The Brand House Collective, Inc.

Second-quarter net sales were $75.8 million versus $86.3 million in the prior-year quarter. Comparable sales declined 9.7%, with store comps slightly positive but e-commerce comps down 38.5%; management estimated the tornado reduced e-commerce sales by 750 basis points and total comparable sales by 190 basis points. Gross margin was 16.3%, down 410 basis points year over year. Net loss was $19.4 million versus $14.5 million, and adjusted net loss was $17.8 million versus $13.9 million; adjusted loss per share was $0.90 versus $1.11, though management said the per-share comparison was affected by a larger share count. The company ended the quarter with $82 million in inventory and $55.2 million in total debt, and as of September 16, 2025, it had $49 million of outstanding debt, $10.8 million of availability after the minimum required excess availability covenant, and $20 million available from Beyond. Management did not provide formal revenue or EPS guidance, but it expects continued liquidation of non-go-forward inventory, no additional significant tornado-related expenses in the second half, incremental tariff costs beginning in Q3, about 100 basis points of tariff pressure in Q3, and limited tariff impact in Q4.

Amy Sullivan framed the quarter as the start of a broader omnichannel transformation rather than a simple rebrand. She said the first Bed Bath & Beyond Home store validated the concept, with strong media attention, traffic, and new customer growth, and she described the rollout as capital-light, with conversions expected to cost less than $100,000 per store. Her tone was confident and execution-focused, emphasizing that the company is using liquidation and capital deployment deliberately to fund conversions and build a national platform.

Andrea Courtois said the quarter was hit by two main issues: tornado disruption at the Jackson distribution center and intentional liquidation ahead of store conversions. She gave the key figures: net sales of $75.8 million, gross margin of 16.3%, operating expenses of $31.1 million, net loss of $19.4 million, and adjusted net loss of $17.8 million. She also broke out margin pressure from liquidation (130 basis points), damaged inventory write-offs (100 basis points), and tariffs (30 basis points), and said the company ended with $82 million of inventory and $55.2 million of debt, with $49 million of debt outstanding as of September 16 and $10.8 million of availability under the revolver after the covenant test.

Analysts focused on the economics of the Bed Bath & Beyond conversion, the pace of store rollouts, e-commerce stabilization, tariff exposure, and the company’s debt/liquidity position. Management said Brentwood cost about $30,000 to convert because it was already recently remodeled, while other stores may still stay below the sub-$100,000 target; Amy also said the company is planning about 25 store closures tied to January 2026 lease expirations and currently expects roughly 250 to 275 existing Kirkland stores to remain in the mix over time. On tariffs, Amy and Andrea said Q3 should carry the heaviest pressure, with Andrea estimating about 100 basis points of gross margin impact in Q3 and limited impact in Q4.