash equivalents                               $    15,719            $  26,914        $     2,899
  Accounts receivable, net                                     16,737               17,384             13,991
  Inventories                                                 225,716              202,134            206,764
  Prepaid expenses and other current assets                     9,174               10,360             10,119
                                                           ----------            ---------          ---------
Total current assets                                          267,346              256,792            233,773
  Property and equipment, net                                 149,771              138,508            137,262
  Goodwill, net                                                21,738               22,376             22,588
  Deferred charges and other noncurrent assets, net             5,789                6,281              6,178
                                                           ----------            ---------          ---------
Total assets                                               $  444,644            $ 423,957          $ 399,801
                                                           ==========            =========          =========

Liabilities and Shareholders' Equity 
Current liabilities:
  Accounts payable                                         $   98,605           $   92,529         $   80,774
  Accrued expenses and other current liabilities               65,754               53,207             34,896
  Due to related parties                                           --                   --             61,498
                                                           ----------      ---------------         ----------
Total current liabilities                                     164,359              145,736            177,168
  Long-term note                                                   --               13,500                 --
  Deferred income taxes and other
    long-term liabilities                                      17,528               14,994             13,176


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;
    19,308,262 issued and outstanding at
    September 27, 1997 and 19,267,758 at
    December 31, 1996                                            193                  193                 --
  Additional paid-in capital                                 204,347              200,189            172,382
  Retained earnings                                           58,217               49,345             37,075
                                                          -----------          -----------         ----------
Total shareholders' equity                                   262,757              249,727            209,457
                                                          -----------          -----------         ----------
Total liabilities and shareholders' equity                  $ 444,644            $ 423,957          $ 399,801
                                                          ===========          ===========         ==========



          See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>

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

                                                                      Thirty-Nine Weeks Ended
                                                                  September 27,         September 28,
                                                                          1997              1996
                                                                  -------------------   ------------
                                                                                (Unaudited)
<S>                                                                 <C>                  <C> 
Cash flows from operating activities:
   Net income                                                     $    8,872           $      2,769
   Adjustments to reconcile net income to
     net cash provided by (used in) operating activities:

       Depreciation and amortization                                  13,058                 10,760
       Deferred income taxes                                           2,495                  2,595
       Loss on disposal of assets                                      1,342                    602
       Changes in assets and liabilities:
            Decrease (increase) in accounts receivable                   647                    (36)
            Increase in inventories                                  (23,582)               (29,871)
            Decrease in prepaid expenses
              and other current assets                                 1,440                  1,032
            Increase in deferred charges
              and other noncurrent assets                                 --                   (100)
            Increase in accounts payable                              17,925                    295
            Increase (decrease) in accrued expenses
              and other liabilities                                   19,686                 (5,663)
                                                                 -----------            ------------
   Net cash provided by (used in) operating activities                41,883                (17,617)
                                                                 ------------            -----------

Cash flows from investing activities:
   Additions to property and equipment                               (24,534)               (39,915)
                                                                 ------------            -----------

Cash flows from financing activities:
   Decrease in due to related parties                                (10,000)               (57,154)
   Capital contributions by CVS                                           --                130,010
   Decrease in book overdrafts                                       (18,544)               (16,647)
                                                                  -----------          -------------
   Net cash (used in) provided by financing activities               (28,544)                56,209
                                                                  -----------          ------------
   Net decrease in cash and cash equivalents                         (11,195)                (1,323)
   Cash and cash equivalents at beginning of year                     26,914                  4,222
                                                                  ----------           ------------
Cash and cash equivalents at end of period                         $  15,719            $     2,899
                                                                  ==========            ===========

</TABLE>

          See accompanying notes to consolidated financial statements.


<PAGE>


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


1.  Business

Linens 'n Things, Inc. (formerly Bloomington,  MN., L.T., Inc.) and subsidiaries
(collectively the "Company") operated 170 stores, including 146 superstores,  in
36 states  across the United  States as of  September  27, 1997.  The  Company's
superstores  average  approximately  35,000 square feet while traditional stores
average approximately 10,000 square feet. The Company's stores emphasize a broad
assortment of home  textiles,  housewares  and home  accessories,  carrying both
national brand and private label goods.


2.  Basis of Presentation

The accompanying consolidated financial statements,  except for the December 31,
1996  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 September  27, 1997 and  September  28,
1996 and the results of operations for the respective  thirteen and  thirty-nine
weeks then ended and cash flows for the thirty-nine 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, 1996,  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, 1996 consolidated  balance sheet amounts have been derived from
the Company's audited consolidated balance sheet amounts.


3.  Initial Public Offering

The Company was a wholly-owned  subsidiary of CVS Corporation ("CVS"),  formerly
Melville  Corporation,  until  November 26, 1996,  when CVS completed an initial
public  offering  ("IPO") of 13,000,000  shares of the  Company's  common stock.
Immediately  following the IPO, CVS owned  approximately  32.5% of the Company's
outstanding common stock, having retained 6,267,758 shares. On May 30, 1997, CVS
sold  6,267,658  shares of the Company's  common stock in a secondary  offering,
retaining 100 shares of the Company's common stock.

During 1996, CVS acquired 100 shares of common stock of Linens 'n Things Center,
Inc. ("LNT Center"), a newly formed California corporation, for $130,010,000. In
June,  1996,  CVS  contributed  all  outstanding   shares  of  common  stock  of
Bloomington,  MN.,  L.T.,  Inc. to LNT Center.  In addition,  CVS made a capital
contribution  of $28,000,000 to LNT Center during October,  1996.  Subsequently,
CVS contributed  all outstanding  shares of common stock of LNT Center to Linens
'n  Things,  Inc.,  a  newly  formed  Delaware  corporation.   The  accompanying
consolidated financial statements are presented as if Linens 'n Things, Inc. had
existed and owned LNT Center and Bloomington, MN., L.T., Inc. throughout 1996.

Immediately  prior to the consummation of the IPO, the authorized  capital stock
of the Company was changed from 100 shares of common  stock,  par value $.01 per
share, to 60 million shares of common stock,  par value $.01 per share, and each
issued and  outstanding  share of common  stock was  converted  into  192,677.58
shares of common stock.


<PAGE>


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


4.  Short-Term Borrowing Arrangements

Prior to the IPO, all  financing  was  provided to the Company by CVS.  Interest
rates  charged  on  borrowings  from CVS were  based  on CVS'  commercial  paper
borrowing  rates.  In connection with the IPO, the Company repaid all short-term
indebtedness to CVS and entered into a three-year, $125 million senior revolving
credit   facility   agreement   (the  "Credit   Agreement")   with  third  party
institutional   lenders.   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
September 27, 1997, the Company was in compliance  with all terms and conditions
of the  Credit  Agreement.  The  Credit  Agreement  allows  for $20  million  in
borrowings from uncommitted lines of credit outside of the Credit Agreement.  As
of September 27, 1997, the Company had no borrowings  under the Credit Agreement
or against the uncommitted  lines of credit.  The average  short-term  borrowing
rate for the thirty-nine week period ended September 27, 1997 was 6.4%.

5.  Long-Term Note

In  conjunction  with the IPO,  the Company  issued a four-year,  $13.5  million
subordinated  note (the  "Note") to CVS.  The Note  consisted  of a $10  million
tranche  ("Tranche  A") and a $3.5  million  tranche  ("Tranche  B").  The  Note
contained  no principal  amortization  prior to maturity in December  2000,  and
required  quarterly  interest  payments  at  the  90-day  LIBOR  rate  plus  the
applicable  spread under the Credit  Agreement  described  above.  The Note also
provided for a reduction of principal by CVS, at varying amounts, based upon the
proceeds from any sales of the  Company's  common stock by CVS together with the
market value of the common stock that CVS continued to own at December 31, 1997.
On May 30, 1997,  CVS sold  6,267,658  shares of its remaining  shares of Common
Stock.  As a result of the proceeds  from the  secondary  offering,  CVS reduced
Tranche B by 100% and therefore  the $3.5 million was  converted  into equity by
the  Company  at the  completion  of the sale.  On July 21,  1997,  the  Company
pre-paid Tranche A utilizing cash flows from  operations.  The Note contained no
pre-payment  penalties.  The  average  borrowing  rate  for  the  Note  for  the
thirty-nine week period ended September 27, 1997 was 7.2%.


6.  Recent Accounting Pronouncement

In February 1997, Statement of Financial Accounting Standards No. 128, "Earnings
per Share" ("SFAS No. 128") was issued.  SFAS No. 128  simplifies  the standards
for  computing  earnings per share,  and makes the United  States  standards for
computing  earnings per share more comparable to international  standards.  SFAS
No. 128 requires the  presentation of "basic" earnings per share (which excludes
dilution)  and  "diluted"  earnings  per share.  SFAS No. 128 is  effective  for
financial  statements  issued for periods  ending  after  December  15, 1997 and
requires  restatement of prior period earnings per share presented.  The Company
does not  believe  the  adoption  of SFAS No.  128 in  fiscal  1997  will have a
significant impact on the Company's reported earnings per share.


<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 September 27, 1997 and  September 28, 1996,  and the related
consolidated  statements of  operations  for the thirteen and  thirty-nine  week
periods then ended and the related consolidated statements of cash flows for the
thirty-nine week periods ended September 27, 1997 and September 28, 1996.
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, 1996 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, 1997,  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, 1996, is fairly presented, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.



/S/ KPMG Peat Marwick LLP

New York, New York
October 15, 1997


<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  September 27, 1997  Compared  with  Thirteen  Weeks Ended
September 28, 1996

Net sales  increased  24.8% to  $225.2  million  for the  thirteen  weeks  ended
September 27, 1997,  compared with $180.4 million for the same period last year,
primarily as a result of new store openings since September 28, 1996. Comparable
store net sales for the thirteen  weeks ended  September 27, 1997 increased 8.0%
at the  Company's  superstore  locations  and 6.7% for the  Company  as a whole.
Traditional  store net sales  were  less than 7% of total net sales  during  the
thirteen  weeks ended  September  27,  1997,  and will  continue to  represent a
declining  percentage  of total net sales as more  superstores  are  opened  and
traditional stores are closed. Comparable store net sales were strong across all
major geographic  regions.  The Company's  average net sales per superstore were
$5.8 million for the  fifty-two  weeks ended  September  27, 1997,  up from $5.4
million for the same period in 1996. The Company's average  superstore net sales
per square foot were $175 for the fifty-two  weeks ended  September 27, 1997, up
from $170 for the fifty-two week period ending September 28, 1996.

During the thirteen  weeks ended  September 27, 1997,  the Company  opened eight
superstores and closed six stores, as compared with opening four superstores and
closing  three stores  during the thirteen  weeks ended  September  28, 1996. At
September  27,  1997,  the  Company  operated  170  stores,  of  which  146 were
superstores,  as compared  with 156 stores,  of which 117 were  superstores,  at
September 28, 1996. Store square footage increased 25% to 5,201,000 at September
27, 1997 compared with 4,147,000 at September 28, 1996.

For the  thirteen  weeks  ended  September  27,  1997,  net  sales  of  "things"
merchandise increased  approximately 40% over the same period in 1996, while net
sales of "linens" merchandise  increased  approximately 20% over the same period
in 1996.  This is  consistent  with  the  Company's  strategy  to  increase  the
penetration  of  "things"  merchandise.  The  increase  in net sales of "things"
merchandise  resulted  primarily  from the  growth in the  number of  superstore
locations,  which carry a larger line of  "things"  merchandise,  as well as the
overall expansion of the product categories in existing stores.

Gross profit for the thirteen weeks ended  September 27, 1997 was $89.2 million,
or 39.6% of net sales,  compared with $69.2 million,  or 38.3% of net sales, for
the same period in 1996.  The  increase in gross profit was related to increased
penetration  of  "things"  business,  which has  higher  margins  than  "linens"
business,   reduced   freight  costs  from  the   leveraging  of  the  Company's
distribution  center and overall  improved  selling  mix.  Gross margin for both
"linens"  and  "things"  merchandise  increased  consistent  with the  Company's
consolidated results.

Selling,  general and  administrative  expenses  ("SG&A") for the thirteen weeks
ended  September 27, 1997 were $76.2  million,  or 33.8% of net sales,  compared
with $59.9  million,  or 33.2% of net sales,  for the same period in 1996.  This
increase is primarily a function of the number of store  openings and  closings.
The increase is also due to immature  stores having higher  occupancy costs as a
percent of net sales,  reflecting  36 stores opened in 1996 and 16 stores opened
through September 27, 1997.

Operating  profit for the thirteen  weeks ended  September 27, 1997 increased to
$13.0 million, or 5.8% of net sales,  compared with $9.3 million, or 5.1% of net
sales, for the same period in 1996.


<PAGE>


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


Net interest  expense  (including  commitment  fees in connection  with the $125
million Credit  Agreement)  for the thirteen weeks ended  September 27, 1997 was
$26,000 compared with $644,000 for the same period in 1996. The Company was in a
net average  investment  position of $10.6 million (in cash equivalents) for the
thirteen weeks ended September 27, 1997 as compared with net average  borrowings
of $30.2  million  for the same  period in 1996.  The  reduction  in net average
borrowings is a result of the capital  contributions  from CVS of $158.0 million
in 1996, prior to the IPO, as well as improved operating performance.
See "Liquidity and Capital Resources."


The Company's income tax expense for the thirteen weeks ended September 27, 1997
was $5.5 million as compared with $3.7 million for the same period in 1996.

Net income for the thirteen  weeks ended  September  27, 1997  increased to $7.5
million or $0.38 per share,  compared with $5.0 million or $0.26 per share,  for
the same period in 1996.


Thirty-Nine Weeks Ended September 27, 1997 Compared with Thirty-Nine Weeks Ended
September 28, 1996

Net sales  increased  26.7% to $590.9  million for the  thirty-nine  weeks ended
September  27, 1997  compared  with $466.3  million for the same period in 1996,
primarily as a result of new store openings since September 28, 1996. Comparable
store net sales for the  thirty-nine  weeks ended  September 27, 1997  increased
7.8% at the Company's  superstore locations and 6.2% for the Company as a whole.
Traditional  store net sales  were  less than 7% of total net sales  during  the
thirty-nine  weeks ended  September  27, 1997,  and will continue to represent a
declining  percentage  of total net sales as more  superstores  are  opened  and
traditional stores are closed.

During the  thirty-nine  weeks ended  September  27,  1997,  the Company  opened
sixteen superstores and closed fifteen stores, as compared with opening eighteen
superstores  and closing  seventeen  stores during the  thirty-nine  weeks ended
September 28, 1996.

For the  thirty-nine  weeks  ended  September  27,  1997,  net sales of "things"
merchandise increased  approximately 40% over the same period in 1996, while net
sales of "linens" merchandise  increased  approximately 20% over the same period
in 1996.  This is  consistent  with  the  Company's  strategy  to  increase  the
penetration  of  "things"  merchandise.  The  increase  in net sales of "things"
merchandise  resulted  primarily  from the  growth in the  number of  superstore
locations,  which carry a larger line of  "things"  merchandise,  as well as the
overall expansion of the product categories in existing stores.

Gross  profit for the  thirty-nine  weeks  ended  September  27, 1997 was $230.1
million,  or 38.9% of net sales,  compared with $175.9 million,  or 37.7% of net
sales,  for the same period in 1996. The improvement in gross profit was related
to an increase in all  components of margin which  included  lower freight costs
from the leveraging of the Company's  distribution  center,  and lower clearance
markdowns.  Gross margin for both  "linens" and "things"  merchandise  increased
consistent with the Company's consolidated results.

SG&A  expenses for the  thirty-nine  weeks ended  September 27, 1997 were $213.8
million,  or 36.2% of net sales,  compared with $166.6 million,  or 35.7% of net
sales for the same period in 1996.  The  increase in SG&A is  attributed  to the
number of store  openings  and  closings.  The  increase is also due to immature
stores having higher  occupancy  costs as a percent of net sales,  reflecting 36
stores  opened in 1996 and 16 stores  opened  through  September  27,  1997.  In
addition,  during the  thirty-nine  weeks ended  September 28, 1996, the Company
recorded a $0.5 million insurance recovery gain associated with damage to one of
its  stores  caused by severe  winter  conditions.  The  Company  also  incurred
additional  expenses  operating as a stand alone  company that were not incurred
during the same period in 1996.


<PAGE>


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


Operating profit for the thirty-nine weeks ended September 27, 1997 increased to
$16.3 million,  or 2.8% of net sales,  compared with $9.3 million or 2.0% of net
sales for the same period in 1996.

Net interest  expense  (including  commitment  fees in connection  with the $125
million Credit Agreement) for the thirty-nine weeks ended September 27, 1997 was
$1.0  million  compared  with $4.5 million  during the same period in 1996.  The
reduction  in  net  interest  expense  is  due to a  reduction  in  net  average
borrowings,  which were $7.5 million for the  thirty-nine  weeks ended September
27,  1997 as  compared  with  $97.0  million  for the same  period in 1996.  The
reduction  in net average  borrowings  is a result of the capital  contributions
from CVS of  $158.0  million  in 1996,  prior  to the IPO,  as well as  improved
operating performance. See "Liquidity and Capital Resources."

The Company's  income tax expense for the thirty-nine  weeks ended September 27,
1997 was $6.4 million compared with $2.1 million for the same period in 1996.

Net income for the thirty-nine  weeks ended September 27, 1997 was $8.9 million,
or $0.45 per share, compared with $2.8 million, or $0.14 per share, for the same
period in 1996.

Liquidity and Capital Resources

The Company's  capital  requirements  are primarily  capital  investments in new
stores,  new store  inventory  purchases  and seasonal  working  capital.  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 $125 million  three-year  senior  revolving  credit
facility  and a $20 million  uncommitted  line of credit.  Management  currently
believes that the Company's  cash flows from  operations,  the revolving  credit
facility  and  the  uncommitted  lines  of  credit  will be  sufficient  to fund
anticipated  capital  expenditures  and  working  capital  requirements  in  the
foreseeable future.

Net cash  provided  by  operating  activities  for the  thirty-nine  weeks ended
September  27, 1997 was $41.9  million  compared with net cash used in operating
activities  of $17.6  million for the same period in 1996.  The  increase in net
cash provided by operating  activities was due to improved inventory  management
and an increase in net income. The Company has reduced inventory per square foot
by 13% compared to last year resulting in an overall increase in inventory of 9%
compared to a sales increase of 26.7%. In addition  accounts  payable  increased
over last year due to increased inventory levels and timing of vendor payments.

Net cash  used in  investing  activities  during  the  thirty-nine  weeks  ended
September  27, 1997 was $24.5  million  compared with $39.9 million for the same
period  in 1996.  The  decrease  from the  thirty-nine  week  period  in 1996 is
associated with the timing and number of the Company's new store openings.

Net cash  used in  financing  activities  during  the  thirty-nine  weeks  ended
September  27,  1997 was  $28.5  million  compared  with net  cash  provided  by
financing activities of $56.2 million for the same period in 1996. Net cash used
during the thirty-nine  weeks ended September 27, 1997 was the result  primarily
of the timing of the settlement of vendor  payments as well as the prepayment of
the $10 million CVS Note. Net cash provided during the  thirty-nine  weeks ended
September 28, 1996 was the result primarily of CVS' capital  contribution  which
was used to repay the intercompany debt.

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.


<PAGE>


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


Seasonality

The  Company's   business  is  subject  to  substantial   seasonal   variations.
Historically,  the Company has realized a  significant  portion of its net sales
and substantially all of its net income for the year during the third and fourth
quarters, with a majority of net sales and net income for such quarters realized
in the fourth quarter.  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.



Forward-Looking Statements

The  foregoing  contains  forward-looking  statements  within the meaning of The
Private  Securities  Litigation  Reform  Act  of  1995.  The  statements  may be
identified  by such  forward-looking  terminology  such as "expect",  "believe",
"may",  "intend"  or  similar  statements  or  variations  of such  terms.  Such
forward-looking  statements  involve certain risks and  uncertainties  including
levels of sales,  store traffic,  acceptance of product  offerings and fashions,
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 4 - Submission  of Matters to a Vote of Security Holders


On May 6, 1997,  the Company  held its Annual  Meeting of  Shareholders.  At the
Annual  Meeting,  Philip E. Beekman was elected as a director,  with  14,861,496
shares voted for and 1,013,155  shares for which a vote was withheld.  Directors
whose term of office  continued  following  the meeting  were:  Norman  Axelrod,
Charles C. Conaway and Stanley P. Goldstein.  Also at the Annual  Meeting,  on a
proposal to approve the adoption of the Company's  1996  Incentive  Compensation
Plan for purposes of Section  162(m) of the  Internal  Revenue  Code,  9,750,093
votes were cast in favor of such proposal, 4,946,361 votes were cast against and
5,395 votes abstained.



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:

         No Current  Reports on Form 8-K were  filed by the  Company  during the
         thirteen week period ended September 27, 1997.






                                    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)



                               By:---------------------------------------------
                                  James M. Tomaszewski
                                 Senior Vice President, Chief Financial Officer


Date:   November 12, 1997