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 26, 1998

                         Commission File Number 1-12381


                             LINENS 'N THINGS, INC.
             (Exact name of registrant as specified in its charter)


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



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


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



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



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

               Class                             Outstanding at November 5, 1998

  Common Stock, $0.01 par value                            38,941,705


<PAGE>

<TABLE>
<CAPTION>
                                      INDEX


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

     <S>                                                                                 <C>
     Consolidated Statements of Operations for the
       Thirteen Weeks and Thirty-Nine Weeks
       Ended September 26,1998 and September 27, 1997                                         3

     Consolidated Balance Sheets as of September 26, 1998,
       December 31, 1997 and September 27, 1997                                               4

     Consolidated Statements of Cash Flows for the
        Thirty-Nine Weeks Ended September 26, 1998
       and September 27, 1997                                                                 5

     Notes to Consolidated Financial Statements                                             6-7

     Independent Auditors' Review Report                                                      8

     Management's Discussion and Analysis of
        Financial Condition and Results of Operations                                      9-13


Part II. - Other Information                                                                 14

     Item 6 - Exhibits and Reports on Form 8-K                                               14

     Exhibit Index                                                                           14

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


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


                                                              Thirteen Weeks Ended               Thirty-Nine Weeks Ended
                                                        ---------------------------------- -------------------------------------
                                                         September 26,    September 27,         September 26,    September 27,
                                                             1998              1997                 1998             1997
                                                        ---------------- -----------------     ---------------- ----------------
                                                                    (Unaudited)                         (Unaudited)
<S>                                                            <C>               <C>                  <C>              <C>   
Net sales                                                      $278,642          $225,239             $718,773         $590,873

Cost of sales, including buying and warehousing costs           167,450           135,993              435,375          360,792
                                                        ---------------- -----------------     ---------------- ----------------

Gross profit                                                    111,192            89,246              283,398          230,081

Selling, general and administrative expenses                     93,168            76,229              258,480          213,808
                                                        ---------------- -----------------     ---------------- ----------------

Operating profit                                                 18,024            13,017               24,918           16,273

Interest expense, net                                               105                26                    5              972
                                                        ---------------- -----------------     ---------------- ----------------

Income before provision for income taxes                         17,919            12,991               24,913           15,301

Provision for income taxes                                        6,901             5,459                9,594            6,429
                                                        ---------------- -----------------     ---------------- ----------------

Net income                                                    $  11,018         $   7,532              $15,319         $  8,872
                                                        ================ =================     ================ ================

Per share of common stock:

Basic
   Net income                                                     $0.28             $0.20                $0.39            $0.23

   Weighted average shares outstanding                           38,955            38,617               38,868           38,563

Diluted
   Net income                                                     $0.27             $0.19                $0.38            $0.23

   Weighted average shares outstanding                           40,508            39,676               40,387           39,423


</TABLE>


See accompanying notes to consolidated financial statements.


<PAGE>


<TABLE>
<CAPTION>

                     LINENS 'N THINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
       As of September 26, 1998, December 31, 1997 and September 27, 1997
                      (in thousands, except share amounts)

                                                                    September 26,         December 31,          September 27,
                                                                        1998                  1997                  1997
                                                                  ------------------    -----------------    -------------------
                                                                     (Unaudited)                                (Unaudited)
<S>                                                                 <C>                 <C>                   <C>              
ASSETS
    Current assets:
      Cash and cash equivalents                                     $        15,847     $         39,882      $          15,719
      Accounts receivable, net                                               19,810               13,764                 16,737
      Inventories                                                           294,161              223,188                225,716
      Prepaid expenses and other current assets                              16,586               13,058                  9,174
                                                                  ------------------    -----------------    -------------------
    Total current assets                                                    346,404              289,892                267,346

    Property and equipment, net                                             164,093              154,480                149,771
    Goodwill, net                                                            20,889               21,526                 21,738
    Deferred charges and other noncurrent assets, net                         5,477                6,201                  5,789
                                                                  ------------------    -----------------    -------------------

Total assets                                                        $       536,863      $       472,099       $        444,644
                                                                  ==================    =================    ===================

LIABILITIES AND SHAREHOLDERS' EQUITY 
    Current liabilities:
      Accounts payable                                              $       136,807     $         98,418      $          98,605
      Accrued expenses and other current liabilities                         66,741               68,099                 60,909
                                                                  ------------------    -----------------    -------------------
    Total current liabilities                                               203,548              166,517                159,514

    Deferred income taxes and other long-term liabilities                    34,355               25,547                 22,373

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

      Common stock, $.01 par value;
           60,000,000 shares authorized;
           38,975,698 issued and 38,922,365 outstanding
           at September 26, 1998, 38,633,840 issued and
           outstanding at December 31, 1997 and 38,616,524 at
           September 27, 1997                                                   390                  386                    386

      Additional paid-in capital                                            209,507              204,514                204,154
      Retained earnings                                                      90,453               75,135                 58,217
           Treasury stock, at cost; 53,333 shares  at
             September 26, 1998                                              (1,390)                   --                     --
                                                                  ------------------    -----------------    -------------------
    Total shareholders' equity                                              298,960              280,035                262,757

Total liabilities and shareholders' equity                          $       536,863      $       472,099      $         444,644
                                                                  ==================    =================    ===================

</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>


<TABLE>
<CAPTION>

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




                                                                         Thirty-Nine Weeks Ended
                                                                 -----------------------------------------
                                                                   September 26,          September 27,
                                                                        1998                  1997
                                                                 -------------------    ------------------
                                                                               (Unaudited)
<S>                                                               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                        $         15,319      $          8,872
   Adjustments to reconcile net income to net
   cash (used in) provided by operating activities:
     Depreciation and amortization                                          15,766                13,058
     Deferred income taxes                                                   2,056                 2,495
     Loss on disposal of assets                                                652                 1,342
     Changes in assets and liabilities:
       (Increase) decrease in accounts receivable                           (6,046)                  647
       Increase in inventories                                             (70,973)              (23,582)
       (Increase) decrease in prepaid expenses
               and other current assets                                     (2,889)                1,440
       Decrease in deferred charges                                            197                    --
       Increase in accounts payable                                         22,836                17,925
       Increase in accrued expenses and other
               liabilities                                                  12,565                19,686
                                                                 -------------------    ------------------

   Net cash (used in) provided by operating activities                     (10,517)               41,883
                                                                 -------------------    ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment                                     (24,867)              (24,534)
                                                                 -------------------    ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in due to related parties                                          --                (10,000)
   Proceeds from common stock issued under
         stock incentive plans                                               4,997                    --
   Purchase of treasury stock                                               (1,390)                   --
   Increase (decrease) in book overdrafts                                    7,742               (18,544)
                                                                 -------------------    ------------------
   Net cash provided by (used in) financing activities                      11,349               (28,544)
                                                                 -------------------    ------------------

   Net decrease in cash and cash equivalents                               (24,035)              (11,195)
   Cash and cash equivalents at beginning of year                           39,882                26,914
                                                                 -------------------    ------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $         15,847      $         15,719
                                                                 ===================    ==================


</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>


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


1.  Basis of Presentation

The accompanying consolidated financial statements,  except for the December 31,
1997  consolidated  balance sheet, are unaudited.  In the opinion of management,
the  accompanying  consolidated  financial  statements  contain all  adjustments
(consisting of only normal recurring  accruals)  necessary to present fairly the
financial  position of the Company as of September  26, 1998 and  September  27,
1997 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, 1997,  included in the  Company's  Annual Report on Form 10-K filed with the
Securities and Exchange Commission.  All significant  intercompany  accounts and
transactions have been eliminated.

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

2.  Short-Term Borrowing Arrangements

The Company has  available a three-year,  $90 million  senior  revolving  credit
facility  agreement  (the  "Credit  Agreement")  with third party  institutional
lenders expiring March 31, 2001. The amount of borrowings can be increased up to
$125  million  provided  certain  terms and  conditions  contained in the Credit
Agreement are met. The Credit Agreement  contains certain  financial  covenants,
including those relating to the  maintenance of a minimum  tangible net worth, a
minimum fixed charge coverage ratio, and a maximum leverage ratio, as defined in
the Credit  Agreement.  Interest  on all  borrowings  is  determined  based upon
several alternative rates as set forth in the Credit Agreement.  As of September
26, 1998,  the Company was in  compliance  with all terms and  conditions of the
Credit  Agreement.  The Credit  Agreement  also  allows for up to $25 million in
borrowings from uncommitted lines of credit outside of the Credit Agreement.  As
of September 26, 1998, the Company had no borrowings  under the Credit Agreement
or against the uncommitted lines of credit.

3.  Long-Term Note

In  conjunction  with its 1996 initial  public  offering,  the Company  issued a
four-year,  $13.5  million  subordinated  note  (the  "Note")  to CVS.  The Note
provided for  forgiveness  by CVS, at varying  amounts,  based upon the proceeds
from any sales by CVS of the  Company's  common stock  together  with the market
value of any common stock that CVS continued to own at December 31, 1997. In May
1997, CVS sold 6,267,658 of its remaining shares of Common Stock, on a pre-split
basis, representing substantially all of its holdings (at December 31, 1997, CVS
owned no shares of the Company's common stock).  As a result of the net proceeds
received,  $3.5 million of the Note was forgiven  and  contributed  as equity by
CVS.  In July 1997,  the  Company  prepaid the  remaining  $10.0  million to CVS
utilizing  cash  flows  from  operations.  The  Note  contained  no  pre-payment
penalties.



<PAGE>


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


4.  Recent Accounting Pronouncement

Effective  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 128,  "Earnings per Share" which  requires a
dual  presentation of earnings per share--basic and diluted.  Basic earnings per
share has been computed by dividing net income by the weighted average number of
shares  outstanding  of 38,955,000  and  38,617,000 for the thirteen weeks ended
September 26, 1998 and  September 27, 1997,  respectively,  and  38,868,000  and
38,563,000 for the thirty-nine  weeks ended September 26, 1998 and September 27,
1997, respectively. Diluted earnings per share has been computed by dividing net
income  by the  weighted-average  number  of shares  outstanding  including  the
dilutive   effects  of  stock   options   and   deferred   stock   grants.   The
weighted-average   shares   outstanding  for  the  diluted  earnings  per  share
calculation  were  40,508,000  and  39,676,000  for  the  thirteen  weeks  ended
September 26, 1998 and  September 27, 1997,  respectively,  and  40,387,000  and
39,423,000 for the thirty-nine  weeks ended September 26, 1998 and September 27,
1997, respectively.


5.  Stockholders' Equity

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


6.  Deferred Compensation Plan

The Company has a deferred  compensation plan (the "Plan") established to enable
key  employees  of  the  Company,   as  designated  by  the  Company,  to  defer
compensation,  including stock and stock  denominated  awards.  Participation is
voluntary  and  participants  can  elect  to  make  contributions  to the  Plan.
Participants are 100% vested in their own deferrals to the Plan at all times. At
September 26, 1998,  the liability  under the Plan,  which is reflected in other
long-term liabilities, was $4.0 million.




<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 26, 1998 and  September 27, 1997,  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 26, 1998 and September 27, 1997. These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.

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

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

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


KPMG Peat Marwick LLP



New York, New York
October 13, 1998






<PAGE>



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


The following  discussion and analysis  should be read in  conjunction  with the
consolidated financial statements of the Company and the notes thereto appearing
elsewhere in this document.

Results of Operations

Thirteen  Weeks Ended  September 26, 1998  Compared  with  Thirteen  Weeks Ended
September 27, 1997

Net sales  increased  23.7% to  $278.6  million  for the  thirteen  weeks  ended
September  26,  1998,  up from  $225.2  million  for the  same  period  in 1997,
primarily as a result of new store  openings  since  September 27, 1997.  During
1998,  the  Company  shifted  the  timing of its  semi-annual  clearance  event,
normally  held in June, to the Fall season.  Comparable  store net sales for the
thirteen weeks ended September 26, 1998 were 11.2% as compared with 6.7% for the
same period last year. Taking into account the shift in the clearance event from
the second quarter to the third quarter, the combined comparable store net sales
for the second and third  quarters  were 8.8% as compared with 6.4% for the same
time period last year. Comparable store net sales as a whole continued to remain
strong across most major geographic regions.

During the  thirteen  weeks ended  September  26, 1998,  the Company  opened six
superstores  and closed one store,  compared with opening eight  superstores and
closing six stores during the same period in 1997.  At September  26, 1998,  the
Company operated 183 stores,  of which 169 were  superstores,  compared with 170
stores,  of which 146 were  superstores,  at September  27,  1997.  Store square
footage  increased  approximately  15.2% to  5,990,000  at  September  26,  1998
compared with 5,201,000 at September 27, 1997.

For the  thirteen  weeks  ended  September  26,  1998,  net  sales  of  "things"
merchandise increased  approximately 30% over the same period in 1997, while net
sales of "linens" merchandise  increased  approximately 20% over the same period
in 1997.  This is  consistent  with  the  Company's  strategy  to  increase  the
penetration  of  "things"  merchandise.  The  increase  in net sales of "things"
merchandise  is the result of the continued  maturation of this business as well
as the overall expansion of the product categories in existing stores.

Gross profit for the thirteen weeks ended September 26, 1998 was $111.2 million,
or 39.9% of net sales,  compared with $89.2 million,  or 39.6% of net sales, for
the same period in 1997.  The  increase  in gross  profit was  primarily  due to
improvements  in the selling  mix.  These  improvements  were offset by a slight
increase in markdowns  due to the shift in the  clearance  event from the second
quarter to the third quarter as well as increased freight costs that were due to
timing of receipts.

Selling,  general and  administrative  expenses  ("SG&A") for the thirteen weeks
ended  September 26, 1998 were $93.2  million,  or 33.4% of net sales,  compared
with $76.2  million,  or 33.8% of net sales,  for the same period in 1997.  This
decrease as a percentage of net sales is primarily a function of increased sales
leverage  through  strong  comparable  store net sales  coupled with fewer store
openings and closings  than in the same period in 1997.  However,  these savings
were offset by additional  selling  expense as the Company  continues to improve
guest  service  levels  through  increased  payroll.   Management  believes  the
improvement in guest service has contributed to the strong  comparable store net
sales performance.

Operating  profit for the thirteen  weeks ended  September 26, 1998 increased to
$18.0 million, or 6.5% of net sales, compared with $13.0 million, or 5.8% of net
sales, for the same period in 1997.




<PAGE>



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


The Company incurred net interest expense of approximately  $105,000  (including
commitment fees in connection  with the Company's $90 million credit  agreement)
for the thirteen  weeks ended  September 26, 1998,  compared with  approximately
$26,000 for the same period in 1997. The slight increase in net interest expense
compared  with the same  period in 1997 was  primarily  due to the fact that the
Company was in a net average borrowing position of $1.6 million for the thirteen
weeks ended September 26, 1998,  compared with a net average investment position
of $10.6 million for the same period in 1997.  This increase was offset  through
lower  commitment fees from  renegotiation  of the $90 million credit  agreement
that  was  amended   effective  March  31,  1998.  See  "Liquidity  and  Capital
Resources."

The Company's income tax expense for the thirteen weeks ended September 26, 1998
was $6.9  million as  compared  with $5.5  million  for the same period in 1997.
Through tax planning initiatives, the Company has reduced its effective tax rate
to  approximately  38.5% for the year ending  December 31, 1998,  compared  with
42.0% for the year ended December 31, 1997.

Net income for the thirteen  weeks ended  September 26, 1998  increased to $11.0
million or $0.27 per share,  compared with $7.5 million, or $0.19 per share, for
the same period in 1997. Both per share amounts are adjusted for the stock split
as indicated in Note 5 to the consolidated financial statements.

Thirty-Nine Weeks Ended September 26, 1998 Compared with Thirty-Nine Weeks Ended
September 27, 1997

Net sales  increased  21.6% to $718.8  million for the  thirty-nine  weeks ended
September  26, 1998  compared  with $590.9  million for the same period in 1997,
primarily as a result of new store openings since September 27, 1997. Comparable
store net sales for the  thirty-nine  weeks ended  September 26, 1998  increased
8.4%  compared  with 6.2% for the same  period in 1997.  During the  thirty-nine
weeks ended  September 26, 1998, the Company opened 17 superstores and closed 10
stores,  compared with opening 16  superstores  and closing 15 stores during the
same period in 1997.

For the  thirty-nine  weeks  ended  September  26,  1998,  net sales of "things"
merchandise increased  approximately 30% over the same period in 1997, while net
sales of "linens" merchandise  increased  approximately 20% over the same period
in 1997.  This is  consistent  with  the  Company's  strategy  to  increase  the
penetration  of  "things"  merchandise.  The  increase  in net sales of "things"
merchandise is the result of the continued maturation of this business,  as well
as the overall expansion of the product categories in existing stores.

Gross  profit for the  thirty-nine  weeks  ended  September  26, 1998 was $283.4
million,  or 39.4% of net sales,  compared with $230.1 million,  or 38.9% of net
sales,  for the same period in 1997.  The  increase  in gross  profit was due to
improvements in the selling mix as well as lower markdowns.  These  improvements
were partially offset by a slight increase in freight expense as a percentage of
net sales.  Gross margin for both  "linens" and "things"  merchandise  increased
consistent with the Company's consolidated results.

SG&A  expenses for the  thirty-nine  weeks ended  September 26, 1998 were $258.5
million,  or 36.0% of net sales,  compared with $213.8 million,  or 36.2% of net
sales,  for the same period in 1997.  The SG&A expense rate for the  thirty-nine
weeks  ended  September  26,  1998  was  primarily  leveraged  through  a strong
comparable  store net sales increase as well as fewer store  closings.  This has
been offset in part by additional  selling expenses as the Company  continues to
improve guest service  levels,  as well as $1.0 million of expenses  relating to
the  implementation  of the tax  planning  initiatives  designed  to reduce  the
effective tax rate.


<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 26, 1998 increased to
$24.9 million,  or 3.5% of net sales, as compared with $16.3 million, or 2.8% of
net sales, for the same period in 1997.

Net interest expense (including commitment fees in connection with the Company's
$90 million credit agreement) for the thirty-nine weeks ended September 26, 1998
was approximately  $5,000 compared with  approximately  $972,000 during the same
period in 1997. The savings in interest expense compared with the same period in
1997  was  primarily  due to the  fact  that the  Company  was in a net  average
investment  position of $7.7 million during the  thirty-nine  week period ending
September  26, 1998 as compared  with a net average  borrowing  position of $7.5
million for the same period in 1997. Also contributing to the savings were lower
fees from  renegotiation  of the $90 million  credit  agreement that was amended
effective March 31, 1998. The reduction in net average borrowings is a result of
the elimination of the $13.5 million note to CVS ($10.0 million payment and $3.5
million  forgiveness from CVS), as well as improved operating  performance.  See
"Liquidity and Capital Resources."

The Company's  income tax expense for the thirty-nine  weeks ended September 26,
1998 was $9.6  million  compared  with $6.4 million for the same period in 1997.
Through tax planning initiatives, the Company has reduced its effective tax rate
to  approximately  38.5% for the year ending December 31, 1998, as compared with
42.0% for the year ended December 31, 1997.

Net income for the thirty-nine weeks ended September 26, 1998 was $15.3 million,
or $0.38 per share, compared with $8.9 million, or $0.23 per share, for the same
period in 1997.

Liquidity and Capital Resources

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

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

Net cash used in operating  activities for the thirty-nine weeks ended September
26,  1998  was  $10.5  million  compared  with net cash  provided  by  operating
activities  of  $41.9  million  for the same  period  in 1997.  This  change  is
primarily a result of an increase in inventory levels of 30% over the prior year
offset by an increase in accounts payable.  The increase in inventory  primarily
reflects the opening of new stores  since the same period last year,  as well as
the Company's decision to maintain and improve its in-stock  position,  which is
consistent with the Company's  approach to improve guest service.  Excluding the
impact  of new  stores,  the  increase  in  inventory,  which was done both on a
category  basis  as  well  as a  store  basis,  was in  response  to the  strong
comparable store net sales increase the Company has achieved throughout 1998.

Net cash  used in  investing  activities  during  the  thirty-nine  weeks  ended
September  26, 1998 was $24.9  million  compared with $24.5 million for the same
period in 1997. The slight  increase is associated with the timing and number of
the Company's new store openings.



<PAGE>



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


Net cash provided by financing  activities  during the  thirty-nine  weeks ended
September  26, 1998 was $11.3  million  compared with net cash used in financing
activities  of $28.5  million  for the same  period in 1997.  Net cash  provided
during the  thirty-nine  weeks ended September 26, 1998 was primarily the result
of the timing and settlement of vendor payments as well as the proceeds received
from common stock issued under stock incentive  plans.  Net cash used during the
thirty-nine  weeks  ended  September  27, 1997 was  primarily  the result of the
timing and settlement of vendor payments as well as the $10.0 million payment of
the CVS note.

Year 2000

The Company has  conducted a  comprehensive  review of its  computer  systems to
identify  material  systems  that could be affected by the "Year 2000" issue and
has developed an implementation plan intended to address this issue.

The Company has adopted a five-phase Year 2000 program consisting of:

         Phase I:     Identification  and ranking of the  components  of the
                      Company's systems, equipment and significant suppliers and
                      vendors that may be vulnerable to Year 2000 problems

         Phase II:    Assessment of items identified in Phase I

         Phase III:   Remediation or replacement of non-compliant  internal
                      systems and components and  determination of solutions for
                      non-compliant suppliers and vendors

         Phase IV:    Testing  of   systems   and   components   following
                      remediation

         Phase V:     Developing  contingency  plans  to  address  the  most
                      reasonably likely worst case Year 2000 scenarios

The  identification  and  assessment  phases of the Year 2000  program have been
substantially completed and these phases included both the Company's significant
information  technology  systems and hardware  ("IT  Systems") and the Company's
significant  non-information  technology  equipment  known to have microchips or
other  embedded   technology   ("non-IT   Equipment").   The  Company  has  also
substantially  completed the remediation phase for its IT Systems and its non-IT
Equipment and substantially completed testing its "mission critical" IT Systems.
The  Company   currently   expects  to  complete  the  testing  phase  including
installation and testing of Year 2000 versions,  by the end of the first quarter
of 1999. The Company will continue  periodic  testing during fiscal 1999 for new
installations,  versions  or  changes.  Virtually  all the  compliance  has been
performed and is currently expected to be performed using internal resources.

In addition to Year 2000  implementation  for the Company's internal systems and
equipment, the Company is communicating with significant suppliers,  vendors and
other third parties with whom the Company has a business  relationship  with, to
determine  their state of  readiness  with respect to Year 2000.  Assessment  of
significant  third party Year 2000  readiness  is  expected to be  substantially
completed  in early 1999.  Failure of  significant  suppliers,  vendors or other
third parties to timely  address and remedy Year 2000 problems or to develop and
effect appropriate contingency plans could have a material adverse effect on the
Company's business and operations.  The Company believes that the geographically
disbursed  nature of its business and its large  supplier and vendor base should
minimize such potential adverse effects.

The Company presently  believes that with modifications to existing software and
conversions to new software for certain applications, the Year 2000 problem will
not cause a significant  disruption of its  operations.  However,  the Year 2000
problem is unique and the  Company's  Year 2000  compliance  program is based on
various  assumptions and  expectations  that cannot be assured.  Potential risks
include loss of electric power or certain communication links, other disruptions
to  its  business  such  as  delayed  deliveries  from  suppliers,  as  well  as
disruptions  to  the  distribution  channels,  including  ports,  transportation
services  and the  Company's  own  Distribution  Center.  The  Company is in the
process of developing a contingency  plan,  which is expected to be completed by
approximately  the second  quarter  of 1999 and will be based on its  continuing
assessment of potential risks.


<PAGE>



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


The  Company  does not expect the costs  associated  with  addressing  Year 2000
issues to be  material  to the  Company's  financial  condition  or  results  of
operations.  Costs  incurred to date have been expensed and were budgeted  costs
funded through operating cash flows. The costs associated with the completion of
Year 2000 will be expensed as incurred and are not currently  expected to have a
material  adverse  impact on the  Company's  financial  position  or  results of
operations.  The Company's cost estimates do not include costs  associated  with
addressing  and resolving  issues as a result of the failure of third parties to
become Year 2000 compliant.

Inflation

The Company does not believe  that its  operating  results have been  materially
affected by inflation through the past year. 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 and the
scheduling  of sale events.  The Company  believes  this is the general  pattern
associated with its segment of the retail  industry.  Consequently,  comparisons
between quarters are not necessarily  meaningful and the results for any quarter
are not necessarily indicative of future results.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains  forward-looking  statements  within
the  meaning  of The  Private  Securities  Litigation  Reform  Act of 1995.  The
statements  are  made a number  of  times  throughout  the  document  and may be
identified by forward-looking terminology as "expect," "believe," "may," "will,"
"intend" or similar statements or variations of such terms. Such forward-looking
statements involve certain material risks and uncertainties  including levels of
sales, store traffic, acceptance of product offerings and fashions,  competitive
pressures from other home furnishings retailers, availability of suitable future
store locations, schedule of store expansion plans and Year 2000 issues relating
to technology.  These and other important  factors that may cause actual results
to differ  materially from such  forward-looking  statements are included in the
"Risk Factors"  section of the Company's  Registration  Statement on Form S-1 as
filed with the  Securities  and Exchange  Commission on May 29, 1997, and may be
contained  in  subsequent   reports  filed  with  the  Securities  and  Exchange
Commission.  You are urged to consider  such  factors.  The  Company  assumes no
obligation for updating any such forward-looking statements.



<PAGE>



 PART II - OTHER INFORMATION


Item 6 - Exhibits and Reports on Form 8-K


(a)      EXHIBIT INDEX

 EXHIBIT
 NUMBER    DESCRIPTION


     11     Computation  of Net  Income  Per  Common  Share 
     15     Letter re  unaudited interim   financial   information   
     27     Financial   Data  Schedule   (filed electronically with SEC only)



 (b)     Reports on Form 8-K:

         No Current  Reports on Form 8-K were  filed by the  Company  during the
         thirteen week period ended September 26, 1998.


                                    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:___________________________________
                                             William T. Giles
                                             Chief Financial Officer
                                             (Duly authorized officer and
                                              principal financial officer)
Date:   November 10, 1998