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Bed Bath & Beyond (BBBY)
NYSE:BBBY
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Bed Bath & Beyond
(NYSE:BBBY)
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Rating:48Neutral
Price Target:
$5.00
▼(-1.38% Downside)
Action:ReiteratedDate:02/24/26
The score is held down primarily by weak financial performance (multi-year revenue contraction, ongoing losses, and continued negative cash flow) and bearish technicals (below key moving averages with negative MACD). Offsetting this, the latest earnings call showed meaningful margin and EBITDA improvement with positive 2026 directional commentary, while recent corporate actions are supportive but introduce additional execution and risk exposure.
Positive Factors
Gross Margin Expansion
Sustained gross margin expansion (FY ~24.7%, +390 bps YoY) reflects structural improvements in vendor terms, product mix, inventory and returns management. Those operating levers support durable margin improvement and provide a clearer path to positive operating leverage as volumes recover and higher‑margin pillars scale.
Operational Efficiency & EBITDA Progress
Meaningful year-over-year EBITDA improvement and realized $150M+ run‑rate cost cuts signal lasting structural expense discipline. Lower S&M and G&A, plus efficiency gains, reduce the break‑even threshold and improve margin resilience, increasing the odds that future revenue growth can translate into sustainable profitability.
Strategic 3‑Pillar M&A & Scale Opportunity
A clear multi‑pillar M&A strategy to add omnichannel scale (~$1.5B plus potential $500M) diversifies revenue into higher‑margin services and protection offerings. If executed, this structural expansion could improve consolidated margins over time and create cross‑sell advantages versus pure retail peers.
Negative Factors
Multi‑Year Revenue Contraction
A sharp, multi‑year top‑line decline erodes scale economics, supplier leverage and fixed‑cost absorption. Persistent revenue shrinkage reduces margin upside potential, constrains reinvestment capacity, and raises the execution burden on M&A and restructuring to rebuild a sustainable revenue base.
Persistent Negative Cash Flow
Ongoing negative operating and free cash flow (≈-$57M FCF in 2025) limits internal funding for capex, technology, and integration costs. Reliance on external financing or asset monetization increases vulnerability to credit market shifts and can materially compress time available to execute strategic pivots.
Limited Near‑Term Liquidity & Integration Risk
Modest combined cash/inventory (~$207M) and materially eroded equity reduce the financial buffer while the company pursues acquisitions and tech upgrades. Integration and transaction costs, plus early‑stage tech initiatives, heighten execution risk and could strain liquidity if synergies are delayed.
Bed Bath & Beyond (BBBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$347.19M
Dividend YieldN/A
Average Volume (3M)1.65M
Price to Earnings (P/E)―
Beta (1Y)2.68
Revenue Growth-27.23%
EPS Growth62.19%
CountryUS
Employees32,000
SectorGeneral
Sector StrengthN/A
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.30
Shares Outstanding68,886,750
10 Day Avg. Volume1,592,349
30 Day Avg. Volume1,654,689
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)1.51
Price to Sales (P/S)0.31
P/FCF Ratio-5.79
Enterprise Value/Market Cap0.65
Enterprise Value/Revenue0.22
Enterprise Value/Gross Profit0.88
Enterprise Value/Ebitda-2.99
Forecast
1Y Price Target
$10.67Price Target Upside110.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)-0.69
Revenue Forecast (FY)$1.09B
Bed Bath & Beyond Business Overview & Revenue Model
Company DescriptionBed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and various juvenile products. As of February 26, 2022, the company had 953 stores, which included 771 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico, and Canada; 130 buybuy BABY stores in 37 states and Canada; and 52 stores in 6 states under the names Harmon, Harmon Face Values or Face Values. It also offers products through various Websites and applications comprising bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, facevalues.com, buybuybaby.com, buybuybaby.ca, and decorist.com. In addition, the company operates Decorist, an online interior design platform that provides personalized home design services. Bed Bath & Beyond Inc. was incorporated in 1971 and is headquartered in Union, New Jersey.
How the Company Makes MoneyBed Bath & Beyond generates revenue primarily through the sale of home goods and related products in its physical stores and online platform. The company operates a multi-channel retail model, combining brick-and-mortar locations with e-commerce capabilities. Key revenue streams include sales of bedding, bath products, kitchenware, and home décor items. Additionally, BBBY leverages various promotional strategies, including coupons and loyalty programs, to drive customer engagement and repeat purchases. The company has historically partnered with various brands and suppliers to offer exclusive products, which can enhance its market presence and sales. Seasonal sales events and holiday promotions also contribute significantly to its earnings, as consumers tend to spend more during these periods.
Bed Bath & Beyond Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call emphasized substantial operational and margin progress (gross margin expansion, large YoY adjusted EBITDA improvement, cost reductions, improved AOV and orders) and laid out a detailed, multi-pillar strategic plan with near-term M&A and integration milestones. Key near-term risks include a recent revenue decline, remaining reported losses, integration and transaction costs, limited combined cash/inventory balance, and early-stage technology initiatives. On balance, the improvements in profitability metrics, structural margin progress and a clear strategic roadmap outweigh the challenges, though successful execution of acquisitions and tech integrations will be critical to realize the upside.Q4-2025 Updates
Positive Updates
Significant Adjusted EBITDA Improvement
Adjusted EBITDA loss narrowed to $4.0M in Q4 (an improvement of $23M or 84% year-over-year) and full-year adjusted EBITDA loss improved to $31M, a $113M improvement versus 2024 (about 79% improvement).
Material Gross Margin Expansion
Gross margin was 24.6% in Q4, up 160 basis points year-over-year; full-year gross margin improved 390 basis points to 24.7%, driven by better vendor negotiations, improved product mix, tighter inventory controls and structural freight/returns changes.
Top-Line Stabilization Signals
Management reported the year-over-year revenue gap narrowed meaningfully in Q4 and early 2026 has shown low- to mid-single-digit year-over-year revenue increases; the company is targeting low- to mid-single-digit revenue growth for full-year 2026 (e-commerce base).
Operational Efficiency and Cost Reductions
Sales & marketing spend decreased by $15M and improved efficiency by ~350 basis points as a percent of revenue; G&A and tech expense decreased by $15M year-over-year to $33M, and the company exceeded its commitment to achieve a $150M annual run-rate reduction.
Improved Customer and Order Metrics
Average order value (AOV) improved 7% in Q4; orders delivered increased 13% quarter-over-quarter (Q4 vs Q3 2025), indicating improving activation and fulfillment performance.
Better Cash Flow and Working Capital Progress
Full-year cash used in operating activities improved by more than $118M (about a 67% improvement year-over-year); combined cash, restricted cash and inventory balance at quarter end totaled $207M.
Clear Strategic 3-Pillar Ecosystem Plan and M&A Activity
Management reiterated a structured '3-pillar' strategy (omnichannel retail, protection/financial services, home services) and disclosed near-term transactions including the Kirkland's acquisition expected to close in Q2, aiming to add omnichannel scale (~$1.5B current plus a potential additional ~$500M transaction) and further transformative acquisitions across pillars to approach a potential ~$3B annualized run rate.
Margin Expansion Roadmap and Long-Term Targets
Company targeting structural progression of gross margin toward a 24%–26% framework midpoint (25%) for the base business in 2026 and anticipates consolidated margin expansion above 30% over time as Pillar 2 and Pillar 3 higher-margin businesses scale.
Negative Updates
Quarterly Revenue Decline
Revenue declined 10% year-over-year in Q4 2025 (a 6% decline excluding discontinued Canadian operations), attributed to housing market softness and deliberate SKU/vendor eliminations that sacrificed top-line for margin integrity.
Ongoing Reported Losses and Limited Profitability
Despite large improvements, the company still reported a Q4 adjusted EBITDA loss of $4M and a full-year adjusted EBITDA loss of $31M, and reported diluted EPS was a loss of $0.30 in Q4, indicating the company has not yet returned to GAAP profitability.
Integration and Transaction Costs Ahead
Planned acquisitions (e.g., Kirkland's and other pillar transactions) will incur transaction and transition costs; Q2 is described as an 'integration quarter' that will not reflect full synergies and may pressure near-term margins and results.
Liquidity and Balance Sheet Considerations
Reported combined cash, restricted cash and inventory of $207M at quarter end (not pure cash) highlights limited near-term liquidity headroom while executing transformation and M&A plans.
Technology and Execution Risks
Management acknowledged the technology stack and AI pilots are early-stage (chat/instant checkout pilot only weeks old), engaging external advisors (Alvarez) to assess infrastructure—indicating execution and integration risk over the next 12–24 months.
Revenue Mix and AOV Risk with Omnichannel Expansion
Management noted a potential decline in AOV as brick-and-mortar and omnichannel assortment (towels, small appliances, housewares) scale, which could lower average order dollars even as customer counts increase; this mix shift could pressure near-term AOV metrics.
Company Guidance
Management delivered directional (not formal) 2026 commentary calling for low- to mid-single-digit revenue growth for the full year (e‑commerce base only) and a push to advance gross margin toward 25% (midpoint of a 24%–26% framework); Q4 2025 GM was 24.6% (+160 bps YoY) and FY GM was 24.7% (+390 bps YoY). They expect Q1 2026 revenue up roughly 3%–5% YoY with at least ~30% improvement in EBITDA versus Q1 last year, view Q2 (Kirkland’s close on/around April 1) as an integration quarter with ~90–120 days to realize synergies, expect integration to flow more materially in Q3 with a stretch objective to approach breakeven, and see an opportunity for profitability in Q4 if milestones are met. Recent quarterly metrics referenced include Q4 revenue down 10% YoY (down 6% ex‑Canada), AOV +7%, orders delivered +13% vs Q3, Q4 adjusted EBITDA loss $4M (an $23M/84% YoY improvement) and FY adjusted EBITDA loss $31M (a $113M YoY improvement), reported diluted EPS loss $0.30 (an $1.36/82% YoY improvement), S&M down $15M (~350 bps efficiency gain), G&A & tech $33M (down $15M YoY), exceeded a $150M annual run‑rate cost reduction target, ended the quarter with cash + restricted cash + inventory of $207M, and improved cash used in operations by >$118M (≈67%). Management also noted omnichannel scale (~$1.5B including Kirkland plus an expected additional ~$500M transaction) and potential Pillar 2/3 acquisitions that could add north of $1.5B, which they say could drive consolidated margins above 30% over time in a normal housing environment.Bed Bath & Beyond Financial Statement Overview
Summary
Financials remain high-risk: revenue has materially contracted (≈$2.49B in 2021 to ≈$1.04B in 2025), profitability is still negative despite gross margin improvement (~25% in 2025), and operating cash flow/free cash flow have stayed negative in 2023–2025 (≈-$57M FCF in 2025). Low reported leverage helps, but equity and assets have eroded materially, reducing resilience.Income Statement
Revenue has contracted materially over the period (down from ~$2.49B in 2021 to ~$1.04B in 2025), indicating ongoing demand and/or footprint pressure. Profitability deteriorated from positive earnings in 2021–2022 to sustained losses in 2023–2025, with 2025 net margin around -8% (improved versus 2023–2024 but still negative). Gross margin improved in 2025 (~25%) versus 2023–2024 (~19–20%), a constructive sign on pricing/merchandise mix, but operating results remain loss-making, keeping the income statement weak overall.18
Very Negative
Balance Sheet
Leverage appears modest on the data provided, with debt-to-equity generally low (about 0.10 in 2025 and ~0.20 in 2024), which reduces near-term balance-sheet financial risk versus highly levered peers. However, equity has fallen meaningfully from 2022 levels (from ~$744M in 2022 to ~$218M in 2025), consistent with cumulative losses eroding the capital base. Total assets have also declined over time, pointing to a shrinking operating footprint and reduced financial flexibility despite low reported debt.47
Neutral
Cash Flow
Cash generation is the primary concern: operating cash flow is negative in 2023–2025, including about -$57M in 2025, and free cash flow is also negative across those years (2025 free cash flow about -$57M). The trend shows large cash outflows in some periods (notably 2023-02-25 operating cash flow near -$991M), highlighting volatility and execution risk. While cash burn moderated substantially by 2025 versus the worst period, the business is still not self-funding on a cash basis.12
Very Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.04B | 1.39B | 1.56B | 1.93B | 2.76B |
| Gross Profit | 257.52M | 272.55M | 295.84M | 427.37M | 606.04M |
| EBITDA | -61.21M | -236.85M | -244.91M | -11.89M | 147.06M |
| Net Income | -84.62M | -258.80M | -307.84M | -35.24M | 108.55M |
Balance Sheet | |||||
| Total Assets | 425.48M | 401.95M | 635.82M | 878.55M | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 175.29M | 159.17M | 302.61M | 371.26M | 503.34M |
| Total Debt | 22.07M | 32.66M | 3.75M | 42.51M | 51.35M |
| Total Liabilities | 207.53M | 239.22M | 276.69M | 232.72M | 321.58M |
| Stockholders Equity | 217.58M | 162.73M | 359.13M | 645.83M | 744.39M |
Cash Flow | |||||
| Free Cash Flow | -56.70M | -194.66M | -63.58M | -1.32B | -336.33M |
| Operating Cash Flow | -56.70M | -174.30M | -18.59M | -990.98M | 17.85M |
| Investing Cash Flow | -49.23M | 24.93M | -44.63M | -298.74M | -349.18M |
| Financing Cash Flow | 0.00 | 32.72M | -5.49M | 967.03M | -606.02M |
Bed Bath & Beyond Technical Analysis
Negative
5.07
Price Trends
6.04
Negative
6.88
Negative
7.44
Negative
Market Momentum
-0.36
Positive
37.40
Neutral
31.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBBY, the sentiment is Negative. The current price of 5.07 is below the 20-day moving average (MA) of 5.60, below the 50-day MA of 6.04, and below the 200-day MA of 7.44, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 37.40 is Neutral, neither overbought nor oversold. The STOCH value of 31.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBBY.
Bed Bath & Beyond Risk Analysis
Bed Bath & Beyond disclosed 59 risk factors in its most recent earnings report. Bed Bath & Beyond reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bed Bath & Beyond Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $25.54B | 23.52 | 56.92% | 1.37% | 5.10% | 7.59% | |
72 Outperform | $6.18B | 20.23 | 20.83% | 3.10% | 13.37% | -19.37% | |
67 Neutral | $3.94B | 10.79 | 18.34% | 1.04% | -0.65% | -10.35% | |
62 Neutral | $14.02B | 22.09 | 22.49% | 5.46% | -0.95% | -48.28% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
55 Neutral | $11.92B | -31.09 | ― | ― | 3.35% | 42.99% | |
48 Neutral | $347.19M | -1.84 | -72.72% | ― | -27.23% | 62.19% |
* General Sector Average
BBBY
Bed Bath & Beyond
5.07
-2.36
-31.76%
BBY
Best Buy Co
62.71
-22.78
-26.65%
WSM
Williams-Sonoma
201.88
8.51
4.40%
W
Wayfair
73.47
30.62
71.46%
ASO
Academy Sports and Outdoors
58.89
8.26
16.31%
MNSO
MINISO Group Holding
19.48
-0.56
-2.79%
Bed Bath & Beyond Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Bed Bath & Beyond expands loan participation in retailer
Positive
Jan 9, 2026
On January 9, 2026, Bed Bath & Beyond purchased an additional $2.17 million participation in term loans issued by The Container Store under an existing credit agreement, following an earlier $6.46 million loan participation made on November 25, 2025. Together, these transactions increased the company’s exposure to The Container Store’s debt and entitle Bed Bath & Beyond to interest and principal repayments and associated enforcement rights, signaling a deeper financial involvement with another specialty retailer that could affect its investment profile and risk-return dynamics.
The most recent analyst rating on (BBBY) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Bed Bath & Beyond stock, see the BBBY Stock Forecast page.
Business Operations and StrategyExecutive/Board Changes
Bed Bath & Beyond Names Marcus Lemonis as CEO
Neutral
Jan 5, 2026
On December 30, 2025, Bed Bath & Beyond’s board appointed Executive Chairman and principal executive officer Marcus Lemonis as Chief Executive Officer, effective January 1, 2026, consolidating the company’s top leadership roles under a single executive as it finalizes his employment agreement. Concurrently, the employment of Chief Operating Officer and principal operating officer Alexander Thomas was terminated on January 1, 2026, though he is expected to remain as an advisor during a transition period to support continuity in operations and leadership change management.
The most recent analyst rating on (BBBY) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Bed Bath & Beyond stock, see the BBBY Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Bed Bath & Beyond Acquires Loans from Container Store
Neutral
Dec 2, 2025
On November 25, 2025, Bed Bath & Beyond, Inc. acquired a portion of loans from The Container Store, Inc. through a participation agreement. This transaction, valued at $6,461,843.09, allows the company to gain rights to interest payments and loan repayments, potentially impacting its financial operations and stakeholder interests.
The most recent analyst rating on (BBBY) stock is a Sell with a $6.00 price target. To see the full list of analyst forecasts on Bed Bath & Beyond stock, see the BBBY Stock Forecast page.
M&A TransactionsPrivate Placements and FinancingRegulatory Filings and Compliance
Bed Bath & Beyond Announces Merger with TBHC
Positive
Nov 25, 2025
On November 24, 2025, Bed Bath & Beyond, Inc. announced a merger agreement with The Brand House Collective, Inc., where TBHC will become a wholly owned subsidiary. The merger involves an exchange of shares and is subject to customary conditions, including shareholder approval and regulatory compliance. Additionally, Bed Bath & Beyond has amended its credit agreement to increase its loan commitments by $10 million, indicating a strategic financial maneuver to support the merger and future operations.
The most recent analyst rating on (BBBY) stock is a Sell with a $6.00 price target. To see the full list of analyst forecasts on Bed Bath & Beyond stock, see the BBBY Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.