Q1 2026 Bed Bath & Beyond Inc Earnings Call

April 27, 2026

Operator 2: 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 one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Melissa Smith, General Counsel and Corporate Secretary. Melissa, please go ahead.

Operator: 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 one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Melissa Smith, General Counsel and Corporate Secretary. Melissa, please go ahead.

Speaker #1: 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.

Speaker #1: Melissa, please go ahead.

Speaker #2: 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 Lemonis, President Amy Sullivan, Chief Financial Officer Adrianne Lee, and Chief Operating Officer Lisa Foley.

Melissa Smith: Thank you, operator. Good afternoon and welcome to Bed Bath & Beyond, Inc.'s Q1 2026 Earnings Conference Call. Joining me on the call today are Executive Chairman and Chief Executive Officer, Marcus Lemonis, President, Amy Sullivan, Chief Financial Officer, Adrianne Lee, and Chief Operating Officer, Lisa Foley Dubois.

Speaker #2: 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, 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.

Melissa Smith: Today's discussion and our responses to your questions reflect management's views as of today, 27 April 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.

Speaker #2: Actual results could differ materially from such statements. Additional information about risks and 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.

Melissa Smith: Additional information about risks, 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 Q1 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 2 of that presentation. With that, Marcus, it's all yours.

Speaker #2: 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.

Melissa Smith: Our filings with the SEC, including our Q1 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.

Speaker #2: 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.

Speaker #2: Please review the important forward-looking statements disclosure on slide 2 of that presentation. With that, Marcus, it's all yours.

Speaker #3: Thank you so much. I am both honored and privileged to be serving, as of January 1st, as the CEO of Bed Bath & Beyond.

Marcus Lemonis: Thank you so much. I am both honored and privileged to be serving as of January first as the CEO of Bed Bath & Beyond, and I wanna 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Marcus Lemonis: It's 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. We're 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. 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 company. 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.

Speaker #3: These priorities have not changed. We're focused on driving top-line growth, operating profitability, and building something that is unique, durable, and meaningful in the home space.

Speaker #3: 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 company.

Speaker #3: 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.

Speaker #3: I knew the changes would take time to show up, but that when they did, they would appear in a way that was durable and repeatable.

Marcus Lemonis: 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-pillar 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 discontinued 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.

Speaker #3: 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-pillar ecosystem, we as a team committed to inflect top-line growth while continuing to reduce costs.

Speaker #3: 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. This marks the first time in 18 quarters that this business has delivered year-over-year growth.

Speaker #3: 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.

Marcus Lemonis: 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. 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Marcus Lemonis: 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.

Speaker #3: 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.

Speaker #3: 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.

Marcus Lemonis: 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. 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 omnichannel platform is where the relationship begins. Yeah, the retail business, online and in-store.

Speaker #3: 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.

Speaker #3: 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.

Marcus Lemonis: 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 omnichannel platform is where the relationship begins. Yeah, the retail business, online and in-store.

Speaker #3: The omnichannel 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.

Marcus Lemonis: Our products and financial services platform allows us to participate more deeply in the economic activity tied to the home. 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 omnichannel 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 Elfa and ClosetWorks that will move into pillar three, a foundational culture and process that will sit at the hub of pillar one. It comes with exceptional leadership as well.

Speaker #3: 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 omnichannel pillar with the Kirkland transaction.

Speaker #3: 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.

Speaker #3: That transaction gives us trophy real estate that is wildly underutilized, world-class distribution and supply chain systems, and a home services business with Alpha and Closet Works that will move into pillar three.

Marcus Lemonis: 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 Elfa and ClosetWorks that will move into pillar three, a foundational culture and process that will sit at the hub of pillar one. It comes with exceptional leadership as well.

Speaker #3: A foundational culture and process that will sit at the hub of pillar one. 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.

Marcus Lemonis: Between those two, we will absorb the capabilities our businesses and our customers want and eliminate all of the redundancies and inefficiencies quickly. Pillar two, our product and financial services group, is just getting started. As noted previously, will include property and casualty insurance and home warranties through a nationwide relationship with Brown & Brown, Inc. via the Beyond Home Agency. It will also include America First Credit Union in partnership with a 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.

Speaker #3: Pillar Two, our Product and Financial Services group, is just getting started. And as noted previously, we'll include property and casualty insurance and home warranties through a nationwide relationship with Brown & Brown Insurance via the BEYOND Home Agency.

Speaker #3: It will also include America's First Homeowner Credit Union in partnership with a leading credit union. Additionally, this pillar will include our credit card program and product warranties.

Speaker #3: 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.

Marcus Lemonis: 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.

Speaker #3: 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 acquisition.

Marcus Lemonis: 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 acquisition. The final pillar, and potentially the most exciting, is pillar three, our home services business. Earlier this quarter, we announced the intent to acquire F9 Brands, which includes Cabinets To Go, Lumber Liquidators, and Southwind Building Products. This acquisition would serve as the platform transaction, bringing unbelievable executive management, warehouse and supply chain capabilities, and over a half a billion dollars of revenue. Attached to that platform are Elfa and The Closet Works organization systems, which were part of The Container Store transaction. Lastly, we've agreed in principle to acquire a nationwide network of installation and renovation professionals. We believe that's part of building our mode.

Speaker #3: The final pillar, and potentially the most exciting, is pillar three, our home services business. Earlier this quarter, we announced the intent to acquire F9 Brands, which includes Cabinets To Go, Lumber Liquidators, and Southwind Building Products.

Speaker #3: This acquisition would serve as the platform transaction, bringing unbelievable executive management, warehouse and supply chain capabilities, and over half a billion dollars of revenue.

Marcus Lemonis: This acquisition would serve as the platform transaction, bringing unbelievable executive management, warehouse and supply chain capabilities, and over $0.5 billion of revenue. Attached to that platform are Elfa and The Closet Works organization systems, which were part of The Container Store transaction. Lastly, we've agreed in principle to acquire a nationwide network of installation and renovation professionals. We believe that's part of building our mode.

Speaker #3: Attached to that platform are Alpha and Closet Works organization systems, which were part of The Container Store transaction. Lastly, we've agreed in principle to acquire a nationwide network of installation and renovation professionals.

Speaker #3: 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 differentiates our company as a service provider, regardless of what's happening with the economy.

Marcus Lemonis: Together, we believe this creates a high margin pillar that is defensible against e-commerce competitors and firmly differentiates our company as a service provider, regardless of what's happening with the economy. What is equally important, 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 lifecycle.

Speaker #3: But what is equally important, that I want to be very clear about, is how we are building this business. We are not acquiring companies for the sake of scale.

Speaker #3: 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.

Speaker #3: 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.

Marcus Lemonis: 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 lifecycle.

Speaker #3: 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.

Marcus Lemonis: When you think about the wide space of homeownership, each of these businesses represents a critical function 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 just fundamentally diverges from traditional consolidation. Most consolidations focus on cost removal.

Speaker #3: Our strategy is to extract those capabilities, preserve what makes them valuable, and very strongly eliminate the layers of cost and inefficiency that came with operating them independently.

Speaker #3: 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 Built that allows that single operating connectivity system to work for the consumer.

Marcus Lemonis: 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 just fundamentally diverges from traditional consolidation. Most consolidations focus on cost removal.

Speaker #3: 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.

Speaker #3: This is where our model is fundamentally divergent 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.

Marcus Lemonis: That's part of our model, and we'll continue to eliminate those costs and inefficient operating expenses, including underperforming assets. 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 acquisition while increasing the lifetime value that customer could offer us. Each of these businesses has built and retained its own customer base.

Speaker #3: 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.

Speaker #3: 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 acquisition while increasing the lifetime value that customer could offer us.

Speaker #3: 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.

Marcus Lemonis: 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, buybuy BABY, Kirkland's, Lumber Liquidators, Elfa, The Closet Works, and Cabinets To Go, along with our partnerships across insurance, credit, warranties, and our planned acquisitions 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.

Speaker #3: 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, buybuy BABY, Kirkland's, Lumber Liquidators, Alfa, 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.

Speaker #3: It's an ecosystem. Each business contributes a capability. Each capability strengthens the platform. And together, they create something significantly more valuable than the sum of its parts.

Speaker #3: 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.

Marcus Lemonis: 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 Adrianne.

Speaker #3: With that, I'll turn the call over to Adrianne.

Speaker #1: Thank you, Marcus. I'll now turn to our first quarter financial results. Revenue increased 7% year over year in the first quarter, and 9% if you exclude the impact of discontinuing our Canadian operations.

Adrianne Lee: Thank you, Marcus. I'll now turn to our Q1 financial results. Revenue increased 7% year over year in the first quarter and 9% if you exclude the impact of discontinuing our Canadian operations. AOV improved 6%, driven by our continued focus on improving assortment, driving a healthy mix into living room furniture and patio on the Bed Bath & Beyond site, and an increased sales mix into Overstock. Orders delivered increased by almost 1% in the period. Gross margin landed at 23.9% for the quarter, a decline compared to the same period last year, but still within the bounds of our operating range. We maintained effective discounting tactics, partially offset by lower sales and marketing expense, lapped loyalty points breakage from Q1 2025, and saw benefits from improved carrier costs and exiting underperforming operations.

Adrianne Lee: Thank you, Marcus. I'll now turn to our Q1 financial results. Revenue increased 7% year over year in the Q1 and 9% if you exclude the impact of discontinuing our Canadian operations. AOV improved 6%, driven by our continued focus on improving assortment, driving a healthy mix into living room furniture and patio on the Bed Bath & Beyond site, and an increased sales mix into Overstock. Orders delivered increased by almost 1% in the period. Gross margin landed at 23.9% for the quarter, a decline compared to the same period last year, but still within the bounds of our operating range. We maintained effective discounting tactics, partially offset by lower sales and marketing expense, lapped loyalty points breakage from Q1 2025, and saw benefits from improved carrier costs and exiting underperforming operations.

Speaker #1: AOV improved 6%, driven by our continued focus on improving assortment, driving a healthy mix into living room furniture and patio on the Bed Bath site, and an increased sales mix into Overstock.

Speaker #1: Orders delivered increased by almost 1% in the period. Gross margin landed at 23.9% for the quarter, a decline compared to the same period last year, but still within the bounds of our operating range.

Speaker #1: We maintained effective discounting tactics, partially offset by lower sales and marketing expense. We lapped loyalty points breakage from one Q2 and saw benefits from improved carrier costs and exiting underperforming operations.

Speaker #1: Sales and marketing expense had improved efficiency of 50 basis points as a percent of revenue versus last year. This result was driven by disciplined spend in paid and improved return in owned channels.

Adrianne Lee: Sales and marketing expense had improved efficiency of 50 basis points as a percent of revenue versus last year. This result was driven by disciplined spend on paid and improved return in own channels. G&A and tech expense of $36 million decreased by $5 million year over year, or $8 million if you exclude the impact of one-time costs from acquisition-related activities. All in, adjusted EBITDA came in at a loss of $8 million, a 41% or $5 million improvement versus Q1 2025. Reported adjusted diluted EPS was a loss of $0.25 per share, a 17-cent improvement year over year. We ended the quarter with cash equivalents, and restricted cash of $163 million. Cash used in operating activities improved year over year by more than $39 million or 77%, illustrating stabilization of operations.

Speaker #1: G&A and tech expense of $36 million decreased by $5 million year over year, or $8 million if you exclude the impact of one-time costs from acquisition-related activities.

Speaker #1: All in, adjusted EBITDA came in at a loss of $8 million, a 41%, or $5 million, improvement versus the first quarter of 2025. Reported adjusted diluted EPS was a loss of $0.25 per share, a $0.17 improvement year over year.

Speaker #1: We ended the quarter with cash, cash equivalents, and restricted cash of $163 million. Cash used in operating activities improved year over year by more than $39 million, or 77%, illustrating stabilization of operations.

Speaker #1: In the quarter, we invested approximately $26 million in acquisition-related activities. With that, I'll turn the call over to Amy.

Adrianne Lee: In the quarter, we invested approximately $26 million in acquisition-related activities. With that, I'll turn the call over to Amy.

Speaker #2: Thank you, Adrianne. Our focus on the operating side is simple: translate the strategy into consistent, disciplined execution, and ensure that as we scale these capabilities, we do it in a way that is efficient, scalable, and built to drive sustainable returns.

Amy Sullivan: Thank you, Adrianne. Our focus on the operating side is simple: translate the strategy into consistent, disciplined execution and ensure that as we scale these capabilities, we do it in a way that is efficient, scalable, and built to drive sustainable returns. This work is being led by a strong operating team. Lisa is driving execution across operations and shared services, while Kyla, who we announced this afternoon, is leading our technology transformation. Together, they are building the unified data and intelligence layer that connects the ecosystem and enables how we operate and scale. Today, the majority of our revenue is driven by an asset-light, increasingly productive e-commerce platform. We're pairing that strength with a fleet of more than 320 stores, allowing us to serve the customer across channels while improving productivity and return on assets.

Speaker #2: This work is being led by a strong operating team. Lisa is driving execution across operations and shared services, while Kyla, who we announced this afternoon, is leading our technology transformation.

Speaker #2: Together, they are building the unified data and intelligence layer that connects the ecosystem and enables how we operate and scale. Today, the majority of our revenue is driven by an asset-light, increasingly productive e-commerce platform.

Speaker #2: We're pairing that strength with a fleet of more than 320 stores, allowing us to serve the customer across channels while improving productivity and return on assets.

Speaker #2: As we scale, we are focused on identifying the capabilities that truly drive performance and building around them, while decisively eliminating the inefficiencies that come from operating as fragmented, layered businesses.

Amy Sullivan: As we scale, we are focused on identifying the capabilities that truly drive performance and building around them, while decisively eliminating the inefficiencies that come from operating as fragmented, layered businesses. Across the fleet, we are evolving our store formats with clearer roles and stronger economics while taking a disciplined approach to underperforming locations through repositioning, consolidation, or exit, where returns do not meet our thresholds. That same discipline is driving our merchandising strategy, where we are simplifying assortments, improving margin productivity, and strengthening vendor partnerships. Across the organization, we are simplifying how we operate, consolidating systems and teams into a unified platform while removing layers that slow decision-making and limit efficiency. This approach extends to our data and engagement layer. As announced this morning, our partnership with Bilt accelerates a unified customer identity and loyalty foundation across the portfolio, strengthening engagement and lifetime value across all our brands.

Speaker #2: Across the fleet, we are evolving our store formats with clearer roles and stronger economics, while taking a disciplined approach to underperforming locations through repositioning, consolidation, or exit where returns do not meet our thresholds.

Speaker #2: That same discipline is driving our merchandising strategy, where we are simplifying assortments, improving margin productivity, and strengthening vendor partnerships. Across the organization, we are simplifying how we operate, consolidating systems and teams into a unified platform, while removing layers that slow decision-making and limit efficiency.

Amy Sullivan: That same discipline is driving our merchandising strategy, where we are simplifying assortments, improving margin productivity, and strengthening vendor partnerships. Across the organization, we are simplifying how we operate, consolidating systems and teams into a unified platform while removing layers that slow decision-making and limit efficiency. This approach extends to our data and engagement layer. As announced this morning, our partnership with Bilt accelerates a unified customer identity and loyalty foundation across the portfolio, strengthening engagement and lifetime value across all our brands.

Speaker #2: This approach extends to our data and engagement layer. As announced this morning, our partnership with Built accelerates a unified customer identity and loyalty foundation across the portfolio, strengthening engagement and lifetime value across all our brands.

Speaker #2: Customer service is central to this transformation. As we consolidate these functions, we are raising the bar across every single brand and every touchpoint so the customer experiences consistency regardless of how they engage with us.

Amy Sullivan: Customer service is central to this transformation. As we consolidate these functions, we are raising the bar across every single brand and every touchpoint so the customer experiences consistency regardless of how they engage with us. This is about building an operating model that scales, retaining what drives value and removing what does not. As we continue to integrate new capabilities into the platform, that same approach will apply across the ecosystem, ensuring we preserve what works and remove excess complexity across retail, products, financial services, and home services. The result is a simpler, more transparent, and more accountable organization with a cost structure designed to drive profitable growth. With that, I'll turn back to Marcus to close.

Speaker #2: This is about building and operating models that scale, retaining what drives value and removing what does not. As we continue to integrate new capabilities into the platform, that same approach will apply across the ecosystem, ensuring we preserve what works and remove excess complexity across retail, products and financial services, and home services.

Speaker #2: The result is a simpler, more transparent, and more accountable organization with a cost structure designed to drive profitable growth. With that, I'll turn back to Marcus to close.

Speaker #3: Thanks, Amy. What you're seeing this quarter is early proof of a model that is beginning to come together. Look, we've stabilized the core business, demonstrated that we can grow revenue while removing costs, and established a framework that allows us to build on that foundation with confidence.

Marcus Lemonis: Thanks, Amy. What you're seeing this quarter is early proof of a model that is beginning to come together. Look, we've stabilized the core business, demonstrated that we can grow revenue while removing costs, and established a framework that allows us to build on that foundation with confidence. As we continue to add capabilities into the platform, we expect those capabilities to contribute not only to the efficiency, but to the incremental growth across the system over time. Importantly, this is not a model built solely on cost reduction. While we will continue to remove duplicative and inefficient operating expenses, including underperforming assets, the larger opportunity is the ability to drive revenue through a connected system powered by data, technology, and artificial intelligence.

Speaker #3: As we continue to add capabilities into the platform, we expect those capabilities to contribute not only to the efficiency, but to the incremental growth across the system.

Speaker #3: Over time, importantly, this is not a model built solely on cost reduction. While we will continue to remove duplicative and inefficient operating expenses, including underperforming assets, the larger opportunity is the ability to drive revenue.

Speaker #3: Through a connected system powered by data, technology, and artificial intelligence, all can expect that over the next nine months, as we bring these pillars together and fold in these companies with their capabilities, we will remove an additional $60 million of costs out of the consolidated company while simultaneously strengthening our ability to grow more efficiently.

Marcus Lemonis: All can expect that over the next nine months, as we bring these pillars together and fold in these companies with their capabilities, we will remove an additional $60 million of cost out of the consolidated company while simultaneously strengthening our ability to grow more efficiently. As we approach our shareholder vote on 14 May, we are asking for your support as we continue to execute this strategy. For those of you who have been long-term holders of our company, we appreciate your trust. For those who are newer to the story, we believe there's nothing more meaningful than the opportunity ahead. We have work to be done to reset the business. We think we're well on our way. Before we head into the Q&A session, I wanna thank Adrianne Lee for the years of service that she has provided this company.

Speaker #3: As we approach our shareholder vote on May 14, we are asking for your support as we continue to execute this strategy. For those of you who have been long-term holders of our company, we appreciate your trust.

Speaker #3: For those who are newer to the story, we believe there's nothing more meaningful than the opportunity ahead. We have work to be done, to reset the business.

Marcus Lemonis: For those who are newer to the story, we believe there's nothing more meaningful than the opportunity ahead. We have work to be done to reset the business. We think we're well on our way. Before we head into the Q&A session, I wanna thank Adrianne Lee for the years of service that she has provided this company.

Speaker #3: We think we're well on our way. Before we head into the Q&A section, I want to thank Adrianne Lee for the years of service that she has provided this company.

Speaker #3: She has been by my side as we have taken the current business down to the studs, we've developed a new operating strategy, and have seen the fruits of that labor pay off from our team's hard work in the first quarter.

Marcus Lemonis: She has been by my side as we have taken the current business down to the studs. We've developed a new operating strategy and have seen the fruits of that labor pay off from our team's hard work in Q1. Brian LaRose, who came with The Container Store acquisition and has been a very formidable CFO in the omni-channel retail products and services space, will be joining our company. He's joining us here on the call today. It is important to recognize that we have seen a lot of changes in the last couple of years. To Adrienne and all the folks that helped us get to this point, we are grateful. To the new companies and new executives who are joining our company, like Jason, like Amy, like Brian, we believe that the future is very bright.

Speaker #3: Brian LaRuce, who came with The Container Store acquisition and has been a very formidable CFO in the omnichannel retail products and services space, will be joining our company.

Speaker #3: He's joining us here on the call today. But it is important to recognize that we have seen a lot of changes in the last couple of years, and to Adrianne and all the folks that helped us get to this point, we are grateful.

Speaker #3: To the new companies and new executives who are joining our company, like Jason, like Amy, like Brian, we believe that the future is very bright.

Speaker #3: So, we'll move into the formal Q&A section.

Marcus Lemonis: We'll move into the formal Q&A section.

Speaker #1: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand.

Operator 2: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Steven Forbes from Guggenheim. Your line is open. Please go ahead.

Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Steven Forbes from Guggenheim. Your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Stephen Forbes from Guggenheim.

Speaker #1: Your line is open. Please go ahead.

Speaker #4: Hey, everyone. Hey, Marcus. Given the upcoming transition—right—the upcoming transition of The Container Store locations, curious if you can maybe just speak or give us a sneak peek at the amount of space you plan to merchandise with Bed Bath & Beyond products.

Steven Forbes: Everyone. Hey, Marcus. Given the upcoming transition of The Container Store locations, curious if you can maybe just speak or give us a sneak peek in the amount of space you plan to merchandise with Bed Bath & Beyond products. What are some of the key merchandising features you're gonna be reintroducing to the consumer with these refreshes? If you can, like, how you sort of expect sales per square foot to change over time as we look out, you know, 12, 24 months and so.

Speaker #4: What are some of the key merchandising features you're going to be reintroducing to the consumer with these refreshes? And then, if you can, how do you sort of expect sales per square foot to change over time as we look out 12, 24 months and so on?

Speaker #3: Yeah, it's a great question. I think it's important to delineate the two omnichannel businesses that we have purchased. Kirkland's, with its small format—what I consider undermarket real estate—meaning that we believe we acquired leases that are undermarket, about 230 to 240 of them.

Marcus Lemonis: Yeah, it's a great question. I think it's important to delineate the two omni-channel businesses that we have purchased. Kirkland's with its small format, what I consider under market real estate, meaning that we believe we acquired leases that are under market, about 230 to 240 of them. They range from 5 to about 10,000sq ft, and you've heard me talk about them over the last year. The reason that we slowed our pace down of converting many of them to Bed Bath & Beyond Home Stores is, as we looked at the numbers, we just didn't feel like we had all of the categories that we needed.

Speaker #3: They range from 5 to about 10,000 square feet. And you've heard me talk about them over the last year. The reason that we slowed our pace down of converting many of them to Bed Bath & Beyond home stores is, as we looked at the numbers, we just didn't feel like we had all of the categories that we needed.

Speaker #3: And while we did the economic standoff with the current owners of TCS, I knew that eventually we would get that transaction to fold in with the pressure that we were putting on that business.

Marcus Lemonis: While we did the economic standoff with the current owners of TCS, I knew that eventually we would get that transaction to fold in with the pressure that we were putting on that business. In addition to the 100 Container Store locations, we will have at least 100 small neighborhood format locations of Bed Bath & Beyond/Container Store, Container Store/Bed Bath & Beyond. As I move to The Container Store specifically, for the last 18 months I've been studying this business, visiting every single store. I've been to, I think 93 of the 100 already and spent a lot of time really trying to understand what they had, what they had too much of, how their sales per square foot were functioning, how they used to function, how the custom spaces functioned. What I came down to is one simple conclusion.

Speaker #3: So in addition to the 100 container store locations, we will have at least 100 small neighborhood format locations of Bed Bath & Beyond/container store/container store/Bed Bath & Beyond.

Speaker #3: As I move to The Container Store specifically, for the last 18 months, I've been studying this business, visiting every single store. I've been to, I think, 93 of the 100 already.

Marcus Lemonis: I've been to, I think 93 of the 100 already and spent a lot of time really trying to understand what they had, what they had too much of, how their sales per square foot were functioning, how they used to function, how the custom spaces functioned. What I came down to is one simple conclusion.

Speaker #3: And spent a lot of time really trying to understand what they had, what they had too much of, how their sales per square foot were functioning, how they used to function, how the custom spaces function. And what I came down to is one simple conclusion.

Speaker #3: Across the 100 locations, there was 2.2 million square feet of retail. And in my opinion, half of that—maybe slightly more—was wildly underutilized.

Marcus Lemonis: Across the 100 locations, there was 2.2 million sq ft of retail. In my opinion, half of that, maybe slightly more, was wildly underutilized with triple-facing SKUs, with, in my opinion, certain categories far too wide and not deep enough, and with an attempt to address the certain categories that I felt fell very short. Rather than thinking about walking into the store and expecting to see Bed Bath & Beyond on the left and The Container Store on the right, I would rather you thought about it as general merchandise in one specific area that includes storage and organization, kitchen, bath, bedroom, a little bit of decor and other impulse items that may be seasonally relevant on one portion of the store.

Speaker #3: With triple-facing SKUs, with, in my opinion, certain categories far too wide and not deep enough, and with an attempt to address certain categories that I felt fell very short.

Speaker #3: Rather than thinking about walking into the store and expecting to see Bed Bath & Beyond on the left and Container Store on the right, I would rather you thought about it as general merchandise in one specific area.

Speaker #3: That includes storage and organization, kitchen, bath, bedroom, a little bit of decor, and other impulse items that may be seasonally relevant on one portion of the store. The other portion of the store would be filled with custom spaces and design spaces.

Marcus Lemonis: The other portion of the store would be filled with custom spaces and design spaces, which would include Elfa, The Closet Works, Gracious Home Cabinetry, which is a higher version of Cabinets To Go, and Gracious Home Flooring, which is a higher version of Lumber Liquidators, but leveraging their existing supply chain and expertise. That when a consumer walks through the door, it is my goal to take it from an average of about $220 per square foot. I think we can get to $500 a square foot within 24 months. Now, nobody should be applauding or patting anybody on the back for $500 a square foot.

Speaker #3: Which would include Alpha, Closet Works, Gracious Home Cabinetry—which is a higher version of Cabinets-to-Go—and Gracious Home Flooring, which is a higher version of Lumber Liquidators, but leveraging their existing supply chain and expertise.

Speaker #3: So that when a consumer walks through the door, it is my goal to take it from an average of about $220 per square foot—I think we can get to $500 per square foot within 24 months.

Speaker #3: Now, nobody should be applauding or patting anybody on the back for $500 a square foot. The true number to get to the 7% EBITDA contribution on a four-wall basis is, it takes about $615 a square foot.

Marcus Lemonis: The true number to get to the 7% EBITDA contribution on a four-wall basis is it takes about $615/sq ft, but it takes a very good balance between general merchandise and the home services business. The reason that I create that delineation is that the blended margin of general merchandise should be in the 35% to 37% range, and the blended margin of the home services business is north of 60%. We wanna make sure that we're allocating not only enough talent, training, and resources to the home services, but we need that blended margin to come in north of 40 for us to see the kind of EBITDA margins we know give us the kind of returns on investment we need.

Speaker #3: But it takes a very good balance between general merchandise and the home services business. And the reason that I create that delineation is that the blended margin of general merchandise should be in the 35% to 37% range.

Speaker #3: And the blended margin of the home services business is north of 60%. So we want to make sure that we're allocating not only enough talent, training, and resources to the home services, but we need that blended margin to come in north of 40% for us to see the kind of EBITDA margins we know give us the kind of returns on investment we need.

Steven Forbes: That's super helpful. Then maybe just a quick follow-up and more of a clarification for myself and maybe the group on the line here. The goal to remove $60 million of cost, right? That's sort of post all the announced acquisitions over the next nine months. I don't know if you can maybe just frame up for us, like what is the end state of that. Does that bring the business to a positive free cash flow state, or is there still more work to be done, whether it's, you know, sales growth or greater productivity initiatives to get to a free cash flow positive state?

Speaker #4: That's super helpful. And then, maybe just a quick follow-up—more of a clarification for myself, and maybe for the group on the line here.

Speaker #4: The goal to remove $60 million of cost, right, that's sort of post all the announced acquisitions over the next nine months. And I don't know if you can maybe just frame up for us, what is the end state of that?

Speaker #4: Does that bring the business to a positive free cash flow state, or is there still more work to be done—whether it's sales growth or greater productivity initiatives—to get to a free cash flow positive state?

Speaker #3: It is my belief that if we continue with low to mid-single-digit revenue growth in our primary business, and we're able to stabilize the margin as we have for the last 12 months—continue to stabilize it—and we're able to expand the home services business, the $60 million of eliminated cost puts us way ahead of needing to worry about being cash flow positive.

Marcus Lemonis: It is my belief that if we continue with low to mid-single digit revenue growth in our primary business and we're able to stabilize the margin as we have for the last 12 months, continue to stabilize it. We're able to expand the home services business. The $60 million of eliminated costs puts us way ahead of needing to worry about being cash flow positive. My goal is to get this business to a 6% to 7% EBITDA margin business. To be candid with you, if you go back and look at the amount of costs that have been taken out of just the original Overstock business, which is north of $100 million, one should assume that my $60 million number is very conservative. What I wanna be realistic about is that I wanna make sure that we make the right decisions.

Speaker #3: My goal is to get this business to a 6 to 7 percent EBITDA margin business, and to be candid with you, if you go back and look at the amount of costs that have been taken out of just the original Overstock business, which is north of $100 million, one should assume that my $60 million number is very conservative.

Marcus Lemonis: To be candid with you, if you go back and look at the amount of costs that have been taken out of just the original Overstock business, which is north of $100 million, one should assume that my $60 million number is very conservative. What I wanna be realistic about is that I wanna make sure that we make the right decisions.

Speaker #3: What I want to be realistic about is that I want to make sure that we make the right decisions—the right decisions on what locations to close.

Marcus Lemonis: The right decisions on what locations to close, the right decisions on what headcount to eliminate. I have to be, unfortunately, brutally clear and honest with everybody, both internally and externally. With the formation of AI outside of our business and now being deeply integrated in our business, and us only wanting to take on capabilities that we think add value, we're going to experience significant reduction in headcount. It's significant. In some cases, some of that reduction will be redeployed in areas where we think we're undernurtured. Customer service does not have enough to my liking. The amount of staff, qualified, trained staff in the stores, upselling customers, designing for customers, servicing their home for customers, is not enough.

Speaker #3: The right decisions on what headcount to eliminate. But I have to be, unfortunately, brutally clear and honest with everybody, both internally and externally. With the formation of AI outside of our business and now being deeply integrated in our business—and us only wanting to take on capabilities that we think add value—we're going to experience significant reduction in headcount.

Speaker #3: It's significant. And in some cases, some of that reduction will be redeployed in areas where we think we're under-nurtured. Customer service does not have enough, to my liking.

Speaker #3: The amount of qualified, trained staff in the stores upselling customers, designing for customers, servicing their home for customers is not enough. But we are going to become an organization that puts its payroll in the field, that puts its payroll generating revenue, and does not put its payroll in corporate offices with big leases and lots of warehouses.

Marcus Lemonis: We are gonna become an organization that puts its payroll in the field, that puts its payroll generating revenue, and does not put its payroll in corporate offices with big leases and lots of warehouses. We will be eliminating supply chain costs. We will be eliminating IT, accounting, marketing, merchandising, et cetera, across the entire platform. It's never a good thing to do that, but if you go back and you study the independent financial statements of all these businesses, just in a normal mid-cycle environment, The Container Store as an example, prior to COVID, $90 million every year. Kirkland's, $25 million every year. We know what Bed Bath can do. We know what buybuy BABY can do. The problem is we're living in a different world.

Speaker #3: So we will be eliminating supply chain, costs. We will be eliminating IT, accounting, marketing, merchandising, etc., across the entire platform. And it's never a good thing to do that.

Speaker #3: But if you go back and you study the independent financial statements of all these businesses just in a normal mid-cycle environment—Container Store, as an example, prior to COVID—$90 million every year. Kirkland's, $25 million every year.

Speaker #3: We know what Bed Bath can do. We know what Buy Buy Baby can do. The problem is we're living in a different world. And this particular forecast and model that I'm talking to you about today assumes no inflection in the housing market.

Marcus Lemonis: This particular forecast and model that I'm talking to you about today assumes no inflection in the housing market. The goal was always to get this business to neutral or slightly positive in this kind of economic environment that we're living at today, where the 10-year Treasury's north of 4, where mortgage rates are north of 6. While I don't have a crystal ball that will tell me when south of 4 and south of 6 are gonna happen, we are gonna take out all the costs to prove that we can be a break-even company in an environment like this. What does that tell you? You get to a mid-cycle environment and you're not talking about 4, 5, 6, 7% increases in revenue. You're talking about low double-digit increases in revenue, 10, 12, 15%.

Speaker #3: The goal was always to get this business to neutral or slightly positive in this kind of economic environment that we're living in today, where the 10-year Treasuries are north of 4%.

Speaker #3: Mortgage rates are north of 6%. And while I don't have a crystal ball that will tell me when south of 4% and south of 6% are going to happen, we are going to take out all the costs to prove that we can be a break-even company in an environment like this.

Speaker #3: What does that tell you? You get to a mid-cycle environment, and you're not talking about four, five, six, seven percent increases in revenue.

Speaker #3: You're talking about low double-digit increases in revenue—10, 12, 15 percent. And if the cost structure is right and the sourcing is right, then our profitability will be where it's supposed to be.

Marcus Lemonis: If the cost structure's right and the sourcing is right, then our profitability will be where it's supposed to be.

Speaker #4: Thank you.

Tom Forte: Thank you.

Steven Forbes: Thank you.

Speaker #1: Your next question comes from the line of Thomas Forte with Maxim Group. Your line is open. Please go ahead.

Operator 2: Your next question comes from the line of Tom Forte with Maxim Group. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Tom Forte with Maxim Group. Your line is open. Please go ahead.

Speaker #4: Amy and Brian, welcome to the call. Adrian, it was a pleasure working with you, and I wish you all the best in your future endeavors.

Tom Forte: Amy and Brian, welcome to the call. Adrianne, it was a pleasure working with you, and I wish you all the best in your future endeavors. Marcus, I have one plain vanilla question, and I have one spicy one. We'll start with the plain vanilla first. Can you give your current thoughts and your decision tree for building, buying or partnering to advance your three pillars?

Speaker #4: So Marcus, I have one plain vanilla question and I have one swicey one. We'll start with the plain vanilla first. So can you give your current thoughts on your decision tree for building buying or partnering to advance your three pillars?

Speaker #3: It's very simple for me. On a whiteboard back on December 31st, while everybody was out having a party, I drew out what I thought the homeowner timeline was to owning a home in one simple cycle.

Marcus Lemonis: Very simple for me. On a whiteboard back on December 31, while everybody was out having a party, I drew out what I thought the homeowner timeline was to owning a home in one simple cycle, and it's about 11 or 12 years. I thought about every single thing that the homeowner would do right before they decided to buy, all the way to the point that they made the decision and closed on the sale they bought 11 years ago. I started to think about all the needs, both the products, the services, the financial needs that they would have, the insurance needs that they would have, the life events that they would experience, and started to map out on a giant whiteboard what were all the types of products and services that were missing to be able to do this.

Speaker #3: And it's about 11 or 12 years. And I thought about every single thing that the homeowner would do right before they decided to buy, all the way to the point that they made the decision and closed on the sale they bought 11 years ago.

Speaker #3: And I started to think about all the needs—both the products, the services, the financial needs that they would have, the insurance needs that they would have, the life events that they would experience—and started to map out on a giant whiteboard what were all the types of products and services that were missing to be able to do this.

Marcus Lemonis: I started to think about all the needs, both the products, the services, the financial needs that they would have, the insurance needs that they would have, the life events that they would experience, and started to map out on a giant whiteboard what were all the types of products and services that were missing to be able to do this.

Speaker #3: Now, most of you know what my background is. For 25 years, I had the blessing of being able to build a business that is an ecosystem around one particular lifestyle.

Marcus Lemonis: Now, most of you know what my background is. For 25 years, I had the blessing of being able to build a business that is an ecosystem around one particular lifestyle. I understood that in order to do that, you had to aggregate all these products and services, and as you did that, the moat would get deeper and deeper and deeper. The goal here is to not only build the moat, but to be part of the homeowner's life cycle, not just once, but multiple times. What's missing for me, Tom, what was always missing, is that it's great to sell couches, patio furniture, containers, decor for your home, flooring, and all those things.

Speaker #3: And I understood that in order to do that, you had to aggregate all these products and services and, as you did that, the moat would get deeper and deeper and deeper.

Speaker #3: And the goal here is to not only build the moat, but to be part of the homeowner's lifecycle—not just once, but multiple times.

Speaker #3: What's missing for me, Tom, what was always missing, is that it's great to sell couches and patio furniture and containers and decor for your home and flooring and all those things.

Speaker #3: But the reality of it is that the cost to find that customer—the cost to acquire that customer, retain that customer—is what led most of those companies to have to take on debt, take on lots of different expenses, take on layers of personnel, and allowed them—forced them—to not be as successful.

Marcus Lemonis: The reality of it is that the cost to find that customer, the cost to acquire that customer, retain that customer, is what led most of those companies to have to take on debt, take on lots of different expenses, take on layers of personnel, and allow them, force them to not be as successful. As I started studying all the things that were available in the marketplace, it is true, I do like distressed things. I like them because for my shareholders, we get a good deal. But we only get a good deal if we recognize that extracting capabilities and discarding duplicative costs has to be the mandate, has to be the discipline. When I listed off all those brands, I don't think a year ago or two years ago everybody would've imagined, anybody would've imagined that all those brands can be part of one system.

Speaker #3: As I started studying all the things that were available in the marketplace, it is true I do like distressed things. I like them because, for my shareholders, we get a good deal.

Speaker #3: But we only get a good deal if we recognize that extracting capabilities and discarding duplicative costs has to be the mandate, has to be the discipline.

Speaker #3: When I listed off all those brands, I don't think a year ago or two years ago anybody would have imagined—anybody would have imagined—that all those brands can be part of one system.

Marcus Lemonis: When I listed off all those brands, I don't think a year ago or two years ago everybody would've imagined, anybody would've imagined that all those brands can be part of one system.

Speaker #3: But the thing that I think is missing is how it all interconnects. And I'd like to have Amy talk about that, and then we'll get on to your other question.

Marcus Lemonis: The thing that I think is missing is how it all interconnects, and I'd like to have Amy talk about that. We'll get onto your other question.

Speaker #1: Yeah, so we announced our partnership with Bilt this morning, and I think that's a really important sort of moment to think about the sort of red thread that goes through all of these brands.

Amy Sullivan: Yeah. We announced our partnership with Bilt this morning, and I think that's a really important sort of moment to think about the sort of red thread that goes through all of these brands. When you think of the cost of customer acquisition and the desire to make those customers trust our brands and be the most loyal they can be to us, we believe the partnership with Bilt begins to build that entire network for us of how we link our brands together within our own ecosystem and how we link our brands within the neighborhood that he or she lives in. That partnership is really the part that begins to tie this together.

Speaker #1: And so, when you think of the cost of customer acquisition and the desire to make those customers trust our brands and be the most loyal they can be to us, we believe the partnership with Bilt begins to build that entire network for us—of how we link our brands together within our own ecosystem, and how we link our brands within the neighborhood that he or she lives in.

Speaker #1: And so that partnership is really the part that begins to tie this together. Both Lisa, who is joining us on the call today, and Kyla, who's an amazing new talent that we added to our team, will be part of driving that with us.

Amy Sullivan: Both Lisa, who is joining us on the call today, and Kyla, who's an amazing new talent that we added to our team, will be part of driving that with us. There are parts of our business that are just such a natural match for what Bilt already does with renters that we believe we can benefit from what they have already built, as well as partner together on things such as the financial services pillar of our business that we wanna do together with Bilt.

Speaker #1: But there are parts of our business that are just such a natural match for what Bilt already does with renters, that we believe we can benefit from what they have already built, as well as partner together on things such as the financial services pillar of our business that we want to do together with Bilt.

Speaker #4: Great, thanks. And then for my follow-up—so Marcus, you're about as shrewd as they come, and I appreciate all your efforts to drive shareholder value.

Tom Forte: Great. Thanks. For my follow-up, so Marcus, you're about as shrewd as they come, and I appreciate all your efforts to drive shareholder value. I was curious what you thought of the following. Would you consider converting any of The Container Store locations to AI compute centers given their close proximity to urban city centers?

Speaker #4: I was curious what you thought of the following: Would you consider converting any of the Container Store locations to AI compute centers, given their close proximity to urban city centers?

Speaker #3: The answer is no. We don't want to play games with having AI be part of our boxes. But what I can tell you definitively is that in our new team member, Kyla, who's joining our team, and Lisa, who's now our Chief Operating Officer, the two of them have been insanely focused on eliminating headcount and eliminating costs by layering in AI as part of all of our business.

Marcus Lemonis: The answer is no. We don't wanna play games with having AI be part of our boxes. What I can tell you definitively is that in our new team member, Kyla, who's joining our team, and Lisa, who's now our Chief Operating Officer, the two of them have been insanely focused on eliminating head count and eliminating costs by layering in AI as part of all of our business. Even when we start to look in the accounting or the risk mitigation world, where we're managing payables, or managing receivables, or managing treasury, this is a technology business first. The problem was is that the technology that we've been working through and getting rid of was a decade or two old. That doesn't make it bad, it just makes it not current.

Speaker #3: And even when we start to look in the accounting, in the risk mitigation world, where we're managing payables, we're managing receivables, we're managing treasury, this is a technology business first.

Speaker #3: The problem was that the technology that we've been working through and getting rid of was a decade or two old. That doesn't make it bad?

Speaker #3: It just makes it not current. And so, while we're not going to turn any of our locations into AI centers, we are going to turn our business into an AI-centered business—not because it's fun to say or we think it's going to drive our stock, but because we know it's necessary to be competitive; we know the customer expects it, to get information that's curated for them; and we know that in order to efficiently market our business and get our marketing costs down back into the 12 or lower range, we have to be far more efficient with everything.

Marcus Lemonis: While we're not gonna turn any of our locations into AI centers, we are gonna turn our business into an AI-centric business, not because it's fun to say or we think it's gonna drive our stock, but because we know it's necessary to be competitive, we know the customer expects it to get information that's curated for them, and we know that in order to efficiently market our business and get our marketing costs down back into the 12 or lower range, we have to be far more efficient with everything.

Speaker #4: Thanks, Marcus. Thanks, Amy.

Tom Forte: Thanks, Marcus. Thanks, Amy.

Speaker #2: Thank you.

Amy Sullivan: Thank you.

Speaker #1: Your next question comes from the line of Alicia Reese with Wedbush. Your line is open. Please go ahead.

Operator 2: Your next question comes from the line of Alicia Reese with Wedbush. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Alicia Reese with Wedbush. Your line is open. Please go ahead.

Speaker #5: Thanks for taking my questions today. First, just following up on the last question—you had mentioned in your prepared remarks, of course, that the Container Store real estate is wildly underutilized.

Alicia Reese: Thanks for taking my questions today. First, you know, just following up on the last question, you had mentioned in your prepared remarks, of course, The Container Store real estate is wildly underutilized. Just wondering if you can speak to some possible uses if it's not for AI data centers or anything of that manner. What possible uses have you considered so far?

Speaker #5: Just wondering if you can speak to some possible uses, if it's not for AI data centers or anything of that manner. What possible uses have you considered so far?

Speaker #3: So, when I take a typical store that's around 22,000 square feet, those stores have been generating a decent amount of revenue with general merchandise that The Container Store historically held.

Marcus Lemonis: When I take a typical store that's around 22,000 sq ft, those stores have been generating a decent amount of revenue with general merchandise that The Container Store historically held and sold Elfa Closets and a few other custom closet systems. As we acquire businesses across the home space, it is our expectation that all of them in some form or another will have a physical presence there. Whether that is providing cash offers on real estate, or allowing a title closing to happen there, or allowing somebody to come prepared to take their son or daughter to college, or getting ready for the Christmas holiday, or picking out new floors for your newly bought house, or designing a new kitchen, we wanna make sure that every single square inch of those 22,000 sq ft are intensely utilized.

Speaker #3: And sold Alpha Closets and a few other custom closet systems. As we acquire businesses across the home, many of them in some form or another will have a physical presence there.

Speaker #3: And whether that is providing cash offers on real estate, allowing a title closing to happen there, allowing somebody to come prepared to take their son or daughter to college, getting ready for the Christmas holiday, picking out new floors for your newly bought house, or designing a new kitchen.

Marcus Lemonis: Whether that is providing cash offers on real estate, or allowing a title closing to happen there, or allowing somebody to come prepared to take their son or daughter to college, or getting ready for the Christmas holiday, or picking out new floors for your newly bought house, or designing a new kitchen, we wanna make sure that every single square inch of those 22,000 sq ft are intensely utilized.

Speaker #3: We want to make sure that every single square inch of those 22,000 square feet is intensely utilized. When I talk to you about the quality of this real estate, for those of you that know The Container Store in your own town, it is the cream-of-the-crop real estate.

Marcus Lemonis: When I talk to you about the quality of this real estate, for those of you that know The Container Store in your own town, it is the cream of the crop real estate. One of the things that I think brought Container Store to a tough spot is that it didn't have a broad enough offering for the home. It was very niche-y. As the internet came to be more predominant, it lost a little bit of its competitive edge. As the economy got tougher, it lost a little bit of its competitive edge. Historically, The Container Store has served the customer that was probably $200,000 a year in household income.

Speaker #3: But one of the things that I think brought Container Store to a tough spot is that it didn't have a broad enough offering for the home.

Speaker #3: It was very niche. And as the Internet became more predominant, it lost a little bit of its competitive edge. As the economy got tougher, it lost a little bit of its competitive edge.

Speaker #3: Historically, The Container Store has served the customer that was probably $200,000 a year in household income. We believe that the addition of Bed Bath not only widens the funnel for that customer, but the offering widens as well.

Marcus Lemonis: We believe that the addition of Bed Bath not only widens the funnel for that customer, but the offering widens as well. I would expect that within 24 months, the revenue coming out of those 22,000 sq ft, when you incorporate all the home services and the general merchandise, and you can quote me on this, should be double. It should be double. I don't think anybody in our company believes that that's a pie in the sky number, only because the company has done it before. We wanna utilize those to meet customers, to serve customers, and to have every pillar in our company, including our potential brokerage business, our credit union business, our credit card business, all of those businesses extract value.

Speaker #3: I would expect that within 24 months, the revenue coming out of those 22,000 square feet, when you incorporate all the home services and the general merchandise—and you can quote me on this—should be doubled.

Speaker #3: It should be doubled. And I don't think anybody in our company believes that that's a pie-in-the-sky number, only because the company has done it before.

Speaker #3: So, we want to utilize those to meet customers, to serve customers, and to have every pillar in our company—including our potential brokerage business, our credit union business, our credit card business—all of those businesses extract value.

Speaker #3: What we like to say internally is, 'We're going to sweat the assets and get every last drop of revenue that that piece of property was intended to give us.'

Marcus Lemonis: What we like to say internally is we're gonna sweat the assets and get every last drop of revenue that that piece of property was intended to give us.

Speaker #5: Thank you for detailing that. I'm wondering if you could also speak to the product shift at the original Overstock.com site and how you're honing that. To what extent are you layering products from the other businesses now, or steering people to other banners under your other businesses?

Alicia Reese: Thank you for detailing that. I'm wondering if you could also speak to the product mix shift at the original Overstock.com site and how you're honing that, to what extent you're layering products from the other businesses now or steering people to other banners under your other businesses.

Speaker #2: Hi, Alicia. I'll take that one. So, as we think about all of the banners, I do believe that each fills a unique portion of the home segment of the business.

Amy Sullivan: Hi, Alicia, I'll take that one. As we think about all of the banners, I do believe they each fill a unique portion of the home segment of the business. Marcus just described in The Container Store real estate, in our largest stores, for example, there's an opportunity for all of those things to be represented. When you get back to the e-commerce business, there's a massive opportunity for each of those to be more thoughtfully curated to what we all expect from those brands. Overstock specifically has really been headed in the right direction in terms of its focus on patio, rugs, and furniture, as well as sort of an eyedropper amount of the fashion luxury space that does so well on that site.

Speaker #2: And so, as Marcus just described, in The Container Store real estate, in our largest stores, for example, there's an opportunity for all of those things to be represented.

Speaker #2: But when you get back to the e-commerce business, there's a massive opportunity for each of those to be more thoughtfully curated to what we all expect from those brands.

Speaker #2: Overstock, specifically, has really been headed in the right direction in terms of its focus on patio, rugs, and furniture, as well as sort of an eyedropper amount of the fashion, luxury space that does so well on that site.

Speaker #2: Bed Bath and Beyond is probably where we have the most opportunity to sort of fine-tune and make sure that that business is the best of what we remember of Bed Bath and Beyond while still protecting some of the growth that we've sort of acquired over time with that legacy overstock customer.

Amy Sullivan: Bed Bath & Beyond is probably where we have the most opportunity to sort of fine-tune and make sure that that business is the best of what we remember of Bed Bath & Beyond, while still protecting some of the growth that we've sort of acquired over time with that legacy Overstock customer. I think there's tremendous opportunity to curate each one of them, but really bring it together in the store footprint.

Speaker #2: So, I think there's tremendous opportunity to curate each one of them, but really bring it together in the store footprint.

Speaker #3: I want to add a little bit to that. Overstock is run by an unbelievable woman who came back to the company because she liked the direction that we were going and has brought in a whole new supporting cast of merchants underneath her.

Marcus Lemonis: I wanna add a little bit to that. You know, Overstock is run by an unbelievable woman who came back to the company because she liked the direction that we were going and has brought in a whole new supporting cast of merchants underneath her. Really, if you think about Overstock in its best days, was great brands and big-ticket items at unbelievable prices. You could expect that even by the end of the year. I don't want anybody to, like, overreact to this, but even by the end of the year, in addition to selling patio, rug, furniture, Rolex watches, Gucci handbags, we will be selling cars and anything else that we believe fits into the four corners of the property and the four walls of the house. We're not gonna be the sellers.

Speaker #3: And really, if you think about Overstock in its best days, it was great brands and big-ticket items at unbelievable prices. You could expect that even by the end of the year—and I don't want anybody to overreact to this—but even by the end of the year, in addition to selling patio, rugs, furniture, Rolex watches, and Gucci handbags, we will be selling cars and anything else that we believe fits into the four corners of the property and the four walls of the house.

Speaker #3: We're not going to be the sellers. It's a marketplace. And we rely on the best companies, the best brands, and the best supply chains to satisfy that.

Marcus Lemonis: It's a marketplace, and we rely on the best companies, the best brands, and the best supply chains to satisfy that. I think Overstock, when I look at all of our e-commerce businesses, separate from getting normal improvement out of Bed Bath & Beyond, the normal improvement out of The Container Store, Overstock is the one that has the most potential to be a massive brand again. On a trailing twelve months, we're back up around a quarter of a billion dollars, and every day we're seeing 700 to 800 thousand dollars a day. We know that it needs to be unlocked and unleashed, and we've always been trying to manage our priorities while trying to get to profitability. As we bring on these other businesses, we start to add billions of revenue.

Speaker #3: But I think Overstock, when I look at all of our e-commerce businesses—separate from getting normal improvement out of Bed Bath, the normal improvement out of The Container Store—Overstock is the one that has the most potential to be a massive brand again.

Speaker #3: On a trailing 12 months, we're back up around a quarter of a billion dollars. And every day, we're seeing $700,000, $800,000 a day.

Speaker #3: We know that it needs to be unlocked and unleashed. And we've always been trying to manage our priorities while trying to get to profitability.

Speaker #3: As we bring on these other businesses and we start to add billions of revenue—and I want to be clear—Container Store, Bed Bath, Overstock, Lumber, Cabinets To Go, Alpha Closet Works, all these brands—we're starting to dance in the $2-plus-plus-plus billion-dollar range.

Marcus Lemonis: I wanna be clear, The Container Store, Bed Bath & Beyond, Overstock, Lumber Liquidators, Cabinets To Go, Elfa, The Closet Works, all these brands, we're starting to dance in the 2 plus, plus billion-dollar range. When you start to add all of that revenue and all of that gross profit and you extract the costs that come with those, you start to get to profitability within a year or two in a material way. In a material way. Overstock is like that crown jewel that doesn't get enough attention, but it will continue to get the attention, and we expect the growth to continue to be low double-digit like it has been over the last 12 months.

Speaker #3: And when you start to add all of that revenue and all of that gross profit, and you extract the cost that comes with those, you start to get to profitability within a year or two in a material way.

Speaker #3: In a material way, Overstock is like that prized jewel box that doesn't get enough attention. But it will continue to get the attention, and we expect the growth to continue to be low double-digit, like it has been over the last 12 months.

Speaker #5: Your next question comes from the line of Jonathan Matozewski with Jefferies. Your line is open. Please go ahead.

Operator 2: Your next question comes from the line of Jonathan Matuszewski with Jefferies. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Jonathan Matuszewski with Jefferies. Your line is open. Please go ahead.

Speaker #6: Great. Good afternoon, and thanks for taking my questions. My first one, Marcus, was just on a theme that's emerging here, and that's kind of potential revenue synergies from cross-marketing across the businesses that you've been aggregating.

Jonathan Matuszewski: Great, good afternoon, and thanks for taking my questions. My first one, Marcus, was just on, you know, a theme that's emerging here, and that's kind of potential revenue synergies from cross-marketing across the businesses that you've been aggregating. So how should we think about kind of measuring progress there? As you think about the separate customer files today, where does cross-shopping stand, you know, before integration? And are there any kind of milestones that you have in terms of, you know, measuring as these businesses come under one umbrella? That was my first question. Thanks.

Speaker #6: So, how should we think about kind of measuring progress there? As you think about the separate customer files today, where does cross-shopping stand before integration?

Speaker #6: And are there any kind of milestones that you have in terms of measuring as these businesses come under one umbrella? That was my first question.

Speaker #6: Thanks.

Speaker #3: We've been working with a firm out of Canada. Lisa Fully, our Chief Operating Officer, has been working to really understand how to create one single data layer.

Marcus Lemonis: We've been working with a firm out of Canada, Lisa Foley, our Chief Operating Officer, to really understand how to create one single data layer. That data layer takes the entry point of any customer in any brand at any moments in time and ingests them into that data layer. Ultimately, what we wanna do is ensure that we de-duplicate and that person, and we create two unique identifiers. The first is the homeowner or renter. It's an important distinction, both. The homeowner or renter themselves and their behavior and their historical purchases, so we know who they are and what their preferences are. That's the first unique sign-on. The second is the home itself. I liken it to the automobile business when you think about cars.

Speaker #3: And that data layer takes the entry point of any customer in any brand at any moment in time, and ingests them into that data layer.

Speaker #3: Ultimately, what we want to do is ensure that we dedupe that address and that person, and we create two unique identifiers. The first is the homeowner or renter—it's an important distinction—both, the homeowner or renter themselves and their behavior and their historical purchases.

Speaker #3: So we know who they are and what their preferences are. That's the first unique sign-on. The second is the home itself. And I'd liken it to the automobile business when you think about cars.

Speaker #3: When you are in the automobile business and you're trying to grow any portion of that ecosystem, you think about the car and you think about the VIN number.

Marcus Lemonis: When you are in the automobile business and you're trying to grow any portion of that ecosystem, you think about the car and you think about the VIN number. There's a term called VIN explosion, which allows you to understand a heck of a lot more about that car and its journey through its life cycle, including repairs, maintenance, accidents, insurance, everything. We look at the home address the same way. The single sign-on with the customer tells us about them, and the home address tells us about the home. Over time, with all of these partners, including title, mortgage, credit card, and all of these other brands that we talked about, we wanna be able to gather everything about that address that you can imagine.

Speaker #3: And there's a term called VIN explosion, which allows you to understand a heck of a lot more about that car and its journey through its life cycle, including repairs, maintenance, accidents, insurance—everything.

Speaker #3: We look at the home address the same way. So the single sign-on with the customer tells us about them, and the home address tells us about the home.

Speaker #3: Over time, with all of these partners, including title, mortgage, credit card, and all of these other brands that we talked about, we want to be able to gather everything about that address that you can imagine.

Speaker #3: Not only the purchase price, not only the square footage, permits, titles, deeds, surveys, mortgages, and you could expect all of that data to live on blockchain.

Marcus Lemonis: Not only the purchase price, not only the square footage, permits, titles, deeds, surveys, mortgages, and you could expect all of that data to live on blockchain. Remember, this company is also heavily invested in tokenization and in blockchain, and we believe that the transfer of information for the homeowner, transferring it for themselves or for the home itself, transferring it from one owner through title to another owner, should be able to transfer that proprietary data information on that home as well. As we understand those two single sets of data, we then create journeys that allow us to communicate with those two assets uniquely based on where we think they are in their 11- or 12-year life cycle.

Speaker #3: Remember, this company is also heavily invested in tokenization and in blockchain. And we believe that the transfer of information for the homeowner—transferring it for themselves or for the home itself—transferring it from one owner through title to another owner—should be able to transfer that proprietary data information on that home as well.

Speaker #3: As we understand those two single sets of data, we then create journeys that allow us to communicate with those two assets uniquely based on where we think they are in their 11- or 12-year life cycle.

Speaker #3: As we think about where they are in that journey, Lisa's done an unbelievable job of starting to craft the way we communicate with those different assets and giving them the right offer at the right time, with the right price and the right tone.

Marcus Lemonis: As we think about where they are in that journey, Lisa's done an unbelievable job of starting to craft the way we communicate with those different assets and giving them the right offer at the right time with the right price and the right tone, hoping that they will capture something there as opposed to this, you know, spraying effect where every customer gets every email every single day. It is not a perfect science today, which is why Amy and Lisa fought really hard to bring Kyla into our organization.

Speaker #3: Hoping that they will capture something there as opposed to this spraying effect where every customer gets every email every single day. It is not a perfect science today.

Speaker #3: Which is why Amy and Lisa fought really hard to bring Kyla into our organization. She has transformed multiple companies on the digital and AI transformation roadmaps.

Marcus Lemonis: She has transformed multiple companies on the digital and AI transformation roadmaps and believes, when we interviewed her, that she could really help layer this simplicity to ingest the data, to understand it, and to communicate back to it in a way that we don't believe any other company in the home space can do it for one simple reason. There is no other company in the home space, not Home Depot, not Wayfair, not anybody else, that will have as many touch points across those 11 years and as many entry points into the life cycle as we have. We're not done making acquisitions.

Speaker #3: And believes when we interviewed her, that she could really help layer the simplicity to ingest the data to understand it and to communicate back to it in a way that we don't believe any other company in the home space can do it for one simple reason: there is no other company in the home space, not Home Depot, not Wayfair, not anybody else, that will have as many touch points across those 11 years and as many entry points into the life cycle as we have.

Speaker #3: And we're not done making acquisitions. And so, whether it's buying a brokerage—and knowing that that's a hot origination today—or doing a HELOC on blockchain with somebody today, or selling somebody a crib today, we know that all those moments create opportunities to bring them into our system and keep them through life.

Marcus Lemonis: whether it's buying a brokerage and knowing that that's a hot origination today or doing a HELOC on blockchain with somebody today or selling somebody a crib today, we know that all those moments create opportunities to bring them into our system and keep them through life.

Speaker #6: Really helpful, Marcus. And then just a quick follow-up, as we think about the core business, I think you mentioned some progress on improved repeat spend.

Jonathan Matuszewski: Really helpful, Marcus. Then just a quick follow-up, you know, as we think about the core business, I think you mentioned some progress on improved repeat spend. Just wanted to ask about kind of customer loyalty, and maybe if you could frame it in terms of just an update on the Welcome Rewards program. You know, where is that today in terms of enrollment? How productive is that customer and what's possible ahead with all the changes you're making to merchandising and whatnot? Thanks.

Speaker #6: So just wanted to ask about kind of customer loyalty and maybe if you could frame it in terms of just an update on the welcome rewards program.

Speaker #6: Where is that today in terms of enrollment? How productive is that customer? And what's possible ahead with all the changes you're making to merchandising and whatnot?

Speaker #6: Thanks.

Speaker #3: You got it. Well, first and foremost, the e-commerce business is not our core business anymore. Our core business is the everything home business. And everything that's around it, particularly when you look at the revenue and margin contribution, the e-commerce business, coupled with our retail business, is our omnichannel business.

Marcus Lemonis: You got it. Well, first and foremost, the e-commerce business is not our core business anymore. Our core business is the Everything Home business and everything that's around it, particularly when you look at the revenue and margin contribution. The e-commerce business coupled with our retail business is our omni-channel business. That's pillar one. Those other pillars really matter significantly to make sure that we are addressing everything that that homeowner wants. As it relates to our Welcome Rewards, our Welcome Rewards program will be ingested by our Bilt program.

Speaker #3: That's pillar one. And those other pillars really matter significantly to make sure that we are addressing everything that that homeowner wants. As it relates to our welcome rewards, our welcome rewards program will be ingested by our built program.

Speaker #1: So, as we think about the built program, I would think of that as sort of the halo over all of the loyalty programs in our system.

Amy Sullivan: As we think about the Bilt program, I would think of that as sort of the halo over all of the loyalty programs in our system. We wanna be able to recognize that if someone is a buybuy BABY customer or a Cabinets To Go customer, that that's how they entered the system. We want them to be able to earn in the whole ecosystem of Beyond Rewards, which will be powered by Bilt, so that those points can be leveraged and traded from anything from a crib purchase over to Bed Bath & Beyond to how you think about mortgage and our financial services businesses as well.

Speaker #1: And so we want to be able to recognize that if someone is a buy-by-baby customer or a cabinet-to-go customer, that that's how they entered the system.

Speaker #1: But we want them to be able to earn in the whole ecosystem of Beyond Rewards, which will be powered by Built. So that those points can be leveraged and traded from anything from a crib purchase over to Bed Bath & Beyond to how you think about mortgage and our financial services businesses as well.

Speaker #1: So we're less focused on Beyond Rewards as a standalone reward program, and more appropriately focused, I would say, on building out this entire ecosystem that I believe she will find far more value in as she shops all of our brands.

Amy Sullivan: We're less focused on Beyond Rewards as a stand-alone reward program and more appropriately focused, I would say, on building out this entire ecosystem that I believe she will find far more value in as she shops all of our brands.

Speaker #6: Thank you. Best of luck.

Jonathan Matuszewski: Thank you. Best of luck.

Speaker #3: Hey, Jonathan. One thing before you go. It is really important. And it's a big shift because over the last 24 months, all we've been talking about is taking revenue down and getting rid of SKUs and getting rid of negative-margin vendors and getting rid of people.

Marcus Lemonis: Hey, Jonathan, one thing before you go. It is really important, and it's a big shift because, you know, over the last 24 months, all we've been talking about is taking revenue down and getting rid of SKUs and getting rid of negative margin vendors and getting rid of people. It's been a painful process, which is why our stock is, in my opinion, wildly undervalued. Based on what was happening, we understood that. As we did these transactions with these other sellers and we asked them to take all stock, we were asking them to put their business, their lifelong business in the hands of our business. They understood that what we were ultimately trying to build was something that had never been done before.

Speaker #3: And it's been a painful process, which is why our stock is, in my opinion, wildly undervalued. But, based on what was happening, we understood that.

Speaker #3: As we did these transactions with these other sellers, and we asked them to take all stock, we were asking them to put their business, their lifelong business, in the hands of our business.

Speaker #3: And they understood that what we were ultimately trying to build was something that had never been done before. And I love reading articles about how ambitious it is, or how it's not possible, or how that's not going to work.

Marcus Lemonis: I love reading articles about how ambitious it is, or how it's not possible, or how this isn't gonna work. It really is very simple for me. If you start by understanding data and how to properly catalog it and how to properly look at it, and how to properly communicate with it, and then you're surrounded by businesses in the same eco space. We're not gonna be off doing random things just because we have data. Really what you've done is you've taken good brands with a lower cost structure, with good talent playing in the same space, and you've allowed them to play in a totally different sandbox. What that ultimately means is that the customer should be the big winner because as they do business with us in one business, they should be earning rewards.

Speaker #3: And it really is very simple for me. If you start by understanding data, and how to properly catalog it, and how to properly look at it, and how to properly communicate with it, and then you surround it by businesses in the same ecospace, we're not going to be off doing random things just because we have data.

Speaker #3: Then, really, what you've done is you've taken good brands with a lower cost structure, with good talent, playing in the same space, and you've allowed them to play in a totally different sandbox.

Speaker #3: What that ultimately means is that the customer should be the big winner. Because as they do business with us in one business, they should be earning rewards.

Speaker #3: And the one thing that we said to the founder of Built when we did this deal, and Amy and I sat in their offices, was, "I'm only going to do this deal if we can build the model where, if they buy a lot of stuff from us as a renter, they can earn enough points to have enough of a down payment to buy their first home." I had been obsessed for the last 12 months about the lack of affordability of buying a home in America.

Marcus Lemonis: The one thing that we said to the founder of Bilt when we did this deal, and Amy and I sat in their offices, "I'm only gonna do this deal if we can build a model where if they buy a lot of stuff from us as a renter, they can earn enough points to have enough of a down payment to buy their first home." I have been obsessed for the last 12 months about the lack of affordability of buying a home in America, and I don't see any company doing anything about it. Part of what we wanna ultimately do is bring low cost, high value, and whether that's bringing a credit union to the forefront, whether it'll be mortgages, HELOCs, checking and savings, or bringing Bilt to the forefront, where they'll be able to enjoy rewards at tens and twenties of brands.

Speaker #3: And I don't see any company doing anything about it. Part of what we want to ultimately do is bring low-cost, high-value—and whether that's bringing a credit union to the forefront, where there'll be mortgages, HELOCs, checking and savings, or bringing Built to the forefront, where they'll be able to enjoy rewards at tens of brands, twenties of brands—that ultimately is, I think, what's been missing from the general marketplace.

Marcus Lemonis: Part of what we wanna ultimately do is bring low cost, high value, and whether that's bringing a credit union to the forefront, whether it'll be mortgages, HELOCs, checking and savings, or bringing Bilt to the forefront, where they'll be able to enjoy rewards at tens and twenties of brands.

Marcus Lemonis: That ultimately is, I think, what's been missing from the general marketplace. Brands trying to stand on their own, never gonna work. Brands trying to stand inside of a simple, flatter ecosystem, we think that's ultimately why this matters. It really is data centered. We wanna be known going forward as a data and technology company that happens to cut its teeth in the home space. The largest TAM in America, by the way.

Speaker #3: Brands trying to stand on their own—never going to work. Brands trying to stand inside of a simple, flatter ecosystem—we think that's ultimately why this matters.

Speaker #3: But it really is data at the center. We want to be known, going forward, as a data and technology company that happens to cut its teeth in the home space.

Speaker #3: The largest TAM in America, by the way.

Speaker #1: Your next question comes from the line of Bernie McTernan with Needham. Your line is open. Please go ahead.

Operator 2: The next question comes from the line of Bernie McTernan with Needham. Your line is open. Please go ahead.

Operator: The next question comes from the line of Bernie McTernan with Needham. Your line is open. Please go ahead.

Speaker #6: Great. Thanks for taking the question. I was wondering if the better-than-expected results, at least relative to our estimates for 1Q, impacts how you're thinking about the year-at-all.

Bernie McTernan: Great. Thanks for taking the question. I was wondering if the better than expected results, at least relative to our estimates for Q1, impacts how you're thinking about the year at all. Maybe within that, just any impact you're seeing either on the consumer or suppliers or anything you're hearing in the industry, just in terms of higher gas prices impacting the macro.

Speaker #6: And maybe within that, just any impact you're seeing, either on the consumer or suppliers, or anything you're hearing in the industry, just in terms of higher gas prices impacting the macro.

Speaker #3: We haven't seen gas prices change our demand trajectory, but we are holding steady with the guideposts that we provided earlier in the year, which is low to mid-single-digit revenue growth.

Marcus Lemonis: We haven't seen gas prices change our demand trajectory, but we are holding steady with the guideposts that we provided earlier in the year, which is low to mid single digit revenue growth. It is important that everybody understand one part very clearly. As we get into Q2, we will have one-time operating expenses that will be directly associated with eliminating redundancies, purging systems, terminating leases, and doing all the unpopular things that are required. Brian has committed that we will clearly, in our Q2, show people what the core revenue is and the core margin is and the core operating expenses are, and we will highlight clearly what expenses. For example, in the Q2, we will run through the P&L about $12 to 13 million of expenses through the Kirkland's P&L because we haven't had it in our hands until 1 April.

Speaker #3: It is important that everybody understands one part very clearly. As we get into Q2, we will have one-time operating expenses that will be directly associated with eliminating redundancies and purging systems and terminating leases and doing all the unpopular things that are required.

Speaker #3: Brian has committed that we will clearly, in our second quarter, show people what the core revenue is, the core margin is, and the core operating expenses are.

Marcus Lemonis: Brian has committed that we will clearly, in our Q2, show people what the core revenue is and the core margin is and the core operating expenses are, and we will highlight clearly what expenses. For example, in the Q2, we will run through the P&L about $12 to 13 million of expenses through the Kirkland's P&L because we haven't had it in our hands until 1 April.

Speaker #3: And we will highlight clearly what expenses, for example, in the second quarter, we will run through the P&L about 12 to 13 million dollars of expenses through the Kirkland P&L because we haven't had it in our hands until April 1st.

Speaker #3: But I'm happy with what we're seeing there. I also want to be clear that when we did the deal a while ago, there were 300 stores.

Marcus Lemonis: I'm happy with what we're seeing there. I also wanna be clear that when we did the deal a while ago, there were 300 stores. There are now 240 stores. We may end at 210 stores. I am not taking any chances of any kind on deploying any of my shareholder assets on anything that I don't think we can get a return on. What I'd rather do is be upfront about what we're getting out of it. When we look at The Container Store, there are already 3 leases that we have shaken hands on, had a nice, gracious exit, and we will be exiting those locations. We are getting out of distribution centers. We are getting rid of lots of old contracts.

Speaker #3: There are now 240 stores. We may end at 210 stores. I am not taking any chances of any kind on deploying any of my shareholder assets on anything that I don't think we can get a return on.

Speaker #3: And what I'd rather do is be upfront about what we're getting out of it. When we look at the Container Store, there are already three leases that we have shaken hands on, had a nice, gracious exit, and we will be exiting those locations.

Speaker #3: We aren't getting out of distribution centers. We are getting rid of lots of old contracts and so, as you look at the next couple of quarters, it is important to know that there will be incremental expenses I believe that if you looked at what we had laid out in the guidepost, Q2 will have about 13 million dollars of one-time expenses.

Marcus Lemonis: As you look at the next couple of quarters, it is important to know that there will be incremental expenses. I believe that if you looked at what we had laid out in the guidepost, Q2 will have about $13 million of one-time expenses. I would expect that Q3 will probably have between TCS around $13 or $14 million as well. We don't see as much in the Lumber Liquidators, Cabinets To Go business. Jason Delz, who's the CEO of that company, runs a pretty tight ship, and he's feeling a little, I think he's getting a little FOMO knowing that he's gotta get rid of some things as well.

Speaker #3: I would expect that Q3 will probably have, between TCS, around $13 or $14 million as well. We don't see as much in the Lumber Liquidators' Cabinets-To-Go business.

Speaker #3: Jason Delves, who's the CEO of that company, runs a pretty tight ship, and I think he's getting a little FOMO, knowing that he's got to get rid of some things as well.

Speaker #3: And then, as we start to think about all the deals we're doing going forward, we're requiring a lot of those businesses to make those changes when we sign the deal.

Marcus Lemonis: As we start to think about all the deals we're doing going forward, we're requiring a lot of those businesses make those changes when we sign the deal. As you see other deals get announced here, you're probably going to see immediate and radical changes happening at the same time that we announce it. With Kirkland's and TCS, we didn't own Kirkland's until 1 April, and we don't technically own TCS until 1 July-ish, around that date. We're lining it all up, but we will have to purge the system. Nothing daunting or nothing monumental, and nothing that we can't handle. We want everybody to know that there are some one-time things that we will lay out for people.

Speaker #3: And so, as you see other deals get announced here, you're probably going to see immediate and radical changes happening at the same time that we announce it.

Speaker #3: With Kirkland’s and TCS, we didn’t own Kirkland’s until April 1st, and we don’t technically own TCS until July 1st-ish, around that date. We’re lining it all up, but we will have to purge the system—nothing daunting or nothing monumental, and nothing that we can’t handle.

Speaker #3: But we want everybody to know that there are some one-time things that we will lay out for people.

Speaker #6: Understood. Thanks, Marcus. And as a follow-up, with all these acquisitions set to close in relatively short order, how should we expect them to start impacting the larger company strategy?

Bernie McTernan: Understood. Thanks, Marcus. As a follow-up, with all these acquisitions, you know, set to close in relatively short order, how should we expect them to start impacting the larger company strategy? Like as you mentioned, there's, you know, a bunch of things that need to be done once deals close. What's the timeline that we should expect these to be a positive influence in that connected home strategy?

Speaker #6: As you mentioned, there’s a bunch of things that need to be done once deals close. So, what’s the timeline that we should expect? Yeah, these to be a positive influence in that connected home strategy?

Speaker #3: I think in Q2, as an example, based on when we closed and the time of year that it is, we'll see about $80 million of increase coming out of Kirkland, $75 to $80 million coming out of Kirkland.

Marcus Lemonis: I think in Q2, as an example, you know, based on when we close and the time of year that it is, we'll see about $80 million of increase coming out of Kirkland's, $75 to 80 million coming out of Kirkland's. It's an H2 business. We're still seeing nice revenue growth on the e-commerce business that, you know, low- to mid-single-digit growth there. The only thing that you should expect to see in Q2 is about $13 million of one-time expenses. Whatever your consensus was, whatever your number was, and I don't know what it is on this call, I would add about $13 million to it. We're hoping to be a little bit better than that. Then the same thing would happen in Q3 with the closing of TCS.

Speaker #3: It's a second half of the year business. We're still seeing nice revenue growth on the e-commerce business that low to mid-single-digit growth there. The only thing that you should expect to see in Q2 is about 13 million dollars of one-time expenses.

Speaker #3: So, whatever your consensus was, whatever your number was—and I don't know what it is on this call—I would add about $13 million to it.

Speaker #3: We're hoping to be a little bit better than that. And then the same thing would happen in Q3 with the closing of TCS. I would expect that we will have a forecast that looks pretty good.

Marcus Lemonis: I would expect that we will have a forecast that looks pretty good in probably 30 to 45 days. That will give you an outlook, a range, a guidepost, assuming the economy doesn't get any better, with about 6% to 7% revenue growth on a CAGR for 2027, 2028, and 2029. That's what we're hoping to show you guys in the next 45 to 60 days, and I think it'll be about what you would expect it to be. You know, the TCS business is about half a billion dollars. The Kirkland's business on an annualized basis is about 350, 325, depending on how many stores we end up keeping. The Lumber Liquidators, Cabinets To Go business is about $500 million. The installation business that we're talking about, the renovation installation business, is about $60 million.

Speaker #3: In probably 30 to 45 days, that will give you an outlook, a range, a guidepost, assuming the economy doesn't get any better, with about 6% to 7% revenue growth on a CAGR for ’27, ’28, and ’29.

Speaker #3: That's what we're hoping to show you guys in the next 45 to 60 days. And I think it'll be about what you would expect it to be.

Speaker #3: The TCS business is about half a billion dollars. The Kirkland's business, on an annualized basis, is about $350 million, $325 million, depending on how many stores we end up keeping.

Speaker #3: The lumber liquidators' cabinets-to-go business is about 500 million dollars. The installation business that we're talking about, the renovation installation business, is about 60 million dollars.

Speaker #3: And so we'll build all of that for you as we build this live together. But they'll fold in in cadence, and I would expect that by August, September, we should have everything closed.

Marcus Lemonis: We'll build all of that for you as we build this live together. They'll fold in Cadence. I would expect that by August, September, we should have everything closed that you've heard about today. That doesn't mean there won't be more chunky acquisitions that would fit into pillar one, two, or three based on what Amy wanted, Brian wanted, or Jason wants.

Speaker #3: That you've heard about today, that doesn't mean there won't be more talking acquisitions that would fit into pillar one, two, or three, based on what Amy wanted, Brian wanted, or Jason wanted.

Speaker #6: Thanks, Marcus.

Bernie McTernan: Thanks, Marcus.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Marcus Lemonis for closing remarks.

Operator 2: We have reached the end of the Q&A session. I will now turn the call back to Marcus Lemonis for closing remarks.

Operator: We have reached the end of the Q&A session. I will now turn the call back to Marcus Lemonis for closing remarks.

Speaker #6: I don't have any closing remarks. We are happy that we were able to report Q1, and we're looking forward to exciting quarters ahead. Thanks for joining us.

Marcus Lemonis: I don't have any closing remarks. We are happy that we were able to report Q1, and we're looking forward to exciting quarters ahead. Thanks for joining us.

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Access the Beyond, Inc. IR website for more information. This line will now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Access the Beyond, Inc. IR website for more information. This line will now disconnect.

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