Bob's Discount Furniture — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue for the third quarter ended September 27, 2026, was $680.4 million, a 10.3% increase from $616.9 million in the prior year period.
• Net income increased 28.8% to $41.7 million, compared to $32.3 million in the third quarter of fiscal year 2025.
• Adjusted net income increased 18.5% to $38.8 million, compared to $32.7 million in the prior year period.
• Diluted net income per share was $0.31, compared to $0.29 in the prior year period; adjusted diluted net income per share was $0.28.
• Gross profit increased 11.3% to $316.0 million, resulting in a gross margin of 46.4%.
• Adjusted gross margin decreased to 45.7%, compared to 46.0% in the prior year period, excluding $4.9 million in IEEPA tariff refunds recognized in cost of sales.
• Selling, general and administrative (SG&A) expenses increased 7.6% to $250.1 million, representing 36.7% of revenue, down from 37.7% in the prior year period.
• Adjusted EBITDA increased 17.6% to $75.5 million, or 11.1% of net revenue, compared to $64.2 million or 10.4% in the prior year period.
• Year-to-date net cash provided by operating activities was $204.8 million, an increase of $86.0 million compared to the prior year.
• Total liquidity was $287.9 million, comprised of $109.9 million in cash and cash equivalents and $178.0 million in available borrowing capacity.
• Inventories were $373.6 million, an increase of 6.7% compared to year-end 2025.
• The Company recognized $4.9 million in IEEPA tariff refunds in cost of sales for the quarter and $42.8 million for the year-to-date period, plus $1.5 million in interest income.

Guidance and Future Outlook:

• Reaffirmed full fiscal year 2026 net revenue guidance of $2,600 to $2,625 million.
• Reaffirmed full fiscal year 2026 comparable sales growth guidance of 1.5% to 2.5%.
• Reaffirmed full fiscal year 2026 net income guidance of $145 to $153 million.
• Reaffirmed full fiscal year 2026 adjusted EBITDA guidance of $255 to $265 million.
• Reaffirmed full fiscal year 2026 adjusted net income guidance of $121 to $129 million.
• Updated pre-opening expenses guidance to approximately $23 million, down from prior expectations of $26 million.
• Updated effective tax rate guidance to approximately 28%, up from prior expectations of 27%.
• Updated new store count guidance to approximately 20 for the full year.
• The 53rd week of fiscal year 2026 is expected to deliver $46.0 million in net revenues, $4.4 million in net income, and $6.2 million in adjusted EBITDA.
• Net capital expenditures guidance for the full year remains $110 to $115 million.

Business Segments and Product Lines:

• Opened 11 new stores during the third quarter, ending the quarter with 229 stores across 28 states.
• Comparable sales growth of 3.8% was driven by higher average order value and increased eCommerce traffic, partially offset by lower in-store traffic.
• Favorable product mix shift into the "Best" product category relative to historical levels contributed to margin performance.
• New store performance, including entry into the Nashville market, was highlighted as a strength.
• Early development of a new distribution center in Georgia is underway, contributing to year-to-date capital expenditures of $70.7 million.

Market and Competitive Landscape:

• Industry demand trends remained relatively stable during the quarter.
• The Company reported market share gains during the period.
• Customers continue to respond to the company's value proposition, combining everyday value, differentiated products, and omnichannel capabilities.

Risks and Challenges:

• Ongoing cost pressures across parts of the business, including higher inventory and fuel-related costs and increased tariffs.
• Reliance on foreign manufacturing, suppliers, and imports for products.
• Significant competition within the industry.
• Potential impacts of global economic conditions and discretionary consumer spending pressures.
• Challenges associated with managing planned new store growth and supply chain disruptions.
• Risks related to third-party supplier failures, quality standards, and regulatory compliance.

Management Commentary and Tone:

• Bill Barton, President and CEO, described the quarter as "strong," citing sales growth, market share gains, and margin expansion.
• Management expressed confidence in the ability to grow profitably while expanding into new markets.
• Teams executed with discipline despite cost pressures.
• The tone emphasized the resilience of the business model and customer response to the value proposition.

Other Key Points:

• The Company received approval for $46.4 million in IEEPA tariff refunds.
• The Company repaid its Term Loan in the nine-month period, resulting in an acceleration of debt issuance costs of $10.7 million.
• The Advisory Agreement with the controlling stockholder terminated in connection with the IPO, resulting in a $2.0 million termination fee.
• Proceeds from the issuance of common stock, net of underwriter discounts, were $310.9 million in the nine-month period.
• Principal payments on the Term Loan totaled $350.0 million in the nine-month period.
• The fiscal year 2026 includes 53 weeks.
• Expected average fully diluted shares outstanding for fiscal year 2026 is approximately 135 million.