Bed Bath & Beyond targets 25% gross margin and low- to mid-single-digit revenue growth in 2026 as integration accelerates

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• Revenue declined 10% year-over-year in Q4, with 6% decline excluding Canada discontinuation, while AOV improved 7% driven by improved assortment and increased Overstock sales mix

  80% confidence

• 2025 was focused on stabilizing and building the base of the business, while 2026 is about growing and expanding it within a 3-pillar ecosystem

  80% confidence

• Home services in Pillar 3 have margins in excess of 40%, while Pillar 2 services carry margins north of 50%

  80% confidence

• Q1 2026 is expected to see year-over-year revenue growth and at least 30% EBITDA improvement compared to Q1 2025

  80% confidence

• The company expects continued year-over-year improvement in 2026, but that improvement will not be linear

  80% confidence

• The low to mid-single-digit revenue growth target is for e-commerce only, and Kirkland's will have similar growth at the same time

  80% confidence

• Gross margin improved 160 basis points year-over-year to 24.6% in Q4, with full year improvement of 390 basis points to 24.7%, driven by structural changes in freight contracts, returns economics, and pricing discipline

  80% confidence

• The current plan does not assume a housing recovery, but the ecosystem is positioned to benefit as mortgage rates moderate and transaction volumes return to historical mid-cycle levels

  80% confidence

• The company is very deliberate and confident in its sequencing

  80% confidence

• Consolidated margins could expand above and beyond 30% for the overall ecosystem in the next 36 months, pending acquisitions

  80% confidence

• By Q4 2026, assuming integration milestones are achieved, the company expects positive top line growth and improved margin leverage with an opportunity for profitability

  80% confidence

• The company is seeing low to mid-single-digit year-over-year revenue growth increases early in 2026 and targeting this level for the full year

  80% confidence

• Pillar 1 is largely owned, Pillar 2 focuses on partnerships due to regulatory complexity, and Pillar 3 is targeted for ownership to control customer journey and margin

  80% confidence

• The company is targeting 3% to 5% revenue improvement in Q1 2026 and a 30% improvement in EBITDA margin year-over-year for the same period

  80% confidence

• The trough in active customer base is behind the company, and everything going forward will show growth in revenue, EBITDA performance, and number of active customers

  80% confidence