NASHVILLE, Tenn.-- Neighborhood Intelligence, Inc. (NASDAQ:NXH), formerly Bed Bath & Beyond, Inc., reported third quarter 2026 revenue of $509 million, an increase of 98% year over year, primarily driven by the acquisitions of Kirkland’s and The Container Store. Core e-commerce revenue increased approximately 9%, led by 75% year-over-year growth at Overstock.com.
Gross profit was $173 million, representing a reported gross margin of approximately 34%. The quarter included a planned $14 million purchase price accounting benefit associated with inventory conditions identified and factored into the acquisitions before closing. This benefit was substantially offset by the Company’s planned elimination of dated, obsolete and underperforming inventory. Management sees a path to 37% through improved sourcing, assortment, inventory discipline and higher-margin home services.
Year to date, the Company has eliminated more than $50 million in annualized SG&A costs and merger synergies. Management has identified more than $40 million in additional annualized operational and merger savings through supply chain consolidation, elimination of organizational redundancies and optimization of the store fleet. The Company expects the full benefits of integration and merger synergies to develop over approximately six to nine months.
Management believes if it achieves mid-single-digit organic revenue growth, improved operating efficiencies and expansion of higher-margin home services the Company should be positioned to achieve an enterprise-wide positive cash flow inflection by the second half of 2027.
Inclusive of all closed transactions, retail store fleet rationalization and modest organic growth, the Company currently expects consolidated revenue of $2.0 billion to $2.1 billion in 2027, with gross margins ranging from 33% to 34%.
“Our legacy e-commerce business has achieved two important milestones worth noting: sustained revenue growth and adjusted EBITDA neutrality. We have accomplished what we set out to do in the underlying legacy business, and our focus now is on realizing the full potential of the enterprise we have assembled,” said Marcus A. Lemonis, Executive Chairman and Chief Executive Officer of Neighborhood Intelligence.
“While our baseline for 2027 is deliberately measured and assumes a continued depressed housing market, we are moving quickly to prepare for a more robust return to normalized housing activity. Our decision to accelerate the integration of our acquisitions, recalibrate inventory and simplify our operating structure reflects that conviction. We believe we can compound growth without a housing recovery, but even a modest improvement in housing activity could create meaningful upside and operating leverage.”
Third Quarter 2026 Highlights
Net revenue was $509 million, an increase of 98.0% year over year. Of the year-over-year increase, $229 million was attributable to acquired businesses, reflecting the integration of The Brand House Collective, including the Kirkland’s and Kirkland’s Home brands, and The Container Store, which was acquired during the quarter. The remaining $23 million increase was driven by continued strength in the core online e-commerce business and an improved assortment.
Active customers increased to 9.0 million, up 117% year over year, and orders delivered increased to 4.0 million, up 217% year over year, reflecting growth in the base business and the inclusion of acquired brands. Orders per active customer increased to 2.0 from 1.3 in the prior-year period, an increase of 53%.
Gross profit was $173 million, or approximately 34% of net revenue. Of the year-over-year increase, $97 million was attributable to acquired businesses. The quarter included the planned purchase price accounting benefit and related inventory recalibration described above.
Sales and marketing expense was $54 million, or 10.7% of net revenue, an improvement of 330 basis points year over year.
Technology and general and administrative expense was $165 million compared with $33 million in the prior-year period, primarily due to acquired entities, with the remaining change attributable to various items, including professional fees related to acquisitions.
Net loss was $26 million, compared with a net loss of $5 million in the prior-year period. The current period includes approximately $20 million of special items, primarily acquisition-related costs, restructuring costs, and non-cash store-closure impairments.
Adjusted EBITDA (non-GAAP) was ($26) million, compared with ($5) million in the prior year period.
The Company's available sources of liquidity include, but are not limited to $127 million of cash, cash equivalents and restricted cash, $228 million in inventory and real estate owned free of borrowings of $26M. Equity in inventory at September 30, 2026 was $110 million, net of ABL borrowings of $118M.
Longer-Term Growth Opportunity
The Company’s 2027 baseline assumes continued weakness in housing starts and existing-home sales, with existing-home sales remaining near levels last seen during the Great Recession. Existing-home sales in 2025 were below 2009 levels and approximately 25% below the 2015–2019 average.
Management believes approximately 5% annual organic revenue growth is achievable from its 2027 base over the following three to four years without requiring a housing recovery. We see additional upside from 3 additional primary drivers. High Margin, High Average Order Home Services, Namely Elfa Systems being restocked with rebuilt sales funnel and lead management system; Full integration of Bed Bath & Beyond traditional product assortment and brand across 75+ store fleet (product being fully stocked now with signage and branding complete by Q1 2027); any potential improvement in the housing market currently recording both housing starts and existing home sales below 2009 Great Recession levels.
Even a modest improvement in housing activity could provide additional upside. A gradual return toward mid-cycle levels, still below those experienced during 2016–2019, could create meaningful operating leverage. Management believes it is able to generate approximately $30 million in incremental operating contribution for every additional $100 million of organic revenue.
“We have a clear plan to drive organic growth, strengthen margins and improve operating efficiency across our business,” said Amy Sullivan, President of Neighborhood Intelligence, Inc. “We’re leveraging the brands, sourcing capabilities and home services infrastructure we’ve acquired to create new opportunities for growth, while remaining disciplined in how we manage costs and deploy capital. We believe these initiatives can support normalized gross margins of 33% to 34% in the near term, with a longer-term objective of 37% as our sourcing improvements, assortment strategy and higher-margin home services contribute more fully.”