Bed Bath & Beyond issued a letter from Marcus Lemonis, Executive Chairman and CEO, outlining the company's framework, 2025 results, and the outlook for 2026.

Bed Bath & Beyond, Inc. (NYSE: BBBY) ("Bed Bath & Beyond" or "BBBY") has issued the following letter from Marcus Lemonis, Executive Chairman and Chief Executive Officer of Bed Bath & Beyond:

To Our Fellow Shareholders,

On January 5, 2026, I outlined a clear framework for the future of this company. That framework remains unchanged. We are building the first Everything Home Company designed to make home ownership and living simpler and more affordable through a disciplined, interconnected ecosystem.

2025 was about stabilizing and building our base. 2026 is about defining our future and growing.

While revenue declined year over year, it was our deliberate decision to eliminate vendors and SKUs that generated negative contribution margin. We chose margin integrity over headline revenue, and it shows in the results. That discipline strengthened the foundation of the business and materially lowered our breakeven point for profitability as we build from here and look forward to a housing market recovery.

Importantly, the year-over-year revenue gap narrowed meaningfully in the fourth quarter, representing the closest we have come to flat revenue performance while improving adjusted EBITDA loss by more than $23 million or 84%. We believe the true base of the business has now been established.

The year began with a trend of low to mid-single digit revenue growth on a further reduced cost structure year-over-year. We are targeting full-year 2026 revenue growth year-over-year of low to mid-single digits based on current trends. Gross margin remains in the 24% to 26% range, fluctuating seasonally based on sales mix and competitive landscape.

We are sequencing and prioritizing growth and acquisitions carefully. We believe margin integrity will be maintained and will expand modestly as the platform comes together, driving a real ecosystem for the customer.

We believe we have sufficient discipline, relationships, and liquidity sources to support our strategy. Furthermore, we recognize the need to build the ecosystem with the acknowledgement that (1) third parties add expertise, (2) acquisitions add talent and skill, and (3) lasting, differentiated businesses are built deliberately over time. At the forefront of this growth are two main goals, modern day technology yielded efficiencies in process and reduced run costs, and trusted human relationships create a long term, value-based ecosystem. We expect both goals will and can be achieved.

Pillar One

Omni-channel retail brands form engagement and origination. Bed Bath & Beyond, Overstock, buybuy BABY and Kirkland's represent the base. Upon anticipated closing of the Kirkland's transaction, we believe the combined base business will generate approximately $1.5 billion revenue on an annualized basis. We have an additional omni-channel transaction agreed to in principle that we expect will add an additional $500 million of incremental annualized revenue.

We believe with this anticipated transaction we will have covered all the retail centric brands and categories to fully execute our plan with small tuck ins from time to time rounding out the offering. It is our goal to ensure that the retail brands and assets can be materially enhanced, extracting all the value that the brands and real estate offer. We intend to maximize revenue opportunities inside the existing fixed cost structure and real estate footprint through optimizing performance, space utilization and talent.

Pillar Two

Pillar Two will center on protection, advocacy and financing solutions including property and casualty insurance, renters' insurance, home warranties, product warranties, mortgages, HELOCs, renovation loans and title services.

We are pursuing the acquisition or development of a scaled residential brokerage network of tens of thousands of agents to generate origination and act as a consultative sales force across the ecosystem.

Lastly, we are advancing our trust-based credit union partnership model, launching a unique homeowner centric community, designed to provide competitive rates on checking, savings, mortgages and HELOCs. In an effort to provide choices, we are partnering with Figure Technologies to deliver innovative digital home equity and financing products to consumers.

Pillar Three

Pillar Three will focus on home services and installable products including flooring, cabinetry, closet and storage systems, and renovation and installation offerings.

This pillar is designed to meet homeowners at critical life events giving them the tools and resources to adapt and improve their home.

Additionally, LifeChain™, our blockchain-based dual-vault ledger, is being developed as part of a broader home operating system to create durable records around both the homeowner and the home.

Data, Loyalty, and Experience

The ecosystem is unified by a proprietary wrapper executed through a customized consumer experience layer in partnership with BILT. This wrapper will enable single sign-on, unified household record keeping, curated solutions and predictive engagement across all pillars.

Capital Discipline and Alignment

We will only pursue transactions that are strategically accretive and financially disciplined inside the ecosystem we have laid out. Where appropriate, transactions may include meaningful equity components. Principally, counterparties have agreed to accept equity aligned with long-term enterprise value.

2026 and Beyond

2026 is about driving revenue and transactions, completing platform-enhancing acquisitions, advancing technology partnerships, integrating systems and expanding recurring revenue.

We understand that confidence is earned through results. We are committed to demonstrating measurable progress quarter by quarter as we have, while we build the first Everything Home Company.

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