The Brand House Collective, Inc. Reports Financial Results

December 16, 2025  by Karen Parrish in Business Strategy, Industry   

Amy Sullivan, CEO of Brand House Collective, said, "Our inventory optimization efforts are strategically supporting our store conversion program, creating space for expanded Bed Bath & Beyond assortments as we transform our retail footprint. The successful conversion of our Tennessee locations to the Bed Bath & Beyond Home format demonstrates the progress we're making in this evolution. Looking ahead, the pending merger with Bed Bath & Beyond will combine our complementary strengths and will enable us to build a powerful omnichannel platform for sustained growth. We are confident this combination will strengthen our comprehensive home retail offering, unlock meaningful operational and financial synergies, and deliver increased earnings power with enhanced long-term growth potential for all shareholders."

Third Quarter 2025 Financial Results

—Net sales in the third quarter of 2025 were $103.5 million, compared to $114.4 million in the prior year quarter, driven by a 7.4% decline in consolidated comparable sales and a decline in store count of approximately 6%. Consolidated comparable sales is inclusive of a comparable store sales increase of 1.7% and e-commerce decline of 34.6% compared to the third quarter of fiscal 2024.

—Gross profit was $21.1 million, or 20.4% of net sales, compared to $32.1 million, or 28.1% 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 and incremental tariff costs.

—Operating expenses in the third quarter of 2025 were $23.1 million, or 22.3% of net sales, compared to $34.5 million, or 30.2% of net sales in the prior year quarter. The reduction in expenses to prior year was driven by reduced marketing spend and lower cost for self-insured employee benefits, as well as a $10.0 million gain on the sale of the Kirkland's brand to Beyond.

—Net loss in the third quarter of 2025 was $3.7 million, or a loss of $0.16 per diluted share, compared to $7.7 million, or a loss of $0.59 per diluted share in the prior year quarter. Diluted weighted average shares outstanding in the third 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 third quarter of 2025 was $13.6 million, or an adjusted loss of $0.61 per diluted share, compared to adjusted net loss of $3.8 million, or an adjusted loss of $0.29 per diluted share in the prior year quarter.

—Adjusted EBITDA* in the third quarter of 2025 was a loss of $9.9 million compared to income of $0.5 million in the prior year quarter.

—During the period, the Company closed three Kirkland's Home stores and converted 3 Kirkland's Home stores to Bed Bath & Beyond Home stores to end the quarter with 303 Kirkland's Home stores and 3 Bed Bath & Beyond Home stores.

Balance Sheet

—As of November 1, 2025, inventory was $88.9 million compared to inventory of $111.2 million as of November 2, 2024.

—As of November 1, 2025, the Company had a cash balance of $6.5 million, with $61.6 million of outstanding debt and $5.8 million in outstanding letters of credit under its senior secured revolving credit facility, and $13.7 million in debt to Beyond, a related party and 40% owner of the Company. As of November 1, 2025, the Company had $1.0 million of availability for borrowing under the revolving credit facility, after the minimum required excess availability covenant.

—As of December 15, 2025, the Company had $20.7 million of outstanding debt and $5.8 million of outstanding letters of credit under its revolving credit facility with $12.2 million of availability, after the minimum required excess availability covenant, and $23.7 million in term loans to Beyond with $20.0 million available from Beyond.

—Availability under the Company's revolving credit facility fluctuates largely based on eligible inventory levels, and as eligible inventory increases in the second and third fiscal quarters in support of the Company's back-half sales plans, the Company's borrowing capacity increases correspondingly.

*Non-GAAP financial measures. Please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP Net Income to Adjusted EBITDA" and "Reconciliation of GAAP Net Income to Adjusted Net Income" for more information.

Conference Call

Given the pending acquisition by Bed Bath & Beyond, Inc. the Company will not conduct an earnings call related to the Q3 results.