Francesco Marmo

Francesco Marmo asked for elaboration on Bed Bath & Beyond's expected positive revenue growth for 2026, identifying key initiatives and the anticipated shape of that growth profile.

Answer

Executive Chairman and Principal Executive Officer Marcus Lemonis committed to positive revenue growth in 2026, driven by leveraging the omnichannel partner's supply chain and store footprint, exploring new categories (luxury, jewelry, apparel) at Overstock.com, and merging merchandising organizations for better category segmentation and vendor relationships. He emphasized that improving conversion from the current 1.1-1.2% to over 1.3% is crucial, expecting this to add $27 million to $35 million in revenue with a strong contribution margin.

Francesco Marmo asked for elaboration on Bed Bath & Beyond's expected positive revenue growth for 2026, seeking insights into the particular initiatives driving this growth and the anticipated shape of the growth profile.

Answer

Marcus Lemonis, Executive Chairman and Principal Executive Officer, committed to positive revenue growth in 2026, attributing it to leveraging the omnichannel partner's supply chain and store footprint, exploring new categories (e.g., luxury, jewelry, apparel) at Overstock.com, and merging merchandising organizations for better category segmentation and vendor relationships. He emphasized that the current Bed Bath & Beyond merchandising team, largely reskinned Overstock.com personnel, will benefit from the omnichannel group's expertise in kitchen, housewares, and textiles. Lemonis also stressed the critical role of improving conversion rates, targeting north of 1.3%, which could add $27 million-$35 million in revenue without incremental expense.

Francesco Marmo from Maxim Group inquired about the drivers of the significant gross margin improvement, specifically the impact of reduced promotions and price increases. He also asked about wholesale channel trends, initiatives with partners, the renewed interest in traditional watches among younger consumers, and the strategy behind successful limited-edition collaborations.

Answer

CEO Franco Fogliato explained that the move to a full-price model has been successful, with consumers showing resilience and AURs increasing, validating the brand's value. He highlighted stronger wholesale relationships, investments in in-store presentation, and the upcoming Nick Jonas campaign. Fogliato also confirmed a comeback for traditional watches, driven by younger consumers and successful collaborations that create brand heat. CFO Randy Greben added that tariffs have been effectively mitigated, but noted that Q3 gross margin will be impacted by the accounting for minimum royalty shortfalls, though the underlying margin rate remains strong.

The analyst inquired about the drivers of the significant gross margin improvement, specifically the impact of reduced promotions and price increases, as well as any effects from tariffs. He also asked for details on initiatives and trends in the wholesale channel and questioned the renewed interest in traditional watches among younger consumers, including the role of brand collaborations.

Answer

The company attributed the gross margin expansion to a successful shift to a full-price model and supply chain efficiencies, noting that consumers have been resilient to the change. They confirmed no negative impact from tariffs so far, but noted a Q3 margin dip is expected due to minimum royalty guarantee accounting. In wholesale, they are strengthening partnerships by reducing promotions and investing in in-store presentation and marketing, like the upcoming Nick Jonas campaign. They also confirmed a resurgence in traditional watches, particularly in the Americas and India, driven by younger consumers and fueled by highly successful collaborations like Minecraft and Superman.

Francesco Marmo of Maxim Group asked for an expansion on the company's AI-driven initiatives in its credit business and the anticipated impact of AI on operations and costs following the pivot to a fintech focus.

Answer

Michael Seifert, Founder, President, CEO & Chairman, mentioned AI is used broadly for efficiency. Dusty Wunderlich, Director & CSO, elaborated that the company began training AI models for credit underwriting in 2021, which has drastically improved portfolio quality and reduced delinquencies. He noted this success is a key reason the company is now retaining more consumer finance receivables on its balance sheet.

Francesco Marmo inquired about whether MAU trends were meeting expectations, the key drivers behind the 24% sequential ARPU growth, and the planned marketing strategy for the upcoming Rumble Wallet launch.

Answer

CEO Chris Pavlovski stated he was very impressed with the 51 million MAU figure, viewing it as a major win given it was a non-election year and the first full quarter without a top creator. He attributed strong ARPU growth to the successful execution of Rumble Premium, which created a positive flywheel with ad monetization. For the Rumble Wallet, he explained the marketing strategy will target creators both on and off the Rumble platform to drive adoption and, crucially, to catalyze international user growth for the core video platform.

Francesco Marmo asked for more details on how the store closure and distributor model transition is impacting top-line revenue and overall profitability, and inquired about the inventory strategy for the second half of the year given the planned new product launches.

Answer

CFO Annie Mitchell explained that the estimated top-line impact from these structural changes increased by $2 million to a new range of $20-$25 million due to additional opportunistic store closures. She emphasized that these moves, while impacting revenue, are beneficial to the bottom line and working capital. Regarding inventory, Mitchell assured that despite numerous new product launches, strong inventory management would continue, with no expected meaningful increase. CEO Joe Vernachio added that disciplined inventory management is crucial for maintaining full-price sales and building a high-margin brand.