Executive Summary

As of Nov 20, 2025, Kirkland’s, Inc. (now operating and filing as The Brand House Collective, “TBHC”) has not filed Q3 FY2025 results or an earnings call transcript; the most recent quarter reported is Q2 FY2025 (13 weeks ended Aug 2, 2025) and we synthesize Q2 trends and Q3-quarter developments (store conversions, IP sale, financing) to frame the setup into Q3/holiday. We searched SEC press releases, 8-K 2.02 items, and transcripts for KIRK/TBHC for Oct–Nov 2025 and found no Q3 results filings or call transcripts.
Q2 revenue fell to $75.8M with gross margin of 16.3% and a net loss of $20.2M as tornado-related disruptions and inventory liquidation weighed on mix and e-commerce; management opened their first Bed Bath & Beyond Home store in August to “overwhelming demand” and accelerated conversions.
Strategically in Q3-to-date: TBHC sold the Kirkland’s Home IP to Bed Bath & Beyond, Inc. for $10M and expanded the credit facility by $20M to fund conversions/operations; BBBY’s 10-Q discloses aggregated acquisition considerations and license structure for the brand.
Liquidity remains the swing factor into Q3/holiday: prior filings flagged going-concern risks and tariff headwinds; financing add-ons (May +$5.2M, Sept +$20M) provide runway for the store-conversion pivot, but execution, traffic, and margin recapture are key.

What Went Well and What Went Wrong

What Went Well

First Bed Bath & Beyond Home store opening (Aug 8, 2025) “was met with overwhelming demand…exceeding our expectations,” prompting an acceleration of conversions (five more Nashville stores in 2025).
IP monetization: Sold Kirkland’s Home intellectual property to Bed Bath & Beyond for $10M, enabling wholesale/channel expansion while tight linking to BBBY’s brand ecosystem.
Incremental liquidity for conversion plan: closed a $20M credit facility expansion with BBBY in September (in addition to May’s $5.2M expansion) to support working capital and conversions.

What Went Wrong

Q2 operational pressure: Net sales fell to $75.8M (vs. $86.3M prior-year), gross margin compressed to 16.3%, and net loss widened to $20.2M as tornado damage (Jackson, TN DC) and deliberate inventory liquidation impacted profitability, particularly in e-commerce.
E-commerce softness: Q2 consolidated comp -9.7%, driven by a 38.5% decline in e-commerce (stores +0.4%), reflecting DC disruption and assortment transitions.
Balance sheet caution: Prior filings highlight going-concern language and tariff exposure; at Aug 2 TBHC reported $3.6M cash, ~$41.5M outstanding under the revolver and $13.7M related-party debt to BBBY, underscoring reliance on facility availability and execution.

Financial Results

Recent reported quarters (oldest → newest)

Metric	Q4 FY2024 (13w ended Feb 1, 2025)	Q1 FY2025 (13w ended May 3, 2025)	Q2 FY2025 (13w ended Aug 2, 2025)
Net Sales ($M)	148.9	81.5	75.8
Gross Profit Margin %	30.3%	24.9%	16.3%
Operating Income (Loss) ($M)	9.2	(10.5)	(18.7)
Net Income (Loss) ($M)	7.9	(11.8)	(20.2)
Diluted EPS ($)	0.51	(0.54)	(0.90)
Adjusted EBITDA ($M)	12.0	(7.9)	(14.3)

KPIs and balance sheet context (oldest → newest)

KPI	Q4 FY2024	Q1 FY2025	Q2 FY2025
Store Count (period end)	317	314	309
Inventory ($M)	81.9	76.4	81.7
Cash & Cash Equivalents ($M)	3.8	3.5	3.6
Revolving/Outstanding Debt ($M)	Total borrowings 64.0 (includes term loans)	$38.9 outstanding debt under revolver	$41.5 outstanding debt under revolver
Related-Party Debt to BBBY ($M)	$17.0	$8.5 (converted to equity Feb 5)	$13.7

Note: Q3 FY2025 results and transcript were not available as of this analysis. We searched KIRK/TBHC filings for 8‑K 2.02 press releases and earnings call transcripts dated Oct–Nov 2025 and found none.

Guidance Changes

No formal numeric FY2025 guidance was provided in recent releases. Strategic and execution milestones relevant to outlook:

Metric/Topic	Period	Previous Guidance	Current Update	Change
Bed Bath & Beyond Home store conversions	FY2025–FY2026	n/a	5 additional Nashville stores in FY2025; plan to convert all Kirkland’s Home stores over 24 months	New plan
First Bed Bath & Beyond Home opening	Aug 2025	n/a	Opening “exceeded expectations” (demand/traffic)	New milestone
IP monetization (Kirkland’s Home brand)	Sept 2025	n/a	Sold to BBBY for $10M; structure detailed in BBBY filings	New action
Liquidity actions	May & Sept 2025	n/a	+$5.2M facility expansion (May); +$20M expansion (Sept)	New funding

Earnings Call Themes & Trends

(Company canceled its Q1 call; we did not find Q2/Q3 call transcripts; themes derived from reported materials)

Topic	Prior Mentions (Q4 FY2024 and Q1 FY2025)	Current Period (Q2 FY2025 and Q3-to-date)	Trend
Store conversion strategy (BBBY, Overstock, buybuy BABY)	Identified conversions/pilot plans; rebranding to The Brand House Collective; targeting Bed Bath & Beyond Home/Overstock pilots	First BBBY Home opened to “overwhelming demand”; 5 more in FY2025; plan to convert all stores within 24 months	Acceleration
Supply chain/DC disruptions	Tornado hit Jackson, TN DC (May 20), impacting late Q1 and Q2 operations	Q2 tornado costs, inventory write-offs; pressure on e-commerce	Transitory headwind; recovery needed
Liquidity/going concern	FY2024 10-K flagged substantial doubt; highlighted tariffs and macro pressure	Added credit expansions (+$5.2M, +$20M); continued focus on working capital	Incremental support, still sensitive
Tariffs/margin	Tariffs cited as risk; merchandise margin pressure	Q2 margin compressed on liquidation/tariffs; mix shift	Headwind persists
Leadership/talent	Ongoing transformation of org structure	New CMO for portfolio coordination (shared with BBBY)	Strengthening go-to-market

Management Commentary

“The debut of our first Bed Bath & Beyond Home store was met with overwhelming demand, exceeding our expectations…That early success gives us confidence to accelerate the conversion of Kirkland's Home stores.” — Amy Sullivan, CEO (Q2 FY2025 business update)
“We are executing an operational reset…consolidating real estate…accelerate the launch of Bed Bath & Beyond Home stores…pending the results of the initial market we plan to convert approximately 75 stores through 2026.” (Rebranding and transformation roadmap, June)
“Fiscal 2024 was an important year in our transformation…uncertainty around tariffs…we have identified the first of many potential store conversions under the Bed Bath & Beyond Home and Overstock banners…” (Q4 FY2024)

Q&A Highlights

We did not find Q3 or Q2 call transcripts. The company canceled its Q1 call amid restructuring. This limits visibility into Q&A clarifications; key themes are drawn from press releases and 8‑Ks.

Estimates Context

We attempted to retrieve S&P Global consensus for Q3 FY2025 EPS and revenue; consensus was unavailable due to a mapping/limit issue at the time of query. As such, we cannot provide a vs. estimates comparison for Q3. (We will update once S&P Global data is accessible.)

Key Takeaways for Investors

No Q3 print yet; the setup hinges on holiday execution and conversion cadence after an “overwhelming” Nashville BBBY Home launch. Expect updates on comp trajectory, gross margin recapture, and conversion productivity.
Q2 shows the trough dynamics: DC tornado disruption, inventory liquidation, and mix headwinds pressured gross margin to 16.3% and drove a $20.2M net loss; the quarter likely understates steady-state margins if disruptions normalize.
Strategic pivot is monetizing brand/IP and leaning into BBBY’s brand equity; IP sale ($10M) and shared marketing/leadership (new CMO) align incentives and could improve traffic and conversion, but execution risk remains.
Liquidity actions (+$5.2M in May; +$20M in Sept) extend runway for conversions, yet going-concern and tariff risks flagged in filings underscore the importance of sustained margin improvement and inventory productivity.
Watch leading indicators: store traffic and conversion in converted markets, e-commerce recovery post-DC restoration, inventory turns, and the pace of wholesale channel ramp for Kirkland’s Home.
A decisive holiday (Q3) update—when filed—should be a stock catalyst, particularly if it shows stabilization in comps, gross margin rebuild, and proof points on conversion ROI.

Sources and Searches Conducted

TBHC/KIRK Q2 FY2025 business update and financials (press release):
KIRK Q1 FY2025 results (press release and 8‑K): –
KIRK Q4 FY2024 results (press release and 8‑K): –
Rebrand/strategy and conversion plans (8‑K): –
Liquidity/going concern/tariffs (10‑K): –
Credit expansions with BBBY: +$5.2M (May) ; +$20M (Sept)
Brand/IP sale details from BBBY filings:
Leadership (CMO) appointment:

Note on document availability: We searched for a KIRK/TBHC Q3 FY2025 8‑K 2.02 earnings press release and earnings call transcript dated Oct–Nov 2025 and found none as of this analysis date.

KIRKLAND'S, INC (KIRK)·Q3 2025 Earnings Summary