Core Insights - The Brand House Collective reported a net sales decline to $103.5 million in Q3 2025 from $114.4 million in the same quarter last year, while narrowing losses significantly [1] - The company experienced a 7.4% drop in consolidated comparable sales and a 6% reduction in store numbers [1] Financial Performance - Gross profit decreased to $21.1 million, representing 20.4% of net sales, down from $32.1 million or 28.1% in Q3 2024, primarily due to weaker merchandise margins and fixed store occupancy costs [2] - The adjusted net loss widened to $13.6 million, or $0.61 per diluted share, compared to an adjusted net loss of $3.8 million, or $0.29 per diluted share, a year earlier [3] - Adjusted EBITDA moved to a loss of $9.9 million, contrasting with an adjusted EBITDA income of $0.5 million in the same period of 2024 [3] Operating Expenses and Cost Management - Operating expenses totaled $23.1 million, representing 22.3% of net sales, down from $34.5 million or 30.2% of net sales a year earlier, attributed to lower marketing expenditure and reduced self-insured employee benefit costs [3][4] - A $10.0 million gain from the sale of the Kirkland's brand to Beyond contributed to the reduction in operating expenses [4] Store Operations and Inventory - The company closed three Kirkland's Home stores and converted three into Bed Bath & Beyond Home stores, ending the period with 303 Kirkland's Home stores and three Bed Bath & Beyond Home stores [4] - Inventory decreased to $88.9 million as of November 1, 2025, down from $111.2 million a year earlier [4] Cash and Debt Position - Cash amounted to $6.5 million, with outstanding debt of $61.6 million and $5.8 million in letters of credit under the senior secured revolving credit facility [5] - The Brand House Collective operates over 300 stores across 35 US states and manages a portfolio of home and family brands through its e-commerce operations [5]

This audio is auto-generated. Please let us know if you have feedback Dive Brief:The Brand House Collective’s third quarter net sales declined about 9.6% year over year to $103.5 million, per a company press release Tuesday. The drop was driven by a 7.4% decline in consolidated comparable sales, which includes both stores and e-commerce, and a 6% drop in store count.By channel, store comps grew 1.7%, while e-commerce declined 34.6%. Three Kirkland's Home stores were closed in Q3 and three Kirkland's Home l ...

Financial Data and Key Metrics Changes - For Q2 2026, net sales were $75.8 million, down from $86.3 million in the prior year, reflecting a 12.5% year-over-year decline [11] - Comparable sales decreased by 9.7%, with a 5% decline in store count [12] - Gross margin decreased by 410 basis points to 16.3%, primarily due to a decline in merchandise margin and occupancy deleverage [12] - Net loss was $19.4 million compared to $14.5 million in the prior year, with an adjusted net loss of $17.8 million [15] Business Line Data and Key Metrics Changes - E-commerce sales faced a significant decline of 38.5%, impacted by a tornado disruption and liquidation efforts [12] - Store sales showed slightly positive comparable sales growth, driven by increased traffic and conversion, but were offset by lower average transaction values due to liquidation [12] Market Data and Key Metrics Changes - The company opened its first Bed Bath & Beyond Home Store in Brentwood, Tennessee, with strong initial sales and customer traffic exceeding expectations [5][6] - The company plans to convert all Kirkland's Home stores into Bed Bath & Beyond stores over the next 24 months, with each conversion expected to cost less than $100,000 [8] Company Strategy and Development Direction - The partnership with Bed Bath & Beyond is central to the company's transformation strategy, focusing on omnichannel retail and leveraging the Bed Bath & Beyond brand [10] - The company is also exploring expansion into the wholesale market for Kirkland's Home, aiming to improve supply chain efficiency and unit economics [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Q2 due to the tornado and liquidation efforts but expressed confidence in the future growth potential of the Bed Bath & Beyond brand [3][4] - The company expects to continue promotional activities and manage tariff costs while focusing on brick-and-mortar sales to improve profitability [18][32] Other Important Information - The company ended the quarter with $82 million in inventory, down 12% from the prior year, and total debt outstanding of $55.2 million [16] - Management indicated that they do not expect significant additional expenses related to the tornado damage in the second half of the year [17] Q&A Session Summary Question: What were the conversion costs for the Brentwood store? - The conversion cost for the Brentwood store was approximately $30,000, significantly less than the projected $100,000 due to minimal renovations [23] Question: How many stores are expected to be converted versus closed? - The company plans to close about 25 stores with natural lease expirations and estimates that 250 to 275 existing Kirkland's stores will remain in the mix over time [28][29] Question: When can we expect stabilization in the e-commerce business? - Management anticipates that e-commerce may normalize to earlier declines, focusing on more profitable brick-and-mortar transactions [32] Question: What is the expected impact of tariffs in the back half of the year? - Tariff impacts are expected to be around 100 basis points in Q3, with limited impact anticipated in Q4 [39] Question: How many conversions are planned for 2026? - The company has placed buys for 30 conversions in the first quarter of 2026, aiming for a wide rollout in preparation for the back-to-campus season [41]

Core Viewpoint - The Brand House Collective, Inc. will release its financial results for Q2 2025 on September 16, 2025, and will host a conference call to discuss these results [1]. Company Overview - The Brand House Collective, Inc., formerly known as Kirkland's, Inc., operates as a multi-brand merchandising, supply chain, and retail operator, managing a portfolio that includes Kirkland's Home and Bed Bath & Beyond brands [4]. - The company currently operates over 300 stores across 35 states and has e-commerce platforms at www.kirklands.com and www.bedbathandbeyondhome.com, offering curated, high-quality product assortments [4].