BED BATH & BEYOND, INC.
For the period ended Mar 31, 2026. Filed Apr 27, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 27, 2026
NXH$1.66-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-27.
0001130713-25-000078
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-27.
0001130713-26-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 109 current paragraphs.
50 unchanged; 25 reworded; 33 added; 25 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
Recent Developments
Current report
On April 2, 2026, we completed the previously announced acquisition of The Brand House Collective, Inc. pursuant to the Agreement and Plan of Merger, dated as of November 24, 2025 (the “TBHC Merger Agreement”), by and among the Company, Knight Merger Sub II, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Knight Merger Sub”), and TBHC. Pursuant to the TBHC Merger Agreement, upon the terms and subject to the conditions set forth therein, Knight Merger Sub merged with and into TBHC, with TBHC surviving as a wholly owned subsidiary of the Company. We believe the acquisition of TBHC will allow us to strengthen our presence in key categories of home décor and seasonal merchandise, while providing a flexible store base that can be integrated into our broader platform.
Current report
Merger Agreement with The Container Store Holdings, LLC
Current report
On April 2, 2026 (the “Effective Date”), we entered into an Agreement and Plan of Merger (the “TCS Merger Agreement”) by and among the Company, Falcon Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“TCS Merger Sub”) and The Container Store Holdings, LLC, a Delaware limited liability company (“TCS”), pursuant to which, subject to the terms and conditions set forth therein, TCS Merger Sub will merge with and into TCS (the “TCS Merger”), with TCS surviving such TCS Merger as a wholly owned subsidiary of the Company (the “Surviving Entity”).
Current report
Pursuant to the terms of the TCS Merger Agreement, the aggregate consideration to be delivered at closing is expected to be approximately $150 million (the “Purchase Price”), subject to certain adjustments and structural considerations as set forth in the TCS Merger Agreement. The consideration will consist of a combination of (i) senior convertible notes of the Company with an aggregate principal amount of at least $54.0 million, subject to adjustment, and (ii) shares of our common stock, subject to certain limitations, including an equity issuance cap. To the extent such equity issuance cap is exceeded, additional consideration will be delivered in the form of senior convertible notes. The Merger Consideration (as defined in the TCS Merger Agreement) may be paid to TCS equityholders or, under certain circumstances, to TCS lenders in satisfaction of outstanding indebtedness.
Current report
The completion of the TCS Merger is subject to customary closing conditions, including, among others, (i) the absence of legal restraints, (ii) receipt of required lender approvals or the completion of an alternative restructuring transaction, (iii) the receipt of specified financing, (iv) the delivery of audited financial statements of TCS, and (v) the accuracy of representations and warranties and compliance with covenants by the parties.
Current report
In connection with the TCS Merger Agreement, we also entered into related agreements, including a transaction support agreement with certain equityholders and lenders of TCS, a put agreement with certain lenders, and commitments to provide up to $30.0 million of incremental financing to TCS prior to closing, subject to specified conditions.
Current report
The TCS Merger Agreement may be terminated under certain circumstances, including by either party if the transaction has not been completed by July 31, 2026 (subject to extension in certain circumstances), or upon certain breaches, mutual consent, or the occurrence of legal restraints. The transaction is expected to close in the third quarter of 2026.
Current report
Revenue for the three months ended March 31, 2026, was $247.8 million, compared to $231.7 million for the three months ended March 31, 2025, representing an increase of $16.0 million, or 6.9%. The increase was primarily due to a 5.8% or $11.15 increase in average order value, which resulted in a revenue increase of approximately $13.4 million, and a 1.1% increase in the number of orders delivered, which resulted in a revenue increase of approximately $2.6 million. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price. The increase in orders delivered was driven by higher website visits influenced by improved marketing efficiency.
Current report
Gross profit for three months ended March 31, 2026, was $59.2 million, or 23.9% of revenue, compared to $58.1 million, or 25.1% of revenue, for the three months ended March 31, 2025. This represents an increase of $1.1 million, or 1.8%. The increase in gross profit was primarily attributable to higher revenue, which increased gross profit by approximately $3.9 million, partially offset by a decreased gross margin that contributed $2.9 million of the gross profit decline. Gross margin decreased by 120 basis points year-over-year, primarily due to approximately 150 basis points from loyalty points breakage in the prior year, partially offset by rationalized discounting of approximately 20 basis points as compared to the prior year period.
Current report
Sales and marketing expenses were $32.3 million, or 13.0% of revenue, for the three months ended March 31, 2026, compared to $31.3 million, or 13.5% of revenue, for the three months ended March 31, 2025. This represents an increase of $1.0 million, or 3.3%. The increase was primarily driven by increased performance marketing expenses of $2.0 million, partially offset by a $0.6 million reduction in staff-related expenses and a $0.4 million reduction in brand advertising.
Current report
Technology expenses decreased by $5.5 million for the three months ended March 31, 2026, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $2.7 million, a $1.5 million reduction in depreciation and amortization and a $1.3 million reduction in third-party expenses driven by our technology transformation efforts, including the adoption of evolving technological advancements such as artificial intelligence.
Current report
General and administrative expenses increased by $0.5 million for the three months ended March 31, 2026, compared to the prior period. The increase was primarily due to a one-time $3.7 million acquisition‑related professional fees, partially offset by a $2.5 million reduction in staff-related expenses.
Current report
Other operating income, net decreased by $0.3 million for the three months ended March 31, 2026, compared to the prior period. The decrease was not material.
Current report
Consolidated cash and cash equivalents decreased from $175.3 million as of December 31, 2025, to $135.8 million as of March 31, 2026, a decrease of $39.5 million, primarily as a result of disbursement for notes receivable of $26.2 million with $20.0 million to TBHC, and net cash outflows from operating activities of $11.8 million.
Current report
Key Operating Metrics
Current report
We review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial forecasts and make strategic decisions. We believe these operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with U.S. GAAP. You should read the key operating and financial metrics in conjunction with the following discussion of our results of operations and together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
Current report
We use the following key operating metrics to assess the performance of our business (in thousands, except for LTM net revenue per active customer, average order value and orders per active customer):
Current report
(1) Active customers represent the total number of unique customers who have made at least one purchase during the prior twelve-month period. This metric captures both the inflow of new customers and the outflow of existing customers who have not made a purchase during the prior twelve-month period. We view active customers as a key indicator of our growth.
Current report
(2) Last twelve months (LTM) net revenue per active customer represents total net revenue in a twelve-month period divided by the total number of active customers for the same twelve-month period. We view LTM net revenue per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.
Current report
(3) Orders delivered represents the total number of orders delivered in any given period, including orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and in those circumstances, we estimate delivery dates based on historical data. We view orders delivered as a key indicator of our growth.
Current report
(4) Average order value is defined as total net revenue in any given period divided by the total number of orders delivered in that period. We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers.
Current report
(5) Orders per active customer is defined as orders delivered in a twelve-month period divided by active customers for the same twelve-month period. We view orders per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.
Current report
Revenue for the three months ended March 31, 2026, was $247.8 million, compared to $231.7 million for the three months ended March 31, 2025, representing an increase of $16.0 million, or 6.9%. The increase was primarily due to a 5.8% or $11.15 increase in average order value, which resulted in a revenue increase of approximately $13.4 million, and a 1.1% increase in the number of orders delivered, which resulted in a revenue increase of approximately $2.6 million. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price. The increase in orders delivered was driven by higher website visits influenced by improved marketing efficiency.
Current report
Gross profit for three months ended March 31, 2026, was $59.2 million, or 23.9% of revenue, compared to $58.1 million, or 25.1% of revenue, for the three months ended March 31, 2025. This represents an increase of $1.1 million, or 1.8%. The increase in gross profit was primarily attributable to higher revenue, which increased gross profit by approximately $3.9 million, partially offset by a decreased gross margin that contributed $2.9 million of the gross profit decline. Gross margin decreased by 120 basis points year-over-year, primarily due to approximately 150 basis points from loyalty points breakage in the prior year, partially offset by rationalized discounting of approximately 20 basis points as compared to the prior year period.
Current report
Sales and marketing expenses were $32.3 million, or 13.0% of revenue, for the three months ended March 31, 2026, compared to $31.3 million, or 13.5% of revenue, for the three months ended March 31, 2025. This represents an increase of $1.0 million, or 3.3%. The increase was primarily driven by increased performance marketing expenses of $2.0 million, partially offset by a $0.6 million reduction in staff-related expenses and a $0.4 million reduction in brand advertising.
Current report
Technology expenses decreased by $5.5 million for the three months ended March 31, 2026, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $2.7 million, a $1.5 million reduction in depreciation and amortization and a $1.3 million reduction in third-party expenses driven by our technology transformation efforts, including the adoption of evolving technological advancements such as artificial intelligence.
Current report
General and administrative expenses increased by $0.5 million for the three months ended March 31, 2026, compared to the prior period. The increase was primarily due to a one-time $3.7 million acquisition‑related professional fees, partially offset by a $2.5 million reduction in staff-related expenses.
Current report
Other operating income, net
Current report
Other operating income, net decreased by $0.3 million for the three months ended March 31, 2026, compared to the prior period. The decrease was not material.
Current report
For the three months ended March 31, 2026, investing activities resulted in a net cash outflow of $27.3 million, primarily due to disbursement of notes receivable of $26.2 million with $20.0 million to TBHC.
Current report
Future liquidity commitments
Current report
We expect to fund the ongoing operations, capital requirements, and working capital needs of TBHC and TCS, if the TCS Merger is completed, through existing cash balances, cash flows from operations, and available credit facilities.
Removed paragraphs (25)
Previous report
In August 2025, we changed our corporate name from Beyond, Inc. to Bed Bath & Beyond, Inc. and changed our ticker symbol from "BYON" to "BBBY".
Previous report
Revenue for the three months ended September 30, 2025, was $257.2 million, compared to $311.4 million for the three months ended September 30, 2024, representing a decrease of $54.2 million, or 17%. The decrease was primarily due to a 20% decrease in the number of orders delivered, which contributed $63.6 million of the revenue decline, partially offset by a 3% or $6.60 increase in average order value, which resulted in a revenue increase of approximately $9.3 million. The decrease in orders delivered was driven by a decline in website visits influenced in part by a shift in consumer spending preferences and macroeconomic factors impacting consumer sentiment and the home furnishings industry as well as a reduction in overall sales and marketing spend as we focus on improving more efficient traffic channels and refine our assortment. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price.
Previous report
Gross profit for three months ended September 30, 2025, was $65.2 million, or 25.3% of revenue, compared to $66.0 million, or 21.2% of revenue, for the three months ended September 30, 2024. This represents a decrease of $0.8 million, or 1%. The decline in gross profit was primarily attributable to lower revenue, which reduced gross profit by approximately $12.6 million, partially offset by an improved gross margin that contributed an increase of approximately $11.8 million. Gross margin increased by 420 basis points year-over-year, primarily due to approximately 160 basis points of lower carrier costs, 160 basis points of lower return costs, and 90 basis points of improvement from discontinued Canada operations.
Previous report
Sales and marketing expenses were $36.1 million, or 14.0% of revenue, for the three months ended September 30, 2025, compared to $51.9 million, or 16.7% of revenue, for the three months ended September 30, 2024. This represents a decrease of $15.7 million, or 30%. The decrease was primarily driven by decreased performance marketing expenses of $11.9 million and a $2.6 million reduction in brand advertising.
Previous report
Technology expenses decreased by $7.1 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $4.9 million and a $1.9 million reduction in third-party expenses.
Previous report
General and administrative expenses decreased by $5.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a $4.4 million reduction in staff-related expenses and a $1.1 million reduction in third-party expenses.
Previous report
Other operating expense (income), net decreased by $1.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease reflects the non-recurrence of the $1.6 million loss from the sale of our corporate headquarters in 2024.
Previous report
For information regarding revisions to previously issued consolidated financial statements and resulting reclassifications, see the information set forth under Note 2—Summary of Significant Accounting Policies, in the Notes to Unaudited Consolidated Financial Statements included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q.
Previous report
Revenue for the three months ended September 30, 2025, was $257.2 million, compared to $311.4 million for the three months ended September 30, 2024, representing a decrease of $54.2 million, or 17%. The decrease was primarily due to a 20% decrease in the number of orders delivered, which contributed $63.6 million of the revenue decline, partially offset by a 3% or $6.60 increase in average order value, which resulted in a revenue increase of approximately $9.3 million. The decrease in orders delivered was driven by a decline in website visits influenced in part by a shift in consumer spending preferences and macroeconomic factors impacting consumer sentiment and the home furnishings industry as well as a reduction in overall sales and marketing spend as we focus on improving more efficient traffic channels and refine our assortment. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price.
Previous report
Revenue for the nine months ended September 30, 2025, was $771.2 million, compared to $1,091.8 million for the nine months ended September 30, 2024, representing a decrease of $320.6 million, or 29%. The decrease was primarily due to a 35% decrease in the number of orders delivered, which contributed $394.6 million of the revenue decline, partially offset by an 8% or $15.60 increase in average order value, which resulted in a revenue increase of approximately $73.9 million. The decrease in orders delivered was driven by a decline in website visits influenced in part by a shift in consumer spending preferences and macroeconomic factors impacting consumer sentiment and the home furnishings industry as well as a reduction in overall sales and marketing spend as we focus on improving more efficient traffic channels and refine our assortment. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price.
Previous report
International net revenues were less than 4% of total net revenues for each of the three and nine months ended September 30, 2025 and 2024.
Previous report
Gross profit for three months ended September 30, 2025, was $65.2 million, or 25.3% of revenue, compared to $66.0 million, or 21.2% of revenue, for the three months ended September 30, 2024. This represents a decrease of $0.8 million, or 1%. The decline in gross profit was primarily attributable to lower revenue, which reduced gross profit by approximately $12.6 million, partially offset by an improved gross margin that contributed an increase of approximately $11.8 million. Gross margin increased by 420 basis points year-over-year, primarily due to approximately 60 basis points of lower carrier costs, 160 basis points of lower return costs, and 90 basis points of improvement from discontinued Canada operations.
Previous report
Gross profit for nine months ended September 30, 2025, was $190.3 million, or 24.7 % of revenue, compared to $220.5 million, or 20.2% of revenue, for the nine months ended September 30, 2024. This represents a decrease of $30 million, or 14%. The decline in gross profit was primarily attributable to lower revenue, which reduced gross profit by approximately $71.9 million, partially offset by an improved gross margin that contributed an increase of approximately $41.7 million. Gross margin increased by 450 basis points year-over-year, primarily due to 210 basis points of lower carrier costs, approximately 90 basis points of lower return costs, approximately 90 basis points of lower product costs, and 50 basis points of improvement from discontinued Canada operations.
Previous report
Sales and marketing expenses were $36.1 million, or 14.0% of revenue, for the three months ended September 30, 2025, compared to $51.9 million, or 16.7% of revenue, for the three months ended September 30, 2024. This represents a decrease of $15.7 million, or 30%. The decrease was primarily driven by decreased performance marketing expenses of $11.9 million and a $2.6 million reduction in brand advertising.
Previous report
Sales and marketing expenses were $105.6 million, or 13.7% of revenue, for the nine months ended September 30, 2025, compared to $186.1 million, or 17.0% of revenue, for the nine months ended September 30, 2024. This represents a decrease of $80.4 million, or 43%. The decrease was primarily driven by decreased performance marketing expenses of $66.8 million and a $10.2 million reduction in brand advertising.
Previous report
Technology expenses decreased by $7.1 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $4.9 million and a $1.9 million reduction in third-party expenses.
Previous report
Technology expenses decreased by $14.6 million for the nine months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $13.4 million and a $1.6 million reduction in third-party expenses, partially offset by one-time restructuring costs of $0.5 million.
Previous report
General and administrative expenses decreased by $5.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a $4.4 million reduction in staff-related expenses and a $1.1 million reduction in third-party expenses.
Previous report
General and administrative expenses decreased by $16.2 million for the nine months ended September 30, 2025, compared to the prior period. The decrease was primarily due to a $12.7 million reduction in staff-related expenses, a $3.2 million reduction in third-party expenses and a $0.2 million reduction in depreciation & amortization.
Previous report
Customer service and merchant fees decreased by $13.8 million for the nine months ended September 30, 2025, compared to the prior period. The decrease was primarily driven by an $8.7 million decrease in credit card costs and a $5.1 million decrease in customer service expenses, primarily due to decreased order volume.
Previous report
Other operating expense (income), net
Previous report
Other operating expense (income), net decreased by $1.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease reflects the non-recurrence of the $1.6 million loss from the sale of our corporate headquarters in 2024.
Previous report
Other operating expense (income), net decreased by $3.4 million for the nine months ended September 30, 2025, compared to the prior period. The decrease reflects the non-recurrence of the $10.3 million gain tied to the 2024 sale of the Wamsutta brand, offset by the $5.0 million gain from the sales of Canada and the United Kingdom Bed Bath & Beyond trademarks in 2025, and the $1.6 million loss related to the 2024 corporate headquarters sale.
Previous report
On July 4, 2025, the reconciliation bill, or One Big Beautiful Bill Act (the "OBBBA") was signed into law, which includes a broad range of tax reform provisions that may affect the Company's financial results. The OBBBA allows an elective deduction for domestic Research and Development (R&D), a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on Foreign-derived Deduction Eligible Income, among other provisions. The OBBBA is not currently expected to materially impact the Company's effective tax rate or cash flows in the current fiscal year.
Previous report
For the nine months ended September 30, 2024, investing activities resulted in a net cash outflow of $6.5 million, primarily due to $11.3 million of expenditures for property and equipment and $6.0 million for purchases of intangible assets, offset by $10.3 million of proceeds received from the sale of intangible assets.
Reworded paragraphs (25)
Previous wording
Bed Bath & Beyond, Inc. is an ecommerce-focused retailer with an affinity model that owns or has ownership interests in various retail brands, offering a comprehensive array of products and services that enable its customers to enhance everyday life through quality, style, and value. In addition, it also offers an increasing number of add-on services across our platforms, including warranties, shipping insurance, and installation services. We will be reimagining our loyalty offering through the reintroduction of Welcome Rewards+ to our Bed Bath & Beyond customers and bringing back the successful Club O loyalty program to our Overstock customers. We currently own Bed Bath & Beyond, Overstock, and buybuy BABY, among other brands. As used herein, "Bed Bath & Beyond," "the Company," "we," "our" and similar terms include Bed Bath & Beyond, Inc. and its controlled subsidiaries, unless the context indicates otherwise.
Current wording
We are an e-commerce-focused retailer with an affinity model that owns or has ownership interests in various brands, offering a comprehensive array of products and services that enable its customers to enhance everyday life through quality, style, and value. In addition, we also offer an increasing number of add-on services across our platforms, including warranties, shipping insurance, and installation services. Our customer engagement and retention are bolstered by our welcome rewards+ membership program, enhancing the overall value proposition for our customers. We currently own Bed Bath & Beyond, Overstock, buybuy BABY, and now the Kirkland's and Kirkland's Home brands, among other brands. As used herein, "Bed Bath & Beyond," "the Company," "we," "our" and similar terms include Bed Bath & Beyond, Inc. and its controlled subsidiaries, unless the context indicates otherwise.
Previous wording
Through the Bed Bath & Beyond brand, we aim to provide an extensive array of home-related products tailored specifically for our target customers - consumers who seek comprehensive support throughout their shopping journey, aspiring to discover quality, stylish products at competitive prices that align with their budget requirements. We regularly refresh our product assortment to reflect the evolving preferences of our customers and aim to stay aligned with current trends. The mission of this brand is to achieve category-leading ownership of four distinct rooms of the home: the bedroom, the bathroom, the kitchen, and the patio, and our goal is for the assortment to include not only core legacy categories like bedding and kitchenware, but also adjacent categories like bedroom and outdoor furniture and rugs. Furniture across all rooms continues to play a critical role in our strategy. Leveraging an asset-light supply chain, direct shipping is offered to customers from both our suppliers and third-party logistics providers.
Current wording
Through our Bed Bath & Beyond brand, we provide an extensive array of home-related products tailored specifically for our target customers - consumers who seek comprehensive support throughout their shopping journey, aspiring to discover quality, stylish products at competitive prices that align with their budget requirements. We regularly refresh our product assortment to reflect the evolving preferences of our customers and aim to stay aligned with current trends. Furniture across all rooms continues to play a critical role in our strategy. Leveraging an asset-light supply chain, direct shipping is offered to customers from both our suppliers and third-party logistics providers.
Previous wording
Bed Bath & Beyond's strategic priorities include curating stylish, high-quality assortments to make product selection intuitive and affordable, in addition to enhancing offerings with trusted aspirational brands. Our goal is to transform the customer experience by building trust, creating life-stage experiences, and consistently delivering inspiration, quality, and value.
Current wording
Bed Bath & Beyond's strategic priorities include curating stylish, high-quality assortments to make product selection intuitive and affordable, in addition to enhancing offerings with trusted aspirational brands. We transform the customer experience by building trust, creating life-stage experiences, and consistently delivering inspiration, quality, and value.
Previous wording
Through the Overstock brand, we aim to provide a wide array of quality goods at discounted prices, and a treasure hunt-like experience for our target customers - consumers who are highly engaged, very accustomed to purchasing online, and actively seeking great deals. The mission of this brand is to delight our customers by offering deals on products they will love. Our product assortment includes home categories such as indoor and outdoor furniture, rugs, décor, and lighting, as well as lifestyle categories such as jewelry and watches, apparel and accessories, and designer shoes and handbags.
Current wording
Through our Overstock brand, we aim to provide a wide array of quality goods at discounted prices, and a treasure hunt-like experience for our target customers - consumers who are highly engaged, very accustomed to purchasing online, and actively seeking great deals. The mission of this brand is to delight our customers by offering them deals on products they will love. Our product assortment includes home categories such as indoor and outdoor furniture, rugs, décor, and lighting, as well as lifestyle categories such as jewelry and watches, apparel and accessories, and designer shoes and handbags.
Previous wording
Consolidated cash and cash equivalents increased from $159.2 million as of December 31, 2024, to $167.4 million as of September 30, 2025, an increase of $8.2 million, primarily as a result of $101.7 million in net proceeds from the sales of our common stock pursuant to our "at-the-market" public offering, net of offering costs and $6.3 million in proceeds from sales of intangible assets, offset by net cash outflows from operating activities of $50.2 million, purchases of intangible assets of $15.2 million, disbursement for notes receivable of $8.2 million, purchases of equity securities in The Brand House Collective of $8.0 million, payments on short-term debt of $7.0 million, repurchases of common stock under the stock repurchase program of $6.2 million, and expenditures for property and equipment of $5.2 million.
Current wording
Acquisition of The Brand House Collective, Inc.
Previous wording
Customer service and merchant fees decreased by $3.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily driven by a $1.8 million decrease in customer service expenses and a $1.8 million decrease in credit card costs, primarily due to decreased order volume.
Current wording
Customer service and merchant fees decreased by $0.3 million for the three months ended March 31, 2026, compared to the prior period. The decrease was primarily driven by a $1.1 million decrease in customer service outsourced labor, partially offset by a $0.8 million increase in credit card costs, primarily due to increased order volume.
Previous wording
We continue to monitor recent macroeconomic trends and geopolitical events, including, without limitation, ongoing global conflicts, trade barriers including tariffs, financial and stock market volatility, higher interest rates, inflation, the U.S. government shutdown, and their impacts. These events have and may continue to negatively impact consumer confidence and consumer spending, which have and may continue to adversely affect our business and our results of operations. Many of our suppliers source from other countries and may be negatively affected by increased tariffs or other import/export controls by the United States and foreign governments, as well as uncertainty in the market as it responds to global macroeconomic factors. Due to the uncertain and constantly evolving nature and volatility of these trends and events, we cannot currently predict their long-term impact on our operations and financial results. As of September 30, 2025, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures.
Current wording
We continue to monitor recent macroeconomic trends and geopolitical events, including, without limitation, ongoing global conflicts, trade barriers including tariffs, financial and stock market volatility, higher interest rates, inflation, and their impacts. These events have and may continue to negatively impact consumer confidence and consumer spending, which have and may continue to adversely affect our business and our results of operations. Many of our suppliers source from other countries and may be negatively affected by increased tariffs or other import/export controls by the United States and foreign governments, as well as uncertainty in the market as it responds to global macroeconomic factors. Due to the uncertain and constantly evolving nature and volatility of these trends and events, we cannot currently predict their long-term impact on our operations and financial results. As of March 31, 2026, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures.
Previous wording
Comparisons of Three Months Ended September 30, 2025 to Three Months Ended September 30, 2024, and Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024
Current wording
Comparisons of Three Months Ended March 31, 2026 to Three Months Ended March 31, 2025
Previous wording
Our overall gross margins fluctuate based on factors such as competitive pricing; product costs; discounting; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs which include costs incurred to operate and staff warehouses, including rent and depreciation expense associated with these facilities, costs to receive, inspect, pick, and prepare customer order for delivery, and direct and indirect labor costs including payroll, payroll-related benefits, and stock-based compensation, all of which we include as costs in calculating gross margin.
Current wording
Our overall gross margins fluctuate based on factors such as competitive pricing; product costs; discounting; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs which include costs incurred to operate and staff warehouses, including rent and depreciation expense associated with these facilities, and costs to receive, inspect, pick, and prepare customer order for delivery, all of which we include as costs in calculating gross margin.
Previous wording
Gross margins for the past seven quarterly periods and fiscal year ending 2024 were:
Current wording
Gross margins for the past five quarterly periods and fiscal year ending 2025 were:
Previous wording
Customer service and merchant fees decreased by $3.6 million for the three months ended September 30, 2025, compared to the prior period. The decrease was primarily driven by a $1.8 million decrease in customer service expenses and a $1.8 million decrease in credit card costs, primarily due to decreased order volume.
Current wording
Customer service and merchant fees decreased by $0.3 million for the three months ended March 31, 2026, compared to the prior period. The decrease was primarily driven by a $1.1 million decrease in customer service outsourced labor, partially offset by a $0.8 million increase in credit card costs, primarily due to increased order volume.
Previous wording
The following table summarizes our other operating expense (income), net (in thousands):
Current wording
The following table summarizes our other operating income, net (in thousands):
Previous wording
The $24.2 million favorable change in other income (expense), net for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable to a $24.2 million decrease in loss recognized from our equity method securities. The decrease reflects the change from a recognized loss on equity method securities of $17.2 million for the three months ended September 30, 2024 to a recognized gain on equity method securities of $7.0 million for the three months ended September 30, 2025.
Current wording
The $17.6 million favorable change in other income (expense), net for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributable to a $14.7 million decrease in loss recognized from our equity method securities and a $2.8 million gain recognized on a loan commitment to TBHC. The decrease in loss recognized from our equity method securities reflects the change from a recognized loss on equity method securities of $17.1 million for the three months ended March 31, 2025 to a recognized loss on equity method securities of $2.4 million for the three months ended March 31, 2026. The gain recognized on the loan commitment was driven by the fact that TBHC had drawn the entire available balance from the Delayed Draw Loan Commitment.
Previous wording
Our provision for income tax for the three months ended September 30, 2025 and 2024 was $233,000 and $189,000, respectively. The effective tax rate for the three months ended September 30, 2025 and 2024 was (5.4)% and (0.3)%, respectively. Our provision for income tax for the nine months ended September 30, 2025 and 2024 was $714,000 and $635,000, respectively. The effective tax rate for the nine months ended September 30, 2025 and 2024 was (1.1)% and (0.4)%, respectively. Our tax provision and rate differs from the statutory federal income tax rate of 21% primarily due to year-to-date losses on our retail operations for which tax benefits are limited.
Current wording
Our provision for income tax for the three months ended March 31, 2026 and 2025 was $0.2 million and $0.2 million, respectively. The effective tax rate for the three months ended March 31, 2026 and 2025 was (1.5)% and (0.5)%, respectively.
Previous wording
We are subject to taxation in the United States and multiple state and foreign jurisdictions. Tax years beginning in 2020 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used.
Current wording
We are subject to taxation in the United States and multiple state and foreign jurisdictions. Tax years beginning in 2020 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. We are under audit by the Internal Revenue Service ("IRS") for the calendar year 2023. The IRS has not indicated or communicated any deficiencies. We expect the audit to continue during 2026.
Previous wording
Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to execute on our business strategy, our ability to realize the benefits of any investment in new business strategies, acquisitions, or other transactions, and consumer sentiment towards our offerings. In the event that additional liquidity is required from outside sources, we may not be able to raise the capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
Current wording
Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to execute on our business strategy, our ability to integrate and realize synergies from investments in new business strategies, acquisitions, or other transactions, and consumer sentiment towards our offerings. In the event that additional liquidity is required from outside sources, we may not be able to raise the capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
Previous wording
Our principal sources of liquidity are existing cash and cash equivalents and accounts receivable, net. At September 30, 2025, we had $167.4 million of cash and cash equivalents and $17.3 million of accounts receivable, net of allowance for credit losses.
Current wording
Our principal sources of liquidity are existing cash and cash equivalents and accounts receivable, net. At March 31, 2026, we had $135.8 million of cash and cash equivalents and $24.0 million of accounts receivable, net of allowance for credit losses.
Previous wording
During the nine months ended September 30, 2025, the Company entered into standby letter of credits with BMO Bank N.A. valued at $7.0 million. The letter of credits were issued in favor of the Company's payment processors as a financial guarantee in connection with ongoing payment processing operations.
Current wording
During the three months ended March 31, 2026, the Company entered into standby letter of credits with BMO Bank N.A. valued at $9.5 million. The letter of credits were issued in favor of the Company's payment processors as a financial guarantee in connection with ongoing payment processing operations.
Previous wording
We entered into a Sales Agreement dated June 10, 2024 with JonesTrading, under which we have conducted and may in the future conduct "at the market" public offerings of our common stock. Under the Sales Agreement, JonesTrading, acting as our sales agent or principal, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. At September 30, 2025, we had $52.4 million available under our "at the market" sales program. We have no obligation to sell additional shares under the Sales Agreement, but we may do so from time to time. Under the agreement, we will pay JonesTrading up to a 2% sales commission on all sales. For the nine months ended September 30, 2025, we sold 12,432,021 shares of our common stock pursuant to the Sales Agreement and have recognized $101.7 million in proceeds, net of $2.1 million of offering costs, including commissions paid to JonesTrading.
Current wording
We entered into a Sales Agreement dated June 10, 2024 with JonesTrading, under which we have conducted and may in the future conduct "at the market" public offerings of our common stock. Under the Sales Agreement, JonesTrading, acting as our sales agent or principal, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. At March 31, 2026, we had $16.0 million available under our "at the market" sales program. We have no obligation to sell additional shares under the Sales Agreement, but we may do so from time to time. Under the agreement, we will pay JonesTrading up to a 2% sales commission on all sales. For the three months ended March 31, 2026, we did not sell any shares of our common stock pursuant to the Sales Agreement.
Previous wording
The $50.2 million of net cash used in operating activities during the nine months ended September 30, 2025, was primarily due to loss from operating activities of $63.7 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, gain on sale of intangible assets, and loss from equity method securities of $34.8 million and cash used by changes in operating assets and liabilities of $21.3 million.
Current wording
The $11.8 million of net cash used in operating activities during the three months ended March 31, 2026, was primarily due to loss from operating activities of $16.4 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, and loss from equity method securities of $4.3 million offset by cash provided by changes in operating assets and liabilities of $0.3 million.
Previous wording
The $152.6 million of net cash used in operating activities during the nine months ended September 30, 2024, was primarily due to loss from operating activities of $177.5 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, gain on sale of intangible assets, write-down of assets held for sale, and loss from equity method securities of $65.9 million and cash used by changes in operating assets and liabilities of $41.0 million.
Current wording
The $50.9 million of net cash used in operating activities during the three months ended March 31, 2025, was primarily due to loss from operating activities of $39.9 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, and loss from equity method securities of $23.6 million and cash used by changes in operating assets and liabilities of $34.6 million including $15.0 million used for the purchase of inventory and the remainder primarily due to timing of partner and marketing payments.
Previous wording
For the nine months ended September 30, 2025, investing activities resulted in a net cash outflow of $30.4 million, primarily due to $15.2 million for purchases of intangible assets, $8.2 million for disbursement of notes receivable, $8.0 million for purchases of equity securities in The Brand House Collective, and $5.2 million of expenditures for property and equipment, offset by $6.3 million of proceeds received from the sale of intangible assets.
Current wording
For the three months ended March 31, 2025, investing activities resulted in a net cash outflow of $13.1 million, primarily due to $8.0 million for purchases of equity securities, $5.2 million for purchases of intangible assets, and $1.2 million of expenditures for property and equipment, offset by $1.3 million of proceeds received from the sale of intangible assets.
Previous wording
For the nine months ended September 30, 2024, financing activities resulted in a net cash outflow of $2.1 million, primarily due to $3.3 million for payment of taxes withheld upon vesting of employee stock awards.
Current wording
For the three months ended March 31, 2026, financing activities resulted in a net cash outflow of $0.6 million, primarily due to $1.0 million for payment of taxes withheld upon vesting of employee stock awards.
Previous wording
For the nine months ended September 30, 2025, financing activities resulted in a net cash inflow of $89.0 million, primarily due to $101.7 million in net proceeds from the sales of our common stock pursuant to our "at the market" public offering, net of offering costs, offset by $7.0 million payments on short-term debt and $6.2 million repurchases of common stock under the stock repurchase program.
Current wording
For the three months ended March 31, 2025, financing activities resulted in a net cash inflow of $19.5 million, primarily due to $19.5 million in net proceeds from the sales of our common stock pursuant to our "at the market" public offering, net of offering costs.
Previous wording
We are involved in various tax matters, the outcomes of which are uncertain. As of September 30, 2025, accrued tax contingencies were $3.8 million. Changes in federal, foreign, state, and local tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities. These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings.
Current wording
We are involved in various tax matters, the outcomes of which are uncertain. As of March 31, 2026, accrued tax contingencies were $3.6 million. Changes in federal, foreign, state, and local tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities. These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our tax provision and rate differs from the statutory federal income tax rate of 21% primarily due to year-to-date losses on our retail operations for which tax benefits are limited.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The $26.2 million favorable change in other income (expense), net for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable to a $26.8 million decrease in loss recognized from our equity method securities.