Bed Bath & Beyond Inc. (NASDAQ:BBBY) showed improved profitability in the third quarter, despite missing revenue expectations.
The company posted revenue of $257.19 million, down 17% from the same period last year and slightly below analyst estimates of $260.12 million.
However, Bed Bath & Beyond narrowed its net loss by 93% year-over-year to $4.5 million.
Adjusted loss per share came in at $0.19, beating expectations of a $0.32 loss.
Gross margin improved by 420 basis points to 25.3%, driven by disciplined expense management, including a $13 million reduction in technology and administrative costs.
Bed Bath & Beyond ended the quarter with over $200 million in cash and equivalents and highlighted strategic investments in technology and blockchain assets.
During the quarter, the company invested $3 million in GrainChain, acquired Kirkland’s intellectual property for $10 million, and raised $113 million through an at-the-market offering to support balance sheet strength and future strategic initiatives.
Management expressed optimism about turning revenue growth positive in 2026, citing goals of maintaining margin consistency, improving operational efficiency, and enhancing site conversion rates.
“The third quarter marked substantial progress towards achieving profitability through outstanding metric performance as well as material progress at both tZERO and GrainChain, two important platforms driving our long-term goal of becoming the ‘Everything Home’ company,” Bed Bath & Beyond executive chairman and principal executive officer Marcus Lemonis said in a statement.
Analysts at Wedbush repeated their ‘Outperform’ rating and $13 price target on Bed Bath & Beyond following its Q3 report, noting that the company has essentially completed its endeavour to lower its fixed costs and improve profitability.
“The company is executing on its target to achieve consistent revenue and profitability improvements throughout 2025 as Overstock.com grows its closeout business, Bed Bath & Beyond and Buy Buy Baby expand their customer base across different life stages, and gross margins expand following the elimination of unprofitable SKUs,” the analysts wrote.
“We think Bed Bath & Beyond can return to revenue growth in 2026, as it resumes inventory expansion on a more profitable SKU set, leverages its various brands alongside others, and as its marketing campaigns help build momentum in re-expanding its customer base.”
The analysts noted that they have lowered their revenue growth estimates at Bed Bath & Beyond rebuilds its core business, but they now expect more rapidly improving margins.
“We revised our revenue estimates lower to reflect a more modest and methodical ramp, taking our revenue estimates for 2025 to $1.04 billion from $1.06 billion, 2026 to $1.19 billion from $1.45 billion, and 2027 to $1.35 billion from $1.74 billion,” they wrote.
After initially rising on its earnings, shares of Bed Bath & Beyond traded down 4.3% at about $8 late morning on Tuesday.