BED BATH & BEYOND, INC.

Any investment in our securities involves a high degree of risk. Please consider the following risk factors and the risk factors previously disclosed in Part 1, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2025 carefully. If any one or more of such risks were to occur, it could have a material adverse effect on our business, prospects, financial condition and results of operations, and the market price of our securities could decrease significantly. Statements to the effect that an event could or would harm our business (or have an adverse effect on our business or similar statements) mean that the event could or would have a material adverse effect on our business, prospects, financial condition and results of operations, which in turn could or would have a material adverse effect on the market price of our securities. Many of the risks we face involve more than one type of risk. Consequently, you should carefully read all of the risk factors below, the risk factors described in our Form 10-K for the year ended December 31, 2025, and in any reports we file with the SEC after we file this Form 10-Q, before making any decision to acquire or hold our securities.

Other than the risk factors set forth below, there are no material changes from the risk factors previously disclosed in Part I, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2025.

If our stockholders do not approve the proposal to increase the number of authorized shares of our common stock, our future capital‑raising and strategic flexibility could be materially limited.

At the Company’s 2026 Annual Stockholder Meeting, stockholders are being asked to vote on a proposal to amend our certificate of incorporation to increase the number of authorized shares of our common stock (the “Share Increase Amendment”). Failure to obtain stockholder approval of the Share Increase Amendment could adversely affect our ability to issue shares in the future for other purposes, for example to raise capital through equity financings, satisfy obligations under equity compensation arrangements, issue equity incentive awards for long-term retention, pursue strategic acquisitions or partnerships, or support our growth strategy. Any such limitations could require us to seek alternative financing arrangements, delay or reduce strategic initiatives, forego opportunities that require the issuance of equity, or rely more heavily on our cash from operations, any one of which could adversely affect our business, financial condition, and results of operations. Additionally, if the Share Increase Amendment is not approved by our stockholders, the interest rate on the Convertible Notes (as defined below) will increase (see “—Risks Related to the TCS Merger—If we do not obtain the requisite stockholder approvals required under the indenture that will govern the Convertible Notes, the interest rate on the Convertible Notes will increase, which could materially increase our interest expense, adversely affect our liquidity, and reduce our financial flexibility.”).

Risks Related to the TCS Merger

The TCS Merger may not be completed and the TCS Merger Agreement may be terminated in accordance with its terms.

The Agreement and Plan of Merger (the “TCS Merger Agreement”) by and among The Container Store Holdings, LLC (“TCS”), the Company, and Falcon Merger Sub, LLC (“Merger Sub”) is subject to a number of conditions that must be satisfied or waived (to the extent permitted) prior to the completion of our proposed merger with TCS (the “TCS Merger”), including (i) the absence of laws or orders restraining the consummation of the TCS Merger, (ii) either (A) receipt of the required TCS term loan lender approvals contemplated by the TCS Merger Agreement (the “TCS Lender Transaction Approval”) or (B) (x) the occurrence of a foreclosure and related restructuring in accordance with the strict foreclosure agreement contemplated by the TCS Merger Agreement and (y) the delivery of written consent from more than 50% of the holders of Class A Units of TCS following foreclosure and related restructuring (the “Post-Foreclosure Securityholder Written Consent”), (iii) TCS’s receipt of authorized new loans in an aggregate principal amount of no less than $55.0 million, which such new loans shall be repaid in full at the closing of the TCS Merger via the issuance of convertible notes (the “Convertible Notes”), (iv) the satisfaction of certain conditions set forth in TCS’s asset-based revolving credit agreement, including, among other things, approving or consenting to the TCS Merger, (v) the Company’s receipt of a copy of TCS’s 2026 audited financial statements and, if the closing of the TCS Merger has not occurred on or prior to August 15, 2026, receipt of the unaudited quarterly financial statements of TCS for the fiscal quarter ended June 30, 2026 and (vi) the representations and warranties of TCS, Merger Sub and the Company being true and correct, subject to the materiality standards contained in the TCS Merger Agreement, and TCS, Merger Sub and the Company having complied with their respective obligations under the TCS Merger Agreement. These conditions to the completion of the TCS Merger, some of which are beyond the control of the Company and TCS, may not be satisfied or waived in a timely manner or at all, and, accordingly, the TCS Merger may be delayed or not completed.

Additionally, either the Company or TCS may terminate the TCS Merger Agreement under certain circumstances, including, among other reasons, if the other party breaches its representations, warranties, or covenants under the TCS Merger Agreement in a way that would result in a failure of its condition to closing being satisfied (subject to certain procedures and cure periods), if there exists any law or order restraining the consummation of the TCS Merger, or if the TCS Merger has not closed by July 31, 2026, or, if the only condition that has not been satisfied or waived at such time is TCS’s requirement to deliver certain financial statements, September 30, 2026.

The termination of the TCS Merger Agreement could negatively impact our business and the trading prices of our common stock.

If the TCS Merger is not completed, the ongoing business of the Company may be adversely affected and, without realizing any of the expected benefits of having completed the TCS Merger, we would be subject to a number of risks, including the following:

•failure to complete the proposed TCS Merger may result in negative publicity and a negative impression of us in the investment community;

•we may experience negative reactions from our customers, employees, and other counterparties;

•we will be required to pay our costs relating to the TCS Merger, such as financial advisory, legal, financing and accounting costs and associated fees and expenses, whether or not the TCS Merger is completed; and

•matters relating to the TCS Merger (including integration planning) will require substantial commitments of time and resources by management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to us.

Our current stockholders will have a reduced ownership and voting interest in us after the TCS Merger compared to their current ownership and will exercise less influence over management.

Based on the number of issued and outstanding shares of common stock as of March 31, 2026, it is expected that TCS’s equity holders and creditors entitled to receive merger consideration will collectively own up to approximately 22%, of our outstanding shares of common stock after giving effect to the TCS Merger and assuming the conversion of all Convertible Notes. As a result of the TCS Merger, assuming consummated, our current stockholders will own a smaller percentage of the combined company than they currently own, and as a result will have less influence on our management and policies of the combined company than they now have on our management and policies, as the case may be.

Under the TCS Merger Agreement, the merger consideration includes a combination of the Convertible Notes and shares of common stock. The number of shares of common stock that may be issued at closing is subject to a cap equal to the lesser of (i) 19.99% of the combined voting power or number of shares of common stock outstanding immediately prior to entry into the TCS Merger Agreement and (ii) the number of authorized and unissued shares of common stock not otherwise reserved as of the closing date. To the extent the required stock consideration would exceed that threshold, the amount of such excess generally would instead be satisfied through the issuance of convertible notes. As a result, the ultimate mix of equity and debt securities issued in the TCS Merger may differ materially from current expectations and/or could require the Company to pay interest on an increased principal amount of convertible notes, which could affect investor perception of the transaction, create uncertainty regarding dilution and leverage, and adversely affect the market price of our common stock.

Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the TCS Merger.

The TCS Merger is subject to a number of conditions to closing as specified in the TCS Merger Agreement. These closing conditions include, among others, the absence of laws or orders restraining the consummation of the TCS Merger, either the TCS Lender Transaction Approval or the occurrence of a foreclosure and written consent from more than 50% of holders of Class A units of TCS following foreclosure, TCS’s receipt of authorized new loans in an aggregate principal amount of no less than $55.0 million, the satisfaction of certain conditions set forth in TCS’s asset-based revolving credit agreement, including, among other things, approving the TCS Merger, the Company’s receipt of a copy of TCS’s 2026 audited financial statements, and representations of the parties being true and correct, subject to the materiality standards contained in the TCS Merger Agreement, and the parties having complied in all material respects with their respective obligations under the TCS Merger Agreement. No assurance can be given that these approvals, financings, consents and other required conditions to closing will be obtained or satisfied, and, if they are obtained or satisfied, no assurance can be given as to their timing or the terms on which they are obtained. Any delay in completing the TCS Merger could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that we expect to achieve if the TCS Merger is successfully completed within the expected time frame.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the TCS Merger.

The success of the TCS Merger will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by us and TCS. It is possible that these employees may decide not to remain with us or TCS, as applicable, while the TCS Merger is pending, or with the combined company if the merger is consummated. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating us and TCS to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, we and TCS may not be able to locate suitable replacements for any key employees who leave either company or offer employment to potential replacements on reasonable terms. In addition, there could be disruptions to or distractions for the workforce and management, including disruptions associated with integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of ours and TCS to the same extent that those companies have been able to attract or retain their own employees in the past.

The TCS Merger, and uncertainty regarding the TCS Merger, may cause customers, strategic partners and others to delay or defer decisions concerning us or TCS and adversely affect each company’s ability to effectively manage its respective business.

The TCS Merger will occur only if the stated conditions are met, including the receipt of required approvals, and consents among other conditions. Many of these conditions are beyond our control and TCS’s control, and both parties also have certain rights to terminate the TCS Merger Agreement under certain circumstances.

Accordingly, there may be uncertainty regarding the completion of the TCS Merger. This uncertainty may cause customers, strategic partners or others that deal with us or TCS to delay or defer entering into contracts with us or making other decisions concerning us or seek to change or cancel existing business relationships with us, which could negatively affect the business of either company. Any delay or deferral of those decisions or changes in existing agreements could have an adverse impact on our business, regardless of whether the TCS Merger is ultimately completed.

Whether or not the TCS Merger is completed, the announcement and pendency of the TCS Merger could cause disruptions in our business, which could have an adverse effect on our business and financial results.

Whether or not the TCS Merger is completed, the announcement and pendency of the TCS Merger could cause disruptions in our business, including by diverting the attention of our management away from day-to-day business operations and toward the completion of the TCS Merger. In addition, we have diverted significant management resources in an effort to complete the TCS Merger. If the TCS Merger is not completed, we will have incurred significant costs, including the diversion of management resources, for which we will have received little or no benefit. These disruptions could adversely affect our business and financial results.

The consummation of the TCS Merger is dependent upon financing-related arrangements that may not be completed as expected.

Pursuant to the TCS Merger Agreement, TCS is required to receive authorized new loans in an aggregate principal amount of $55.0 million, and on the closing date, contingent upon the occurrence of the closing, we are required to issue and deliver the Convertible Notes in an aggregate principal amount equal to the aggregate obligations arising under or in connection with such new loans, subject to the adjustments contemplated by the TCS Merger Agreement. In addition, the TCS Merger Agreement contemplates other financing-related arrangements, including specified loan and note mechanics tied to the consummation of the TCS Merger. There can be no assurance that these financing arrangements will be completed on the expected timeline, on acceptable terms, or at all, and failure to do so could delay the consummation of the TCS Merger, increase costs, or otherwise adversely affect us, TCS, or the combined company.

The TCS Merger will involve substantial costs.

We and TCS have incurred and expect to incur non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the TCS Merger. These costs and expenses include fees paid to financial, legal, accounting and other advisors, and other related charges. Some of these costs are payable by us regardless of whether the TCS Merger is completed.

The combined company will also incur restructuring and integration costs in connection with the TCS Merger. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of the combined company. There are processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the TCS Merger and the integration of TCS’s business with our business. We expect that the elimination of duplicative costs, strategic benefits, and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, TCS Merger-related and restructuring costs over time. However, any net benefit may not be achieved in the near term or at all. Many of these costs will be borne by us even if the TCS Merger is not completed. While we have assumed that certain expenses would be incurred in connection with the TCS Merger and the other transactions contemplated by the TCS Merger Agreement, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses.

Lawsuits may in the future be filed against us or TCS, or against our directors or TCS’s principals, challenging the TCS Merger, and an adverse ruling in any such lawsuit may prevent the TCS Merger from becoming effective or from becoming effective within the expected time frame.

Transactions such as the proposed TCS Merger are frequently subject to litigation or other legal proceedings, including actions alleging that our board of directors or the TCS principals breached their respective fiduciary duties to their stockholders or equityholders by entering into the TCS Merger Agreement, by failing to obtain a greater value in the transaction or otherwise. Neither we nor TCS can provide assurance that such litigation or other legal proceedings will not be brought. If litigation or other legal proceedings are in fact brought against us or TCS, or against our board of directors or the TCS principals, we and they will defend against them, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operations or financial position or that of the combined company, including through the possible diversion of either company’s resources or distraction of key personnel.

Furthermore, one of the conditions to the completion of the TCS Merger is that no law or order restraining, enjoining, making illegal, or otherwise prohibiting the consummation of the TCS Merger be in effect. As such, if any plaintiff or governmental authority is successful in obtaining such relief, that relief may prevent the TCS Merger from becoming effective or from becoming effective within the expected time frame.

If we do not obtain the requisite stockholder approvals required under the indenture that will govern the Convertible Notes, the interest rate on the Convertible Notes will increase, which could materially increase our interest expense, adversely affect our liquidity, and reduce our financial flexibility.

Under the indenture that will govern the Convertible Notes, if we do not obtain the stockholder approval required under the New York Stock Exchange rules to permit us to issue more than 19.99% of our outstanding common stock in satisfaction of conversion obligations, the interest rate on the Convertible Notes will increase. The Convertible Notes will initially bear interest at a rate of 5.00% per year. The Indenture will provide that if we have not obtained such stockholder approval on or before the three-month anniversary of the closing of the TCS Merger, the interest payable on the Convertible Notes will increase to 10.00% per year until such stockholder approval is obtained and if the Company has not obtained such stockholder approval on or before the six-month anniversary of the Closing, the interest payable on the Buyer Convertible Notes will increase to 12.00% per year until such stockholder approval is obtained. Accordingly, if stockholder approval is delayed or never obtained, we could remain subject to an elevated interest rate for a prolonged period, which could materially adversely affect our results of operations, cash flows and financial flexibility.

Future sales or other distributions of our stock may depress our stock price or subject us to limitations on our ability to use our net operating loss and tax credit carryforwards.

Sales or other distributions of a substantial number of shares of our common stock, in the public market or otherwise, by us or by a significant stockholder, have in the past and could in the future, depress the trading price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

In addition, we have in the past and may in the future issue additional shares of our common or preferred stock from time to time in amounts that may be significant. We have sold common stock including under our "at the market" sales agreement and in follow-on underwritten offerings in the past and may do so in the future. We also previously issued a class of preferred stock that was publicly traded and may in the future issue preferred stock that is publicly traded. The sale of substantial amounts of our common or any preferred stock, by us or a significant stockholder, or the perception that these sales may occur, could adversely affect the trading prices of our securities.

Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation may be limited in its ability to use its pre-ownership change net operating loss carryforwards and certain other tax attributes to offset its post-ownership change taxable income or otherwise reduce its income tax liabilities. In general, an “ownership change” will occur if the ownership of our stock by certain stockholders or groups of stockholders changes by more than 50% over a rolling three-year period. Similar rules may apply under state tax laws. Changes in the ownership of our stock, including as a result of issuances of stock in connection with the proposed TCS Merger, our merger with TBHC and other transactions (some of which may be beyond our control), may result in an ownership change, which could result in increased future income tax liability to us.

Risks Related to the Combined Company with TCS

We and TCS have each incurred significant losses in recent years, and we cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of the combined company.

We and TCS have each historically used significant amounts of cash in operating activities, and we expect the combined company to continue to use significant amounts of cash to fund ongoing operations, capital requirements, working capital needs, and debt service obligations for the foreseeable future. If we, TCS, or the combined company do not achieve profitability as anticipated, we may be required to allocate additional financial resources, which could adversely affect liquidity, results of operations, or the ability to pursue other strategic initiatives. The incurrence of indebtedness for such purposes would result in increased payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt or secure such debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our liquidity, financial condition, or ability to conduct our business. We cannot be certain when or if our, TCS’s, or the combined company’s operations will generate sufficient cash to fully fund ongoing operations or the growth of the combined company.

Combining our business with that of TCS may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the TCS Merger, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock.

The success of the TCS Merger, if consummated, will depend on, among other things, the ability of us and TCS to combine our businesses in a manner that facilitates growth opportunities. We and TCS have entered into the TCS Merger Agreement because we believe that the TCS Merger and the other transactions contemplated by the TCS Merger Agreement are in the best interests of our respective stockholders and that combining our businesses will produce benefits.

However, we and TCS must successfully combine and integrate our businesses in a manner that permits these benefits to be realized. In addition, the combined company must achieve the anticipated growth without adversely affecting current revenues, liquidity, customer and vendor relationships, and investments in future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the TCS Merger may not be realized fully, or at all, or may take longer to realize than expected.

An inability to realize the full extent of the anticipated benefits of the TCS Merger and the other transactions contemplated by the TCS Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and any potential cost savings, if achieved, may be lower than what we and TCS expect and may take longer to achieve than anticipated. If we and TCS are not able to adequately address integration challenges, we may be unable to successfully integrate operations or realize the anticipated benefits of the integration of the two companies.

The failure to successfully integrate TCS with our businesses and operations in the expected time frame may adversely affect the combined company’s future results.

We and TCS have operated and, until the completion of the TCS Merger, will continue to operate independently. There can be no assurance that our businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees of either company, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating our operations in order to realize the anticipated benefits of the TCS Merger so the combined company performs as expected:

•combining the companies’ operations and corporate functions;

•combining the businesses and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the TCS Merger, the failure of which would result in the anticipated benefits of the TCS Merger not being realized in the time frame currently anticipated or at all;

•integrating the companies’ technologies and technologies licensed from third parties;

•maintaining existing agreements with customers, suppliers, distributors, vendors, landlords, and other counterparties, avoiding delays in entering into new agreements with prospective counterparties, and leveraging relationships with such third parties for the benefit of the combined company;

•coordinating distribution and marketing efforts;

•coordinating geographically dispersed organizations; and

•effecting actions that may be required in connection with obtaining regulatory or other governmental approvals and consents.

In addition, at times the attention of certain members of our and TCS’s management and each company’s respective resources may be focused on completion of the TCS Merger and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company.

The combined company may not be able to retain customers or other business relationships, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with us or TCS.

If the TCS Merger is consummated, the combined company may experience impacts on relationships with customers, suppliers, vendors, landlords, and other counterparties that may harm the combined company’s business and results of operations. Certain counterparties may no longer desire to do business with the combined company following the TCS Merger, may seek to renegotiate commercial terms, or may terminate, reduce, or fail to renew existing relationships. There can be no guarantee that customers and other third parties will remain with or continue to have a relationship with the combined company following the TCS Merger. If any customers or other counterparties stop doing business with the combined company, then the combined company’s business and results of operations may be harmed.

We and TCS also have contracts with landlords, licensors and other business partners which may require us or TCS, as applicable, to obtain consent from these other parties in connection with the TCS Merger, or which may otherwise contain limitations applicable to such contracts following the TCS Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the combined company’s business. In addition, third parties with whom we or TCS currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the TCS Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the TCS Merger. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the TCS Merger or by a termination of the TCS Merger Agreement.

The combined company may be exposed to increased litigation from stockholders, customers, suppliers, distributors, consumers and other third parties due to the combination of our and TCS’s businesses following the TCS Merger. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations.

Due to the TCS Merger, we may be required to recognize impairment charges for goodwill and other intangible assets.

Upon and subject to closing the TCS Merger, we anticipate that we will have a significant amount of goodwill and other intangible assets on our consolidated balance sheet. Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations, such as the TCS Merger. If the carrying amount exceeds fair value, an impairment loss is recognized. Goodwill is tested for impairment at least annually, or when we determine that a triggering event has occurred. Significant negative industry or economic trends, disruptions to our business, the impact of acquired businesses (including an inability to effectively integrate acquired businesses), unexpected significant changes, planned changes in use of the assets, divestitures and market capitalization declines may impair goodwill and other intangible assets. If the TCS Merger is consummated, we may recognize impairment charges for goodwill and other intangible assets. Any charges relating to such impairments could materially and adversely affect our results of operations in the periods recognized, which could result in an adverse effect on the market price of our common stock.

The market price for shares of our common stock following the TCS Merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of our common stock.

If the TCS Merger is consummated, our stockholders and the current equityholders and creditors of TCS entitled to receive merger consideration under the TCS Merger Agreement will hold shares of common stock in the combined company. The business of TCS differs from our business, and, accordingly, the results of operations and prospects of the combined company will be affected by some factors that are different from those currently or historically affecting our results of operations and the market price of our common stock.

Former TCS equityholders and creditors who receive shares of our common stock or the Convertible Notes in the TCS Merger may decide not to hold such securities following the TCS Merger, and our existing stockholders may decide to reduce their investment in us as a result of changes to our investment profile following the TCS Merger. Sales of our common stock after the closing, or the perception that such sales may occur, as well as future conversion of the Convertible Notes into shares of our common stock, could have the effect of depressing the market price of the common stock of the combined company.