The information in this prospectus is not complete and may be changed. The selling shareholders may not sell these securities or accept an offer to buy these securities until the Securities and Exchange Commission declares the registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 11, 2023

PRELIMINARY PROSPECTUS

111,747,196 Shares of Common Stock

This prospectus relates to the resale of up to                  shares (the “CEF Shares”) of our common stock, par value $0.01 per share (“common stock”), by B. Riley Principal Capital II, LLC (“BRPC II” or the “selling shareholder”). The CEF Shares included in this prospectus consist of shares of common stock that we must issue or that we may, in our discretion, elect to issue and sell to BRPC II, from time to time after the date of this prospectus (the “Purchase Shares”), pursuant to a Common Stock Purchase Agreement we entered into with BRPC II on March 30, 2023 (the “Purchase Agreement”) and which became effective on April 10, 2023 (the “Effective Date”), in which BRPC II has committed to purchase from us, at our direction, up to $1.0 billion (the “Total Commitment”) of newly issued shares of the common stock, subject to terms and conditions specified in the Purchase Agreement. Under the applicable Nasdaq (as defined below) rules, in no event may we issue to BRPC II under the Purchase Agreement more than                  Purchase Shares, which number of shares is equal to approximately 19.99% of the shares of the common stock outstanding immediately prior to the Effective Date and which number of shares will be reduced, on a share-for-share basis, by the number of shares of our common stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by the Purchase Agreement under applicable rules of Nasdaq (the “Exchange Cap”), unless we obtain shareholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules; provided, however, the Exchange Cap will not be applicable to the transactions contemplated hereby, solely to the extent that (and only for so long as) the average per share purchase price paid by BRPC II equals or exceeds $0.32. On the trading day immediately following the earlier of (i) the initial satisfaction of the conditions to BRPC II’s purchase obligation set forth in the Purchase Agreement (the “Commencement” and such date, the “Commencement Date”) and (ii) the date which is five (5) consecutive trading days immediately following the date on which we complete the Reverse Stock Split (as defined below) of our common stock, we will issue shares of common stock equal to 0.25% of the Total Commitment, divided by the VWAP during the five (5) consecutive Trading Days (i) immediately following the Reverse Stock Split of the common stock or (ii) if no such Reverse Stock Split occurs, immediately prior to the Commencement Date, (the “Commitment Shares”), which are part of the CEF Shares included in this prospectus, to BRPC II as consideration for its irrevocable commitment to purchase shares of our common stock at our election in our sole discretion, from time to time after the date of this prospectus, upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement. See the section titled “Purchase Agreement” for a description of the Purchase Agreement and the section titled “Selling Shareholder” for additional information regarding BRPC II.

We are not selling any CEF Shares being offered by this prospectus and will not receive any of the proceeds from the sale of such shares by BRPC II. However, we will receive proceeds from sales of Purchase Shares to BRPC II that we may, in our discretion, elect to make, from time to time after the date of this prospectus, pursuant to the Purchase Agreement.

BRPC II may sell or otherwise dispose of the CEF Shares included in this prospectus in a number of different ways and at varying prices. See the section titled “Plan of Distribution (Conflict of Interest)” for more information about how BRPC II may sell or otherwise dispose of the CEF Shares being offered in this prospectus. BRPC II is, with respect to the offer and resale of the CEF Shares through this prospectus, an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”).

Our shares of common stock trade on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “BBBY.” From January 3, 2022 to April 6, 2023, the market price of our common stock has had extreme fluctuations, ranging from an intra-day low of $0.298 per share on April 6, 2023 to an intra-day high of $30.06 on March 7, 2022, and the last reported sale price of our common stock on Nasdaq on April 6, 2023, was $0.3092 per share. From January 3, 2022 to April 6, 2023, according to Nasdaq, daily trading volume of our common stock ranged from as low as approximately 2,121,088 to as high as approximately 395,319,906 shares.

These extreme fluctuations in the market price of and trading volumes in our common stock have been accompanied by reports of strong retail investor interest, including on social media and online forums. While the market price of our common stock may respond to developments regarding our liquidity, operating performance and prospects, and developments regarding our industry, we believe that recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know if or how long these dynamics will last. In addition, as a result of the anticipated new sales of common stock into the market pursuant to the Purchase Agreement or otherwise, current holders of our common stock may experience significant dilution and the value of their shares may decrease.

The last reported sale price of our common stock as quoted on Nasdaq was $0.296 on April 10, 2023.

Investing in our common stock involves risks that are described in the “Risk Factors” section on page 11 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Prospectus dated                      , 2023

TABLE OF CONTENTS

We are responsible for the information contained in this prospectus. We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus or any prospectus supplement is accurate as of any date other than the date of the document containing the information.

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 that the Company has filed with the Securities and Exchange Commission (the “SEC”).

Neither we nor the selling shareholder has authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the selling shareholder takes responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the selling shareholder will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

You should rely only on the information contained in this prospectus. Neither the Company nor the selling shareholder has authorized any other person to provide you with different information from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. Neither the Company nor the selling shareholder takes responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither the Company nor the selling shareholder is making an offer to sell the shares in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is complete and accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or sale of the shares. Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus. If there is a material change in the affairs of the Company, the Company will amend or supplement this prospectus.

Any statement that the Company makes in this prospectus may be modified or superseded by the Company in a subsequent prospectus supplement or a post-effective amendment to the registration statement. The registration statement includes exhibits that provide more detailed descriptions of certain matters discussed in this prospectus. You should carefully read the entirety of this prospectus and the related exhibits filed with the SEC and any prospectus supplement, and the information described under the heading “Where You Can Find Additional Information” in this prospectus.

References to “we,” “us,” “our” and the “Company” and “Bed Bath & Beyond” are references to Bed Bath & Beyond Inc. and its consolidated subsidiaries, unless it is clear from the context that we mean only Bed Bath & Beyond Inc.

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RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the risks described below, as well as the other information contained in this prospectus. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business or results of operations in the future. Any of the following risks could materially adversely affect our business, financial condition or results of operations. In such case, you may lose all or part of your original investment in our securities.

Risks Related to our Capital Resources and Liquidity

We need the proceeds from the sales to BRPC II covered by the Purchase Agreement to pay our outstanding obligations under our Credit Facilities, to meet certain equity proceeds requirements pursuant to the Amended Credit Agreement and to operate our business, and we expect that we will likely file for bankruptcy protection if the expected gross proceeds of our sales to BRPC II are not received.

On March 30, 2023, the Company entered into the Fourth Amendment. The Fourth Amendment waived certain events of default under the Credit Agreement related to negative and affirmative covenants. The Fourth Amendment also revised provisions relating to the equity commitment required therein to reflect the Company’s entry into the ATM Agreement and the Purchase Agreement. In particular, the Fourth Amendment sets forth: (i) the requirement to receive minimum specified equity proceeds (as defined in the Fourth Amendment) or to demonstrate the minimum cumulative specified equity proceeds (as defined in the Fourth Amendment). These testing periods are weekly for the next 8 out of 11 weeks requiring a minimum raise with an aggregate cumulative equity raise requirement of approximately $232 million by June 27, 2023 and then $12.5 million weekly thereafter subject to exceptions.

In addition the Fourth Amendment requires that the Company establishes reserves related to the equity proceeds received. As of the date hereof, the conditions detailed above have been met as of the date required.

The Company, however, may not be able to meet the conditions on future dates. The failure to meet these conditions would likely cause the Company to file for bankruptcy.

The Company presently owes approximately $66.5 million (excluding approximately $105.6 million in Letters of Credit) under the ABL Facility and has approximately $16.3 million available to borrow. Without access to our revolving credit facility, we will not have the necessary cash resources for our operations and we may not have the cash resources available to repay obligations, refinance such indebtedness on commercially reasonable terms, or at all, or to collateralize our letters of credit, and lenders under our Amended Credit Agreement may exercise remedies against the collateral securing our obligations thereunder, all of which would have a material adverse effect on our business, financial condition, results of operations and liquidity. In particular, we likely would be required to file for bankruptcy protection if the Company fails to meet the equity proceeds/reserve conditions contained in the Fourth Amendment, including as a result of failing to generate sufficient gross proceeds pursuant to the Purchase Agreement. The Company has engaged advisors to explore strategic alternatives, including, if needed, filing for bankruptcy protection. Holders of our common stock would not receive any recovery at all in a bankruptcy scenario.

Our borrowing capacity under our Credit Facilities depends on the value of our assets, and the full committed amount of our Credit Facilities may not be available to us.

Under the Fourth Amendment, among other things, (i) the total revolving commitment was decreased from $565 million to $300 million and (ii) the letter of credit sublimit under the revolving credit facility was reduced to $175 million. Our borrowing capacity under the ABL Facility varies according to the Company’s inventory levels and credit card receivables, net of certain reserves, and the FILO Facility is subject to a borrowing base consisting of eligible credit card receivables, eligible inventory and eligible intellectual property. In the event of any decrease in the amount of or appraised value of these assets or upon the disposition of assets or upon the

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receipt of equity proceeds, our borrowing capacity under either the ABL Facility or the FILO Facility, would similarly decrease, which could adversely impact our business and liquidity. We have announced the closure of approximately 150 lower-producing Bed Bath & Beyond banner stores. As the closures are completed and in the event of future closures, we expect our borrowing capacity under both the ABL Facility and FILO Facility will decrease to the extent sales and cash flow levels decrease following such store closures. The ABL Facility and FILO Facility contain customary affirmative covenants, including the delivery of a monthly budget, which shall be subject to the approval of the ABL Agent and the FILO Agent, negative covenants and certain restrictions on operations become applicable if our availability falls below certain thresholds. These covenants could impose significant operating and financial limitations and restrictions on us, including restrictions on our ability to enter into particular transactions such as asset sales and acquisitions, and to engage in other actions that we may believe are advisable or necessary for our business.

Our business would be adversely affected if we are unable to service our debt obligations.

We have incurred substantial indebtedness under our senior unsecured notes and the Amended Credit Agreement. Our ability to pay interest and principal when due, comply with debt covenants or repurchase the senior unsecured notes if a change of control occurs, will depend upon, among other things, sales and cash flow levels and other factors that affect our future financial and operating performance, including prevailing economic conditions and financial and business factors, many of which are beyond our control. Given the current economic environment, and ongoing challenges to our business, we may be unable to service our debt obligations, maintain compliance with the minimum fixed charge coverage ratio covenant under the Amended Credit Agreement or comply with the other terms of the Amended Credit Agreement, which would among other things, result in an event of default under the Amended Credit Agreement. On or around January 13, 2023, certain events of default were triggered under our Credit Facilities as a result of our failure to prepay an over-advance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, the Administrative Agent under the Amended Credit Agreement notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Amended Credit Agreement, are due and payable immediately, (ii) the Company is required, effective immediately, to cash collateralize letter of credit obligations under the Credit Facilities, and (iii) effective as of January 25, 2023, all outstanding loans and obligations under the Credit Facilities shall bear interest at an additional default rate of 2% per annum.

The principal sources of our liquidity are funds generated from operating activities, available cash and cash equivalents, borrowings under the Amended Credit Agreement and supplier and vendor financing. We have incurred net losses in our fiscal years 2020 and 2021. We may continue to incur net losses in future periods, which would adversely affect our business, financial condition and ability to service our debt obligations, and due to the risks inherent in our operations, our future net losses may be greater than our past net losses. Our ability to achieve our business and cash flow plans is based on a number of assumptions which involve significant judgments and estimates of future performance, borrowing capacity and credit availability, which cannot at all times be assured. Accordingly, there is no assurance that cash flows from operations and other internal and external sources of liquidity will at all times be sufficient for our cash requirements. If necessary, we may need to consider actions and steps to improve our cash position and mitigate any potential liquidity shortfall, such as modifying our business plan, pursuing additional financing to the extent available, reducing capital expenditures, pursuing and evaluating other alternatives and opportunities to obtain additional sources of liquidity and other potential actions to reduce costs. There can be no assurance that any of these actions would be successful, sufficient or available on favorable terms. Any inability to generate or obtain sufficient levels of liquidity to meet our cash requirements at the level and times needed would have a material adverse impact on our business and financial position.

If we become unable in the future to generate sufficient cash flow to meet our debt service requirements, we may be forced to take remedial actions such as restructuring or refinancing our debt, seeking additional debt or equity

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capital, reducing or delaying our business activities and strategic initiatives, selling assets, or other strategic transactions and/or measures, including filing for bankruptcy protection. There can be no assurance that any such measures would be successful.

Our ability to obtain any additional financing or any refinancing of our debt, if needed at any time, depends upon many factors, including our existing level of indebtedness and restrictions in the agreements governing our indebtedness, historical business performance, financial projections, the value and sufficiency of collateral, prospects and creditworthiness, external economic conditions and general liquidity in the credit and capital markets. Any additional debt, equity or equity-linked financing may require modification of our existing debt agreements, which there is no assurance would be obtainable. Any additional financing or refinancing could also be extended only at higher costs and require us to satisfy more restrictive covenants, which could further limit or restrict our business and results of operations or be dilutive to our shareholders.

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Risks Related to Business Strategy and Operations

Even if the sales of our common stock to BRPC II covered by the Purchase Agreement are completed, we may not be successful in implementing our transformative plan, including building back our inventory and increasing customer sales, and we have historically underperformed in implementing management plans, which may force us to seek additional strategic alternatives in the future.

We are required to use the net proceeds from sales of our common stock to BRPC II to repay outstanding revolving loans under the ABL Facility. Outstanding revolving loans repaid using net proceeds from sales of our common stock to BRPC II may be reborrowed subject to availability under the ABL Facility, and we expect to use those borrowings for general corporate purposes.

We do not expect the proceeds pursuant to the Purchase Agreement will be adequate to fully implement our transformative plan and repay our borrowings under the Credit Facilities or meet the equity proceeds conditions of the Amended Credit Agreement. For this reason, we concurrently entered into the ATM Agreement, whereby B. Riley Securities will use its commercially reasonable efforts to sell, on the Company’s behalf, the ATM Shares that may be offered by the Company from time to time under the ATM Agreement. The sales of the ATM Shares made under the ATM Agreement will be made by means of ordinary brokers’ transactions on Nasdaq or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. Actual sales will depend on a variety of factors to be determined by the Company from time to time. As of April 10, 2023, the Company has sold approximately 100.1 million shares for approximately $48.5 million of net proceeds under the ATM Agreement, and the Company has available for future issuance approximately 178,200,218 shares of common stock. In the event that we fail to obtain all of the anticipated proceeds under the ATM Agreement and therefore fail to meet the requirement of the Amended Credit Agreement, we expect that we will likely file for bankruptcy protection. The ATM Agreement only provides for sales made pursuant to an effective registration statement on Form S-3. Upon filing our annual report on Form 10-K, which is due by April 26, 2023, we will lose S-3 eligibility and therefore we expect all sales made pursuant to the ATM Agreement will cease by April 26, 2023. We will continue to explore strategic alternatives in the future to the extent necessary to implement our transformative plan.

Unless we receive shareholder approval to increase our authorized share capital or effectuate a reverse stock split, we will not have sufficient authorized share capital for issuing all of the shares of common stock pursuant to the Purchase Agreement. If we are unable to issue all of the shares of common stock pursuant to the Purchase Agreement and therefore fail to meet the requirement of the Amended Credit Agreement, we expect that we will likely file for bankruptcy protection. The Company intends to effectuate the Reverse Stock Split and is seeking to obtain shareholder approval at a special meeting of shareholders to be held on May 9, 2023. See “--Risks Related to the Purchase Agreement -- If we receive shareholder approval to effectuate the Reverse Stock Split, investors may experience dilution and a decline in market price of the shares through the issuance of shares, but if we are unable to receive shareholder approval relating thereto, we expect that we will likely file for bankruptcy protection.”

As previously disclosed, we are undertaking a number of actions to support our ongoing transformation, including but not limited to, cost cutting, lowering capital expenditures and reducing our store footprint, including related distribution centers which are expected to result in our digital channel becoming a higher proportion of our channel mix. We will continue to seek reductions in rental obligations with landlords in our determination of the appropriate footprint. The timely achievement of our transformative plan as well as our ability to maintain an adequate level of liquidity are subject to various risks, some of which are outside of our control. In particular, our ability to build back inventory is critical to the success of our transformative plan and our vendors may not cooperate and effectively allow us to build back inventory at a scale needed for us to successfully operate our business. We have failed to timely make payments due to our vendors, landlords and similar other business partners, which has affected our relationship with such parties and our reputation and may affect our ability to successfully engage with such parties and other business partners in the future. Further, our ability to achieve expected results depends on our ability to attract customers to our sales channels and increase customer sales. Our ability to attract customers and increase customer sales largely depends on various factors,

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including our ability to provide customers with an attractive assortment of merchandise. If we are unable to maintain our relationships with our merchandise suppliers, we will not be able to provide the necessary assortment of merchandise that will enable us to attract customers to our sales channels or increase sales. Our efforts to attract customers and to increase customer sales may be further challenged by current economic conditions, including an inflationary environment and increasing interest rates which may affect customers’ willingness and ability to spend.

Even if the sales of our common stock pursuant to the ATM Agreement and the Purchase Agreement are completed, we may not be successful in implementing our transformative plan. We have historically underperformed in implementing management plans, including our transformative plan. For example, after launching a turnaround plan in the second and the third quarters of fiscal year 2022, we were not able to achieve our anticipated 2022 holiday results, largely due to our inability to supply our various sales channels with the appropriate level of merchandise and its negative impact on traffic trends. If we are not successful in implementing our transformative plan, our business, financial condition and results of operations may adversely be affected, which may force us to consider additional strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including filing for bankruptcy protection. We may not be able to successfully execute any strategic alternatives we are currently considering or any other options, and our ability to do so could be adversely affected by numerous factors, including changes in the economic or business environment, financial market volatility and the performance of our business. See “--Risks Related to Business Strategy and Operations--We may not be successful in implementing our transformative plan and we are considering all strategic alternatives, including restructuring or refinancing of our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code.”

We may not be successful in implementing our transformative plan and we are considering all strategic alternatives, including restructuring or refinancing of our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code.

We are undertaking a number of actions to support our ongoing transformation, including but not limited to, cost cutting, lowering capital expenditures, and reducing our store footprint including related distribution centers. We will continue to seek reductions in rental obligations with landlords in our determination of the appropriate footprint. The timely achievement of our transformative plan as well as our ability to maintain an adequate level of liquidity are subject to various risks, some of which are outside of our control. We may not be successful in implementing our transformative plan or such initiatives may not be successful, which may adversely impact our business, financial condition or results of operations.

In addition, we continue to consider all strategic alternatives including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code. We may not be able to successfully execute any strategic alternatives we are currently considering or any others, and our ability to do so could be adversely affected by numerous factors, including changes in the economic or business environment, financial market volatility and the performance of our business. We caution that trading in our securities is highly speculative and poses substantial risks relating to the potential of bankruptcy proceedings. Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our common stock in bankruptcy proceedings, if any.

Additionally, an important part of our strategy involves providing customers with a seamless omni-channel shopping experience. Customer expectations about the methods by which they purchase and receive products or services are evolving, including as a result of the COVID-19 pandemic, and they are increasingly using technology

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to compare and purchase products. Once products are purchased, customers are seeking alternate options for delivery of those products. The coordinated operation of our network of physical stores and online platforms is fundamental to the success of our omni-channel strategy, and our ability to compete and meet customer expectations may suffer if we are unable to provide relevant customer-facing technology and omni-channel experiences. In addition, execution of our omni-channel strategy and the expansion of our e-commerce business will require significant investments in technology. If we are unable to successfully implement our omni-channel strategy, our business, results of operations, financial condition and financial performance could be materially adversely affected.

Our strategy also involves the rebalancing of our merchandise assortment to align with customer preference by leading with national brands inventory and introducing new, emerging direct-to-consumer brands. Consequently, we announced the exiting of a third of our Owned Brands, including the discontinuation of three of our nine labels (Haven^™, Wild Sage^™ and Studio 3B^™). We also expect to reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply Essential^™, Nestwell^™, Our Table^™, Squared Away^™, H for Happy^™ and Everhome^™). The associated changes to our product assortment may not be successful in terms of customer acceptance, and/or may not achieve the revenue or margin improvements we anticipate.

Given our financial condition and previous failures to pay our vendors on a timely basis, there is no guarantee that vendors will continue to extend trade credit on favorable terms, if at all, and our ability to build back inventory and implement our turnaround plan may be adversely affected.

We depend on our vendors to provide us with inventory and services. Recently, certain of our vendors have sought to impose terms on the purchase of inventory, which has negatively impacted our liquidity. Certain of our vendors finance their operations and/or reduce the risk associated with collecting accounts receivable from us by selling or “factoring” the receivables or by purchasing credit insurance or other forms of protection from loss associated with our credit risks.

We have ongoing discussions concerning our liquidity and financial position with the vendor community and third parties that offer various credit protection services to our vendors. The topics discussed have included such areas as pricing, payment terms and ongoing business arrangements. We have failed to timely make payments due to our vendors which has affected our relationship with such parties and our reputation and may affect our ability to successfully engage with such parties and other business partners in the future. If we are unable to maintain our relationships with our merchandise suppliers and vendors due to our failure to pay, this may lead to the ceasing of product shipments and services by such vendors and suppliers and we will not be able to provide the necessary assortment of merchandise that will enable us to attract customers to our sales channels or increase sales and our turnaround plan may be adversely affected.

Successful execution of our omni-channel and transformation strategy is dependent, in part, on our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve.

Successful execution of our omni-channel strategy depends, in part, on our ability to develop our digital capabilities in conjunction with optimizing our physical store operations and market coverage, while maintaining profitability. Our ability to develop these capabilities will depend on a number of factors, including our assessment and implementation of emerging technologies and our ability to manage a changing mix of in-store and online orders (including as a result of the COVID-19 pandemic) as well as our ability to drive store traffic. The success of our omni-channel strategy is also dependent on our ability to effectively manage inventory across our physical stores and online channels. Our ability to optimize our store operations and market coverage requires active management of our real estate portfolio in a manner that permits store sizes, layouts, locations and offerings to evolve over time, which to the extent it involves the closing of unprofitable stores, relocation of existing stores, store remodels or the opening of additional stores will depend on a number of factors, including our identification and availability of suitable locations; our success in negotiating leases on acceptable terms; and our timely development of new stores, including the availability of construction materials and labor and the absence of significant construction and other delays based on weather or other events. These factors could

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potentially increase the cost of doing business and the risk that our business practices could result in liabilities that may adversely affect our performance, despite the exercise of reasonable care.

There are risks associated with our store fleet optimization strategies, pursuant to which 88 mostly Bed Bath & Beyond stores in the U.S. in fiscal year 2022 and 179 Bed Bath & Beyond stores in the U.S., 5 buybuy BABY stores in the U.S. and 45 Harmon Stores from February 26, 2023 to April 8, 2023.

As part of our ongoing business transformation, we have been executing a store fleet optimization program that included the closure of 88 mostly Bed Bath & Beyond stores in the U.S. in fiscal year 2022 and 179 Bed Bath & Beyond stores in the U.S., 5 buybuy BABY stores in the U.S. and 45 Harmon Stores from February 26, 2023 to April 8, 2023. This, in part, to address changes in consumer shopping patterns which were emerging pre-global pandemic and were accelerated during 2020 and 2021. The future target for physical stores is designed to optimize access, productivity and profitability. In connection with this program, we incurred costs including contract termination costs, employee-related costs, professional fees and non-cash impairment charges. The store fleet optimization program involves numerous risks, including, without limitation, the aggregate cost of payments to the landlords of the stores being closed and the diversion of our attention from our businesses and operations. These or other factors may impair our ability to realize the anticipated benefits of the program, which may materially adversely affect our business, results of operations, financial condition and liquidity. We may also determine that additional store closures are warranted in the future.

Our recurring losses and negative cash flow from operations, as well as current cash and liquidity projections, raise substantial doubt about our ability to continue as a going concern.

Based on recurring losses from operations and negative cash flows from operations for the nine months ended November 26, 2022 as well as current cash and liquidity projections, we have concluded that there is substantial doubt about our ability to continue as a going concern for the next twelve months. Our consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. You should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to holders of our common stock, in the event of liquidation.

We have experienced significant turnover in our senior management team and across our organization, and our success in implementing our transformative plan depends on our ability to attract and retain qualified personnel, skilled workers and key officers, and a failure to do so could have an adverse effect on us, including one or more material weaknesses in our internal control over financial reporting.

We have recently experienced significant turnover in our senior management team and reductions in our workforce and have promoted employees to fill certain key roles and are conducting searches for additional key roles, including a permanent chief financial officer. Our ability to retain key employees in the long-term is affected by our financial situation, our business performance and our ability to successfully implement our transformative plan. Our business may be adversely affected by the transitions in our senior management team and reduction in workforce, and turnover at the senior management level may create instability within the Company, which could disrupt and impede our day-to-day operations, internal controls and our ability to fully implement our business plan and growth strategy. In addition, management transition inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution, and our results of operations and financial condition could be negatively impacted as a result. Competition for key management personnel is intense. If we fail to successfully attract and appoint permanent replacements with the appropriate expertise, we could experience increased employee turnover and harm to our business, results of operations, cash flow and financial condition. The search for permanent replacements could also result in significant recruiting and relocation costs, as well as increased salary and benefit costs. Like most businesses, our employees are important to our success and we are dependent in part on our ability to retain the services of our key management, operational, compliance, finance, administrative and store associate personnel. In order to compete and

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implement our growth strategy, we must attract, retain, and motivate employees, and turnover of senior management, store closures and reductions in workforce may make it difficult to retain qualified and skilled employees.

Significant turnover in our senior management team and across our organization could result in one or more material weakness in our internal control over financial reporting. We are required to provide management’s attestation on internal controls pursuant to the requirements of Section 404 of the Sarbanes-Oxley Act. Management may not be able to effectively and timely implement controls and procedures that adequately respond to regulatory compliance and reporting requirements, due to inadequate staffing levels and/or the loss of senior management to properly supervise and review financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to conclude that our internal controls are effective. If we are unable to confirm that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which could cause the price of our common stock to decline.

A major disruption of, or failure to successfully implement or make changes to, our information technology systems could negatively impact results of operations.

Our results of operations could be negatively impacted by a major disruption of our information technology systems. We rely heavily on these systems to process transactions with customers and vendors, manage inventory replenishment, summarize results and control distribution of products. Despite numerous safeguards and careful contingency planning, these systems are still subject to power outages, telecommunication failures, cybercrimes, cybersecurity attacks and other catastrophic events. A major disruption of the systems and their backup mechanisms may cause us to incur significant costs to repair the systems, experience a critical loss of data and/or result in significant business interruptions that could have a material adverse impact on our financial condition, results of operations or reputation.

In addition, in the ordinary course of business, we regularly evaluate and make changes and upgrades to our information systems. As part of our transformation strategy, we have commenced a multi-year effort to evaluate and, where appropriate, upgrade and/or replace certain of our information systems, including systems for inventory management, order management and our finance systems. These system changes and upgrades can require significant capital investments, dedication of resources and time to fully implement. During this transition, we may need to continue to operate on legacy infrastructure, which has had, and could continue to have, a material adverse impact on our business operations and financial results. While we follow a disciplined methodology when evaluating and making such changes, there can be no assurances that we will successfully implement such changes, that such changes will occur without disruptions to our operations or that the new or upgraded systems will achieve the desired business objectives.

Security breaches and other disruptions to our information technology infrastructure (including third-party service providers) could interfere with our operations. These disruptions can lead to unplanned remediation costs to address enhancements to our IT systems and result in loss of consumer confidence and other negative consequences, which may include litigation and regulatory penalties.

We collect, process, transmit and store relevant information about our customers and employees in the ordinary course of business in connection with certain activities, including, without limitation, credit card processing, website hosting, data encryption and software support. As a result, we face risks associated with unauthorized access to our or our third-party service providers’ information technology systems, loss or destruction of data, computer viruses, malware, distributed denial-of-service attacks or other malicious activities. These threats may result from human error, equipment failure or fraud or malice on the part of employees or third parties. We make significant resource investments to protect this information and continue to invest in resources to maintain confidentiality, integrity and availability of our data. As we migrate our legacy systems to cloud-based

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technologies hosted by third parties, we also continue to develop systems and processes that are designed to protect our customer, associate, and company information. However, it is not always possible to anticipate the evolving threat landscape and mitigate all risks to our systems and information, and while these measures provide reasonable security, our efforts have not in the past, and may not in the future, prevent all incidents of data breach or theft. We could also be affected by risks to the systems and information of our vendors, service providers, counterparties and other third parties. Risks relating to cyberattacks on our vendors and other third parties have also been increasing due to more frequent and severe supply chain attacks impacting software and information technology service providers in recent years.

For example, in October 2022, the Company became aware that an outside party had improperly accessed, via a phishing scam, data on the hard drive and certain shared drives to which one of our employees had access. The Company reviewed the accessed data to determine whether these drives contained any sensitive and/or personally identifiable information. At the time, the Company concluded customers’ payment cards were not compromised and that the accessed information presented limited financial risk exposure as a result of this incident. The Company continued to monitor activity related to this incident and escalation of risk has not occurred. The Company had no reason to believe that this event would be likely to have a material impact on the Company.

Globally, the sophistication, frequency and severity of the techniques used to obtain unauthorized access to systems, sabotage systems or degrade system performance continue to evolve and become harder to detect. We are continuously evaluating and enhancing our cybersecurity and information security systems and creating new systems and processes. However, there can be no assurance that these measures will be effective in preventing or limiting the impact of future cybersecurity incidents. As techniques used to breach security grow in frequency and sophistication and are generally not recognized until launched against a target, we, or our third-party service providers, may not be able to promptly detect that a cyber breach has occurred or, implement security measures in a timely manner or ensure that any such security measures will be effective. If we experience a material cybersecurity incident impacting the confidentiality and integrity of our data or operations of systems this could interfere with our operations and cause us to incur unplanned significant remediation costs to address enhancements to our IT resources, affect our ability to carry out our businesses, impair the trust of our customers or potential customers and expose us to increased risk of lawsuits, regulatory penalties and damage relating to loss of proprietary information, any of which could have a material adverse effect on our business, financial results and our brand and reputation.

Damage to our reputation in any aspect of our operations could potentially impact our operating and financial results.

Our reputation is based, in part, on perceptions of subjective qualities, so incidents involving our brand, our Owned Brands, our products or the retail industry in general that erode customer trust or confidence could adversely affect our reputation and our business.

As we increase the number of items available to be shipped directly from a vendor to a customer for home delivery or in-home assembly, we increasingly rely on the performance of these third-party merchandise vendors and service providers. Our focus on executing strategic partnerships also means that we will rely on the performance of those partners for activities that directly impact the customer experience. Any deficiencies in performance by these third parties or partners could have a material adverse effect on our reputation, despite our monitoring controls and procedures.

Federal, state and local governments, our customers and consumers and shareholders are becoming increasingly sensitive to environmental and other sustainability issues. While the Company values ESG and aims to incorporate ESG considerations into our business strategy, products and services, the Company is currently focused on improving its financial and operational conditions amidst the challenges we faced in fiscal 2022. Failure to manage and successfully execute an ESG strategy or address ESG matters appropriately (or being able to do so only at a significant expense to our business), or failure to adapt our strategy and business to the

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changing regulatory requirements and market expectations, may result in reputational damage and materially and adversely affect our business, results of operations and financial results.

In addition, challenges to our compliance with various regulations, rules and laws, including but not limited to, those related to social, product, labor and environmental matters could also jeopardize our reputation and lead to adverse publicity, especially in the rapidly changing media environment. The increased use of digital platforms, such as social media, by us and consumers has also increased the risk that our reputation could be negatively impacted by information about or affecting us that is easily accessible and rapidly disseminated.

Damage to our brand and reputation could potentially impact our operating and financial results, diminish customer trust and generate negative customer sentiment, as well as require additional resources to rebuild our reputation.

Our success is dependent, in part, on managing costs of labor, merchandise and other expenses that are subject to factors beyond our control.

Our success depends, in part, on our ability to manage operating costs and to look for opportunities to reduce costs. Our ability to meet our labor needs while controlling costs is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation, labor organizing activities and changing demographics. Our ability to find qualified merchandise vendors and service providers and obtain access to products in a timely, efficient and cost-effective manner can be adversely affected by trade restrictions, political instability, financial instability of suppliers, suppliers’ noncompliance with applicable laws, transportation costs, disruptions to our supply chain network serving our stores, distribution facilities and customers due to labor disturbances and other items, and other factors beyond our control, including pandemics and natural disasters.

Disruptions of our supply chain could have an adverse effect on our operating and financial results.

Disruption of our supply chain capabilities due to trade restrictions, port-related issues such as closures, congestion or delays, political instability, war (including the ongoing military conflict between Russia and Ukraine), changes in tax or trade policy, weather, natural disaster, pandemics (including COVID-19), terrorism, product recalls, labor supply or stoppages, financial and/or operational instability of key suppliers and carriers, or other reasons could impair our ability to distribute our products and adversely impact the costs we incur to distribute our products. To the extent we are unable to mitigate the likelihood or potential impact of such events, it could materially and adversely impact our business, results of operations, financial condition and liquidity.

Historically, we have purchased substantially all of our merchandise in the United States, with the majority from domestic sources (who may manufacture overseas) and the balance from importers. We are also developing our direct importing and direct sourcing capabilities will allow for a higher penetration of sourced and developed Owned Brands in our merchandise assortment, which will expose us more directly to the effects of global supply chain disruptions on costs of shipping as well as potential issues with product availability due to delays in product sourcing.

We have experienced in 2022, and expect to continue to experience in 2023, supply chain disruptions, including increased product costs, increased shipping and transportation costs, increased labor wages, labor shortages and port and other delivery delays and associated charges. In addition to increased costs, disruptions may also result in inventory management issues, such as slow replenishment, out-of-stocks and excessive inventory levels. In an effort to mitigate these risks, and as part of our business transformation and strategy, we plan to make capital investments in initiatives aimed to help modernize our supply chain and network operations. Failure to effectively manage this and other supply chain modernization initiatives could materially and adversely impact our business. For example, as part of this program, we have partnered with Ryder System, Inc. to develop and operate two new regional distribution centers to provide merchandise to regional stores for both in-store shopping and online shopping services such as Buy Online Pickup In Store (“BOPIS”) or Curbside, Same Day

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Delivery, and Ship from Store. The first of these facilities began operations in the second half of fiscal 2022. Failure to effectively manage this and other supply chain modernization initiatives could materially and adversely impact our business.

In addition, any significant changes to trade policy, including implementation of additional tax or import restrictions, could result in additional costs to us or require us to seek alternative sources of supply, which could negatively impact our reputation and have a material adverse effect on our business and results of operations.

Rising inflation may adversely affect us by increasing costs of materials, labor and other costs beyond what we can recover through price increases.

Inflation can adversely affect us by increasing the costs of materials, labor and other costs required to manage and grow our business. In the current inflationary environment, depending on the terms of our contracts and other economic conditions, we may be unable to raise prices enough to keep up with the rate of inflation, which would reduce our profit margins and returns. If we are unable to increase our prices to offset the effects of inflation, our business, results of operations and financial condition could be materially and adversely affected.

In addition, inflation is often accompanied by higher interest rates. The banking crisis and the impact of high interest rates and the uncertainty regarding future rate increases, may increase uncertainty and volatility in the global financial markets. In addition, the possibility of high inflation and an extended economic downturn could reduce our ability to incur debt or access capital and impact our results of operations and financial condition.

Inefficient management of relationships and dependencies on third-party service providers could adversely affect our operations.

We rely on third parties to support our business and provide certain services, which include portions of our technology and operational infrastructure. As a result, our business model is complex and can be challenging to manage. If we do not properly manage these relationships, or if these third-party service providers fail to perform, meet expectations, or face disruptions, it could result in the loss of our competitive position and reputational damage and adversely affect our results of operations.

Our success is dependent, in part, on the ability of our employees in all areas of the organization to execute our business plan and, ultimately, to satisfy our customers.

We depend on the skills, working relationships, and continued services of key personnel. In addition, our ability to achieve our operating goals depends on our ability to identify, hire, train, and retain qualified individuals. Our ability to attract and retain qualified employees in all areas of the organization may be affected by a number of factors, including geographic relocation of employees, operations or facilities and the highly competitive markets in which we operate, including the markets for the types of skilled individuals needed to support our continued success. We compete with other companies both within and outside of our industry for talented personnel, and we may lose key personnel or fail to attract, train, and retain other talented personnel. Any such loss or failure could adversely affect our business, results of operations and financial condition.

In particular, our continued success will depend in part on our ability to retain the talents and dedication of key employees. If key employees terminate their employment, become ill (including as a result of the COVID-19 pandemic), or if an insufficient number of employees is retained to maintain effective operations, our business activities may be adversely affected, and our management team’s attention may be diverted. In addition, we may not be able to locate suitable replacements for any key employees who leave or offer employment to potential replacements on reasonable terms, all of which could adversely affect our business, results of operations and financial condition.

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Extreme or unusual weather patterns caused by climate change or otherwise, natural disasters, and other catastrophic events, as well as regulatory or market measures and changing consumer preferences in response to climate change and ESG matters, could adversely affect our business and results of operations.

Our business is susceptible to risks associated with extreme weather patterns, including the impacts of climate change. Extreme weather conditions and natural disasters, such as heavy snow, ice or rainstorms, hurricanes, floods, tornados, earthquakes, wildfires, or a combination of these and other factors, could have a material adverse effect on our business, financial condition and results of operation. For example, extreme weather conditions over a prolonged period of time in the areas in which our stores or distribution centers are located, especially in areas with a high concentration of our stores, may make it difficult for our customers or associates to travel to our stores or distribution centers and thereby reduce our sales and profitability. These conditions can have similar impacts to our supply chain operations causing delivery disruptions or delays in order fulfillment. Such extreme weather conditions or natural disasters could cause significant damage to, destroy and/or force the closure of our stores and distribution centers, as well as those of our third-party service providers.

In addition, our business is susceptible to unusual and unseasonable weather patterns, such as extended periods of warm temperatures in the fall and winter seasons or cool temperatures in the spring and summer seasons, which could result in inappropriate inventory levels, especially for our BABY business, and negatively impact our business, results of operations and financial condition.

There is also increased focus, including by investors, customers and other stakeholders, on climate change and other ESG and sustainability matters, including single use plastic, energy, waste and worker safety. Concern about climate and sustainability-related issues may result in changes in consumer preference, including moving away from products considered to have high climate change impact and toward products that are more sustainably made. If we fail to adapt to these changing consumer preferences, our business, results of operations and reputation may be materially adversely affected.

Concern over climate change may result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation and utility cost increases that adversely affect our business. New or more stringent climate change- related mandates, laws or regulations, or stricter interpretations of existing mandates, law or regulations, could also require additional expenditures by us or our suppliers, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Risks Related to the Purchase Agreement

If we receive shareholder approval to effectuate the Reverse Stock Split, investors may experience dilution and a decline in market price of the shares through the issuance of shares, but if we are unable to receive shareholder approval relating thereto, we expect that we will likely file for bankruptcy protection.

Unless we receive shareholder approval to increase our authorized share capital or effectuate a reverse stock split, we will not have sufficient authorized share capital for issuing all of the shares of common stock pursuant to the Purchase Agreement. The Company intends to effectuate the Reverse Stock Split and is seeking to obtain shareholder approval at a special meeting of shareholders. The Company filed a definitive proxy statement with the SEC on April 5, 2023 in connection with the special meeting, and the proxy was first mailed to shareholders on April 5, 2023. A majority of the outstanding shares of the Company’s common stock entitled to vote at the special meeting must vote in favor of the proposal in order for it to be approved. If the Reverse Split Proposal is approved by the shareholders and the Company effectuates the Reverse Stock Split, the total number of issued and outstanding shares of common stock would decrease based on the final ratio.

Currently, we are authorized in our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to issue up to a total of 900,000,000 shares of common stock. The total number of authorized shares of common stock will not change as a result of the Reverse Stock Split. As of April 10, 2023, we had

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558,735,983 outstanding shares of common stock, 6,537,620 treasury shares and 178,200,218 shares available for future issuance. The Reverse Stock Split would have the effect of reducing the number of outstanding shares of common stock, the number of shares of common stock held in treasury and the number of shares of common stock reserved for issuance pursuant to our stock plans and warrants. Therefore, because the total number of authorized shares of common stock will not change as a result of the Reverse Stock Split, upon the effectiveness of the Reverse Stock Split, the number of authorized shares of common stock that are not issued and outstanding or reserved for issuance would increase. All authorized but unissued shares that are not reserved for issuance would remain available for issuance by the Board to raise equity capital, including pursuant to the Purchase Agreement, at any time, at the Board’s discretion. If the Board were to authorize the issuance of any such shares, such issuances would dilute the ownership interests of existing holders of our common stock and may also cause a decline in the trading price of our common stock.

However, if we do not receive shareholder approval to effectuate the Reverse Stock Split, we will not have sufficient authorized share capital for issuing the shares of common stock pursuant to the Purchase Agreement and we will not be able to receive the proceeds pursuant to the Purchase Agreement. Additionally, we may not have sufficient authorized share capital for issuing shares of common stock subject to the ATM Agreement and we will not be able to receive the proceeds from that financing. The ATM Agreement only provides for sales made pursuant to an effective registration statement on Form S-3. Upon filing our annual report on Form 10-K, which is due by April 26, 2023, we will lose S-3 eligibility and therefore we expect all sales made pursuant to the ATM Agreement will cease by April 26, 2023. If we do not have sufficient authorized share capital for issuing shares pursuant to the Purchase Agreement and for issuing shares subject to the ATM Agreement, we will not be able to receive proceeds from such financing and we expect that we will likely file for bankruptcy protection, in which case holders of our common stock will not receive any recovery.

In order to generate the Total Commitment under the Purchase Agreement, the market price of our common stock would need to increase significantly.

Even if the shareholders approved the Reverse Split Proposal and the Reverse Stock Split was effectuated, we would not have sufficient authorized capital to issue the Total Commitment under the Purchase Agreement unless the market price of our common stock increased significantly. Assuming a closing sales price of $0.31, which was the closing sales price of our common stock on the Nasdaq on April 6, 2023, we would be required to issue a total of approximately 2.8 billion shares of common stock in order to receive the Total Commitment under the Purchase Agreement. Following shareholder approval of the Reverse Split Proposal, if the Board were to adopt a maximum of 1-for-20 final ratio, the 473,094,776 shares of common stock issued (including treasury shares) as of April 3, 2023 prior to the Reverse Stock Split, will be reduced to approximately 23,654,739 issued shares of common stock (including treasury shares) post-Reverse Stock Split. In such a scenario, we would have 868,016,477 shares of common stock available for future issuance, which would be significantly less than the required amount of approximately 2.8 billion shares assuming a closing sales price of $0.31 on April 6, 2023. As such, unless the market price of our common stock increases significantly, we would not have sufficient authorized share capital to issue up to the Total Commitment under the Purchase Agreement even if the Reverse Stock Split was effectuated.

Disruptions in the financial markets could have a material adverse effect on the Company’s ability to access our cash and cash equivalents.

We may have amounts of cash and cash equivalents at financial institutions that are in excess of federally insured limits. While we closely manage our cash and cash equivalents balances to minimize risk, if there were disruptions in the financial markets, we cannot be assured that we will not experience losses on our deposits, and it may negatively impact the availability and cost of capital.

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Our stock price has been and may continue to be subject to volatility, and this and other factors may affect elements of our capital allocation strategy such as share repurchases, future dividends and debt reduction.

Our stock price has experienced volatility over time and this volatility may continue. Stock volatility in itself may adversely affect shareholder confidence as well as employee morale and retention for those associates who receive equity grants as part of their compensation packages. The impact on employee morale and retention could adversely affect our business performance and financial results. Stock volatility and other factors may also affect elements of our capital allocation strategy, and our ability to use equity to fund acquisitions or raise capital.

In addition, we have received, and may continue to receive, significant media attention, including from blogs, articles, message boards and social media. Information provided by third parties may not be reliable or accurate, or contain misleading, incomplete or otherwise damaging information, which could influence trading activity in our stock. As a result, our stock has experienced, and could continue to experience, extreme price and volume fluctuations that may be unrelated to our operating performance, financial position or other business fundamentals. This activity along with other factors, including the involvement of short sellers or activist investors in our stock, has materially impacted in the past, and could materially impact in the future, the trading price of our stock, put pressure on the supply and demand for our stock, limit our shareholders from readily selling their shares and result in significant loss of investment.

As part of our capital allocation strategy, since December 2004, our Board of Directors has authorized several share repurchase programs, and in April 2016, the Board of Directors authorized a quarterly dividend program. Decisions regarding share repurchases and dividends are within the discretion of the Board of Directors, and will be influenced by a number of factors, including the price of our common stock, general business and economic conditions, our financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in business strategy and other factors. Changes in, or the elimination of, our share repurchase programs or dividend could have a material adverse effect on the price of our common stock. Our share repurchase program could change, and would be influenced by several factors, including business and market conditions. For example, in response to the COVID-19 pandemic, in March 2020, we postponed our plans for share repurchases and suspended the payment of dividends and planned debt reductions.

During fiscal 2021, we announced plans to complete our $1.0 billion three-year repurchase plan by the end of fiscal 2021, which was two years ahead of schedule and resulted in the repurchase of $950.0 million of shares under this plan as of February 26, 2022. During the first quarter of fiscal 2022, we completed this program, repurchasing approximately 2.3 million shares of our common stock under the share repurchase plan approved by our Board of Directors, at a total cost of approximately $40.4 million.

On August 31, 2022, we established an at the market equity distribution program (the “Jefferies ATM Program”) by entering into an Open Market Sale Agreement (the “Open Market Sale Agreement”) with Jefferies LLC, acting as sales agent for us, pursuant to which the Company may issue and sell, from time to time, shares of common stock, par value $0.01 per share, in any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Pursuant to the prospectus supplement dated August 31, 2022, the Company offered and sold 12 million shares of common stock for net proceeds of $72.2 million. On October 28, 2022, the Company filed a prospectus supplement to register additional shares of common stock, par value $0.01 per share, to offer and sell under its Jefferies ATM Program at an aggregate sales price of up to $150.0 million. In connection with the Company’s entry into the ATM Agreement, as described below, the Company terminated the Open Market Sale Agreement, on March 27, 2023, effective as of the date thereof. The Company sold approximately 22.2 million shares for approximately $115.4 million of net proceeds pursuant to the Jefferies ATM Program.

On February 7, 2023, the Company issued (i) 23,685 shares of Series A Convertible Preferred Stock, (ii) 84,216 warrants to purchase shares of our Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock Warrants”) and (iii) 95,387,533 Common Stock Warrants pursuant to the Underwriting Agreement, dated February 7, 2023, between the Company and B. Riley Securities, as underwriter.

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Each Common Stock Warrant is immediately exercisable at any time at the option of the holder for one share of common stock at an exercise price of $6.15 per share and will expire five years from the issuance date. If at the time of exercise of the Common Stock Warrant a registration statement is not effective for the issuance of all of the shares of common stock issuable upon exercise of the Common Stock Warrant, the holder may, in its sole discretion, exercise the Common Stock Warrant on a cashless basis. Whether or not a registration statement is effective, the holder may exercise the Common Stock Warrant on an “alternate cashless exercise” basis, in which case the number of shares of common stock issuable will equal the product of (x) the number of shares of common stock then issuable upon exercise and (y) 0.65.

Between February 7, 2023 and March 27, 2023, the Holder exercised 14,212 Series A Convertible Preferred Stock Warrants to purchase 14,212 shares of Series A Convertible Preferred Stock for aggregate proceeds to the Company of $135,014,000. After the Company anticipated that it would not be able to meet the conditions to force the exercise of the Series A Convertible Preferred Stock Warrant in the future and receive cash proceeds therefore, on March 30, 2023, the Company and the Holder entered into the Exchange Agreement. Pursuant to the Exchange Agreement, the Company exchanged the Series A Convertible Preferred Stock Warrant to purchase 70,004 shares of Series A Convertible Preferred Stock for 10,000,000 shares of common stock and rights to receive 5,000,000 shares of common stock upon the effectuation of the Reverse Stock Split. The Series A Convertible Preferred Stock Warrants were terminated pursuant to the Exchange Agreement.

On March 30, 2023, the Company entered into the ATM Agreement with B. Riley Securities, as a sales agent, to offer and sell ATM Shares having an aggregate sales price of up to the ATM Program Amount from time to time through the Company’s “at the market offering” program. As of April 10, 2023, the Company has sold approximately 100.1 million shares for approximately $48.5 million of net proceeds under the ATM Agreement.

It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to BRPC II or whether such sales will generate gross proceeds up to the Total Commitment.

On March 30, 2023, we entered into the Purchase Agreement with BRPC II, pursuant to which BRPC II has committed to purchase up to $1.0 billion of our common stock, subject to certain limitations and conditions set forth in the Purchase Agreement. The Purchase Shares that may be issued under the Purchase Agreement may be sold by us to BRPC II at our discretion from time to time over approximately a 24-month period commencing on the Commencement Date.

We generally have the right to control the timing and amount of any sales of Purchase Shares to BRPC II under the Purchase Agreement. Sales of Purchase Shares, if any, to BRPC II under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to BRPC II all, some or none of the Purchase Shares that may be available for us to sell to BRPC II pursuant to the Purchase Agreement.

Because the purchase price per share to be paid by BRPC II for the Purchase Shares that we may elect to sell to BRPC II under the Purchase Agreement, if any, will fluctuate based on the market prices of our common stock during the applicable VWAP Purchase Period for each Purchase or the applicable Intraday VWAP Purchase Period for each Intraday VWAP Purchase made pursuant to the Purchase Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and prior to any such sales, the number of Purchase Shares that we will sell to BRPC II under the Purchase Agreement, the purchase price per share that BRPC II will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by BRPC II under the Purchase Agreement, if any. Moreover, although the Purchase Agreement provides that we will receive proceeds upon the issuance of the Purchase Shares to BRPC II, only                  shares of our common stock (a portion of which represent the Commitment Shares we will issue to BRPC II on the trading day immediately following the earlier of (i) the Commencement Date and (ii) the date which is five (5) consecutive trading days immediately following the date on which we complete the Reverse Stock Split as payment of a commitment fee for BRPC II’s obligation to purchase shares of our common stock under the

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Purchase Agreement) are being registered for resale by BRPC II as CEF Shares under the registration statement that includes this prospectus. If after the Commencement Date we elect to sell to BRPC II all of the 111,747,196 Purchase Shares being registered for resale by BRPC II under this prospectus that are available for sale by us to BRPC II in VWAP Purchases and Intraday VWAP Purchases under the Purchase Agreement, depending on the market prices of our common stock during the applicable VWAP Purchase Period and Intraday VWAP Purchase Period for each VWAP Purchase and each Intraday VWAP Purchase, respectively, made pursuant to the Purchase Agreement, the actual gross proceeds from the sale of all such shares is expected to be substantially less than the Total Commitment available to us under the Purchase Agreement, which will likely materially adversely affect our liquidity.

In order for us to issue and sell to BRPC II under the Purchase Agreement more than the 111,747,196 shares being registered for resale by BRPC II as Purchase Shares under the registration statement that includes this prospectus in order to receive aggregate gross proceeds equal to the Total Commitment of $1.0 billion under the Purchase Agreement, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by BRPC II of any such additional shares of our common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, and we will need to obtain shareholder approval to issue shares of common stock in excess of the Exchange Cap under the Purchase Agreement in accordance with applicable Nasdaq rules, unless the average per share purchase price paid by BRPC II for all Purchase Shares sold under the Purchase Agreement equals or exceeds $                , in which case, under applicable Nasdaq rules, the Exchange Cap limitation will not apply to issuances and sales of Purchase Shares under the Purchase Agreement, in each case, before we may elect to sell any additional Purchase Shares to BRPC II under the Purchase Agreement. Any issuance and sale by us under the Purchase Agreement of a substantial amount of Purchase Share in addition to the                  Purchase Shares being registered for resale by BRPC II pursuant to such Purchase Agreement under this prospectus could cause additional substantial dilution to our shareholders.

In addition, we are not required or permitted to issue any shares of common stock under the Purchase Agreement if such issuance would breach our obligations under the rules or regulations of Nasdaq. In addition, BRPC II will not be required to purchase any shares of our common stock if such sale would result in BRPC II’s beneficial ownership exceeding 4.99% of the then issued and outstanding common stock. Our inability to access a portion or the Total Commitment under the Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business.

The actual number of shares we will issue under the Purchase Agreement, at any one time or in total, is uncertain.

Upon the Commencement, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period from and after the effective date of this registration statement, to direct BRPC II to make a VWAP Purchase of a specified amount of shares of common stock not to exceed certain limitations set forth in the Purchase Agreement. From and after the Commencement, subject to the satisfaction of certain conditions, including having sufficient authorized shares, not being in default under the Amended Credit Agreement, having an effective resale registration statement and our common stock remaining listed on Nasdaq, we will control the timing and amount of any sales of common stock to BRPC II. Actual sales of shares of common stock to BRPC II under the Purchase Agreement will depend on a variety of factors, some of which are to be determined by us from time to time, including, among other things, market conditions, the trading price of the common stock, the continued listing of our common stock, the quantity of authorized but unissued and non-reserved shares, and determinations by us as to the appropriate sources of funding for our business and operations and certain equity proceeds requirements pursuant to the Amended Credit Agreement.

Investors who buy shares at different times will likely pay different prices.

Pursuant to the Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to BRPC II. If and when we do elect to sell shares of our common stock to

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BRPC II pursuant to the Purchase Agreement, after BRPC II has acquired such shares, BRPC II may resell all, some or none of such shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from BRPC II pursuant to the Purchase Agreement at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from BRPC II pursuant to the Purchase Agreement as a result of future sales made by us to BRPC II at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares to BRPC II under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with BRPC II may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

Risks Related to the Economy and Industry

General economic factors beyond our control, including the impact of COVID-19, and changes in the economic climate have materially adversely affected, and could continue to materially adversely affect our business, results of operations, financial condition and liquidity.

General economic factors that are beyond our control have materially adversely affected, and could continue to materially adversely affect, our business, results of operations, financial condition and liquidity. These factors include, but are not limited to, recent supply chain disruptions, labor shortages, wage pressures, rising inflation and the ongoing military conflict between Russia and Ukraine, as well as housing markets, consumer credit availability, consumer debt levels, fuel and energy costs (for example, the price of gasoline), interest rates, tax rates and policy, unemployment trends, the impact of natural disasters such as pandemics, civil disturbances and terrorist activities, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products sold by us and other matters that influence consumer spending and preferences. Changes in the economic climate and the impact of the COVID-19 pandemic, including on global supply chains, labor markets and economic activity, have materially adversely affected, and could continue to materially adversely affect, our business, results of operations, financial condition and liquidity.

COVID-19 has had, and may continue to have, a material adverse effect, on our business and could also result in the recording of additional non-cash impairment charges. In future periods, our business, results of operations, financial condition and liquidity may be materially adversely impacted by reduced store traffic and consumer spending due to, among other things, significant continued unemployment and economic downturn, as well as consumer anxiety regarding shopping in physical stores. We will continue to review local, state and federal mandates related to COVID-19, which may require us to adjust our operations in response to revised governmental mandates. There can be no assurance that the continuation of the COVID-19 pandemic will not materially impact our future business operations.

We operate in the highly competitive retail business where the use of emerging technologies as well as unanticipated changes in the pricing and other practices of competitors may adversely affect our performance.

The retail business is highly competitive. We compete for customers, employees, locations, merchandise, technology, services and other important aspects of the business with many other local, regional and national retailers. These competitors range from specialty retailers to department stores and discounters as well as online and multichannel retailers, some of which are larger than us with significantly greater financial resources. In recent years, competition has further intensified as a result of reduced discretionary consumer spending, increased promotional activity and deep price discounting.

Rapidly evolving technologies are also altering the manner in which we and our competitors communicate and transact with customers. Our execution of the elements of our transformation strategy is designed to adapt to these changes, in the context of competitors’ actions, customers’ adoption of new technology and related changes

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in customer behavior, and presents a specific risk in the event that we are unable to successfully execute our plans or adjust them over time as needed. Further, unanticipated changes in pricing and other practices of our competitors, including promotional activity (particularly during back-to-school/college and/or holiday periods), reduced thresholds for free shipping and rapid price fluctuation enabled by technology, may adversely affect our performance. If we are unable to adapt effectively and quickly to a changing competitive landscape and maintain our competitive position, we could experience downward pressure on prices, lower demand for our merchandise, reduced sales and margins, inability to take advantage of new business opportunities and loss of market share.

Our failure to anticipate and respond in a timely fashion to changes in consumer preferences and demographic factors may adversely affect our business, results of operations and financial condition.

Our success depends on our ability to anticipate and respond in a timely manner to changing merchandise trends, customer demands and demographics in order to maintain and attract customers. We must continue to monitor and react to consumer expectations, such as the increased focus on environmental, social and governance (“ESG”) matters, climate change, and sustainable products, and appropriately manage our brand to promote the right product lines (including our Owned Brands), drive customer loyalty and protect our reputation. Our failure to anticipate, identify or react appropriately to changes in customer tastes, preferences, shopping and spending patterns and other life interest decisions, including as a result of COVID-19, could lead to, among other things, excess inventories, a shortage of products or reputational damage, and may adversely affect our business, results of operations and financial condition.

In addition, we must manage our inventory effectively and commensurately with customer demand. Often, we need to order merchandise, and enter into contracts for the purchase and manufacturing of such merchandise, multiple seasons in advance of and frequently before customer trends and preferences are known. The extended lead times for many of our purchases may make it difficult for us to respond rapidly to new or changing trends and preferences. These extended lead times may also increase our exposure to the effects of global supply chain disruptions, increasing the risk that merchandise is not received when originally planned. As a result, we are vulnerable to demand and pricing shifts and to misjudgments in the selection and timing of merchandise purchases. If we do not accurately predict our customers’ preferences and demands for our products, our inventory levels will not be appropriate, and our business, results of operations and financial condition may be negatively impacted.

Our business is seasonal in nature, which could negatively affect our results of operations and financial performance.

Our business is subject to seasonal influences, with a significant portion of sales and revenues historically realized during the back to school/college and holiday seasons. We must carry a significant amount of inventory during this time, and if we are not able to sell the inventory, we may be required to take significant inventory markdowns or write-offs, which could reduce profitability. Similarly, if we do not adequately stock or restock popular products, particularly during the back to school and holiday seasons, and fail to meet customer demand, revenue and customer loyalty may be adversely impacted.

In addition, our financial results during the holiday season may fluctuate significantly based on many factors, including holiday spending patterns and weather conditions, and any such fluctuation could have a disproportionate effect on our results of operations for the entire fiscal year. Because of the seasonality of our business, our operating results vary considerably from quarter to quarter, and results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

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Risks Related to Our Common Stock

Nasdaq may delist our common stock from quotation on its exchange, which could limit investors’ ability to sell and purchase our securities and subject us to additional trading restrictions.

Our common stock is currently listed on Nasdaq under the trading symbol “BBBY.” Our share price has dropped below $1.00 since March 20, 2023. If our share price continues to stay below the minimum of $1.00 for a period of 30 consecutive business days, our common stock may be suspended and/or delisted for failure to meet the requirement for continued inclusion on Nasdaq under Nasdaq Listing Rule 5550(a)(2). If our common stock is not listed on Nasdaq at any time pursuant to the Purchase Agreement, we could face significant material adverse consequences, including:

One of the condition precedents to the sale of securities under the Purchase Agreement is that our shares of common stock is listed on an exchange. If our shares of common stock are delisted from Nasdaq, then we will not meet the conditions to being able to sell shares pursuant to the Purchase Agreement. If we do not receive the proceeds pursuant to the Purchase Agreement, whether because we cannot satisfy the conditions precedent or otherwise, then we expect that we will likely file for bankruptcy protection, in which case you will receive no recovery at all for your shares.

The market prices and trading volume of our shares of common stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our common stock to incur substantial losses.

The market prices and trading volume of our shares of common stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our common stock to incur substantial losses. From January 3, 2022 to April 6, 2023, the market price of our common stock has had extreme fluctuations, ranging from an intra-day low of $0.298 per share on April 6, 2023 to an intra-day high of $30.06 on March 7, 2022, and the last reported sale price of our common stock on Nasdaq on April 6, 2023, was $0.3092 per share. From January 3, 2022 to April 6, 2023, according to Nasdaq, daily trading volume of our common stock ranged from as low as approximately 2,121,088 to as high as approximately 395,319,906 shares.

We believe that the recent volatility and our current market prices reflect market and trading dynamics and macro or industry fundamentals, and we do not know how long these dynamics will last. Under the circumstances, we caution you against investing in our common stock, unless you are prepared to incur the risk of incurring substantial losses.

Extreme fluctuations in the market price of our common stock over the past year have been accompanied by reports of strong and atypical retail investor interest, including on social media and online forums. The market volatility and trading patterns we have experienced create several risks for investors, including the following:

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We may continue to incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our shares of common stock may fluctuate dramatically and may decline rapidly, regardless of any developments in our business. See “—Risk Factor— A “short squeeze” due to a sudden increase in demand for shares of our common stock that largely exceeds supply and/or focused investor trading in anticipation of a potential short squeeze have led to, may be currently leading to, and could again lead to, extreme price volatility in shares of our common stock.” Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our common stock or result in fluctuations in the price or trading volume of our common stock, including:

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In addition, in the past, shareholders have instituted securities class action litigation following periods of market volatility. If we are involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

Future issuances of equity or debt securities by us may adversely affect the market price of our common stock and we will not have sufficient authorized share capital to issue all of the shares of common stock subject to the Purchase Agreement.

Our authorized share capital consists of 900.0 million shares of our common stock. As of April 10, 2023, we had an aggregate of 558,735,983 million shares outstanding and 6,537,620 treasury shares and 334,726,397 million shares of common stock authorized but unissued. Such share count takes into account the 5,000,000 shares of common stock to be issued pursuant to the Exchange Agreement. Pursuant to the Purchase Agreement, a maximum of 111,747,196 shares of common stock may be issued, which includes the Commitment Shares. If all such shares are issued and resold by holders thereof, our total number of shares of common stock outstanding following such issuances and resales would be approximately 19.9% of our total number of shares of common stock outstanding as of April 10, 2023 prior to such issuances, assuming that we have sufficient authorized capital stock to issue such shares of common stock.

Unless we receive shareholder approval to increase our authorized share capital or effectuate a reverse stock split, we will not have sufficient authorized share capital for issuing all of the shares of common stock subject to the Purchase Agreement. Based on the future price of our common stock, if we do not receive the proceeds from the sales of our common stock to BRPC II covered by the Purchase Agreement, irrespective of our execution of our transformative plan, then we expect that we will likely file for bankruptcy protection, in which case holders of our common stock will receive no recovery at all for common stock that they own. See “Risk Factors–– Risks Related to the Purchase Agreement—If the Company does not receive the proceeds from the sales of our common stock to BRPC II covered by the Purchase Agreement, we expect that we will likely file for bankruptcy protection” and “—Risks Related to the Purchase Agreement—If we receive shareholder approval to effectuate the Reverse Stock Split, investors may experience dilution and a decline in market price of the shares through the issuance of shares, but if we are unable to receive shareholder approval relating thereto, we expect that we will likely file for bankruptcy protection.”

In the future, we may attempt to obtain financing or to increase further our capital resources, or refinance existing obligations, by issuing additional shares of our common stock or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock. Future acquisitions could require substantial additional capital in excess of cash from operations. There can be no guarantee that these offers to exchange will be successful. In addition, we also expect to issue additional shares in connection with the exercise of our stock options under our incentive plans.

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Issuing additional shares of our common stock or other equity securities or securities convertible into equity for financing or in connection with our incentive plans, acquisitions or otherwise may dilute the economic and voting rights of our existing shareholders or reduce the market price of our common stock or both. Upon liquidation, holders of our debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their stockholdings in us. See “Description of Capital Stock” in this prospectus.

The issuance of the securities pursuant to the Purchase Agreement will significantly dilute the ownership interest of the existing holders of our common stock, and the market price of our common stock will likely decline significantly as a result of sales of such securities into the public market by BRPC II and subsequent investors or the perception that such sales may occur.

Our existing holders of common stock will be significantly diluted by the sales of our common stock to BRPC II. Our public float will be significantly increased and the market price of our common stock could decline significantly as a result of subsequent sales of the shares of common stock issued pursuant to the Purchase Agreement, which could occur at any time, or the perception that such sales may occur.

Pursuant to the Purchase Agreement, assuming that we have sufficient authorized capital stock to issue such shares of common stock, a maximum of 111,747,196 shares of common stock may be issued, at an assumed offering price of $0.296, which was the last reported sale price of our common stock on Nasdaq on April 10, 2023. If all such shares are issued and resold by holders thereof, our total number of shares of common stock outstanding following such issuances and resales would be approximately 19.9% of our total number of shares of common stock outstanding as of April 10, 2023 prior to such issuances, assuming that we have sufficient authorized capital stock to issue such shares of common stock.

In addition, the shares of common stock sold to BRPC II, will be purchased at different prices, many of which could be at prices below the current and/or then trading prices of shares of our common stock or at prices below the price at which our existing shareholders purchased our common stock.

A “short squeeze” due to a sudden increase in demand for shares of our common stock that largely exceeds supply and/or focused investor trading in anticipation of a potential short squeeze have led to, may be currently leading to, and could again lead to, extreme price volatility in shares of our common stock.

Investors may purchase shares of our common stock to hedge existing exposure or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for purchase on the open market, investors with short exposure may have to pay a premium to repurchase shares of our common stock for delivery to lenders of our common stock. Those repurchases may, in turn, dramatically increase the price of shares of our common stock until additional shares of our common stock are available for trading or borrowing. This is often referred to as a “short squeeze.” A large proportion of our common stock has been in the past and may be traded in the future by short sellers, which may increase the likelihood that our common stock will be the target of a short squeeze, and there is widespread speculation that our current trading price is the result of a short squeeze. A short squeeze and/or focused investor trading in anticipation of a short squeeze have led to, may be currently leading to, and could again lead to volatile price movements in shares of our common stock that may be unrelated or disproportionate to our operating performance or prospects and, once investors

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purchase the shares of our common stock necessary to cover their short positions, or if investors no longer believe a short squeeze is viable, the price of our common stock may rapidly decline.

In addition, we do not record or have access to information regarding any share lending or short selling transactions other than what is publicly available from third-party providers. We do not have reliable information about synthetic shares and fake shares and only maintain records regarding shares that we have legally issued and are outstanding. We also understand that there has been considerable trading in derivatives on the Company’s shares including both put and call options. These derivative securities can have the effect of increasing the volatility of our share price.

Investors that purchase shares of our common stock during a short squeeze may lose a significant portion of their investment. Under the circumstances, we caution you against investing in our common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.

Information available in public media that is published by third parties, including blogs, articles, online forums, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate.

We have received, and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including blogs, articles, online forums, message boards and social and other media. This includes coverage that is not attributable to statements made by our directors, officers or employees. You should read carefully, evaluate and rely only on the information contained in this prospectus, any accompanying prospectus or any applicable free writing prospectus or incorporated documents filed with the SEC in determining whether to purchase our shares of common stock. Information provided by third parties may not be reliable or accurate and could materially impact the trading price of our common stock which could cause losses to your investments.

The market price of our common stock could decline due to the large number of outstanding shares of our common stock available for future sale following the effectuation of the Reverse Stock Split. Further, resales by investors of the securities offered hereby could have a significant impact on the market price of our common stock.

Pursuant to the Purchase Agreement, assuming that we have sufficient authorized capital stock to issue such shares of common stock, a maximum of 111,747,196 shares of common stock may be issued, at an assumed offering price of $0.296, which was the last reported sale price of our common stock on Nasdaq on April 10, 2023. If all such shares are issued and resold by holders thereof, our total number of shares of common stock outstanding following such issuances and resales would be 19.9% of our total number of shares of common stock outstanding as of April 10, 2023 prior to such issuances, assuming that we have sufficient authorized capital stock to issue such shares of common stock. See “—The issuance of the securities pursuant to the Purchase Agreement will significantly dilute the ownership interest of the existing holders of our common stock, and the market price of our common stock will likely decline significantly as a result of sales of such securities into the public market by BRPC II pursuant to the Purchase Agreement and subsequent investors or the perception that such sales may occur.”

We may issue shares of our common stock or other securities from time to time as consideration for, or to finance, future acquisitions, investments, debt-for-equity exchanges or for other capital needs. We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares would have on the market price of our common stock. If any such acquisition or investment is significant, the number of shares of common stock or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial and may result in additional dilution to our shareholders. We may also grant registration rights covering shares of our common stock or other securities that we may issue in connection with any such acquisitions and investments.

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Certain provisions of our Certificate of Incorporation, our by-laws and New York law could hinder, delay or prevent a change in control of us that you might consider favorable, which could also adversely affect the price of our common stock.

Certain provisions under our Certificate of Incorporation, our Amended and Restated By-laws (the “By-laws”) and New York law could discourage, delay or prevent a transaction involving a change in control of our Company, even if doing so would benefit our shareholders. These provisions include:

Anti-takeover provisions could substantially impede the ability of a public shareholder to benefit from a change in control or change of our management and Board and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and to cause us to take other corporate actions you desire. Because our Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt to replace current members of our management team. As a result, efforts by shareholders to change the direction or management of the Company may be unsuccessful. See “Description of Capital Stock” in this prospectus for additional information regarding the provisions included in our Certificate of Incorporation and our By-laws.

If our common stock becomes subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq, and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, (ii) a written agreement to transactions involving penny stocks and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore shareholders may have difficulty selling their shares.

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Our preliminary financial estimates represent management’s current estimates and are subject to change.

The preliminary estimated financial information contained in “Prospectus Supplement Summary—Recent Developments—Preliminary Results for Fiscal 2022 Fourth Quarter” represents only preliminary estimates and is based on information available to management as of the date of this prospectus supplement and these estimates could change. Our actual financial results as of and for the three months and year ended February 25, 2023 are subject to the completion of our financial closing processes, any adjustments that may result from the completion of such processes, and the finalization of our actual financial statements. Such actual financial results may not be available until after this offering is completed and, consequently, may not be available to you prior to investing in this offering. Our actual financial results as of and for the three months and year ended February 25, 2023 may differ materially from the preliminary estimated financial information we have provided as a result of completion of our final adjustments, review by our independent registered public accountants and other developments arising between now and the time that our financial results for such period are finalized. KPMG LLP has not audited, reviewed, compiled or performed any procedures with respect to such preliminary estimated financial information as of and for the three months and the year ended February 25, 2023. Accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect to these preliminary estimated amounts.

Complete results as of and for the year ended February 25, 2023 will be included in our Annual Report on Form 10-K, which is due by April 26, 2023. See the other risks described in this section and “Cautionary Note Regarding Forward-Looking Statements” for additional information regarding factors that could result in differences between these preliminary estimated financial results and the actual financial results we will report.

Risks Related to Legal and Regulatory

Changes in statutory, regulatory, and other legal requirements at a local, state or provincial and national level, or deemed noncompliance with such requirements, could potentially impact our operating and financial results.

We are subject to numerous statutory, regulatory and legal requirements at a local, state or provincial and national level, and this regulatory environment is subject to constant change. Our operating results could be negatively impacted by developments in these areas due to the costs of compliance in addition to possible government penalties and litigation, operating interruptions and reputational damage in the event of deemed noncompliance. Changes in the law or the regulatory environment, or deemed noncompliance with such laws or regulations, in the areas of customer, employee or product safety, environmental protection, privacy and information security, labor, wage and hour laws, and international trade policy, among others, could adversely impact our operations and financial results.

Our product offerings now include a selection of Owned Brands which bring additional regulatory and compliance requirements, requiring new resources and the development of new policies and procedures. Our failure to properly manage this expanded business or comply with these regulations could expose us to fines, penalties, litigation and other costs that could harm our reputation and adversely impact our financial results.

Changes to accounting rules, regulations and tax laws, or new interpretations of existing accounting standards or tax laws could negatively impact our operating results and financial position.

Our operating results and financial position could be negatively impacted by changes to accounting rules and regulations or new interpretations of existing accounting standards. Our effective income tax rate could be impacted by changes in accounting standards as well as changes in tax laws or the interpretations of these tax laws by courts and taxing authorities, which could negatively impact our financial results. Such changes would include for example, the possible adoption by the United States of additional tariffs, or the disallowance of tax deductions, with respect to imported merchandise.

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New, or developments in existing, litigation, claims or assessments could potentially impact our reputation, operating and financial results.

We are involved in litigation, claims and assessments incidental to our business, the disposition of which is not expected to have a material effect on our reputation, financial position or results of operations. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially adversely affected by changes in our assumptions related to these matters. While outcomes of such actions vary, any such claim or assessment against us could negatively impact our reputation, operations and financial results.

A failure of our business partners to adhere to appropriate laws, regulations or standards could negatively impact our reputation.

We engage with various third parties to meet business needs. These business partners include, among others, vendors, suppliers, and service providers. The failure of these business partners to comply with applicable regulations, rules, laws, and industry standards could negatively impact our reputation and have a material adverse effect on our business and results of operations.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and any prospectus supplement contain forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, our progress and anticipated progress towards our long-term objectives and our turnaround plan, as well as more generally the status of our future liquidity and financial condition and our outlook for our fiscal year 2022 fourth quarter. Many of these forward-looking statements can be identified by use of words such as “may,” “will,” “expect,” “anticipate,” “approximate,” “estimate,” “assume,” “continue,” “model,” “project,” “plan,” “goal,” “preliminary,” and similar words and phrases, although the absence of those words does not necessarily mean that statements are not forward-looking. Our actual results and future financial condition may differ materially from those expressed in any such forward-looking statements as a result of many factors. Such factors include, without limitation:

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Except as required by law, we do not undertake any obligation to update our forward-looking statements. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. These assumptions could prove inaccurate.

Any forward-looking statement we make in this prospectus, any prospectus supplement or elsewhere speaks only as of the date on which we make it. The risks identified above are not exhaustive, and you should be aware that there may be other risks that could adversely affect our business and financial performance. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. In any event, these and other important factors, including those set forth under the caption “Risk Factors” in a prospectus supplement, may cause actual results to differ materially from those indicated by our forward-looking statements. We have no duty, and do not intend, to update or revise the forward-looking statements we make in this prospectus, any prospectus supplement or elsewhere, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the future events or circumstances described in any forward-looking statement we make in this prospectus, any prospectus supplement or elsewhere might not occur.

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PURCHASE AGREEMENT

The following description of the sales of Purchase Shares to BRPC II is a summary of certain material attributes and characteristics, which does not purport to be complete in every detail and is qualified in its entirety by reference to the Purchase Agreement and the Registration Rights Agreement. The following summary uses words and terms which are defined in the Purchase Agreement and the Registration Rights Agreement. For more information regarding the terms of the sales of the Purchase Shares to BRPC II, reference is made to the Purchase Agreement and Registration Rights Agreement.

On March 30, 2023, we entered into the Purchase Agreement and a Registration Rights Agreement with BRPC II. Pursuant to the Purchase Agreement, from and after the Commencement Date subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company will have the right to sell to BRPC II, up to the Total Commitment of Purchase Shares. See “—Conditions Precedent to Commencement and Each Purchase”. Under the applicable Nasdaq rules, in no event may we issue to BRPC II under the Purchase Agreement more than the Exchange Cap of 111,747,196 shares of our common stock, which number of shares is equal to 19.99% of the shares of our common stock issued and outstanding immediately prior to the execution of the Purchase Agreement, unless (i) we obtain shareholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules, or (ii) the average price per share paid by BRPC II for all of the Purchase Shares that we direct BRPC II to purchase from us pursuant to the Purchase Agreement, if any, equals or exceeds $0.32 per share (which price is calculated based on the lower of the official closing price of our common stock on Nasdaq on the trading day immediately preceding the date of the Purchase Agreement and the average official closing price of our common stock on Nasdaq for the five (5) consecutive trading days ending on the Effective Date, as adjusted pursuant to applicable Nasdaq rules). Moreover, we may not issue or sell any shares of common stock to BRPC II under the Purchase Agreement which, when aggregated with all other shares of common stock then beneficially owned by BRPC II and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in BRPC II beneficially owning more than 4.99% of the outstanding shares of common stock (the “Beneficial Ownership Cap”). Sales of Purchase Shares pursuant to the Purchase Agreement, and the timing of any sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to BRPC II under the Purchase Agreement. In accordance with our obligations under the Registration Right Agreement, we have filed this registration statement that includes this prospectus with the SEC to register under the Securities Act the resale by BRPC II of up to                  CEF Shares, including (i) up to                  Purchase Shares that we may, in our sole discretion, direct BRPC II to make from time to time after the date of this prospectus pursuant to the Purchase Agreement, and (ii) the Commitment Shares to be issued in consideration for BRPC II’s commitment to purchase the Purchase Shares.

We do not have the right to commence any sales of Purchase Shares to BRPC II under the Purchase Agreement until the Commencement Date, which is the date on which all of the conditions to BRPC II’s purchase obligations set forth in the Purchase Agreement have been initially satisfied, including that (i) the registration statement that includes this prospectus, be declared effective by the SEC and (ii) we will have issued the Commitment Shares to BRPC II. From and after the Commencement Date, subject to the satisfaction of certain conditions, including having sufficient authorized shares, not being in default under the Amended Credit Agreement, having an effective resale registration statement and our common stock remaining listed on Nasdaq, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period commencing on the Commencement, to direct BRPC II to purchase a specified amount of shares of common stock in one or more VWAP Purchases and Intraday VWAP Purchases set forth in the Purchase Agreement, by timely delivering VWAP Purchase Notices and/or Intraday VWAP Purchase Notices to BRPC II on certain trading days we select as Purchase Dates for such purchases in accordance with the terms of the Purchase Agreement, so long as, (i) the closing sale price of the common stock on the trading day immediately prior to such Purchase Date is not less than the Threshold Price and (ii) all Purchase Shares subject to all prior VWAP Purchases and all prior Intraday VWAP Purchases by BRPC II under the Purchase Agreement have been received by BRPC II prior to the time such VWAP Purchase Notice or Intraday VWAP Purchase Notice is delivered by us to BRPC II.

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From and after the Commencement Date, subject to satisfaction of certain conditions, we will control the timing and amount of any sales of common stock to BRPC II. Actual sales of shares of our common stock to BRPC II under the Purchase Agreement will depend on a variety of factors, some of which are to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock, the continued listing of our common stock, the quantity of authorized but unissued and non-reserved shares, and determinations by us as to the appropriate sources of funding for our business and operations and certain equity proceeds requirements pursuant to the Amended Credit Agreement.

Neither we nor BRPC II may assign or transfer any of our respective rights and obligations under the Purchase Agreement or the Registration Rights Agreement, and no provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by the parties.

As consideration for BRPC II’s commitment to purchase shares of common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, we agreed to issue to BRPC II the Commitment Shares.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. Copies of the agreements have been filed as exhibits to the registration statement of which this prospectus forms a part and are available electronically on the SEC’s website at www.sec.gov. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

Purchases of Common Stock Under the Purchase Agreement

VWAP Purchases

From and after the Commencement Date, subject to satisfaction of certain conditions, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period commencing on the Commencement, to direct BRPC II to purchase a specified amount of shares of common stock, not to exceed the applicable VWAP Purchase Maximum Amount (as defined in the Purchase Agreement) (such specified number of shares to be purchased by BRPC II in such VWAP Purchase, adjusted to the extent necessary to give effect to the applicable VWAP Purchase Maximum Amount and certain additional limitations set forth in the Purchase Agreement, the “VWAP Purchase Share Amount”), in a VWAP Purchase under the Purchase Agreement, by timely delivering a written Purchase Notice to BRPC II, prior to 9:00 a.m., New York City time, on any trading day we select as the Purchase Date for such VWAP Purchase, so long as:

The maximum number of shares of common stock that BRPC II is required to purchase in any single VWAP Purchase under the Purchase Agreement may not exceed the VWAP Purchase Maximum Amount applicable to such VWAP Purchase, equal to the lesser of (i)                 , and (ii) the product of (A) the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, multiplied by (B) the total number (or volume) of shares of common stock traded on Nasdaq (or, if the common stock is then listed on an eligible market, by such eligible market) during the VWAP Purchase Period for such VWAP Purchase for such VWAP Purchase.

The per share purchase price that BRPC II will be required to pay for shares of common stock in a VWAP Purchase effected by us pursuant to the Purchase Agreement, if any, will be equal to the VWAP of our common

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stock, calculated in accordance with the Purchase Agreement, for the applicable VWAP Purchase Period on the Purchase Date for such VWAP Purchase multiplied by a specified discount. The VWAP Purchase Period for a VWAP Purchase is defined in the Purchase Agreement as the period beginning at the official open of the regular trading session on Nasdaq on such Purchase Date, and ending at the earliest to occur of:

Under the Purchase Agreement, for purposes of calculating the volume of shares of common stock traded during a VWAP Purchase Period, including for purposes of determining whether the applicable VWAP Purchase Share Volume Maximum for a VWAP Purchase has been reached, for purposes of calculating the VWAP of our common stock for the applicable VWAP Purchase Period, and to the extent that we specify in the applicable VWAP Purchase Notice that the Limit Order Discontinue Election will apply, the following transactions, to the extent they occur during such VWAP Purchase Period, are excluded: (x) the opening or first purchase of common stock at or following the official open of the regular trading session on Nasdaq on the applicable Purchase Date for such VWAP Purchase, (y) the last or closing sale of common stock at or prior to the official close of the regular trading session on Nasdaq on the applicable Purchase Date for such VWAP Purchase, and (z) if we did not elect a Limit Order Discontinue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all purchases and sales of common stock on Nasdaq during such VWAP Purchase Period at a price per share that is less than the applicable minimum price threshold for such VWAP Purchase.

Intraday VWAP Purchases

In addition to the regular VWAP Purchases described above, from and after the Commencement, we will also have the right, but not the obligation, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, to direct BRPC II to purchase in an Intraday VWAP Purchase under the Purchase Agreement on any trading day, including the same Purchase Date on which a regular VWAP Purchase is effected (if any), a specified amount of common stock, not to exceed the applicable Intraday VWAP Purchase Maximum Amount calculated in accordance with the Purchase Agreement (such specified number of shares to be purchased by BRPC II in such Intraday VWAP Purchase, adjusted to the extent necessary to give effect to the applicable Intraday VWAP Purchase Maximum Amount and certain additional limitations set forth in the Purchase Agreement, the “Intraday VWAP Purchase Share Amount”), by the delivery to BRPC II of an irrevocable written Intraday VWAP Purchase Notice, after 10:00 a.m., New York City time (and after the VWAP Purchase Period for any earlier regular VWAP Purchase effected on the same Purchase Date as such Intraday VWAP Purchase (if any) and the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase effected on the same Purchase Date as such Intraday VWAP Purchase (if any) have ended), and prior to 3:30 p.m., New York City time, on such Purchase Date, so long as:

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The maximum number of shares of common stock that BRPC II is required to purchase in any single Intraday VWAP Purchase under the Purchase Agreement may not exceed the Intraday VWAP Purchase Maximum Amount applicable to such Intraday VWAP Purchase, equal to the lesser of (i)                 , and (ii) the product of (A) the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, multiplied by (B) the total number (or volume) of shares of common stock traded on Nasdaq (or, if the common stock is then listed on an eligible market, by such eligible market) during the Intraday VWAP Purchase Period for such Intraday VWAP Purchase for such Intraday VWAP Purchase.

The per share purchase price that BRPC II will be required to pay for shares of common stock in an Intraday VWAP Purchase effected by us pursuant to the Purchase Agreement, if any, will be calculated in the same manner as in the case of a regular VWAP Purchase, except that the VWAP used to determine the purchase price for shares of common stock to be purchased in an Intraday VWAP Purchase will be equal to the VWAP, calculated in accordance with the Purchase Agreement, for the applicable Intraday VWAP Purchase Period on the Purchase Date for such Intraday VWAP Purchase multiplied by a specified discount. The Intraday VWAP Purchase Period for an Intraday VWAP Purchase is defined in the Purchase Agreement as the period during the regular trading session on Nasdaq on such Purchase Date, after the latest to occur of:

and ending at the earliest to occur of:

We may, in our sole discretion, timely deliver multiple Intraday VWAP Purchase Notices to BRPC II prior to 3:30 p.m., New York City time, on a single Purchase Date to effect multiple Intraday VWAP Purchases on such same Purchase Date, including the same Purchase Date on which an earlier regular VWAP Purchase was effected by us (as applicable), although we are not required to effect an earlier regular VWAP Purchase on a Purchase Date in order to effect an Intraday VWAP Purchase on such Purchase Date, provided that the VWAP Purchase Period for any such earlier regular VWAP Purchase effected on the same VWAP Purchase Date as such Intraday VWAP Purchase (if any) and the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase effected on the same Purchase Date as such Intraday VWAP Purchase (if any) have ended prior to 3:30 p.m., New York City time, on such Purchase Date, so long as all shares of common stock subject to all prior VWAP Purchases and all prior Intraday VWAP Purchases effected by us under the Purchase Agreement, including those effected earlier on the same Purchase Date as such Intraday VWAP Purchase, have been received

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by BRPC II prior to the time we deliver to BRPC II a new Intraday VWAP Purchase Notice to effect an Intraday VWAP Purchase on the same Purchase Date as a regular VWAP Purchase and/or Intraday VWAP Purchase effected by us earlier on such Purchase Date.

The terms and limitations that will apply to each subsequent Intraday VWAP Purchase effected on the same Purchase Date will be the same as those applicable to any earlier regular VWAP Purchase (as applicable) and any earlier Intraday VWAP Purchase effected on the same Purchase Date as such subsequent Intraday VWAP Purchase, and the per share purchase price for the shares of common stock that we elect to sell to BRPC II in each subsequent Intraday VWAP Purchase effected on the same Purchase Date as an earlier regular VWAP Purchase (as applicable) and/or earlier Intraday VWAP Purchase effected on such Purchase Date will be calculated in the same manner as in the case of such earlier regular VWAP Purchase (as applicable) and such earlier Intraday VWAP Purchase(s) effected on the same Purchase Date as such subsequent Intraday VWAP Purchase, with the exception that the Intraday VWAP Purchase Period for each subsequent Intraday VWAP Purchase will begin and end at different times (and may vary in duration) during the regular trading session on such Purchase Date, in each case as determined in accordance with the Purchase Agreement.

In the case of VWAP Purchases and Intraday VWAP Purchases effected by us under the Purchase Agreement, if any, all share and dollar amounts used in determining the purchase price per share of common stock to be purchased by BRPC II in any such VWAP Purchase or Intraday VWAP Purchase (as applicable), or in determining the applicable maximum purchase share amounts or applicable volume or price threshold amounts in connection with any such VWAP Purchase or Intraday VWAP Purchase (as applicable), in each case, other than the Threshold Price and the VWAP Purchase Minimum Price Threshold used for calculating the purchase price discount, will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during any period used to calculate such per share purchase price, maximum purchase share amounts or applicable volume or price threshold amounts.

At or prior to 5:30 p.m., New York City time, on the applicable Purchase Date for a VWAP Purchase and/or Intraday VWAP Purchase, BRPC II will provide us with a written confirmation for such VWAP Purchase and/or Intraday VWAP Purchase, as applicable, setting forth the applicable purchase price (both on a per share basis and the total aggregate purchase price) to be paid by BRPC II for the shares of common stock purchased by BRPC II in such VWAP Purchase and/or Intraday VWAP Purchase, as applicable.

The payment for, against delivery of, shares of common stock purchased by BRPC II in a VWAP Purchase and any Intraday VWAP Purchase under the Purchase Agreement will be fully settled within one trading day immediately following the applicable Purchase Date for such VWAP Purchase and Intraday VWAP Purchase, as set forth in the Purchase Agreement.

Conditions Precedent to Commencement and Each Purchase

BRPC II’s obligation to accept VWAP Purchase Notices and Intraday VWAP Purchase Notices that are timely delivered by us under the Purchase Agreement and to purchase shares of our common stock in VWAP Purchases and Intraday VWAP Purchases under the Purchase Agreement, are subject to (i) the initial satisfaction, at the Commencement, and (ii) the satisfaction, at the applicable “VWAP Purchase Commencement Time” or “Intraday VWAP Purchase Commencement Time” (as such terms are defined in the Purchase Agreement) on the applicable Purchase Date for each VWAP Purchase or Intraday VWAP Purchase, respectively, after the Commencement, of the conditions precedent thereto set forth in the Purchase Agreement, all of which are entirely outside of BRPC II’s control, which conditions include the following:

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Termination of the Purchase Agreement

Unless earlier terminated as provided in the Purchase Agreement, the Purchase Agreement will terminate automatically on the earliest to occur of:

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We have the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon ten (10) trading days’ prior written notice to BRPC II. We and BRPC II may also terminate the Purchase Agreement at any time by mutual written consent. In any case, no termination of the Purchase Agreement will be effective during the pendency of any Purchase that has not then fully settled in accordance with the Purchase Agreement.

BRPC II also has the right to terminate the Purchase Agreement upon ten (10) trading days’ prior written notice to us, but only upon the occurrence of certain events, including:

No termination of the Purchase Agreement by us or by BRPC II will become effective prior to the fifth (5^th) trading day immediately following the date on which any pending VWAP Purchase has been fully settled in

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accordance with the terms and conditions of the Purchase Agreement, and will not affect any of our respective rights and obligations under the Purchase Agreement with respect to any pending VWAP Purchase, and both we and BRPC II have agreed to complete our respective obligations with respect to any such pending VWAP Purchase under the Purchase Agreement. Furthermore, no termination of the Purchase Agreement will affect the Registration Rights Agreement, which will survive any termination of the Purchase Agreement.

No Short-Selling or Hedging by the Selling Shareholder

BRPC II has agreed that none of BRPC II, its officers, its sole member or any entity managed or controlled by BRPC II or its sole member will engage in or effect, directly or indirectly, for its own account or for the account of any other of such persons or entities, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the common stock or (ii) hedging transaction, which establishes a net short position with respect to the common stock, during the term of the Purchase Agreement.

Prohibition of Certain Variable Rate Transactions

Subject to certain specified exceptions in the Purchase Agreement, we are limited in our ability to enter into specified “Variable Rate Transactions” (as such term is defined in the Purchase Agreement) during the term of the Purchase Agreement. Such transactions include, among others, the issuance of convertible securities with a conversion or exercise price that is based upon or varies with the trading price of our common stock after the date of issuance, or our effecting or entering into an agreement to effect an “equity line of credit” or other substantially similar continuous offering with a third party, in which we may offer, issue or sell common stock or any securities exercisable, exchangeable or convertible into common stock at a future determined price.

Effect of Sales of our Common Stock under the Purchase Agreement on our Shareholders

All shares of common stock that may be issued or sold by us to BRPC II under the Purchase Agreement that are being registered under the Securities Act for resale by BRPC II in this offering are expected to be freely tradable. The shares of common stock being registered for resale in this offering may be issued and sold by us to BRPC II from time to time at our discretion over a period of up to 24 months commencing on the Commencement. The resale by BRPC II of a significant amount of shares registered for resale in this offering at any given time, or the perception that these sales may occur, could cause the market price of our common stock to decline and to be highly volatile. Sales of our common stock, if any, to BRPC II under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to BRPC II all, some or none of the Purchase Shares.

If and when we do elect to sell the Purchase Shares, after BRPC II has acquired such shares, BRPC II may resell all, some or none of such shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from BRPC II in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from BRPC II in this offering as a result of future sales made by us to BRPC II at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares to BRPC II under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with BRPC II may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to affect such sales.

Because the purchase price per share to be paid by BRPC II for the shares of common stock that we may elect to sell to BRPC II under the Purchase Agreement, if any, will fluctuate based on the market prices of our common stock during the applicable VWAP Purchase Period for each VWAP Purchase made pursuant to the Purchase Agreement, if any, as of the date of this prospectus it is not possible for us to predict the number of shares of common stock that we will sell to BRPC II under the Purchase Agreement, the actual purchase price

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per share to be paid by BRPC II for those shares, or the actual gross proceeds to be raised by us from those sales, if any. As of April 10, 2023, there were 558,735,983 shares of our common stock outstanding. Although the Purchase Agreement provides that we may sell up to an aggregate of the Total Commitment of shares of our common stock to BRPC II, only                  shares of our common stock representing the maximum number of shares of common stock we may issue and sell under the Purchase Agreement under the Exchange Cap limitation and inclusive of (i) the Commitment Shares, as consideration for BRPC II’s irrevocable commitment to purchase the Purchase Shares at our election and in our sole discretion, from time to time after the date of this prospectus, upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement are being registered for resale under the registration statement that includes this prospectus. If all of the 111,747,196 shares offered for resale by BRPC II pursuant to the Purchase Agreement were issued and outstanding as of April 10, 2023, such shares would represent approximately 19.9% of the total number of shares of our common stock outstanding as of April 10, 2023.

In order for us to issue and sell to BRPC II under the Purchase Agreement more shares than are being registered for resale under this prospectus in order to receive aggregate gross proceeds of up to $1.0 billion under the Purchase Agreement, we must first (i) obtain shareholder approval to issue shares of common stock in excess of the Exchange Cap under the Purchase Agreement in accordance with applicable Nasdaq rules and file with the SEC one or more additional registration statements to register under the Securities Act the resale by BRPC II of any such additional shares of our common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional shares of our common stock to BRPC II under the Purchase Agreement. The number of shares of our common stock ultimately offered for sale by BRPC II is dependent upon the number of shares of common stock, if any, we ultimately sell to BRPC II under the Purchase Agreement.

The issuance of our common stock to BRPC II pursuant to the Purchase Agreement will not affect the rights or privileges of our existing shareholders, except that the economic and voting interests of each of our existing shareholders will be diluted. Although the number of shares of our common stock that our existing shareholders own will not decrease, the shares of our common stock owned by our existing shareholders will represent a smaller percentage of our total outstanding shares of our common stock after any such issuance.

The following table sets forth the amount of gross proceeds we would receive from BRPC II from our sale of shares of common stock to BRPC II under the Purchase Agreement at varying purchase prices:

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USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling shareholder. All of the common stock offered by the selling shareholder pursuant to this prospectus will be sold by the selling shareholder for its own account. We will not receive any of the proceeds from these sales. We will receive under the Purchase Agreement from any sales we make to BRPC II pursuant to the Purchase Agreement.

However, even if the shareholders approved the Reverse Split Proposal and the Reverse Stock Split was effectuated, we would not have sufficient authorized capital to issue the Total Commitment under the Purchase Agreement unless the market price of our common stock increased significantly. See “Risk Factors—Risks Related to the Purchase Agreement—In order to generate the Total Commitment under the Purchase Agreement, the market price of our common stock would need to increase significantly.”

The amount of proceeds we will receive from sales of our common stock to BRPC II, if any, will depend upon the actual number of shares of our common stock sold and the price at which such shares are sold. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time.

We expect to use the net proceeds, after deducting BRPC II’s commissions and our offering expenses, that we receive from the sale of shares of our common stock to BRPC II, if any, to repay outstanding revolving loans under the ABL Facility in accordance with the Amended Credit Agreement. Under the Amended Credit Agreement, we are required to apply all net cash proceeds received from the sale of our common stock to BRPC II to repay outstanding revolving loans under the ABL Facility or to cash collateralize any outstanding letters of credit. Outstanding revolving loans repaid using net proceeds of sales of common stock to BRPC II may be reborrowed, subject to availability under the ABL Facility, and we expect to use those borrowings for general corporate purposes, including, but not limited to, rebalancing the Company’s inventory assortment and increasing the Company’s inventory levels.

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MARKET INFORMATION FOR SECURITIES AND DIVIDEND POLICY

Market Information

Our shares of common stock trade on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “BBBY.” On April 10, 2023, there were 2,363 holders of record of our common stock.

Market Price

On April 10, 2023, the last sales price of our common stock as reported on the Nasdaq was $0.296 per share.

Dividend Policy

During fiscal year 2016, the Company’s Board of Directors authorized a quarterly dividend program. In March 2020, the Company suspended its future quarterly declarations of cash dividends as a result of the COVID-19 pandemic. During fiscal years 2021, 2020, and 2019, total cash dividends of $0.7 million, $23.1 million, and $85.5 million, respectively, were paid. Any future quarterly cash dividend payments on our common stock will be subject to the determination by the Board of Directors, based on an evaluation of the Company’s earnings, financial condition and requirements, business conditions and other factors, including the restrictions on the payment of dividends contained in the Amended Credit Agreement which limits the payment of dividends to the issuance of additional shares of common stock or preferred stock, as applicable.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Prospectus on Form S-1. This section, as well as other parts of this Form S-1, contain forward-looking statements, such as the Company’s plans, estimates and expectations, that involve risks and uncertainties. The Company’s actual results or other events could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed above in “Risk Factors” and in “Cautionary Note Regarding Forward-Looking Statements”.

Overview

We are an omni-channel retailer that makes it easy for our customers to feel at home. We sell a wide assortment of merchandise in the Home and Baby markets and operate under the names Bed Bath & Beyond and buybuy BABY.

We offer a broad assortment of national brands and an assortment of proprietary Owned Brand merchandise in key destination categories including bedding, bath, kitchen food prep, home organization, indoor décor, baby and personal care.

We operate a robust omni-channel platform consisting of various websites and applications and physical retail stores. Our e-commerce platforms include bedbathandbeyond.com and buybuybaby.com. We operate Bed Bath & Beyond and buybuy BABY stores.

Across our banners, we carry a wide variety of domestics and home furnishings merchandise. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products.

We are driving a digital-first, omni-always growth strategy and optimizing our digital and physical store channels to provide our customers with a seamless omni-channel shopping experience. Digital purchases, including web and mobile, can be shipped to a customer from our distribution facilities, directly from vendors, or from a store. Store purchases are primarily fulfilled from that store’s inventory or may also be shipped to a customer from one of our distribution facilities, from a vendor, or from another store. Customers can also choose to pick up orders using our BOPIS and contactless Curbside Pickup services, as well as return online purchases to a store, or have an order delivered through one of our same day delivery partners.

Results of Operations

Net Sales

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Net sales for the three months ended November 26, 2022 were $1.259 billion, a decrease of $618.8 million, or approximately 33.0%, compared with net sales of $1.878 billion for the three months ended November 27, 2021. Net sales for the nine months ended November 26, 2022 were $4.160 billion, a decrease of $1.657 billion, or approximately 28.5%, compared with net sales of $5.816 billion for the nine months ended November 27,

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2021. The decrease in net sales for the three and nine months ended November 26, 2022 was predominantly due to the decrease in Comparable Sales driven by lower customer traffic and conversion, in part due to consumer spending patterns and demand, a lack of inventory availability and assortment in key product areas, specifically within the Company’s Owned Brands and national brands product mix.

Sales consummated on a mobile device while physically in a store location and BOPIS orders are recorded as customer facing digital channel sales. Customer orders taken in-store by an associate through The Beyond Store, our proprietary, web-based platform, are recorded as in-store sales. Prior to implementation of BOPIS and contactless Curbside Pickup services, customer orders reserved online and picked up in a store were recorded as in-store sales. Sales originally consummated from customer facing digital channels and subsequently returned in-store are recorded as a reduction of in-store sales. Net sales consummated through digital channels represented approximately 33.0% and 37.0% of our sales for the three and nine months ended November 26, 2022, respectively, compared with approximately 35.1% and 35.8% of our sales for the three and nine months ended November 27, 2021, respectively.

Comparable Sales* for the three and nine months ended November 26, 2022 decreased by approximately 32.0% and 27.0%, respectively. Management attributes a portion of this decline to the impact of lower traffic due to macro-economic factors, such as steep inflation, and fluctuations in purchasing patterns of the consumer. Also contributing to the comparable sales decline was the lack of inventory availability and assortment in key product areas, due to vendor constraints and credit line decreases. Comparable Sales the three months ended November 27, 2021 decreased by approximately 7.0%. For the nine months ended November 27, 2021, Comparable Sales was not a meaningful metric as a result of the impact of the extended closure of the majority of our stores during a portion of the comparable period in fiscal 2020 due to the COVID-19 pandemic.

Sales of domestics merchandise and home furnishings accounted for approximately 36.0% and 64.0% of net sales, respectively, for the three months ended November 26, 2022, and approximately 37.6% and 62.4% of net sales, respectively, for the three months ended November 27, 2021. Sales of domestics merchandise and home furnishings accounted for approximately 36.4% and 63.6% of net sales, respectively, for the nine months ended November 26, 2022, and approximately 38.4% and 61.6% of net sales, respectively, for the nine months ended November 27, 2021.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Excluding the impact of the divestitures described above, which represented net sales of $1.290 billion for Fiscal 2020, net sales for our four core banners for Fiscal 2021 decreased by approximately 1% compared with Fiscal 2020, as net sales improvements in the first half of Fiscal 2021, including due to the impact of the COVID-19 pandemic in the first quarter of 2020, were offset by the impact of traffic declines and the supply chain disruptions in the second half of the year. Store closures as part of our store fleet optimization program also contributed to the decline in sales from Fiscal 2020 to Fiscal 2021.

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The decrease in net sales for Fiscal 2020 was primarily due to the impact of the COVID-19 pandemic during the first quarter of Fiscal 2020, as well as the impact of our transformation initiatives, primarily our store fleet optimization program and the business divestitures described above (see Business Transformation and Restructuring).

During Fiscal 2021, Fiscal 2020 and Fiscal 2019, net sales consummated through digital channels represented approximately 37%, 38% and 17%, respectively, of our sales. Sales consummated on a mobile device while physically in a store location and BOPIS orders are recorded as customer facing digital channel sales. Customer orders taken in-store by an associate through The Beyond Store, our proprietary, web-based platform, are recorded as in-store sales. Prior to implementation of BOPIS and contactless Curbside Pickup services, customer orders reserved online and picked up in a store were recorded as in-store sales. Sales originally consummated from customer facing digital channels and subsequently returned in-store are recorded as a reduction of in-store sales.

As a result of the extended closure of the majority of our stores in the first quarter and in June of Fiscal 2020 due to the COVID-19 pandemic and our policy of excluding extended store closures from our comparable sales calculation, we believe that comparable sales* was not a meaningful metric for the first quarter of Fiscal 2020 as well as for the month of June in Fiscal 2020 and, therefore, are not a meaningful metric for Fiscal 2021 and Fiscal 2020.

Our comparable sales metric considers sales consummated through all retail channels—in-store, online, with a mobile device or through a customer contact center. Our omni-channel environment allows our customers to use more than one channel when making a purchase. We believe in an integrated and seamless customer experience. A few examples are: a customer may be assisted by an in-store associate to create a wedding or baby registry, while the guests may ultimately purchase a gift from our websites; or a customer may research a particular item, and read other customer reviews on our websites before visiting a store to consummate the actual purchase; or a customer may buy an item online for in-store or curbside pickup; or while in a store, a customer may make the purchase on a mobile device for in home delivery from either a distribution facility, a store or directly from a vendor. In addition, we accept returns in-store without regard to the channel in which the purchase was consummated, therefore resulting in reducing store sales by sales originally consummated through customer facing digital channels. As our retail operations are integrated and we cannot reasonably track the channel in which the ultimate sale is initiated, we can however, provide directional information on where the sale was consummated.

Sales of domestics merchandise accounted for approximately 37.4%, 34.7%, and 35.2%, of net sales in Fiscal 2021, 2020 and 2019, respectively. Sales of home furnishings accounted for approximately 62.6%, 65.3% and 64.8% of net sales, respectively, for Fiscal 2021, 2020, and 2019.

Gross Profit

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

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Gross profit for the three months ended November 26, 2022 was $278.8 million, or 22.1% of net sales, compared with $668.9 million, or 35.6% of net sales, for the three months ended November 27, 2021. Gross profit for the nine months ended November 26, 2022 was $1.026 billion, or 24.7% of net sales, compared with $1.904 billion, or 32.7% of net sales, for the nine months ended November 27, 2021. Gross profit margin as a percentage of net sales for the three months ended November 26, 2022 includes the unfavorable impact of the acceleration of inventory clearance activity resulting from actions taken to rebalance Owned Brands inventory levels in response to consumer preference as well as higher promotional activity.

Gross profit margin as a percentage of net sales for the nine months ended November 26, 2022 includes $91.6 million associated with the unfavorable impact of the acceleration of inventory clearance activity resulting from actions taken to rebalance Owned Brands inventory levels in response to consumer preference as well as higher promotional activity.

Gross profit for the three and nine months ended November 26, 2022 also includes higher freight expenses, both for inbound product shipments and direct-to-customer fulfillment.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Gross profit in Fiscal 2021 was negatively impacted by markdown activity associated with inventory being removed from our assortment in connection with the launches of new Owned Brands and, to a lesser extent, the redefinition of certain existing Owned Brands, as well as markdown activity associated with store closures as part of our store fleet optimization program. Gross profit for Fiscal 2021 included the impact of charges of $137.2 million for these higher markdowns on inventory sold, as well as an adjustment to reduce the cost of inventory on hand to be removed from the product assortment as part of these initiatives to its estimated realizable value. In addition, higher freight expenses, both for inbound product shipments and direct-to-customer fulfillment and in part due to industry wide, global supply chain challenges, negatively impacted gross margin in Fiscal 2021 compared with Fiscal 2020, which offset the favorable impact of a shift in product assortment toward new Owned Brands and a more normalized mix of digital sales.

The increase in the gross margin between Fiscal 2020 and Fiscal 2019 was primarily attributable to a shift in product mix and the leverage of distribution and fulfillment costs, partially offset by the impact of channel mix, including higher net-direct-to-customer shipping expense. In addition, our gross margin for Fiscal 2020 included the impact of a net benefit of $20.2 million from the reduction of incremental markdown reserves taken in Fiscal 2019, partially offset by restructuring and transformation initiatives.

Selling, General and Administrative Expenses

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

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SG&A for the three months ended November 26, 2022 was $583.6 million, or 46.4% of net sales, compared with $698.0 million, or 37.2% of net sales, for the three months ended November 27, 2021. SG&A for the nine months ended November 26, 2022 was $1.856 billion, or 44.6% of net sales, compared with $2.010 billion, or 34.6% of net sales, for the nine months ended November 27, 2021. The decrease in SG&A for the three months ended November 26, 2022 compared with the three months ended November 27, 2021 was primarily attributable to the Company’s cost reduction initiatives, primarily a decrease in payroll and payroll-related expenses of approximately $66.7 million (primarily salaries), a decline of approximately $19.9 million in rent and occupancy expenses driven by a lower store base as a result of the Company’s real estate and store fleet optimization initiatives as well as cost reductions in marketing spend of approximately $15.7 million.

The decrease in SG&A for the nine months ended November 26, 2022 compared with the nine months ended November 27, 2021 was primarily attributable to the Company’s cost reduction initiatives, primarily a decrease in payroll and payroll-related expenses of approximately $132.0 million (primarily salaries) and a decline of approximately $18.3 million in rent and occupancy expenses driven by a lower store base as a result of the Company’s real estate and store fleet optimization initiatives.

The increase in SG&A as a percentage of net sales for the three and nine months ended November 26, 2022 was primarily due to the impact of de-leveraging of SG&A due to the declines in net sales noted above.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

The decrease in SG&A expenses for Fiscal 2021 was primarily attributable to cost reductions resulting from our transformation initiatives, including reductions in corporate overhead, divestitures of non-core assets and lower rent and occupancy expenses as a result of our store fleet optimization program. The decrease in SG&A expenses as a percentage of net sales for Fiscal 2021 was also largely due to the factors above, as well as the de-leveraging effect caused by sales declines in Fiscal 2020 as a result of the COVID-19 pandemic.

For Fiscal 2020, the increase was primarily attributable to increases in fixed costs such as rent and occupancy and depreciation, and consulting costs related to our strategic initiatives, partially offset by decreases in payroll and payroll-related expenses and advertising.

In addition, during Fiscal 2021 and Fiscal 2020, we recorded credits of approximately $7.8 million and $33.3 million, respectively, as an offset to SG&A expenses as a result of the employee retention credits made available under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) for U.S. employees and under the Canada Emergency Wage Subsidy for Canadian employees.

Goodwill and Other Impairments

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Impairments for the three and nine months ended November 26, 2022 were $100.7 million and $182.9 million, respectively, compared with $1.8 million and $18.5 million, respectively, during the comparable periods last year. Impairment charges for the three months ended November 26, 2022 and November 27, 2021 included $100.7 million and $1.6 million, respectively, relating to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $0.2 million for three months ended

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November 27, 2021. There were no tradename impairment charges for three months ended November 26, 2022. Impairment charges for the nine months ended November 26, 2022 and November 27, 2021 included $180.0 million and $15.6 million, respectively, relating to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $2.9 million and $2.9 million, respectively.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Goodwill and other impairments were $36.5 million for Fiscal 2021, $127.3 million in Fiscal 2020 and $509.2 million in Fiscal 2019. For Fiscal 2021, impairment charges included $30.8 million related to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $5.7 million. For Fiscal 2020, impairment charges included $92.9 million related to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $35.1 million. For Fiscal 2019, impairment charges included goodwill impairments of $391.1 million (primarily as the result of a sustained decline in our market capitalization), tradename impairments of $41.8 million, long-lived assets impairments of $75.1 million and other impairments of $1.2 million.

Restructuring and Transformation Initiative Expenses

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

The Company recorded $54.1 million and $131.4 million in its consolidated statements of operations for the three and nine months ended November 26, 2022, respectively, for costs associated with restructuring and other transformation initiatives, of which approximately $8.6 million and $7.4 million is included in cost of sales for the three and nine months ended November 26, 2022, respectively. In addition, for the three and nine months ended November 26, 2022, approximately $45.5 million and $123.8 million, respectively, was recorded in restructuring and transformation initiative expenses in the consolidated statements of operations, which included approximately $7.9 million and $42.9 million, respectively, of severance costs related to workforce reduction, store closures and leadership changes. The Company also recorded approximately $11.5 million and $18.3 million, respectively, for lease related and other costs, including in connection with store closures, and approximately $26.1 million and $62.6 million, respectively, of costs for other transformation initiatives for the three and nine months ended November 26, 2022.

As part of the Company’s ongoing business transformation, on August 31, 2022, the Company announced the planned closure of approximately 150 lower-producing Bed Bath & Beyond banner stores as part of its real estate and store fleet optimization. During the three months ended November 26, 2022, the Company closed 6 Bed Bath & Beyond stores and recorded $3.9 million of severance costs and $1.4 million of lease-related and other costs associated with planned store closures for which the store closing process has commenced, in restructuring and transformation initiative expenses in the consolidated statements of operations and included above. The Company also recorded $8.6 million within cost of sales, as discussed above, related to the store closures. At this point, the Company is unable to reasonably estimate the amount or range of amounts expected to be incurred for future store closures in connection with these restructuring activities, both with respect to each major type of cost associated therewith and with respect to the total cost or estimated range of total cost.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

During Fiscal 2021 and Fiscal 2020, we recorded charges of $144.0 million and $102.2 million, respectively, in connection with our restructuring and transformation initiatives. In Fiscal 2021, these charges were primarily for costs associated with the store fleet optimization program described above, including for the termination of facility leases, as well as technology transformation and business strategy and operating model transformation programs across core functions, including merchandising, supply chain and finance. In Fiscal 2020, these costs primarily related to severance costs recorded in connection with our workforce reduction and store fleet optimization programs as well as other restructuring activities (see “Restructuring and Transformation Activities,” Note 3 to the accompanying consolidated financial statements).

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Loss on Sale of Businesses

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

During the three and nine months ended November 27, 2021, we recognized a loss of approximately $14.1 million and $18.2 million, respectively, primarily related to a $13.5 million charge associated with the fiscal 2021 settlement of the Christmas Tree Shops (“CTS”) pension plan, as well as certain working capital and other adjustments related to the divestiture of certain banners in fiscal 2020.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

During Fiscal 2021, we recognized approximately $18.2 million in loss on sale of businesses in the consolidated statement of operations, primarily related to a $13.5 million charge associated with the Fiscal 2021 settlement of the CTS pension plan (see “Assets Held for Sale and Divestitures,” Note 16 to the accompanying consolidated financial statements), as well as certain working capital and other adjustments related to the Fiscal 2020 divestitures. During Fiscal 2020, we recognized a loss of approximately $1.1 million on the sale of businesses related to these divestitures discussed above (see Business Transformation and Restructuring).

Operating Loss

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

For the three months ended November 26, 2022, operating loss was $450.9 million, or 35.8% of net sales, compared with an operating loss of $86.1 million, or 4.6% of net sales, for the three months ended November 27, 2021. Operating loss for the three months ended November 26, 2022 included the unfavorable impact of the acceleration of inventory clearance activity resulting from actions taken to rebalance Owned Brands inventory levels in response to consumer preference as well as higher promotional activity, $45.5 million associated with restructuring and other transformation initiatives, and $100.7 million for non-cash impairment charges (each as discussed above or below). The change in operating loss as a percentage of net sales for three months ended November 26, 2022 was primarily due to the decline in gross margin, as discussed above, as well as higher impairment charges compared to the three months ended November 27, 2021.

For the nine months ended November 26, 2022, operating loss was $1.136 billion, or 27.3% of net sales, compared with an operating loss of $242.1 million, or 4.2% of net sales, for the nine months ended November 27, 2021. Operating loss for the nine months ended November 26, 2022 included $91.6 million associated with the unfavorable impact of the acceleration of inventory clearance activity resulting from actions taken to rebalance Owned Brands inventory levels in response to consumer preference as well as higher promotional activity, $123.8 million associated with restructuring and other transformation initiatives, and $182.9 million for non-cash impairment charges (each as discussed above). The change in operating loss as a percentage of net sales for nine months ended November 26, 2022 was primarily due to the decline in gross margin, as discussed above, as well as higher restructuring and transformation initiative expenses and higher impairment charges compared to the nine months ended November 27, 2021.

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Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Operating loss for Fiscal 2021 included the impact of pre-tax charges of $137.2 million included in gross profit primarily associated with the transition of our product assortment to Owned Brands and, to a lesser extent, our store fleet optimization program, as well as $144.0 million associated with restructuring and other transformation initiatives, $36.5 million for non-cash impairments and $18.2 million for loss on sale of business (each as described above). The change in operating loss as a percentage of net sales between Fiscal 2021 and 2020 was primarily due to the decline in gross margin, as discussed above, as well as higher restructuring and transformation expenses in Fiscal 2021 compared to Fiscal 2020.

The favorable change in operating loss as a percentage of net sales between Fiscal 2020 and Fiscal 2019 was primarily due to an increase in the gross margin, lower goodwill and other impairments compared to the prior year period, partially offset by increased SG&A expenses and restructuring and transformation initiative expenses as well as the impact of reductions of net sales, which reflected the impact of the temporary nationwide closure of the majority of our stores due to COVID-19, nearly all of which reopened as of July 2020, and of the divestitures discussed above (see Business Transformation and Restructuring).

Interest Expense, net

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Interest expense, net for the three and nine months ended November 26, 2022 was $33.5 million and $68.6 million, respectively, compared with $15.8 million and $47.9 million, respectively, for the three and nine months ended November 27, 2021. For the three and nine months ended November 26, 2022, the increase in interest expense, net was primarily driven by an increase in borrowings and higher interest rates against our ABL and FILO facilities and finance lease liabilities.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Interest expense, net was $64.7 million, $76.9 million, and $64.8 million in Fiscal 2021, 2020, and 2019, respectively. The decrease in Fiscal 2021 interest expense, net was primarily driven by decreased interest costs attributable to our revolving credit facilities and the impact of the repurchase of a portion of our senior unsecured notes in Fiscal 2020. For Fiscal 2020, the increase in interest expense, net was primarily driven by lower interest income on investments and increased interest costs attributable to our revolving credit facilities, primarily relating to the ABL Facility entered into in Fiscal 2020, partially offset by lower interest costs for our senior unsecured notes, primarily related to the repurchase of a portion of the senior unsecured notes in August 2020. For Fiscal 2019, interest expense, net primarily related to interest on the senior unsecured notes issued in July 2014.

(Gain) Loss on Extinguishment of Debt

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Gain on extinguishment of debt for the three and nine months ended November 26, 2022 of $94.4 million related to the gain of approximately $102.8 million recorded for the privately negotiated exchange offers completed in November 2022, partially offset by third-party costs of approximately $8.0 million incurred with the Exchange Offers and $0.4 million of unamortized debt financing costs written-off related to the extinguished notes. Loss on

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extinguishment of debt for the nine months ended November 27, 2021 of $0.4 million related to partial repayment of senior unsecured notes. We did not record a gain or loss on extinguishment during the three months ended November 27, 2021.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

During Fiscal 2021, we recorded a $0.4 million loss on the partial repayment of senior unsecured notes. During Fiscal 2020, we recorded a $77 million gain on the repurchase of $75 million principal amount of 4.915% senior unsecured notes due August 1, 2034 and $225 million principal of 5.165% senior unsecured notes due August 1, 2044 (see “Long Term Debt,” Note 7 to the accompanying consolidated financial statements).

Income Taxes

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

The effective tax rate for the three and nine months ended November 26, 2022 was (0.7)% and (0.6)%, respectively, compared with (171.3)% and (37.9)%, respectively, for the three and nine months ended November 27, 2021. For the three and nine months ended November 26, 2022, the effective tax rate reflects the impact of continuing to record a valuation allowance against the Company’s U.S. federal and state deferred tax assets (discussed below). For the three and nine months ended November 27, 2021, the effective tax rate reflects the impact of a charge to record a valuation allowance in the fiscal third quarter of $181.5 million, charges for restructuring and transformation initiatives, as well as a benefit under the provisions of the CARES Act.

In assessing the recoverability of our deferred tax assets, we evaluated the available objective positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit the use of existing deferred tax assets in each taxpaying jurisdiction. For any deferred tax asset in excess of the amount for which it is more likely than not that we will realize a benefit, we established a valuation allowance. A valuation allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit carryforward amounts, against future taxable income.

In the third quarter of fiscal 2021, we concluded that, based on our evaluation of available objective positive and negative evidence, it was no longer more likely than not that our net U.S. federal and state deferred tax assets were recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included our cumulative taxable loss before income taxes for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as timing and the cost of our transformation initiatives and their expected associated benefits. Accordingly, in the third quarter of fiscal 2021, we recorded a valuation allowance against substantially all of our net U.S. federal and state deferred tax assets.

During the three and nine months ended November 26, 2022, we concluded that it continues to not be more likely than not that our net U.S. federal and state deferred tax assets are recoverable, and the Company’s assertion for the need of a full valuation allowance remains as of November 26, 2022.

The amount of the deferred tax assets considered realizable, and the associated valuation allowance, could be adjusted in a future period if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.

Potential volatility in the effective tax rate from year to year may occur as we are required each year to determine whether new information changes our assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

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Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

The effective tax rate was (18.4)% for Fiscal 2021, 55.2% for Fiscal 2020, and 19.7% for Fiscal 2019.

For Fiscal 2021, the effective tax rate reflects the recording of a valuation allowance against our U.S federal and state deferred tax assets (discussed below), as well as a benefit resulting from an adjustment to the estimated net operating loss incurred in Fiscal 2020 which was carried back, under the provisions of the CARES Act, to a year in which the tax rate was 35%.

For Fiscal 2020, the effective tax rate reflected the carry back of the net operating loss to a year in which the tax rate was 35% under the CARES Act, and included the impact of the benefit of certain tax planning strategies the Company deployed, in addition to the losses from the divestitures of CTS, Linen Holdings and Cost Plus, partially offset by the impact of impairment charges for tradename and certain store-level assets, the gain on the divestiture of PMall, a benefit related to the carry back of the Fiscal 2019 net operating loss under the CARES Act, and other discrete tax items resulting in net after tax benefits.

For Fiscal 2019, the effective tax rate reflected the impact of charges, portions of which are non-deductible for tax purposes, for goodwill and other impairments, an incremental charge for markdowns, severance costs, shareholder activity costs and a loss from a sale-leaseback transaction, including transaction costs.

In assessing the recoverability of our deferred tax assets, we evaluated the available objective positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction. A valuation allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit carryforward amounts, against future taxable income.

During Fiscal 2021, we concluded that, based on our evaluation of available objective positive and negative evidence, it is no longer more likely than not that our net U.S. federal and state deferred tax assets are recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included our cumulative taxable loss for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as timing and cost of our transformation initiatives and their expected associated benefits. Accordingly, we recorded a charge of $181.5 million in the third quarter of Fiscal 2021 as a reserve against our net U.S. federal and state deferred tax assets. As of February 26, 2022, the total valuation allowance relative to U.S. federal and state deferred tax assets was $224.3 million.

The amount of the deferred tax assets considered realizable, and the associated valuation allowance, could be adjusted in a future period if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.

On March 27, 2020, the CARES Act was enacted in the United States, which provided for certain changes to tax laws which impacted our results of operations, financial position and cash flows. We implemented certain provisions of the CARES Act, such as deferring employer payroll taxes and utilizing the ability to carry back and deduct losses to offset prior income in previously filed tax returns. As of February 27, 2021, the Company had deferred $3.1 million of employer payroll taxes, which were deposited by December 2021. As of February 26, 2022 and February 27, 2021, under the CARES Act, we recorded income tax benefits of $18.7 million and $152.0 million, respectively, as a result of the Fiscal 2020 and Fiscal 2019 net operating losses were carried back to prior years during which the federal tax rate was 35%.

For Fiscal 2021, 2020, and 2019, the effective tax rate included net benefit of approximately $6.0 million, net benefit of approximately $2.1 million, and net expense of approximately $4.3 million, respectively, due to the recognition of discrete federal and state tax items.

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Potential volatility in the effective tax rate from year to year may occur as we are required each year to determine whether new information changes our assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

Net Loss

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

As a result of the factors described above, net loss for the three months ended November 26, 2022 was $393.0 million, or $4.33 per diluted share, compared with net loss of $276.4 million, or $2.78 per diluted share, for the three months ended November 27, 2021. Net loss for the three months ended November 26, 2022 included a net unfavorable impact of $0.68 per diluted share associated with charges for restructuring and other transformation initiatives, and non-cash impairment charges, partially offset by gain on extinguishment of debt (each as discussed above), as well as the associated tax effects. Net loss for the three months ended November 27, 2021 included a net unfavorable impact of $2.53 per diluted share associated with non-cash impairment charges, charges associated with restructuring program and transformation initiatives, loss on sale of business, and the impact of recording a valuation allowance against our U.S. federal and state deferred tax assets.

As a result of the factors described above, net loss for the nine months ended November 26, 2022 was $1.117 billion, or $13.40 per diluted share, compared with net loss of $400.5 million, or $3.90 per diluted share, for the nine months ended November 27, 2021. Net loss for the nine months ended November 26, 2022 included a net unfavorable impact of $3.65 per diluted share associated with inventory markdown reserves, restructuring and other transformation initiatives, and non-cash impairment charges, partially offset by gain on extinguishment of debt, as well as the associated tax effects. Net loss for the nine months ended November 27, 2021 included a net unfavorable impact of $3.74 per diluted share associated with non-cash impairment charges, charges associated with restructuring program and transformation initiatives, loss on sale of business, and loss on extinguishment of debt, partially offset by a gain on the sale of property, and the impact of recording a valuation allowance against our U.S. federal and state deferred tax assets (each as discussed above).

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Net loss for Fiscal 2021 was $559.6 million, or $5.64 per diluted share, compared with net loss of $150.8 million, or $1.24 per diluted share, for Fiscal 2020. Net loss for Fiscal 2021 included a net unfavorable impact of $4.66 per diluted share associated with restructuring and other transformation initiatives, non-cash impairments, loss on sale of business and loss on debt extinguishment, as well as the impact of recording a valuation allowance against the Company’s U.S. federal and state deferred tax assets (see “Provision for Income Taxes,” Note 8 to the accompanying consolidated financial statements). Net loss for Fiscal 2020 included a net unfavorable impact of $0.23 per diluted share associated with the loss on sale of business, non-cash impairments and charges recorded in connection with the restructuring program and transformation initiatives offset by a gain on extinguishment of debt and decrease in the incremental inventory reserve for future markdowns recorded in Fiscal 2019, as well as the associated tax effects.

As a result of the factors described above, the net loss for Fiscal 2021, 2020, and 2019, was $559.6 million, $150.8 million, and $613.8 million, respectively.

Liquidity and Capital Resources

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

The Company’s net cash used in operating activities was $307.6 million and $890.0 million for the three and nine months ended November 26, 2022. Cash, cash equivalents and restricted cash were $225.7 million as of November 26, 2022, a decrease of approximately $245.2 million as compared with February 26, 2022. On or around January 13, 2023, certain events of default were triggered under the Company’s Credit Facilities as a

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result of the Company’s failure to prepay an over-advance and satisfy a financial covenant, among other things. As a result of the continuance of such events of default, on January 25, 2023, the Administrative Agent under the Amended Credit Agreement notified the Company that (i) the principal amount of all outstanding loans under the Credit Facilities, together with accrued interest thereon, the FILO Applicable Premium and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Company accrued under the Amended Credit Agreement, are due and payable immediately, (ii) the Company is required, effective immediately, to cash collateralize letter of credit obligations under the Credit Facilities, and (iii) effective as of January 25, 2023, all outstanding loans and obligations under the Credit Facilities shall bear interest at an additional default rate of 2% per annum. As a result of these events of default, the Company classified its outstanding borrowings under its asset-based revolving credit facility (the “ABL Facility) and its FILO Facility as current in the consolidated balance sheet as of November 26, 2022. The Company’s outstanding borrowings under its ABL Facility and FILO Facility were $550.0 million and $375.0 million, respectively, as of November 26, 2022. In addition, the Company had $186.2 million in letters of credit outstanding under its ABL Facility as of November 26, 2022. The Company also had $1.030 billion in senior notes (excluding deferred financing costs) outstanding as of November 26, 2022. For information regarding the Company’s borrowings, see Note 12.

At this time, the Company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code. The Company is undertaking a number of actions in order to improve its financial position and stabilize its results of operations including but not limited to, cost cutting, lowering capital expenditures, and reducing its store footprint including related distribution centers. In addition, the Company will continue to seek reductions in rental obligations with landlords in its determination of the appropriate footprint, seek additional debt or equity capital, reduce or delay the Company’s business activities and strategic initiatives, or sell assets. These measures may not be successful.

The Company’s key drivers of cash flows are sales, management of inventory levels, vendor payment terms, and capital expenditures. Macro and micro economic challenges increased since the end of the second quarter of fiscal 2022 causing an acceleration of vendor payment terms and credit line constraints. This led to lower inventory receipts than anticipated in the third quarter of fiscal 2022, resulting in lower than required stock levels ahead of the holiday selling season. Additionally, certain service providers and vendors required prepayments.

Based on recurring losses from operations and negative cash flows from operations for the nine months ended November 26, 2022 as well as current cash and liquidity projections, the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for the next 12 months. The consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty.

ATM Program

On August 31, 2022, we established the Jefferies ATM Program (see “Shareholders’ (Deficit) Equity,” Note 13 to the accompanying consolidated financial statements), under which we offered and sold 12 million shares of common stock for net proceeds of $72.2 million pursuant to the prospectus supplement dated August 31, 2022. On October 28, 2022, we filed a prospectus supplement to register additional shares of our common stock to offer and sell under the Jefferies ATM Program at an aggregate sales price of up to $150.0 million. The net proceeds, after commissions and offering costs, from the Jefferies ATM Program were used for a number of general corporate purposes, which include immediate strategic priorities such as rebalancing the Company’s assortment and inventory. As of November 26, 2022, we have sold approximately 22.2 million shares for approximately $115.4 million of net proceeds under the Jefferies ATM Programs. Shares having an aggregate offering price of $105.6 million remained unsold under the Jefferies ATM Program as of the end of fiscal December 2022.

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Exchange Offers

During the third fiscal quarter of 2022, the Company commenced exchange offers (the “Exchange Offers”) with eligible holders for each series of Existing Notes as follows: (i) 2024 Notes for new 3.693% Senior Second Lien Secured Non-Convertible Notes due November 30, 2027 (the “New Second Lien Non-Convertible Notes”) and/or new 8.821% Senior Second Lien Secured Convertible Notes due November 30, 2027 (the “New Second Lien Convertible Notes”); (ii) 2034 Notes for new 12.000% Senior Third Lien Secured Convertible Notes due November 30, 2029 (the “New Third Lien Convertible Notes” and, together with the New Second Lien Non-Convertible Notes and the New Second Lien Convertible Notes, the “New Notes”); and (iii) 2044 Notes for New Third Lien Convertible Notes (see “Long-Term Debt,” Note 12 to the accompanying consolidated financial statements).

In November 2022, the Company completed privately negotiated exchange offers with existing holders of approximately $69.0 million, $15.3 million, and $70.2 million aggregate principal amount of 2024 Notes, 2034 Notes, and 2044 Notes, respectively, under which the Company issued an aggregate of approximately 13.6 million shares of common stock to the existing holders in exchange for the exchange notes, including accrued and unpaid interest, and 0.9 million shares in exchange for a cash payment from an existing holder of $3.5 million. The exchange notes were cancelled and no longer outstanding upon completion of the exchange.

On January 5, 2023, upon the expiration of the Exchange Offers, the Company announced the termination of the offer and consent solicitations with respect to its Existing Notes, as a result of the conditions applicable thereto not being satisfied. As a result of the termination of the Exchange Offers, none of the Existing Notes that had been tendered in the Exchange Offers were accepted for purchase and no consideration will be paid or become payable to holders of the Existing Notes who have tendered their Existing Notes in the Exchange Offers.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

We ended Fiscal 2021 in a solid cash and liquidity position, which we anticipate maintaining, to provide us the flexibility to fund our ongoing initiatives and act upon other opportunities that may arise. As of February 26, 2022, we had approximately $439.5 million in cash and cash equivalents, a decrease of approximately $913.5 million as compared with February 27, 2021, which included $589.4 million for share repurchases. We believe that existing and internally generated funds, as well as availability under our existing credit facilities, will be sufficient to continue to finance our operations for the next twelve months. If necessary, we have the ability to borrow under our ABL Facility, which matures on August 9, 2026. Our ability to borrow under the ABL Facility is subject to customary conditions, including no default, the accuracy of representations and warranties and borrowing base availability. Borrowing base availability under the ABL Facility is based upon a specified borrowing base consisting of a percentage of our eligible inventory and credit card receivables as defined in the ABL Facility, net of applicable reserves (see “Long Term Debt,” Note 7 to the accompanying consolidated financial statements). As of February 26, 2022, the Company had no loans outstanding and had outstanding letters of credit of $96.4 million under the ABL Facility.

In Fiscal 2020, similar to other retailers, we withheld portions of and/or delayed payments to certain of our business partners as we sought to renegotiate payment terms, in order to further maintain liquidity during the period of temporary store closures. In some instances, the renegotiations of lease terms have led to agreements with landlords for rent abatements or rental deferrals. Total payments withheld and/or delayed or deferred as of February 26, 2022 were approximately $1.9 million and are included in current liabilities. During Fiscal 2021, we recognized reduced rent expense of $2.7 million related to rent abatement concessions. Additional negotiations of payment terms are still in process, and there can be no assurance that we will be able to successfully renegotiate payment terms with all such business partners, and the ultimate outcome of these activities including the responses of certain business partners are not yet known. We are also executing on our business transformation program, which includes the closure, as of February 26, 2022, of 207 mostly Bed Bath & Beyond stores under our store fleet optimization program and the introduction of new Owned Brand products in a number of categories.

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Capital Expenditures

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Capital expenditures for the nine months ended November 26, 2022 were $322.1 million, which includes the entering into use of accrued capital expenditures of $63.4 million which were recorded in fiscal 2021. As the Company executes its new strategic plans and refine capital resources to improve liquidity, capital expenditures are related to maintenance, and investments in technology and digital offerings.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Capital expenditures for Fiscal 2021 were $354.2 million, and for Fiscal 2022 are projected to be approximately $390.0 million to $410.0 million. Our capital expenditures in Fiscal 2021 were related to digital and omni-channel capabilities, store remodels and investments in technology across a number of areas including supply chain, merchandising and finance.

We continue to review and prioritize our capital needs and remain committed to making the required investments in our infrastructure to help position us for continued growth and success. Key areas of investment include: continuing to improve the presentation and content as well as the functionality, general search and navigation across our customer facing digital channels; improving customer data integration and customer relations management capabilities; continuing to enhance service offerings to our customers; continuing to strengthen and deepen our information technology, analytics, marketing, e-commerce, merchandising and finance capabilities; and creating more flexible fulfillment options designed to improve our delivery capabilities and lower our shipping costs. These and other investments are expected to, among other things, provide a seamless and compelling customer experience across our omni-channel retail platform.

Stock Repurchases

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

During the three and nine months ended November 26, 2022, we repurchased approximately 0.3 million and 2.9 million shares, respectively, of our common stock, at a total cost of approximately $2.7 million and $45.9 million, respectively. For the nine months ended November 26, 2022, the stock repurchases included approximately 2.3 million shares at a total cost of approximately $40.4 million, repurchased under our share repurchase programs as authorized by our Board of Directors, which was completed in the first quarter of fiscal 2022.

During the three and nine months ended November 27, 2021, we repurchased approximately 5.3 million and 14.0 million shares, respectively, of our common stock, at a total cost of approximately $118.9 million and $358.9 million, respectively, which included approximately 5.1 million and 13.4 million shares, respectively, at a total cost of approximately $113.4 million and $344.6 million, respectively, repurchased under our share repurchase programs as authorized by our Board of Directors.

Additionally, during the three and nine months ended November 26, 2022, we repurchased approximately 0.3 million and 0.6 million shares, respectively, of our common stock, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards, and performance stock unit awards at a total cost of approximately $2.7 million and $5.5 million, respectively. During the three and nine months ended November 27, 2021, we repurchased approximately 0.2 million and 0.6 million shares, respectively, of our common stock, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards, and performance stock unit awards at a total cost of approximately $5.5 million and $14.3 million, respectively.

During fiscal 2021, we announced that we intended to complete our $1 billion three-year share repurchase plan by the end of fiscal 2021, two years ahead of schedule. During the first quarter of fiscal 2022, we completed this program, repurchasing approximately 2.3 million shares of our common stock.

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In January 2021, we entered into an accelerated share repurchase agreement to repurchase an aggregate $150.0 million of our common stock, subject to market conditions. This resulted in the repurchase of 5.0 million shares in the fourth quarter of fiscal 2020, and an additional 0.2 million shares received upon final settlement in the first quarter of fiscal 2021.

Between December 2004 and April 2021, our Board of Directors authorized, through several share repurchase programs, the repurchase of up to $12.950 billion of our shares of common stock. We also acquire shares of our common stock to cover employee related taxes withheld on vested restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the aggregate total of common stock repurchased is approximately 265.0 million shares for a total cost of approximately $11.7 billion. We had approximately $1.2 billion remaining of authorized share repurchases as of November 26, 2022.

Decisions regarding share repurchases are within the discretion of the Board of Directors, and are influenced by a number of factors, including the price of our common stock, general business and economic conditions, our financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in business strategy and other factors. Our share repurchase program could change, and could be influenced by several factors, including business and market conditions. We review our alternatives with respect to its capital structure on an ongoing basis. Any future share repurchases will be subject to the determination of the Board of Directors, based on an evaluation of our earnings, financial condition and requirements, business conditions and other factors, including the restrictions on share repurchases under the ABL Facility (see “Long-Term Debt,” Note 12 to the accompanying consolidated financial statements). We do not currently have plans to engage in stock repurchases as this time.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Capital expenditures for Fiscal 2021 were $354.2 million, and for Fiscal 2022 are projected to be approximately $390.0 million to $410.0 million. Our capital expenditures in Fiscal 2021 were related to digital and omni-channel capabilities, store remodels and investments in technology across a number of areas including supply chain, merchandising and finance.

We continue to review and prioritize our capital needs and remain committed to making the required investments in our infrastructure to help position us for continued growth and success. Key areas of investment include: continuing to improve the presentation and content as well as the functionality, general search and navigation across our customer facing digital channels; improving customer data integration and customer relations management capabilities; continuing to enhance service offerings to our customers; continuing to strengthen and deepen our information technology, analytics, marketing, e-commerce, merchandising and finance capabilities; and creating more flexible fulfillment options designed to improve our delivery capabilities and lower our shipping costs. These and other investments are expected to, among other things, provide a seamless and compelling customer experience across our omni-channel retail platform.

Stock Repurchases

During Fiscal 2021, we repurchased approximately 28.3 million shares of our common stock, at a total cost of approximately $589.4 million, which included approximately 27.7 million shares at a total cost of approximately $574.9 million repurchased under our share repurchase programs as authorized by our Board of Directors, as well as approximately 0.6 million shares, at a total cost of approximately $14.5 million to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards and performance stock unit awards.

During Fiscal 2021, we announced that we intended to complete our $1 billion three-year share repurchase plan two years ahead of schedule. The repurchases made during Fiscal 2021 of $574.9 million, combined with the accelerated share repurchase programs entered into in Fiscal 2020 totaling $375.0 million (discussed below), resulted in the repurchase of $950.0 million under this plan as of February 26, 2022. An additional approximately $40.0 million was repurchased in March of 2022.

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In the first quarter of Fiscal 2020, the Company had postponed share repurchases, but lifted this postponement in October 2020. In October 2020, the Company entered into an accelerated share repurchase agreement with JPMorgan Chase Bank, National Association to repurchase $225.0 million of common stock, subject to market conditions, which settled in the fourth quarter of Fiscal 2020, resulting in the repurchase of a total of 10.8 million shares. In January 2021, the Company entered into a second accelerated share repurchase agreement to repurchase an aggregate $150.0 million of common stock, subject to market conditions. This resulted in the repurchase of 5.0 million shares in the fourth quarter of Fiscal 2020, and an additional 0.2 million shares received upon final settlement in the first quarter of Fiscal 2021. During Fiscal 2020, the Company also repurchased approximately 0.6 million shares of common stock, at a total cost of approximately $5.1 million, to cover employee related taxes withheld on vested restricted stock, restricted stock unit awards and performance stock unit awards.

Between December 2004 and April 2021, the Board of Directors authorized, through several share repurchase programs, the repurchase of $12.950 billion of our shares of common stock. Since 2004 through the end of Fiscal 2021, the Company has repurchased approximately $11.685 billion of common stock through share repurchase programs. The Company also acquires shares of our common stock to cover employee related taxes withheld on vested restricted stock, restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the aggregate total of common stock repurchased is approximately 262.2 million shares for a total cost of approximately $11.685 billion. The Company had approximately $1.267 billion remaining of authorized share repurchases as of February 26, 2022.

Decisions regarding share repurchases are within the discretion of the Board of Directors, and are influenced by a number of factors, including the price of our common stock, general business and economic conditions, our financial condition and operating results, the emergence of alternative investment or acquisition opportunities, changes in business strategy and other factors. Our share repurchase program could change, and could be influenced by several factors, including business and market conditions. We review our alternatives with respect to our capital structure on an ongoing basis. Any future share repurchases will be subject to the determination of the Board of Directors, based on an evaluation of our earnings, financial condition and requirements, business conditions and other factors, including the restrictions on share repurchases under the ABL Facility (see “Long Term Debt,” Note 7 to the accompanying consolidated financial statements).

Debt Repurchases

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

There were no debt repurchases made during the three and nine months ended November 26, 2022. During the nine months ended November 27, 2021, we purchased approximately $11.0 million aggregate principal amount of our outstanding 3.749% senior unsecured notes due August 1, 2024. There were no debt repurchases made during the three months ended November 27, 2021.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

During Fiscal 2021 we purchased approximately $11.0 million aggregate principal amount of our outstanding 3.749% senior unsecured notes due August 1, 2024. During Fiscal 2020, we purchased approximately $300.0 million aggregate principal amount of our outstanding 4.915% Senior Notes due 2034 and 5.165% Senior Notes due 2044.

Cash flow from operating activities

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Net cash used in operating activities for the nine months ended November 26, 2022 was $890.0 million, compared with net cash used in operating activities of $264.7 million in the corresponding period in fiscal 2021.

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The year-over-year change in operating cash flow was primarily due to higher net loss, adjusted for non-cash expense, which included the impact of higher impairments in fiscal 2022, as well as decreases in accounts payable and accrued expenses and other current liabilities, partially offset by decreases in inventory.

Retail inventory, which includes inventory in our distribution facilities for direct to customer shipments, was approximately $1.436 billion at November 26, 2022, a decrease of 16.8% compared with retail inventory at February 26, 2022. We continue to focus on our inventory assortment changes and other merchandising strategies. In the fiscal third quarter of 2022, the Company’s in-stock levels were lower than anticipated due to supplier constraints and vendor credit line decreases.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Net cash provided by operating activities for Fiscal 2021 was $17.9 million, compared with net cash provided by operating activities of $268.1 million in Fiscal 2020. The year-over-year change in operating cash flow was primarily due to higher net loss, adjusted for non-cash expenses, which included the impact of higher restructuring and transformation expenses in Fiscal 2021, as well as investments in inventory, including as a result of changing the timing of purchasing in response to the potential impact of global supply chain disruptions on timing of inventory receipts and availability of product in our stores and on our websites, and lower accounts payable, due primarily to timing of payments for merchandise, and accrued liabilities, including lower incentive compensation accruals. There were partially offset by a decrease in other current assets primarily due to the receipt of income tax refunds in Fiscal 2021. For Fiscal 2020, the decrease in cash provided by operating activities was primarily due to the net decrease in cash provided by components of working capital (primarily merchandise inventories and other current assets, partially offset by accounts payable). This decrease was partially offset by a decrease in net loss, adjusted for non-cash expenses.

Net cash provided by operating activities in fiscal 2020 was $268.1 million, compared with $590.9 million in fiscal 2019. The year-over-year decrease in cash provided by operating activities was primarily due to the net decrease in cash provided by components of working capital (primarily merchandise inventories and other current assets, partially offset by accounts payable). This decrease was partially offset by a decrease in net loss, adjusted for non-cash expenses.

Retail inventory, which includes inventory in our distribution facilities for direct to customer shipments, was approximately $1.725 billion at February 26, 2022, an increase of 3.2% compared with retail inventory at February 27, 2021. We continue to focus on our inventory optimization strategies while also responding to the potential impact of global supply chain disruptions on product availability. Retail inventory at February 27, 2021 decreased approximately 18.0% compared to retail inventory at February 29, 2020, which was primarily related to the Fiscal 2020 divestitures.

Cash flow from investing activities

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Net cash used in investing activities for the nine months ended November 26, 2022 was $322.1 million, compared with net cash used in investing activities of $227.5 million in the corresponding period of fiscal 2021. For the nine months ended November 26, 2022, net cash used in investing activities included $322.1 million of capital expenditures, which includes the entering into use of accrued capital expenditures of $63.4 million which were recorded in fiscal 2021. For the nine months ended November 27, 2021, net cash used in investing activities was comprised of $232.5 million of capital expenditures partially offset by $5.0 million in proceeds from the sale of property.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Net cash used in investing activities for Fiscal 2021 was $349.2 million, compared with net cash provided by investing activities of $737.9 million in Fiscal 2020. For Fiscal 2021, net cash used in investing activities

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included $354.2 million of capital expenditures. For Fiscal 2020, net cash provided by investing activities was comprised of $386.5 million of redemptions of investment securities and $534.5 million in proceeds from the sale of PMall, CTS and Linen Holdings businesses, partially offset by $183.1 million of capital expenditures.

Net cash provided by investing activities in fiscal 2020 was $737.9 million, compared with $91.4 million net cash used in fiscal 2019. In fiscal 2020, net cash provided by investing activities included $386.5 million of redemptions of investment securities and $534.5 million in proceeds from sale of businesses, partially offset by $183.1 million of capital expenditures. In fiscal 2019, net cash provided by investing activities was primarily due to $267.3 million of proceeds from a sale-leaseback transaction and $101.5 million of redemptions of investment securities, net of purchases, partially offset by $277.4 million of capital expenditures.

Cash flow from financing activities

Comparison of the Three and Nine Months Ended November 26, 2022 and November 27, 2021

Net cash provided by financing activities for the nine months ended November 26, 2022 was $968.4 million, compared with net cash used in financing activities of $374.5 million in the corresponding period of fiscal 2021. Net cash provided by financing activities in the nine months ended November 26, 2022 was comprised of $1.225 billion of borrowings under the Credit Facilities, partially offset by repayments of $300.0 million, net proceeds from issuances of common stock and the Jefferies ATM Program offerings of $119.0 million, repurchases of common stock of $45.9 million, of which $40.4 million is related to our share repurchase program, payments of deferred financing costs of $19.5 million, payments of Exchange Offer costs of $8.0 million, repayments of finance leases of $1.8 million and dividend payments of $0.3 million. Net cash used in financing activities in the nine months ended November 27, 2021 was comprised of repurchases of our common stock of $358.9 million, of which $334.6 million is related to our share repurchase program, repayments of long-term debt of $11.4 million, payments of deferred financing costs of $3.4 million and dividend payments of $0.8 million.

Comparison of the Fiscal Years Ended February 26, 2022, February 27, 2021 and February 29, 2020

Net cash used in financing activities for Fiscal 2021 was $606.0 million, compared with net cash used in financing activities of $632.3 million in Fiscal 2020. Net cash used in financing activities in Fiscal 2021 was primarily comprised of repurchases of common stock of $589.4 million, of which $574.9 million was related to our share repurchase program, repayments of long-term debt of $11.4 million and payments of deferred financing costs of $3.4 million. Net cash used in financing activities in Fiscal 2020 was comprised of net repayments of long-term debt of $221.4 million, a $47.6 million prepayment under an accelerated share repurchase agreement with JPMorgan Chase Bank, National Association entered into in October 2020, repurchases of our common stock of $332.5 million, payments of deferred financing costs of $7.7 million and dividend payments of $23.1 million.

Net cash used in financing activities for fiscal 2020 was $632.3 million, compared with $182.8 million in fiscal 2019. The increase in net cash used in financing activities was primarily due to net debt repayments of $221.4 million, primarily associated with the repurchase of a portion of the outstanding senior notes during the second quarter of fiscal 2020, an increase of $232.8 million in treasury stock repurchases, and an increase of $47.6 million related to prepayment under share repurchase agreement, partially offset by lower dividend payments of $62.4 million.

Seasonality

Our business is subject to seasonal influences. Generally, our sales volumes are higher in the calendar months of August, November and December, and lower in September and October.

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Quantitative and Qualitative Disclosure About Market Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment securities and the ABL Facility. As of February 27, 2021, our investments include cash and cash equivalents of approximately $1.353 billion, and long term investments in auction rate securities of approximately $19.4 million, at weighted average interest rates of 0.01% and 0.09%, respectively. The book value of these investments is representative of their fair values.

Our senior unsecured notes have fixed interest rates and are not subject to interest rate risk. As of February 27, 2021, the fair value of the senior unsecured notes was $1.118 billion, which is based on quoted prices in active markets for identical instruments compared to the carrying value of approximately $1.195 billion.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on other assumptions that we believe to be relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. In particular, judgment is used in areas such as inventory valuation, impairment of long-lived assets, goodwill and other indefinite lived intangible assets, accruals for self-insurance and income and certain other taxes. Actual results could differ from these estimates.

Inventory Valuation: Merchandise inventories are stated at the lower of cost or market. Inventory costs are primarily calculated using the weighted average retail inventory method.

Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail values of inventories. The inputs associated with determining the cost-to-retail ratio include: merchandise purchases, net of returns to vendors, discounts and volume and incentive rebates; inbound freight expenses; import charges, including duties, insurance and commissions.

The retail inventory method contains certain management judgments that may affect inventory valuation. At any one time, inventories include items that have been written down to our best estimate of their realizable value. Judgment is required in estimating realizable value and factors considered are the age of merchandise, anticipated demand based on factors such as customer preferences and fashion trends and anticipated changes in product assortment (including related to the launch of our Owned Brands), as well as anticipated markdowns to reduce the price of merchandise from its recorded retail price to a retail price at which it is expected to be sold in the future. These estimates are based on historical experience and current information about future events which are inherently uncertain. Actual realizable value could differ materially from this estimate based upon future customer demand or economic conditions.

We estimate our reserve for shrinkage throughout the year based on historical shrinkage and any current trends, if applicable. Actual shrinkage is recorded at year end based upon the results of our physical inventory counts for locations at which counts were conducted. For locations where physical inventory counts were not conducted in the fiscal year, an estimated shrink reserve is recorded based on historical shrinkage and any current trends, if applicable. Historically, our shrinkage has not been volatile.

We accrue for merchandise in transit once we take legal ownership and title to the merchandise; as such, an estimate for merchandise in transit is included in our merchandise inventories.

Impairment of Long-Lived Assets: We review long-lived assets for impairment when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of

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assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Judgment is required in estimating the fair value of the assets including assumptions related to sales growth rates and market rental rates. These estimates are based on historical experience and current information about future events which are inherently uncertain.

In Fiscal 2021, 2020, and 2019, we recorded $30.8 million, $92.9 million, and $75.1 million, respectively, of non-cash pre-tax impairment charges within goodwill and other impairments in the consolidated statement of operations for certain store-level assets, including leasehold improvements and operating lease assets. Of the stores impaired during Fiscal 2021, partial impairments were recorded at 50 stores resulting in a remaining net book value of long-lived assets at risk of $46.4 million as of February 26, 2022, inclusive of leasehold improvements and right-of-use assets. We will continue to monitor these stores closely. If actual results differ from the estimated undiscounted future cash flows or the estimated price market participants would be willing to pay to sublease store operating leases and acquire remaining store assets, we may be exposed to additional impairment losses that may be material. If events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, we will adjust the carrying value of these long-lived assets in the period in which the impairment occurs.

Other Indefinite Lived Intangible Assets: We review other intangibles that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available, including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. Significant assumptions and estimates are required, including, but not limited to, projecting future cash flows, determining appropriate discount rates, margins, growth rates, and other assumptions, to estimate the fair value of indefinite lived intangible assets. Although we believe that the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results.

Other indefinite lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. We value our tradenames using a relief-from-royalty approach, which assumes the value of the tradename is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the tradename and instead licensed the tradename from another company. For Fiscal 2021, 2020, and 2019, for certain tradenames within other indefinite lived intangible assets, we completed a quantitative impairment analysis by comparing the fair value of the tradenames to their carrying value and recognized non-cash pre-tax tradename impairment charges of $5.7 million, $35.1 million, and $41.8 million, respectively, within goodwill and other impairments in the consolidated statement of operations. For the remaining other indefinite lived intangible assets, we assessed qualitative factors as of February 26, 2022 in order to determine whether any events and circumstances existed which indicated that it was more likely than not that the fair value of these other indefinite lived assets did not exceed their carrying values and concluded no such events or circumstances existed which would require an impairment test be performed. As of February 26, 2022, we have $16.3 million of remaining other indefinite lived intangible assets. If actual results differ from the estimated future cash flows, we may be exposed to additional impairment losses that may be material. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, we will adjust the carrying value of these assets in the period in which the impairment occurs.

Self-Insurance: We utilize a combination of third-party insurance and self-insurance for a number of risks including workers’ compensation, general liability, cyber liability, property liability, automobile liability and employee related health care benefits (a portion of which is paid by our employees). Liabilities associated with the risks that we retain are not discounted and are estimated by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Although our claims experience has not displayed substantial volatility in the past, actual experience could materially vary from our historical experience

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in the future. Factors that affect these estimates include but are not limited to: inflation, the number and severity of claims and regulatory changes. In the future, if we conclude an adjustment to self-insurance accruals is required, the liability will be adjusted accordingly.

Beginning in the fourth quarter of Fiscal 2020, we began insuring portions of our workers’ compensation and medical insurance through a wholly owned captive insurance subsidiary (the “Captive”) to enhance our risk financing strategies. The Captive is subject to regulations in Vermont, including those relating to its levels of liquidity. The Captive was in compliance with all regulations as of February 26, 2022.

Taxes: The Company accounts for its income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

In assessing the recoverability of our deferred tax assets, we evaluate the available objective positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit use of existing deferred tax assets in each taxpaying jurisdiction. For any deferred tax asset in excess of the amount for which it is more likely than not that we will realize a benefit, we establish a valuation allowance. A valuation allowance is a non-cash charge, and does not limit our ability to utilize our deferred tax assets, including our ability to utilize tax loss and credit carryforward amounts, against future taxable income.

During Fiscal 2021, we concluded that, based on our evaluation of available objective positive and negative evidence, it is no longer more likely than not that our net U.S. federal and state deferred tax assets are recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included our cumulative book loss for the past three years, current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as timing and cost of our transformation initiatives and their expected associated benefits. Accordingly, we recorded a charge of $181.5 million in the third quarter of Fiscal 2021 as a reserve against our net U.S. federal and state deferred tax assets. As of February 26, 2022, the total valuation allowance relative to U.S. federal and state deferred tax assets was $224.3 million.

The amount of the deferred tax assets considered realizable, and the associated valuation allowance, could be adjusted in a future period if estimates of future taxable income change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act included a mandatory one-time tax on accumulated earnings of foreign subsidiaries, and as a result, all previously unremitted earnings for which no U.S. deferred tax liability had been previously accrued has now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, the Company intends to continue to reinvest the unremitted earnings of its Canadian subsidiary. Accordingly, no additional provision has been made for U.S. or additional non-U.S. taxes with respect to these earnings, except for the transition tax resulting from the Tax Act. In the event of repatriation to the U.S., it is expected that such earnings would be subject to non-U.S. withholding taxes offset, in whole or in part, by U.S. foreign tax credits.

The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement with the taxing authorities.

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Potential volatility in the effective tax rate from year to year may occur as the Company is required each year to determine whether new information changes the assessment of both the probability that a tax position will effectively be sustained and the appropriateness of the amount of recognized benefit.

The Company also accrues for certain other taxes as required by our operations.

Judgment is required in determining the provision for income and other taxes and related accruals, and deferred tax assets and liabilities. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company’s various tax returns are subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates.

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BUSINESS

We are an omni-channel retailer that makes it easy for our customers to feel at home. We sell a wide assortment of merchandise in the Home and Baby markets and operate under the names Bed Bath & Beyond and buybuy BABY.

We offer a broad assortment of national brands and an assortment of proprietary Owned Brand merchandise in key destination categories including bedding, bath, kitchen, food prep, home organization, indoor décor, baby and personal care.

We operate a robust omni-channel platform consisting of various websites and applications and physical retail stores. Our e-commerce platforms include bedbathandbeyond.com and buybuybaby.com. We operate Bed Bath & Beyond and buybuy BABY stores.

Across our banners, we carry a wide variety of domestics and home furnishings merchandise. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall décor), consumables and certain juvenile products.

We are driving a digital-first, omni-always growth strategy and optimizing our digital and physical store channels to provide our customers with a seamless omni-channel shopping experience. Digital purchases, including web and mobile, can be shipped to a customer from our distribution facilities, directly from vendors, or from a store. Store purchases are primarily fulfilled from that store’s inventory or may also be shipped to a customer from one of our distribution facilities, from a vendor, or from another store. Customers can also choose to pick up orders using our Buy Online Pickup In Store (“BOPIS”) and contactless Curbside Pickup services, as well as return online purchases to a store, or have an order delivered through one of our same day delivery partners.

Starting in late 2019, we have created a more focused portfolio through the divestiture of non-core assets, including businesses and real estate, as part of the ongoing business transformation underway. See “Transformation,” “Strategy” and “Divestitures” below.

Our merchandise and services are offered to customers through an omni-channel platform across our portfolio of banners, which consist of:

Bed Bath & Beyond—a leading specialty home retailer in the U.S. that sells a wide assortment of domestic merchandise and home furnishings. Bed Bath & Beyond is a preferred destination in the home space, particularly in key product categories including bedding, bath, kitchen food prep, home organization and indoor décor.

buybuy BABY—a leading specialty baby retailer in the U.S. that sells a wide assortment of baby essentials and nursery furnishings. BABY strives to build trust with parents by supporting them with what they need so families can celebrate every milestone – big and small – together.

We account for our operations as one North American Retail reporting segment. Net sales outside of the U.S. were not material for Fiscal 2022, 2021, or 2020.

Business Strategy and Operations

In response to the COVID-19 pandemic, we have taken thoughtful steps to safeguard our people and communities while we continue to serve our customers and drive transformative change throughout the organization. Similar to many other businesses, COVID-19 served as a catalyst to accelerate the pace of change and innovation at our Company.

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We have adapted to the dynamic retail environment and the evolving needs of our customers, such as developing BOPIS, Curbside Pickup and Same Day Delivery capabilities. As part of these changes, we have been focused on driving our omni-always platform.

Beginning in the third quarter of Fiscal 2022, we underwent significant strategic and management changes to transform our business and adapt to the dynamic retail environment and the evolving needs of our customers in order to position ourselves for long-term success. Beginning in the third quarter of Fiscal 2022, the Company began to execute a comprehensive strategic plan led by our new President and Chief Executive Officer, Sue Gove, who was appointed in October 2022 after serving as Interim Chief Executive Officer. This plan is focused on strengthening the Company’s financial position through additional liquidity and a reduction of our cost structure, better serving our customers through merchandising, inventory and customer engagement, and regaining our authority in the Home and Baby markets. To accelerate these strategic initiatives, the Company realigned our organizational structure, which included the creation of Brand President roles for Bed Bath & Beyond and bubybuy BABY to lead merchandising, planning, brand marketing, site merchandising and stores for each banner.

In conjunction with the Company’s new strategic focus areas, the Company executed plans to rebalance our merchandise assortment to align with customer preference by leading with national brands inventory and introducing new, emerging direct-to-consumer brands. Consequently, we announced the exiting of a third of our Owned Brands, including the discontinuation of three of our nine labels (Haven^™, Wild Sage^™ and Studio 3B^™). We also expect to reduce the breadth and depth of inventory across our six remaining Owned Brands (Simply Essential^™, Nestwell^™, Our Table^™, Squared Away^™, H for Happy^™ and Everhome^™).

We have continued to create a more focused portfolio, including through the exit of unprofitable businesses such as our Harmon, Decorist and Canada operations. We have also executed key actions such as corporate restructurings and operating expense control to re-set our cost structure and to advance our ongoing efforts to reset our cost structure and build a modern, durable model for long-term profitable growth.

Highlights of Fiscal 2022 include: