#USA #Nashville #Kirkland's #Bed Bath Beyond #Brand House

Overview of Q3 2025 Results

On December 16, 2025, The Brand House Collective, Inc., listed on the Nasdaq under the ticker TBHC and previously known as Kirkland's, Inc., released its financial results for both the third quarter ended November 1, 2025, and the first three quarters of fiscal 2025. The results reflect the company's ongoing transformation and strategic initiatives in the competitive retail landscape.

Financial Performance Highlights

During the third quarter, the company's net sales totaled $103.5 million, a reduction from $114.4 million in the same quarter of the previous year. This decline of approximately 7.4% was influenced by a decrease in store count and a notable drop in e-commerce sales, which fell by 34.6%. However, comparable store sales did see a modest increase of 1.7%, underscoring the company's efforts to optimize its retail strategy and customer experience.

The gross profit for the quarter stood at $21.1 million, accounting for 20.4% of net sales, down from 28.1% the previous year. This downturn can be attributed largely to shrinking merchandise margins driven by aggressive markdowns as part of the inventory optimization process. Operating expenses also saw a significant reduction, amounting to $23.1 million, or 22.3% of net sales, compared to $34.5 million, or 30.2%, in the same period last year. The cost savings were largely due to reduced marketing expenditures and lower health benefit costs. Notably, the company reported a $10 million gain from the sale of the Kirkland's brand to Beyond.

Loss and Future Outlook

The net loss for the third quarter was $3.7 million, translating to a loss of $0.16 per diluted share, an improvement from the $7.7 million loss reported in the prior year. Adjusted numbers show a greater net loss of $13.6 million, or $0.61 per diluted share, compared to an adjusted loss of $3.8 million the previous year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reflected a greater struggle with a loss of $9.9 million, as opposed to a positive figure of $0.5 million during the same quarter last year.

In his remarks, CEO Amy Sullivan emphasized the strategic focus on inventory management alongside the ongoing conversion of retail locations to the Bed Bath Beyond Home format. This initiative aims to boost the product offerings and improve the store experience. The company has converted three Kirkland's stores into Bed Bath Beyond Home stores, illustrating the strategic pivot towards this format. Sullivan expressed confidence that the upcoming merger with Bed Bath Beyond would create a robust omnichannel platform, enhancing growth opportunities and unlocking financial synergies.

Balance Sheet Insights

As of November 1, 2025, The Brand House Collective's inventory decreased to $88.9 million from $111.2 million in the prior year. The company reported a cash balance of $6.5 million along with outstanding debts amounting to $61.6 million, and $5.8 million in letters of credit under its credit facility. This position indicates a cautious approach towards managing liquidity, especially in light of the ongoing strategic initiatives and transformation within the business structure.

Conclusion

The Brand House Collective's results for the third quarter of fiscal 2025 highlight both challenges and opportunities faced by the organization as it transitions toward a new retail paradigm under the Bed Bath Beyond brand. While facing operational losses, the steps taken towards aligning the inventory and redefining store formats may pave the way for a stronger market presence and profitability in the future. Investors and stakeholders will be watching closely as these changes take effect and as the impending merger moves forward. The potential unlocked by the merger and transformations within the business could be significant for long-term growth and shareholder value.