US' Bed Bath & Beyond's 2025 sales drop as turnaround continues

The gross profit increased to $258 million, or 24.7 per cent of revenue, reflecting a 390-basis-point expansion, while sales and marketing expenses improved to 13.7 per cent of revenue and technology and administrative costs decreased to $144 million from $189 million.

Annual net loss narrowed substantially to $85 million, representing a $174 million improvement YoY, while adjusted EBITDA loss improved by $113 million to $31 million. Operating cash flow usage improved by $118 million, highlighting structural gains in capital efficiency and business model optimisation, Bed Bath & Beyond said in a press release.

The company reported its eighth consecutive quarter of measurable progress towards profitability in the fourth quarter (Q4), with net revenue of $273 million, down 9.8 per cent YoY. Excluding the impact of its Canada exit, revenue declined 6.4 per cent, signalling a moderating contraction and increasing stabilisation across core operations.

The growth in this quarter supported by margin expansion, cost discipline and improving operating cash flow despite ongoing revenue pressure.

The gross profit for the quarter reached $67 million, representing 24.6 per cent of net revenue and an improvement of 160 basis points from the prior year. Sales and marketing expenses totalled $38 million, or 13.8 per cent of revenue, marking a 350-basis-point improvement, while technology and general and administrative costs fell to $33 million from $48 million a year earlier.

The company reported a net loss of $21 million for the quarter, narrowing by $60 million YoY. Adjusted EBITDA loss improved by $23 million to $4 million. At quarter-end, cash, cash equivalents, restricted cash and inventory stood at $207 million, indicating strengthened liquidity.

“Our fourth quarter capped a year of measurable financial and operational progress,” said Marcus Lemonis, executive chairman and CEO at Bed Bath & Beyond. “We built our core retail discipline, improved margins, enhanced marketing efficiency and strengthened our balance sheet. As importantly, we saw the rate of revenue decline compress meaningfully throughout the year, positioning us for a return to top line growth.”

“Our omnichannel retail brands serve as the front door relationship with the customer,” added Lemonis. “Our product categories and home services initiatives act as transaction engines that originate demand. These activities feed into our expanding digital and financial infrastructure, creating a connected home ecosystem that increases retention, improves revenue quality and expands lifetime value.”

“We closed 2025 by delivering against our commitments to enhance margins, improve marketing efficiency, and reduce fixed costs. Revenue remains a key priority with focused efforts on conversion and retention tactics to drive disciplined growth. We are encouraged by the significant narrowing of net loss, Adjusted EBITDA loss and operating cash flow use we achieved in 2025,” said Adrianne Lee, president and CFO at the company.

Looking ahead to 2026, Bed Bath & Beyond expects revenue trends to continue improving, targeting low- to mid-single-digit growth for the year. The company anticipates that stronger conversion rates, higher average order values, improved customer retention and expansion of its interconnected home ecosystem will support its transition from stabilisation to sustainable growth as it advances its strategy to become an integrated ‘Everything Home Company.’

Fibre2Fashion News Desk (SG)