Bed Bath & Beyond Inc. reported fourth‑quarter 2025 results that beat consensus estimates, with net revenue of $273.4 million—down 9.8% year‑over‑year from $303.2 million. The company posted an adjusted EBITDA loss of $4 million, a $23 million improvement over the $27 million loss in the same quarter a year earlier, and a net loss of $21 million, a $60 million reduction from the $81 million loss in Q4 2024. Gross profit rose to $67 million, or 24.6% of revenue, reflecting a 160‑basis‑point margin expansion that exceeded analysts’ expectations.
Revenue fell 10% year‑over‑year in the quarter, but the decline narrowed to 6% when the impact of discontinuing operations in Canada was excluded. The company cited housing‑market softness and the elimination of vendors and SKUs that generated negative contribution margin as key drivers of the revenue decline. At the same time, average order value improved 7%, driven by a stronger assortment on the Bed Bath site and a higher sales mix into Overstock.
Margin expansion was largely attributable to structural changes in freight contracts and returns economics, as well as continued pricing and discounting rigor. These operational improvements, combined with disciplined cost management, enabled the company to lift gross margin to 24.6% for the quarter, up 160 basis points from the same period a year earlier. The company also reported a 390‑basis‑point improvement in full‑year gross margin to 24.7%.
"Over the last 8 quarters, we have delivered consistent year‑over‑year EBITDA improvement while materially lowering the breakeven level of the company. That discipline continued in the fourth quarter," said CEO Marcus Lemonis. "Our fourth quarter capped a year of measurable financial and operational progress. We built our core retail discipline, improved margins, enhanced marketing efficiency and strengthened our balance sheet." CFO Adrianne Lee added, "Revenue declined 10% year‑over‑year in the fourth quarter and 6% if you exclude the impact of discontinuing our operations in Canada. AOV improved 7%, driven by our continued focus on improving assortment on the Bed Bath site and an increased sales mix into Overstock." "Gross margin landed at 24.6% for the quarter, a 160 basis point improvement compared to the same period last year. For the full year, we improved gross margin by 390 basis points to 24.7%, driven by structural changes in freight contracts and returns economics as well continued pricing and discounting rigor," Lee noted.
The company reiterated its 2026 outlook, targeting low‑ to mid‑single‑digit revenue growth while maintaining a gross margin in the 24%‑26% range. With $207 million in cash and no debt, Bed Bath & Beyond has a 2½‑year runway at current burn rates, positioning it to continue executing its “Everything Home” strategy and potentially unlock value from its blockchain assets. CEO Lemonis emphasized that the company is building the first Everything Home Company designed to make home ownership and living simpler and more affordable through a disciplined, interconnected ecosystem.
Investors reacted positively to the earnings beat and margin expansion, underscoring confidence in the company’s turnaround trajectory and its disciplined cost‑management approach.
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