- Equity Research Cheat Sheets
- Posts
- BBBY 3Q25 - Revenue growth next year, says company? What do you think? Bull case $16 Bear case $4
BBBY 3Q25 - Revenue growth next year, says company? What do you think? Bull case $16 Bear case $4
Cheat Sheet
BED BATH & BEYOND INC. (BBBY)
📊 Q3 Revenue $257M (-17% YoY) | Net Loss $4.5M (93% Improvement) | Gross Margin 25.3% (+420 bps) | $113M ATM Raise | 7th Consecutive Quarter of Improvement
Adj EBITDA Loss $4.9M (85% Better) | AOV +3% | $20M Opex Cuts Planned 2026 | 250 Stores by Mid-2026 | Kirkland's IP Acquired $10M | GrainChain +$3M Investment | Everything Home Strategy
💰 Name Change Complete | 🏢 Omnichannel Transformation | 🌍 Asset-Light Model
👨💼 Executive Chairman Marcus Lemonis | 🎯 Everything Home Company | 🏠 PropTech Focus
$8.60
+$0.03 (+0.35%)
Q3 2025 | 7th Quarter of Progress
Price Targets (12-18 Months)
Post-Bankruptcy Restructure | 7 Quarters of Consecutive Improvement
$16.00
Bull Case (Turnaround Success)
2026 Profitability Achieved | Revenue Growth Resumes
Everything Home Ecosystem Works
🚀 Needs:
Revenue turns positive YoY in 2026 • 250 stores converted by mid-2026 with local franchise model • New tech stack hits 1.3%+ conversion at Overstock, then migrates to BBBY.com • AI personalization + Shop Pay + Apple Pay work • PropTech (tZERO fractional ownership + GrainChain blockchain) unlocks value • $20M opex cuts realized • Kirkland's IP integrates • Orders grow from "nearly flat" trajectory
$11.00
Base Case (Slow Progress)
2026 Near Break-Even | Continued Sequential Improvement
Steady Execution
⚖️ Needs:
Gross margin holds 25%+ via lower fulfillment/returns costs • Marketing efficiency stays 14% of revenue • Tech/G&A cuts stick (down $13M YoY) • Balance sheet stable with $202M cash post-ATM • Orders stay "nearly flat" = business stabilizes • AOV continues +3% via SKU rationalization • Omnichannel completes on schedule • Canada exit impact stabilizes • Tech stack migrates to BBBY.com by mid-to-late 2026 without revenue disruption
$4.00
Bear Case (Failure to Launch)
Revenue Collapse | Tech Integration Disaster | Liquidity Crisis
Post-BK Relapse
⚠️ Risk:
Revenue decline accelerates past -17% YoY • Orders drop materially • Tech migration disaster repeats Overstock Q3 pain: "$7M of top line lost, 30,000 orders" • Conversion never reaches 1.3% • PropTech (tZERO + GrainChain) bleeds cash with no ROI • Marketing stays high, 12% target unreachable • Store conversion slips past mid-2026 = stranded capex • Franchise model flops • Consumer confidence craters • Kirkland's IP write-off • $202M cash burns faster than improvement trajectory • ATM exhausted, no liquidity options
The TL;DR
💰
What Happened
REVENUE: $257M down 17% YoY (13% ex-Canada) but orders "nearly flat" Q2 to Q3
NET LOSS: $4.5M, 93% improvement YoY - seventh consecutive quarter improving
ADJ EBITDA: Loss $4.9M, 85% better - clear path toward profitability
GROSS MARGIN: 25.3%, up 420 bps via lower fulfillment/returns costs
AOV: +3% from removing unproductive SKUs, leaning into better/best offering
MARKETING: 14% of revenue, down 260 bps YoY
TECH/G&A: Down $13M YoY from org rightsizing, vendor consolidation, automation
NET LOSS: $4.5M, 93% improvement YoY - seventh consecutive quarter improving
ADJ EBITDA: Loss $4.9M, 85% better - clear path toward profitability
GROSS MARGIN: 25.3%, up 420 bps via lower fulfillment/returns costs
AOV: +3% from removing unproductive SKUs, leaning into better/best offering
MARKETING: 14% of revenue, down 260 bps YoY
TECH/G&A: Down $13M YoY from org rightsizing, vendor consolidation, automation
🎯
Balance Sheet Moves
ATM RAISE: $113M raised to strengthen balance sheet, expand investments
CASH POSITION: $202M cash/equivalents/inventory post-ATM
KIRKLAND'S IP: Acquired for $10M - adding trusted home brand
GRAINCHAIN: Additional $3M in blockchain supply chain platform
TZERO: Pursuing public listing for fractional ownership PropTech
NAME CHANGE: Completed rebranding back to Bed Bath & Beyond
CASH POSITION: $202M cash/equivalents/inventory post-ATM
KIRKLAND'S IP: Acquired for $10M - adding trusted home brand
GRAINCHAIN: Additional $3M in blockchain supply chain platform
TZERO: Pursuing public listing for fractional ownership PropTech
NAME CHANGE: Completed rebranding back to Bed Bath & Beyond
🎬
Tech Stack Transformation
OVERSTOCK PILOT: Moved to unified tech stack Q3 - "big risk"
SHORT-TERM PAIN: Cost $7M revenue and 30,000 orders during transition
SHOPIFY EXIT: "Didn't give us all the marketplace tools we wanted"
VERCEL LAYER: "Speak to each consumer in very specific way"
PERSONALIZATION: "Customer x and y may see something totally different"
RECOVERY PROOF: "Revenue bounced back, conversion started to accelerate"
BBBY MIGRATION: Mid-to-late 2026 after hitting 1.3%+ conversion at Overstock
SHORT-TERM PAIN: Cost $7M revenue and 30,000 orders during transition
SHOPIFY EXIT: "Didn't give us all the marketplace tools we wanted"
VERCEL LAYER: "Speak to each consumer in very specific way"
PERSONALIZATION: "Customer x and y may see something totally different"
RECOVERY PROOF: "Revenue bounced back, conversion started to accelerate"
BBBY MIGRATION: Mid-to-late 2026 after hitting 1.3%+ conversion at Overstock
💪
2026 Roadmap
REVENUE TURN: "Expect year over year revenue trends to turn positive" in 2026
$20M OPEX CUTS: "Identified $20M in additional operating expense efficiencies"
MARKETING TARGET: 2026 goal of 12% vs 14% today
250 STORES: "All 250 locations converted by mid-2026" with local franchise model
OMNICHANNEL: "Customer can transact however they want - buy online, pick up in store"
PROFITABILITY: Margin consistency + $20M cuts + improved conversion = profitability
NOT SATISFIED: "We're not satisfied" - Marcus pushing harder on conversion
$20M OPEX CUTS: "Identified $20M in additional operating expense efficiencies"
MARKETING TARGET: 2026 goal of 12% vs 14% today
250 STORES: "All 250 locations converted by mid-2026" with local franchise model
OMNICHANNEL: "Customer can transact however they want - buy online, pick up in store"
PROFITABILITY: Margin consistency + $20M cuts + improved conversion = profitability
NOT SATISFIED: "We're not satisfied" - Marcus pushing harder on conversion
🚀 Bull Thesis
📈
Improving Every Quarter
7TH QUARTER: Net loss down 93% YoY to $4.5M
GROSS MARGIN: 25.3%, up 420 bps
2026 PROFITABILITY: On track to achieve break-even
TRAJECTORY: Sequential improvement every quarter since bankruptcy
GROSS MARGIN: 25.3%, up 420 bps
2026 PROFITABILITY: On track to achieve break-even
TRAJECTORY: Sequential improvement every quarter since bankruptcy
💰
Well Funded
$113M ATM RAISE: Fresh capital raised
$202M LIQUIDITY: Cash/equivalents/inventory
BURN DROPPING: Losses shrinking 85%+ YoY
RUNWAY: Enough cash to reach profitability
$202M LIQUIDITY: Cash/equivalents/inventory
BURN DROPPING: Losses shrinking 85%+ YoY
RUNWAY: Enough cash to reach profitability
🏪
Omnichannel Scale
250 STORES: All converted by mid-2026
ASSET-LIGHT: Local franchise model = scalable
TECH UPGRADE: New platform migration 2026
AI PERSONALIZATION: Targeting 1.3%+ conversion
ASSET-LIGHT: Local franchise model = scalable
TECH UPGRADE: New platform migration 2026
AI PERSONALIZATION: Targeting 1.3%+ conversion
🎯
Cost Cuts + Revenue Turn
$20M CUTS: Additional opex savings in 2026
MARKETING: Targeting 12% of revenue (from 14%)
REVENUE TURN: Expecting positive YoY growth 2026
ORDERS STABLE: "Nearly flat" = stopped bleeding
MARKETING: Targeting 12% of revenue (from 14%)
REVENUE TURN: Expecting positive YoY growth 2026
ORDERS STABLE: "Nearly flat" = stopped bleeding
🐻 Bear Thesis
📉
Revenue Freefall Risk
-17% BRUTAL: Revenue down 17% YoY, -13% ex-Canada
ORDERS FLAT: "Nearly flat" = zero growth momentum
AOV TRICK: +3% only from cutting SKUs
NO CATALYST: Nothing suggests demand returning
ORDERS FLAT: "Nearly flat" = zero growth momentum
AOV TRICK: +3% only from cutting SKUs
NO CATALYST: Nothing suggests demand returning
💸
Tech Migration Disaster
$7M LOSS: Overstock migration cost $7M revenue
BBBY NEXT: Same risky migration planned mid-2026
CONVERSION HELL: Waiting for 1.3%+ (may never hit)
FRAGILE CORE: "Don't wanna risk massive revenue"
BBBY NEXT: Same risky migration planned mid-2026
CONVERSION HELL: Waiting for 1.3%+ (may never hit)
FRAGILE CORE: "Don't wanna risk massive revenue"
🤖
PropTech Money Pit
TZERO: No concrete monetization path
GRAINCHAIN: $3M more into unproven blockchain
KIRKLAND'S: $10M for questionable IP
DISTRACTION: Chasing bets vs fixing core retail
GRAINCHAIN: $3M more into unproven blockchain
KIRKLAND'S: $10M for questionable IP
DISTRACTION: Chasing bets vs fixing core retail
⏰
Execution Risk
NOT SATISFIED: Marcus admits still broken
250 STORES: Aggressive timeline, slippage likely
$20M CUTS: Classic restructuring overpromise
POST-BK STIGMA: 2 years later, still losing money
250 STORES: Aggressive timeline, slippage likely
$20M CUTS: Classic restructuring overpromise
POST-BK STIGMA: 2 years later, still losing money
This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
