The Brand House Collective Announces Business Highlights

September 17, 2025  by Karen Parrish in Business Strategy, Industry   

Amy Sullivan, CEO of Brand House Collective, said, "The debut of our first Bed Bath & Beyond Home store was met with overwhelming demand, exceeding our expectations, and generating nationwide excitement that affirms the strength of this iconic brand. That early success gives us confidence to accelerate the conversion of Kirkland's Home stores. We are also unlocking new opportunities by monetizing the Kirkland's Home name, both inside Bed Bath & Beyond stores and through wholesale partnerships with independent retailers, creating an exciting new chapter for a brand with a 60-year legacy. This is just the beginning of what's ahead."

Recent Business Highlights

— On September 15, 2025, the Company sold the Kirkland's Home intellectual property to Bed Bath & Beyond, Inc. for $10 million and closed a $20 million expansion of the existing credit agreement with Bed Bath & Beyond, Inc. to support current operations as well as store conversion and channel expansion plans.

— On August 8, 2025, the Company successfully opened the first Bed Bath & Beyond Home store in Nashville, TN to strong customer reception and national media attention which generated more than 250 million impressions.

— The Company plans to open 5 additional Bed Bath & Beyond Home stores in the greater Nashville market in fiscal 2025 and is on track to convert all Kirkland's Home stores into Bed Bath & Beyond stores over the next 24 months.

— Store plans for the broader portfolio of Bed Bath & Beyond brands, including buybuy Baby and Overstock, are in development with the expectation for the first buybuy Baby store to open in fiscal 2026.

— The Company is in the early stages of planning and expansion of Kirkland's Home into the wholesale market creating a new growth channel with the potential to add scale, improve supply chain efficiency and strengthen unit economics of current product assortment.

Second Quarter 2025 Financial Results

Ms. Sullivan commented, "Our Q2 results reflect two major events that weighed heavily on the quarter: the tornado damage at our distribution center and our deliberate decision to liquidate select inventory ahead of expanding Bed Bath & Beyond assortments. Together, these factors were the dominant drivers of the year-over-year decline in profitability and created near-term pressure on sales, particularly in e-commerce. While the tornado was a one-time disruption, our inventory actions are intentionally reallocating space and capital to Bed Bath & Beyond assortments that we believe will drive stronger growth ahead."

— Net sales in the second quarter of 2025 were $75.8 million, compared to $86.3 million in the prior year quarter, driven by a 9.7% decline in consolidated comparable sales and a decline in store count of approximately 5%. Consolidated comparable sales is inclusive of a comparable store sales increase of 0.4% and e-commerce decline of 38.5% compared to the second quarter of fiscal 2024.

— Gross profit was $12.4 million, or 16.3% of net sales, compared to $17.7 million, or 20.5% of net sales in the prior year quarter. The decline is primarily a result of a decline in merchandise margin and the deleverage of store occupancy costs on lower sales. The decline in merchandise margin was primarily due to liquidation activity to optimize inventory ahead of expanding Bed Bath & Beyond assortments, the write off of the inventory damaged by the tornado and incremental tariff costs.

— Operating expenses in the second quarter of 2025 were $31.1 million, or 41.1% of net sales, compared to $31.0 million, or 35.9% of net sales in the prior year quarter. The second quarter of 2025 included higher insurance costs related to damage at the Company's Jackson, Tennessee distribution center due to a tornado that hit the center on May 20, 2025.

— In total, the Company incurred expenses of $2.0 million related to damage caused by the tornado that damaged the Company's distribution center in Jackson, Tennessee on May 20, 2025. Related expenses which included freight to move product to temporary storage facilities and professional fees to secure and repair the site, net of insurance proceeds were recorded in other operating expenses, and the write-off of damaged inventory, which is a component of cost of sales.

— Net loss in the second quarter of 2025 was $20.2 million, or a loss of $0.90 per diluted share, compared to $14.5 million, or a loss of $1.11 per diluted share in the prior year quarter. Diluted weighted average shares outstanding in the second quarter of 2025 were approximately 22.5 million compared to 13.1 million in the prior year quarter, mainly due to Beyond acquiring approximately 8.9 million shares of common stock in the Company.

— Adjusted net loss* in the second quarter of 2025 was $17.8 million, or an adjusted loss of $0.79 per diluted share, compared to adjusted net loss of $13.9 million, or an adjusted loss of $1.06 per diluted share in the prior year quarter.

— Adjusted EBITDA* in the second quarter of 2025 was a loss of $14.3 million compared to a loss of $10.2 million in the prior year quarter.

— The Company closed 5 stores during the period to end the quarter with 309 stores.

Conference Call

The conference call will be broadcast live and available for replay here and via the investor relations section of the Company's website at www.kirklands.com. The online replay will follow shortly after the call and continue for one year.

A telephonic replay of the conference call will be available after the conference call through September 23, 2025.

Toll-free replay number: (877) 344-7529
International replay number: (412) 317-0088
Replay ID: 7522303