The Brand House Collective, Inc. (NASDAQ: TBHC) reported a net loss of $3.7 million for the 13‑week quarter ending November 1, 2025, a sharp improvement from the $7.7 million loss recorded in the same period a year earlier. Net sales fell 9.2% to $103.5 million, down from $114.4 million in Q3 2024, while the 39‑week period ended November 1 posted a net loss of $35.7 million versus $31.0 million a year earlier and sales of $260.8 million, a 10.4% decline from $292.5 million. The company’s operating expenses for the 13‑week period dropped to $23.1 million from $34.5 million a year earlier, reflecting a disciplined cost‑control program that offset the revenue decline. For the 39‑week period, operating expenses were $85.0 million, down from $100.1 million a year earlier, driven largely by the sale of the Kirkland’s brand to Bed Bath & Beyond and inventory‑liquidation costs that were front‑loaded in the prior year.
The earnings miss was driven by a $0.61 adjusted loss per share, falling short of the consensus estimate of a $0.13 loss—a miss of $0.48 or 368%. Revenue also missed expectations, coming in at $103.5 million against a consensus of $109.39 million, a shortfall of $5.89 million or 5.4%. The shortfall was largely attributable to a 34.6% decline in e‑commerce sales, which outweighed a modest 1.7% increase in in‑store comparable sales. Gross‑profit margin contracted to 20.4% from 28.1% year‑over‑year, a compression of 7.7 percentage points, driven by lower merchandise margins from inventory liquidation and tariff‑related cost increases.
Pre‑market trading saw the stock fall nearly 6%, a reaction that mirrored the magnitude of the earnings and revenue misses. Analysts cited the sharp e‑commerce decline and margin compression as key headwinds, while the company’s debt load of $61.6 million and high beta added to investor concern. The market’s negative reaction was amplified by the fact that the company’s adjusted loss per share was more than four times the analyst estimate, underscoring the surprise element of the miss.
CEO Amy Sullivan emphasized that inventory‑optimization efforts are supporting the Bed Bath & Beyond store‑conversion program, which has already begun to generate stronger traffic and average‑ticket growth in Tennessee. She reiterated confidence in the pending merger with Bed Bath & Beyond, stating that the combination will unlock operational and financial synergies and create a powerful omnichannel platform. Sullivan also noted that the sale of the Kirkland’s brand for $10 million helped reduce operating expenses and accelerate the transition to the Bed Bath & Beyond format.
The results highlight a company in transition: revenue is declining, but the loss is narrowing thanks to cost discipline and strategic asset sales. Margin compression signals pricing pressure and the impact of inventory liquidation, while the sharp e‑commerce decline points to broader channel challenges. The company’s debt position and high beta suggest that investors will closely monitor the merger’s progress and the effectiveness of the store‑conversion strategy as it seeks to stabilize earnings and rebuild growth momentum.
The company’s guidance for the remainder of the fiscal year was not updated in the release, but the management’s focus on completing the conversion of all Kirkland’s Home stores within 24 months and the ongoing merger with Bed Bath & Beyond indicates a strategic pivot toward a unified omnichannel model. Investors will likely reassess the company’s long‑term prospects as the merger closes and the new store format begins to generate consistent traffic and profitability.
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