Bed Bath & Beyond, Inc.

Hello everyone. Thank you for joining us, and welcome to the Q1 2026 Bed Bath & Beyond, Inc. Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Melissa Smith, General Counsel and Corporate Secretary. Melissa, please go ahead.

Thank you, Operator. Good afternoon, and welcome to Bed Bath & Beyond Inc.' 's first quarter 2026 earnings conference call. Joining me on the call today are Executive Chairman and Chief Executive Officer Marcus Limonis, President Amy Sullivan, Chief Financial Officer Adrienne Lee, and Chief Operating Officer Lisa Foley. Today's discussion and our responses to your questions reflect management's views as of today, April 27, 2026, and may include forward-looking statements, including without limitation to statements regarding our future business strategy, goals, financial performance, outlook for the remainder of the quarter or any other period, anticipated growth, stock price, profitability, macroeconomic conditions, the value of any of our brands and investments, relationships with third parties and agreements we are entering into with them, margin improvement, expense reduction, marketing efficiencies, conversion, customer experience, changes to brands or websites, product offerings, the merger agreement with the container store, blockchain and tokenization efforts and strategies, and the timing of any of the foregoing. Actual results could differ materially from such statements. Additional information about risk, uncertainties, and other important factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31, 2025, in our Form 10-Q for the quarter ended March 31, 2026, and in our subsequent filings with the SEC. During this call, we'll discuss certain non-GAAP financial measures. Our filings with the SEC, including our first quarter earnings release, which is available on our investor relations website at investors.beyond.com, contain important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures. Following management's prepared remarks, we will open the call for questions. A slide presentation with supporting data is available for download on our investor relations website. please review the important forward-looking statements disclosure on slide two of that presentation. With that, Marcus, it's all yours.

Thank you so much. I am both honored and privileged to be serving as of January 1st as the CEO of Bed Bath & Beyond, and I want to thank everybody for joining. Over the last two years, our company has been focused on rebuilding this business, reconstructing the cost structure, and lowering the hurdle for profitability with an intense amount of discipline and tough decisions around headcount, legacy technology, and the cost of acquiring and retaining our customer base. The objective has been to reposition the company for growth with a definitive point of view of reclaiming profitability, coupled with long-term durability. That work was not about short-term fixes or temporary solutions. It was about making structural changes to how we operate by simplifying the organization, removing layers, materially reducing our cost structure, and aligning the team around a clear and consistent set of priorities focused on the homeowner, asset allocation, and data. These priorities have not changed. were focused on driving top-line growth, operating profitability, and building something that is unique, durable, and meaningful in the home space. In many cases, those decisions were not immediately visible in the numbers. The last couple of years were rough. Declining revenue while dramatically improving margins and lowering the cost structure created short-term pressure on the perceived value of our companies. Those changes were necessary because without resetting the foundation, there was no path to substantive profitability or to building something with purpose that would last. I knew the changes would take time to show up, but that when they did, they would appear in a way that were durable and repeatable. This is the eighth quarter in a row where the bottom line has improved. Back in January, when I laid out our long-term plan with our Everything Home three-pillow ecosystem, we as a team committed to inflect top-line growth while continuing to reduce costs. That happened. We delivered revenue of approximately $248 million, up 7% year-over-year, or 9.4% when you exclude our discontinuing operations from Canada, which marks the first time in 19 quarters that this business has delivered year-over-year growth. That result occurred concurrently while our operating costs for the quarter reflected the lowest operating cost structure in over 12 years. The growth we are seeing is emerging from a fundamentally reset operating mindset, not incremental spending or short-term activity. That shift becomes clearer as you look beneath the top line. We're acquiring our customers more efficiently, our own channels are performing better, and the engagement we are seeing is higher quality. As the quality of the business improves, the financial performance begins to reflect it. Adjusted EBITDA improved by $5 million year over year, and our net loss improved by $24 million. At the same time, the underlying trends are moving in the right direction. We're encouraged by the stability of our active customer file with returning customers and orders delivered improving sequentially. These trends are important because they show that the foundation is not only holding up, but it's beginning to build. Stabilizing the business was never the end goal. It was just my starting point. Everything we are building starts with a simple idea. The home is not a single transaction. It is a life cycle that unfolds over time, providing us with an opportunity to use technology and data to create lifetime value from every single customer relationship. On average, homeowners remain in their home for approximately 11 to 12 years. And during that period, they move in, maintain their home, improve it, finance it, experience life events, and eventually transition out of it. Historically, those interactions have been fragmented across different companies and disconnected systems. What we are now building is a connected approach. As a reminder, we have organized the business into three pillars that reflect that life cycle. The omni-channel platform is where the relationship begins. Yeah, the retail business, online and in-store. Our products and financial services platform allows us to participate more deeply in the economic activity tied to the home. And our home services platform, maybe the one I'm most excited about, brings us directly, physically into the home. Earlier this quarter, we completed the first acquisition of our omni-channel pillar with the Kirkland's transaction. We acquired strategic real estate, a product development and sourcing organization second to none, and exceptional management. Additionally, we announced the deal to acquire the Container Store. That transaction gives us trophy real estate that is wildly underutilized, a world-class distribution and supply chain system, and a home services business with Alpha and Closetworks that will move into Pillar 3, a foundational culture and process that will sit at the hub of Pillar 1, and it comes with exceptional leadership as well. Between those two, we will absorb the capabilities our businesses and our customers want and eliminate all of the redundancies and inefficiencies quickly. Pillar 2, our product and financial services group, is just getting started. and as noted previously, will include property and casualty insurance and home warranties through a nationwide relationship with Brown and Brown Insurance via the Beyond Home Agency. It will also include America's first homeowner credit union in partnership with the leading credit union. Additionally, this pillar will include our credit card program and product warranties. At the center of this pillar is a transaction agreed to in principle that includes a real estate brokerage, home title company, and mortgage brokerage. This acquisition would not only create an origination engine for the overall ecosystem, but through technology and AI will allow us to meet and transact with tens of millions of customers without a traditional cost of acquisitions. The final pillar, and potentially the most exciting, is Pillar 3, our home services business. Early this quarter, we announced the intent to acquire F9 Brands, which includes Cabinets to Go, Lumber Liquidators, and Salawin Building Products. This acquisition would serve as a platform transaction, bringing unbelievable executive management, warehouse and supply chain capabilities, and over half a billion dollars of revenue. Attached to that platform are Alpha and Closetworks organization systems, which were part of the Container Store transaction. Lastly, we've agreed to, in principle, to acquire a nationwide network of installation and renovation professionals. We believe that's part of building our moat. Together, we believe this creates a high margin pillar that is defensible against e-commerce competitors and firmly differentiate our company as a service provider, regardless of what's happening with the economy. But what is equally important and what I want to be very clear about is how we are building this business. We are not acquiring companies for the sake of scale. We are acquiring capabilities. Many of these businesses and brands that I mentioned have had decades of success but struggled more recently as standalone entities. They became burdened with fixed costs, duplicative infrastructure, and inefficient cost structures and debt that limited their ability to perform. What we see is something very different. We see capabilities that fill specific roles across our white paper for the entire homeowner life cycle. When you think about the white space of homeownership, each of these businesses represents a critical function that that customer needs over time across those 11 or 12 years. Our strategy is to extract those capabilities, preserve what makes them valuable, and eliminate, very strongly eliminate, the layers of cost and inefficiency that came with operating them independently. We preserve what works, we remove what does not work, and we connect everything through a single system. Earlier today, we announced a partnership with BILT that allows that single operating connectivity system to work for the consumer. When we bring those capabilities together inside of one platform supported by shared infrastructure and a unified data layer and a single customer identity, they become significantly more powerful together than they ever were apart. This is where our model is fundamentally diverges from traditional consolidation. Most consolidations focus on cost removal. That's part of our model. And we'll continue to eliminate those costs and inefficient operating expenses, including underperforming assets. But the real opportunity is not just cost. The real opportunity is the revenue that we believe we can create by understanding that single sign-on unified customer layer, giving each of these brands and each of these businesses an opportunity to cross-promote inside of one big data lake. By connecting these businesses through technology and artificial intelligence, we are building a system that allows us to engage with the same customer across multiple needs over time, dramatically lowering our cost of acquisitions, while increasing the lifetime value that customer could offer us. Each of these businesses has built and retained its own customer base. By bringing those customer bases together into a single ecosystem, we create a competitive advantage that allows us to grow revenue at a disproportionate rate compared to standalone competitors. It's over 100 million unique homeowners. That's not theoretical. It's structural. That is our business model. When you look across the brands we've acquired and are in the process of acquiring, including Overstock, Bed Bath & Beyond, The Container Store, Bye Bye Baby, Kirkland's, Lumber Liquidators, Elfa, Closet Works, and Cabinets To Go, along with our partnerships across insurance, credit, warranties, and our planned acquisition in brokerage, mortgage, title, installation, and renovation, what we are assembling is not a collection of businesses. It's an ecosystem. Each business contributes a capability, each capability strengthens the platform, and together they create something significantly more value than the sum of its parts. Each of these pillars has value independently, but the real value is when they work together. That's what allows us to move from serving a customer once to serving the same customer repeatedly over time. With that, I'll turn the call over to Adrienne.