v3.26.1
BUSINESS COMBINATIONS
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS 3. BUSINESS COMBINATIONS
Acquisition of The Brand House Collective, Inc.

On April 2, 2026 (the "Acquisition Date"), the Company completed the previously announced acquisition of The Brand House Collective, Inc. (“TBHC”) pursuant to the Agreement and Plan of Merger, dated as of November 24, 2025 (the “TBHC Merger Agreement”), by and among the Company, Knight Merger Sub II, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Knight Merger Sub”), and TBHC. Pursuant to the TBHC Merger Agreement, upon the terms and subject to the conditions set forth therein, Knight Merger Sub merged with and into TBHC, with TBHC surviving as a wholly owned subsidiary of the Company. The acquisition of TBHC strengthens the Company's presence in key categories of home décor and seasonal merchandise, while providing a flexible store base that can be integrated into the Company's broader platform.

Under the TBHC Merger Agreement, consideration includes conversion of each share of common stock, no par value, of TBHC (the "TBHC Common Stock") that was issued and outstanding immediately prior to the effective time of the TBHC Merger (the "TBHC Merger Effective Time") converted into the right to receive 0.1993 shares of a fully paid and non-assessable share of common stock, par value $0.0001 per share, of the Company ("BBBY Common Stock").

Each TBHC shareholder who would otherwise have been entitled to receive in the TBHC Merger a fractional share of TBHC Common Stock pursuant to the TBHC Merger Agreement was, in lieu of such fractional share and upon surrender of such holder's certificates representing shares of TBHC Common Stock outstanding prior to the TBHC Merger Effective Time, paid in cash the dollar amount (rounded to the nearest whole cent) without interest and subject to any required tax withholding, determined by multiplying such fraction by $4.62, the closing price of the BBBY Common Stock on the New York Stock Exchange on April 1, 2026, the trading day immediately prior to the TBHC Merger Effective Time.

At the TBHC Merger Effective Time, subject to and in accordance with the terms of TBHC's Amended and Restated 2002 Equity Incentive Plan (the “TBHC Incentive Plan”), each option to purchase shares of TBHC Common Stock (“Option”) that was outstanding as of immediately prior to the TBHC Merger Effective Time was automatically cancelled and converted into the right to receive, without interest and subject to applicable withholding taxes, a number of validly issued, fully paid and nonassessable shares of BBBY Common Stock equal to (i) the Net Option Share Amount (as defined in the TBHC Merger Agreement) multiplied by (ii) the Exchange Ratio, plus any Fractional Share Cash Consideration. Any Option with an exercise price equal to or in excess of $0.94, the closing price of TBHC Common Stock on April 1, 2026, the trading day immediately prior to the closing of the TBHC Merger, was cancelled and will have no further force or effect by virtue of the TBHC Merger, without any action on the part of the holder thereof and without any payment to the holder thereof.
Subject to and in accordance with the terms of the TBHC Incentive Plan, each TBHC restricted stock unit (“RSU”) that was outstanding as of immediately prior to the TBHC Merger Effective Time, whether vested or unvested, automatically, without any action on the part of BBBY, Knight Merger Sub, TBHC or the holder thereof, fully vested and was converted into the right to receive, without interest and subject to applicable withholding taxes, a number of validly issued, fully paid and nonassessable shares of BBBY Common Stock equal to (i) the number of shares of TBHC Common Stock subject to such RSU immediately prior to the TBHC Merger Effective Time multiplied by (ii) the Exchange Ratio, plus any Fractional Share Cash Consideration.

The results of operations of TBHC have been included in the consolidated financial statements of the Company from April 2, 2026, the closing date of the acquisition (as discussed further in Note 2—Summary of Significant Accounting Policies). For the three and six months ended June 30, 2026, results of operations included $70.5 million in revenues and $18.9 million in net loss, respectively, attributable to TBHC.

The following table summarizes the components of the purchase consideration (in thousands):

Share consideration issued to TBHC shareholders (1)
$12,498 
Share consideration to TBHC's Incentive Plan (2)
1,145 
Settlement of existing TBHC indebtedness (3)
10,000 
Settlement of preexisting relationships (4)
48,246 
Total fair value of consideration paid71,889 
Fair value of previously held equity interest in TBHC (5)
8,398 
Investment in TBHC$80,287 
___________________________________________
(1)     Represents the aggregate fair value of 2,705 common shares of the Company issued directly to the sellers based on the closing trading price of the Company's common shares of $4.62 per share on April 1, 2026
(2)     Represents the aggregate fair value of 248 common shares of the Company issued in exchange for TBHC RSU equity awards that accelerated upon the change in control.
(3)     Represents the settlement of TBHC existing indebtedness
(4)     Represents the settlement of preexisting relationships comprised of 1) the settlement of Notes payable and accrued interest due to the Company of $43,732 and $473, respectively, 2) Accounts receivable from inventory sales of $3,836, and 3) Collaboration fee receivable of $205.
(5)     Represents the reported amount of the Company’s previously held interests in TBHC.

Prior to the Acquisition Date, the Company owned 39.8% of the outstanding ownership interests in TBHC which it accounted for as an equity method security under the fair value option. The Acquisition Date fair value of the Company’s previously held ownership interest in TBHC was approximately $8.3 million and is included in the measurement of the investment in TBHC. The Company remeasured the previously held equity investment to its fair value, as of the date of acquisition, based on TBHC’s quoted market price as of April 1, 2026. The remeasurement resulted in an immaterial gain. Refer to Note 2—Summary of Significant Accounting Policies, basis of presentation, and Note 7—Equity Securities for further information.
The Company has provisionally allocated the purchase price based on the fair values of the assets acquired and liabilities assumed at the TBHC acquisition date as follows (in thousands):

April 2, 2026
Cash and cash equivalents $— 
Inventories, net56,194 
Prepaid expenses and other current7,076 
Fixed assets, net34,128 
Goodwill63,701 
Operating lease right-of-use assets121,731 
Other long-term assets, net including securities measured at fair value2,477 
Total assets acquired285,307 
Accounts payable 53,887 
Accrued liabilities18,643 
Unearned revenue143 
Operating lease liabilities, current33,520 
Long-term debt, net6,811 
Operating lease liabilities, non-current 85,699 
Other long-term liabilities, including commitments measured at fair value6,317 
Total liabilities assumed205,020 
Net assets acquired80,287 
Less: Fair value of previously held equity interest(8,398)
Total purchase consideration transferred71,889 
Less: Cash acquired— 
Purchase price, net of cash acquired$71,889 


The fair values presented were estimated by management. The excess of the cost of acquisition over the fair value of the net tangible assets acquired of $63.7 million has been allocated as goodwill. The goodwill recognized is attributable to TBHC’s assembled workforce and expected synergies from combining the operations of the Company and TBHC. Goodwill will not be amortized but will be reviewed annually for impairment. None of the goodwill is expected to be deductible for income tax purposes.

The initial accounting for the TBHC acquisition is incomplete as the valuation of the acquired assets has not yet been finalized. As such there may be adjustments to the purchase accounting and those adjustments could be material. Management is completing its evaluation during the measurement period, which will not exceed one year from the acquisition date. Any adjustments to the provisional amount arising from new information about facts and circumstances that existed as of the acquisition date will be recognized in the period the adjustment is determined, with a corresponding adjustment to goodwill.

Acquisition related costs of $1.5 million and $4.5 million were incurred for the three and six months ended June 30, 2026. These costs are reported in the Consolidated Statements of Operations as General and administrative and relate to professional expenses and other third-party costs.
The following reflects the pro forma impact of the purchase of TBHC on the Company’s results of operations giving effect of the transaction if it had taken place on January 1, 2025 (in thousands):

Three months ended
June 30,		Six months ended
June 30,
2026202520262025
Revenue$361,159 333,786 652,732 647,037 
Net income (loss)(39,497)(31,504)(79,431)(83,240)

Acquisition of SFV Services

On June 30, 2026 (the “Effective Date”), Bed Bath & Beyond, Inc., a Delaware corporation (the “Company”), acquired TwoPonds, Inc., a Delaware corporation (“SFV Services”) and the parent company of SFV-LLGC, LLC, a Florida limited liability company, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of the Effective Date (the “Merger Agreement”), by and among the Company, Beyond Home Services, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Parent”), SFV Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Parent (“Merger Sub”), SFV Services, Mitchell Rosen Revocable Trust (“MR Trust”) and Sharon Rosen Revocable Trust (“SR Trust”, and together with MR Trust, collectively, “Sellers”). Pursuant to the Merger Agreement, Merger Sub merged with and into SFV Services (the “Merger”), with SFV Services surviving the Merger as a wholly owned subsidiary of Parent. SFV Services is a provider of installation and construction services.

The opening balances of SFV Services have been included in the consolidated balance sheet of the Company as of June 30, 2026, the closing date of the acquisition. For the three and six months ended June 30, 2026, the consolidated statement of operations did not include SFV Services results, as the transaction closed on the final day of the quarter.

The following table summarizes the components of the purchase consideration (in thousands):

Share consideration issued to SFV Services shareholders (1)
$37,080 
Investment in SFV Services$37,080 
___________________________________________
(1)     Represents the aggregate fair value of 7,200 unregistered shares of common stock of the Company issued directly to the sellers at price of $5.15 per share, based on the closing trading price of the Company's common stock of $5.79 per share on June 30, 2026, adjusted for discount for lack of marketability.
The Company has provisionally allocated the purchase price based on the fair values of the assets acquired and liabilities assumed at the SFV Services acquisition date as follows (in thousands):

June 30, 2026
Cash and cash equivalents$3,990 
Accounts receivable, net2,748 
Prepaid expenses and other current758 
Fixed assets, net35 
Goodwill32,295 
Operating lease right-of-use assets783 
Other long-term assets, net including securities measured at fair value140 
Total assets acquired40,749 
Accounts payable1,432 
Accrued liabilities284 
Unearned revenue1,134 
Operating lease liabilities, current214 
Operating lease liabilities, non-current569 
Other long-term liabilities, including commitments measured at fair value36 
Total liabilities assumed3,669 
Net assets acquired37,080 
Less: Cash acquired(3,990)
Purchase price, net of cash acquired$33,090 

The fair values presented were estimated by management. The fair value of the assets acquired includes accounts receivable of $2.7 million, of which all is expected to be collectible. The excess of the cost of acquisition over the fair value of the net tangible assets acquired of $32.3 million has been allocated as goodwill. The goodwill recognized is attributable to SFV Services’ assembled workforce and expected synergies from combining the operations of the Company and SFV Services. The initial accounting for the SFV Services acquisition is incomplete as the valuation of the acquired assets has not yet been finalized. As such there may be adjustments to the purchase accounting and those adjustments could be material. Goodwill will not be amortized but will be reviewed annually for impairment. None of the goodwill is expected to be deductible for income tax purposes.

Acquisition related costs of $0.3 million and $0.8 million were incurred for the three and six months ended June 30, 2026, respectively. These costs are reported in the Consolidated Statements of Operations as General and administrative and relate to professional expenses and other third-party costs.

The following reflects the pro forma impact of the purchase of SFV Services on the Company’s results of operations giving effect of the transaction if it had taken place on January 1, 2025 (in thousands):

Three months ended
June 30,		Six months ended
June 30,
2026202520262025
Revenue$374,124 $298,003 $636,149 $543,865 
Net income (loss)(37,871)(18,249)(53,397)(56,300)