1. TBHC announced Q3 2025 financial results; net sales down 9.7%. 2. Plan to convert Kirkland's stores to Bed Bath & Beyond Home format. 3. Pending merger with Bed Bath & Beyond expected to strengthen operations. 4. Net loss improved compared to the previous year; adjusted losses widened. 5. Cash reserves remain low at $6.5 million amidst high debt levels.
FAQ
Why Bullish?
The pending merger with Bed Bath & Beyond could stabilize operations. Historically, mergers often lead to increased investor confidence, as seen with other retail consolidations.
How important is it?
The financial results indicate critical growth strategies and operational changes. TBHC's future performance is deeply tied to the success of the merger and store conversions.
Why Long Term?
Merger synergies may take time to materialize, affecting financial health over several quarters. For instance, similar mergers in retail often require time for integration.
The Brand House Collective Reports Third Quarter Fiscal 2025 Results
The Brand House Collective, Inc. (Nasdaq: TBHC), formerly known as Kirkland's, Inc., has officially announced its financial results for the 13-week and 39-week periods ending November 1, 2025. The latest figures highlight both challenges and strategic advancements as the company undergoes significant transformations.
Key Highlights from Q3 Fiscal 2025
- Net Sales: $103.5 million, a decrease from $114.4 million in the same quarter last year.
- Gross Profit: $21.1 million, representing 20.4% of net sales versus 28.1% in Q3 fiscal 2024.
- Net Loss: $3.7 million, or a loss of $0.16 per diluted share, compared to a loss of $7.7 million or $0.59 in the previous year.
- Adjusted Net Loss: $13.6 million, or $0.61 per diluted share, an increase from $3.8 million, or $0.29, in the prior quarter.
Operational Insights and Future Plans
Amy Sullivan, CEO of the Brand House Collective, emphasized the importance of current initiatives, stating, "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." She highlighted the successful conversion of Tennessee locations to the Bed Bath & Beyond Home format as a testament to the company's ongoing evolution.
The forthcoming merger with Bed Bath & Beyond is anticipated to synergize resources, enabling the Brand House Collective to leverage its strengths and build a robust omnichannel platform aimed at sustained growth. Sullivan expressed confidence that this strategic move will enhance the long-term growth potential for all shareholders.
Financial Performance Breakdown
For the third quarter of 2025, net sales reflected a notable **7.4%** decline in consolidated comparable sales, attributed largely to a **6%** reduction in store count. The company witnessed a **1.7%** increase in comparable store sales, juxtaposed against a **34.6%** decline in e-commerce activity compared to Q3 of fiscal 2024.
The reported gross profit decreased, primarily due to lower merchandise margins resulting from liquidation activities aimed at inventory optimization, coupled with increased tariff costs. Operating expenses also saw a reduction to **$23.1 million** from **$34.5 million**, largely through decreased marketing expenditures and lower employee benefit costs.
Balance Sheet Overview
As of November 1, 2025, the Brand House Collective reported an inventory level of **$88.9 million**, a decrease from **$111.2 million** the previous year. The company's cash balance stood at **$6.5 million**, with **$61.6 million** in outstanding debt and **$5.8 million** in letters of credit under its senior secured revolving credit facility.
The company's ability to borrow under its revolving credit facility is largely contingent on eligible inventory levels. Improvements in eligible inventory in upcoming quarters are expected to enhance borrowing capacity as the company prepares for holiday sales.
Conference Call Update
In light of the pending acquisition by Bed Bath & Beyond, the Brand House Collective will not conduct an earnings call for its Q3 results. This strategic decision reflects the company's focus on integrating with Bed Bath & Beyond and the potential implications of the merger on its financial trajectory.
About The Brand House Collective
The Brand House Collective, Inc. operates a comprehensive portfolio of home and family brands, including Kirkland's and Bed Bath & Beyond. With over **300 stores** across **35 states** and a robust online presence, the Company aims to deliver curated and high-quality product assortments catering to diverse consumer needs.
For more information, visit the official websites: kirklands.com and bedbathandbeyondhome.com.