BRAND HOUSE COLLECTIVE, INC. (TBHC)·Q2 2026 Earnings Summary

Executive Summary

• Q2 2026 missed on both revenue and EPS as tornado-related disruption and deliberate inventory liquidation weighed on comps and margins; net sales were $75.79M vs $77.63M consensus and diluted EPS was -$0.90 vs -$0.74 consensus. The company cited a 9.7% consolidated comp decline (stores +0.4%, e‑commerce -38.5%) and ~$2.0M tornado costs as key drivers . Consensus from S&P Global indicated revenue and EPS misses for Q2 2026 and Q1 2026 as well (see Estimates Context).*
• No formal financial guidance was provided, but management accelerated the store conversion strategy after the first Bed Bath & Beyond Home grand opening “exceeded expectations” and announced plans to convert all Kirkland’s Home stores over 24 months and open 5 additional Bed Bath & Beyond Home stores in 2025 .
• Liquidity actions were notable: closed a $20M delayed‑draw term loan with Bed Bath & Beyond and monetized the Kirkland’s brand for $10M; as of Sep 16, 2025, TBHC had $49.0M revolver borrowings, $5.1M LCs, $10.8M revolver availability, and $20M additional term loan capacity with Beyond .
• Risk flagged: going‑concern uncertainty persists given ongoing losses, macro headwinds and tariffs; waivers were obtained in May but management still sees substantial doubt for at least 12 months despite cost actions and financing .

What Went Well and What Went Wrong

• What Went Well

  • Bed Bath & Beyond Home launch exceeded expectations, supporting faster conversions: “The debut…was met with overwhelming demand, exceeding our expectations” (Amy Sullivan) .
  • Strategic monetization and financing enhanced near‑term liquidity: $10M IP sale of Kirkland’s brand to Beyond and $20M delayed‑draw term loan commitments to fund conversions and operations .
  • Operating cash burn improved YoY: net cash used in operations was -$10.07M for 26 weeks vs -$26.39M in the prior year period, aided by inventory timing and dissolution of a collateral trust offset by weaker operating performance .

• What Went Wrong

  • Demand/mix pressure: consolidated comps -9.7%, with e‑commerce -38.5% (tornado disruption) driving gross margin compression to 16.3% from 20.5% YoY .
  • Profitability deteriorated: operating loss widened to -$18.74M (24.8% of sales) vs -$13.32M (15.4%) YoY; adjusted EBITDA loss increased to -$14.32M vs -$10.21M YoY .
  • Liquidity/risk: going‑concern warning remains; as of Sep 16, $49.0M revolver borrowings and limited availability underscore dependence on seasonal inventory build and external financing .

Financial Results

Revenue, EPS, and margin comparison (oldest → newest)

Segment breakdown: TBHC reports as one segment; no segment table applicable .

Key performance indicators

Notes:

• Q2 2026 revenue decline was driven by lower average ticket and the e‑commerce disruption from the Jackson, TN DC tornado; promotions and damaged inventory also pressured margins .
• Operating expenses increased as % of sales (41.1%) due to deleverage and tornado‑related repairs despite cost actions .

Guidance Changes

Management did not issue quantitative guidance; commentary focused on conversions, merchandising transition, and liquidity actions .

Earnings Call Themes & Trends

(Transcript not available in the document set searched; themes below drawn from 10‑Q and press release commentary.)

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 .
• “Our Q2 results reflect two major events that weighed heavily on the quarter: the tornado damage at our distribution center and our deliberate decision to liquidate select inventory ahead of expanding Bed Bath & Beyond assortments.” — Amy Sullivan .
• Strategic priorities: accelerate conversions, unlock wholesale (Kirkland’s Home) to add scale and improve unit economics, expand Bed Bath & Beyond brand formats .

Q&A Highlights

• An earnings call was held on Sep 16, 2025, but a transcript was not available in the searched corpus; therefore, Q&A themes and any guidance clarifications could not be independently verified here .

Estimates Context

Actuals vs S&P Global consensus

Estimate count was limited (1 estimate for revenue and EPS in both Q1 and Q2 2026).*
Implication: Consensus likely needs to reflect lower e‑commerce run‑rate, conversion‑related mix/promo pressure, and tornado impacts; near‑term margin assumptions may be high given 420 bps YoY gross margin compression and deleverage .

Key Takeaways for Investors

• Conversion acceleration is the central equity narrative: early BB&B Home success plus 5 more openings in 2025 and a 24‑month fleet conversion target can reset demand and brand perception, but execution risk and transition costs are material .
• Liquidity bridge improved but remains tight: $10M IP proceeds and $20M delayed‑draw term loan commitments add runway; revolver availability was $10.8M on Sep 16, 2025; seasonality and borrowing base dynamics matter into holiday .
• Macro and tariffs still bite: elevated promotions, tariff costs, and weak category demand pressured gross margin to 16.3% (down 420 bps YoY); watch for margin recovery as assortments pivot and DC disruption fades .
• E‑commerce recovery is a swing factor: DC tornado drove a 38.5% e‑commerce comp decline; normalization should lift outbound freight deleverage and mix, but timing uncertain .
• Cost actions vs deleverage: operating expense rate rose to 41.1% on sales deleverage despite cost cuts; sustained comp improvement is needed to bend the operating margin curve .
• Going‑concern overhang persists: until profitability inflects and liquidity strengthens, headline risk from covenant/going‑concern language remains a sensitivity for the stock .
• Near‑term trading setup: results missed low‑coverage consensus; catalysts include additional BB&B Home openings, wholesale announcements, and evidence of margin repair; risks include holiday promo intensity and supply chain normalization pace .

Footnotes

• Values retrieved from S&P Global.