UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 2625, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 0-20214

BED BATH & BEYOND INC.

(Exact name of registrant as specified in its charter)


New York						11-2250488
(State or other jurisdiction of						(IRS Employer
incorporation or organization)						Identification No.)

650 Liberty Avenue, Union, New Jersey 07083

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 908/688-0888

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common stock, $.01 par value	BBBY	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X_ No __X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes __ No X

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes X No__

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No X

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. X

AsIf ofsecurities ~~August 28,~~are ~~2021,~~registered ~~the~~pursuant ~~aggregate~~to ~~market~~Section ~~value~~12(b) of the ~~common~~Act, ~~stock~~indicate ~~held~~ by ~~non-affiliates~~check ~~(which~~mark ~~was~~whether ~~computed~~the byfinancial ~~reference~~statements toof the ~~closing~~registrant ~~price~~included onin ~~such~~the ~~date~~filing ofreflect ~~such~~the ~~stock~~correction onof ~~the~~an ~~Nasdaq~~error ~~Global~~to ~~Select~~previously ~~Market)~~issued ~~was~~financial ~~$2,838,477,804~~statements.*

~~The~~Indicate ~~number~~by check mark whether any of ~~shares~~those ~~outstanding~~error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s ~~common~~executive ~~stock~~officers ~~(par~~during ~~value~~the ~~$0.01~~relevant ~~per~~recovery ~~share)~~period atpursuant ~~March 26,~~to ~~2022: 79,845,789~~§240.10D-1(b).

~~Documents~~As ~~Incorporated~~of August 27, 2022, the aggregate market value of the common stock held by ~~Reference~~non-affiliates (which was computed by reference to the closing price on such date of such stock on the Nasdaq Global Select Market) was $848,397,597.*

~~Portions~~The number of ~~the~~shares ~~Registrant’s~~outstanding ~~definitive~~of ~~proxy statement for~~ the ~~2022~~registrant’s ~~Annual~~common ~~Meeting~~stock of(par ~~Shareholders~~value to$0.01 beper ~~filed~~share) ~~pursuant~~at toMay ~~Regulation~~9, ~~14A~~2023: ~~are incorporated by reference in Part III hereof~~739,056,836.

* For purposes of this calculation, all outstanding shares of common stock have been considered held by non-affiliates other than the ~~866~~1,~~820~~073,200 shares beneficially owned by directors and executive officers. In making such calculation, the Registrant does not determine the affiliate or non-affiliate status of any shares for any other purpose.

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TABLE OF CONTENTS

Form 10-K
Item No.	Name of Item	Page
	PART I
Item 1.	Business	46
Item 1A.	Risk Factors	1112
Item 1B.	Unresolved Staff Comments	2017
Item 2.	Properties	2018
Item 3.	Legal Proceedings	2220
Item 4.	Mine Safety Disclosures	2321
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	2422
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2624
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4038
Item 8.	Financial Statements and Supplementary Data	4139
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	7685
Item 9A.	Controls and Procedures	7685
Item 9B.	Other Information	7685
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	7685
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7787
Item 11.	Executive Compensation	7790
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	77117
Item 13.	Certain Relationships and Related Transactions, and Director Independence	78118
Item 14.	Principal Accounting Fees and Services	78118
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	79119
Item 16.	Form 10-K Summary	83124

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~~PART~~INTRODUCTORY INOTE

~~Unless~~On ~~otherwise~~April ~~indicated~~23, ~~references~~2023 to(the ~~"we,"~~“Petition ~~"our~~Date”)," ~~"us," "ourselves" and~~ the "Company" ~~refer~~and ~~collectively~~materially toall ~~Bed~~of ~~Bath~~its &direct ~~Beyond Inc.~~ and ~~its~~indirect subsidiaries as(collectively, ofthe ~~February 26,~~“Debtors” ~~2022.~~or ~~Our~~the ~~fiscal~~“Company ~~year~~Parties”) isfiled ~~comprised~~a ofvoluntary petition (the 52“Chapter or11 53Cases”) ~~week~~under ~~period~~Chapter ~~ending~~11 onof the ~~Saturday~~U.S. ~~nearest~~Bankruptcy ~~February~~Code ~~28.~~(the ~~Accordingly,~~“Bankruptcy ~~throughout~~Code”) ~~this~~in ~~Annual~~the ~~Report~~U.S. onBankruptcy ~~Form~~Court ~~10-K:~~for ~~(i)~~ the ~~term~~District ~~"Fiscal~~of ~~2021"~~New ~~means~~Jersey ~~our~~(the ~~fiscal~~“Bankruptcy ~~year~~Court”). ~~beginning~~On ~~February 28~~the Petition Date, ~~2021~~the ~~and~~Company ~~ending~~Parties ~~February 26,~~filed ~~2022,~~a ~~(ii)~~motion with the ~~term~~Bankruptcy ~~"Fiscal~~Court ~~2020"~~seeking ~~means~~to ~~our~~jointly ~~fiscal~~administer ~~year~~the ~~beginning~~Chapter ~~March 1,~~11 ~~2020~~Cases. ~~and~~On ~~ending~~April ~~February 27~~24, ~~2021~~2023, ~~and (iii)~~ the ~~term~~Bankruptcy ~~"Fiscal~~Court ~~2019"~~entered ~~means~~an ~~our~~order ~~fiscal~~approving ~~year~~joint ~~beginning~~administration ~~March 3,~~under ~~2019~~the ~~and~~caption ~~ending~~“In ~~February 29,~~re ~~2020.~~Bed ~~Unless~~Bath ~~otherwise~~& ~~indicated~~Beyond Inc.,” ~~all~~Case ~~references~~No. ~~herein~~23-13359. toCertain ~~periods~~ of ~~time~~the ~~(e.g.,~~Company’s ~~quarters)~~subsidiaries ~~are~~were innot ~~relation~~included toin the ~~fiscal~~Chapter ~~years~~11 ~~defined above~~filing.

~~ITEM~~On 1April –25, ~~BUSINESS~~2023, the Bankruptcy Court entered an order approving the bidding procedures in connection with the sale of all or substantially all of the Debtors’ assets.

~~Overview~~1. Stalking Horse Deadline: June 11, 2023, at 5:00 p.m. (prevailing Eastern Time)

~~We are an omni-channel retailer that makes it easy for our customers to feel at home~~2. Bid WeDeadline: June ~~sell a wide assortment of merchandise in the Home~~16, ~~Baby~~2023, ~~Beauty~~at &12:00 ~~Wellness markets and operate under the names Bed Bath & Beyond, buybuy BABY ("BABY"), and Harmon, Harmon Face Values, or Face Values (collectively, "Harmon")~~p.m. ~~We also operate Decorist~~ (~~"Decorist"),~~prevailing anEastern ~~online interior design platform that provides personalized home design services.~~ Time)

We3. Auction ~~offer a broad assortment of national brands and a growing assortment of proprietary Owned Brand merchandise – including eight new proprietary Owned Brands~~ (~~"Owned~~if ~~Brands"~~applicable): ~~launched~~An inAuction ~~Fiscal~~may ~~2021~~be –held inon ~~key~~June ~~destination categories including bedding~~21, ~~bath~~2023, ~~kitchen~~at ~~food~~10:00 ~~prep,~~a.m. ~~home~~(prevailing ~~organization,~~Eastern ~~indoor~~Time) ~~décor,~~via ~~baby~~live ~~and personal care.~~auction

We4. Notice ~~operate a robust omni-channel platform consisting~~ of ~~various~~Successful ~~websites~~Bidder: ~~and~~As ~~applications~~soon and physical retail stores. Our e-commerce platforms include bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, facevalues.com, buybuybaby.com, buybuybaby.ca and decorist.com. We also operate 953 retail stores, as ofreasonably ~~February 26,~~practicable ~~2022,~~after ~~consisting of 771 Bed Bath & Beyond stores in all 50 states,~~ the ~~District~~conclusion of Columbia, Puerto Rico and Canada, 130 BABY stores in 37 states and Canada and 52 Harmon stores in 6 states. During Fiscal 2021, we opened 4 new stores and closed 70 stores. As of February 26, 2022, our total store square footage, net of openings and closings, was approximately 27.9 million square feet. In addition to our U.S. and Canadian operations, we are a partner in a joint venture that operates 11 stores in Mexico under the ~~name~~Auction ~~Bed~~(if ~~Bath & Beyond~~necessary).

~~Starting~~5. Sale inObjection ~~late~~Deadline: ~~2019,~~June ~~we have created a more focused portfolio through the divestiture of non-core assets~~26, ~~including businesses and real estate~~2023, asat ~~part~~9:00 ~~of the ongoing business transformation underway~~a.m. ~~See~~(prevailing ~~"Transformation,"~~Eastern ~~"Strategy" and "Divestitures" below.~~Time)

~~Our~~6. Sale ~~merchandise~~Hearing: ~~and~~June ~~services~~27, ~~are~~2023, ~~offered~~or toas ~~customers~~soon ~~through~~thereafter anas ~~omni-channel~~the ~~platform~~Court’s ~~across~~calendar ~~our portfolio of banners, which consist of:~~permits

~~Bed~~The ~~Bath~~Company &Parties ~~Beyond~~continue -to aoperate ~~leading~~their ~~specialty~~business ~~home~~and ~~retailer~~manage their properties as “debtors-in-possession” ~~North~~under ~~America~~the ~~that~~jurisdiction ~~sells~~of athe ~~wide~~Bankruptcy ~~assortment~~Court and in accordance with the applicable provisions of ~~domestics~~the ~~merchandise~~Bankruptcy Code and ~~home~~orders ~~furnishings~~of the Bankruptcy Court. ~~Bed~~Except ~~Bath~~as &otherwise ~~Beyond~~specifically isstated aherein, ~~preferred~~the ~~destination~~description and disclosures presented elsewhere in this Form 10-K reflect the ~~home~~Company’s ~~space~~business as of February 25, ~~particularly~~2023, inprior ~~key~~to ~~product~~the ~~categories~~filing ~~including~~of ~~bedding,~~the ~~bath~~Chapter 11 Cases. As a result of the filing of the Chapter 11 Cases, ~~kitchen~~the ~~food~~Company ~~prep~~no longer has any operations, ~~home~~other ~~organization~~than those relating to the wind down of its business and ~~indoor~~the ~~decor~~completion of the Chapter 11 process.

~~buybuy~~CAUTIONARY ~~BABY~~INFORMATION -REGARDING aTRADING ~~leading~~IN ~~specialty~~THE ~~baby~~COMPANY’S retailer in North America 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.SECURITIES

~~Harmon~~Holders ~~Health~~of the Company’s equity securities will likely be entitled to no recovery on their investment following the Chapter 11 Cases, and ~~Beauty~~recoveries -to ~~offers~~other anstakeholders ~~expansive~~cannot ~~assortment~~be determined at this time. The Company cautions that trading in the Company’s securities given the pendency of ~~leading~~the ~~name~~Chapter ~~brand~~11 Cases is highly speculative and ~~private~~poses ~~label~~substantial ~~personal~~risk. ~~care~~Trading ~~and~~prices ~~beauty~~for ~~brands~~the atCompany’s ~~deep~~securities ~~everyday~~bear little or no relationship to the actual value realized, if any, by holders of the Company’s securities in the Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future investment in its securities.

Decorist - an online interior design company that makes decorating a home easy and affordable. Executed entirely online, Decorist's roster of over 190 professional interior designers help beautifully design any room in the home, staying within a client's style and budget. For customers not ready to start a full design project, they can consult Decorist's Design Bar to have quick design questions answered by Decorist's team of interior designers, completely free of charge.

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

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~~customer~~PART 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 delivery partners, including DoorDash and Uber. Customers can also make purchases through one of our customer contact centers and in-store through The Beyond Store, our proprietary web-based platform. I

AsUnless ofotherwise ~~February 26~~indicated, ~~2022,~~references to "we," ~~had~~"our," ~~distribution~~"us," ~~facilities~~"ourselves" ~~totaling~~and ~~approximately~~the 4"Company" refer collectively to Bed Bath & Beyond Inc.~~4 million~~ ~~square~~and ~~feet~~its subsidiaries as of February 25, ~~including~~2023. ~~our~~Our ~~first~~fiscal ~~regional~~year ~~distribution~~is ~~center,~~comprised anof ~~approximately~~the ~~one million~~52 ~~square~~or ~~foot~~53 ~~facility~~week inperiod ~~Frackville,~~ending ~~Pennsylvania~~on the Saturday nearest February 28. Accordingly, ~~which~~throughout ~~became~~this ~~operational~~Annual ~~during~~Report ~~Fiscal~~on ~~2021.~~Form We10-K: ~~also~~(i) ~~executed~~the aterm ~~lease~~"Fiscal ~~for~~2022" means our ~~second~~fiscal ~~regional~~year ~~distribution~~beginning ~~center~~February 27, in2022, ~~Jurupa~~and ~~Valley~~ending February 25, ~~California~~2023, ~~which~~(ii) isthe ~~expected~~term to"Fiscal be2021" ~~operational~~means byour ~~late~~fiscal ~~2022.~~year ~~Ryder~~beginning ~~Systems~~February 28, ~~Inc.~~2021, ~~will~~and ~~operate~~ending ~~these~~February 26, ~~two~~2022, ~~regional~~and ~~distribution~~(iii) ~~centers~~the ~~under~~term a"Fiscal ~~strategic~~2020" ~~partnership,~~means ~~with~~our ~~the~~fiscal ~~objective~~year ofbeginning ~~reducing~~March 1, ~~product~~2020, ~~replenishment~~and ~~times~~ending ~~and~~February 27, ~~improving~~2021. ~~the~~Unless ~~customer~~otherwise ~~experience.~~indicated, ~~All~~all references herein to periods of ~~these~~time ~~capabilities~~(e.g., ~~allow~~quarters) usare toin ~~better~~relation ~~serve~~to ~~customers~~the ~~across~~fiscal ~~our~~years ~~omni-channel~~defined ~~network~~above.

WeCAUTIONARY ~~account~~NOTE ~~for~~REGARDING ~~our~~FORWARD-LOOKING ~~operations~~STATEMENTS as one North American Retail reporting segment. In Fiscal 2020 and 2019, we accounted for our operations as two operating segments: North American Retail and Institutional Sales, the latter of which did not meet the quantitative thresholds under GAAP and, therefore, was not a reportable segment, and which was divested in October 2020. Net sales outside of the U.S. were not material for Fiscal 2021, 2020, or 2019.

~~Transformation~~This Annual Report on Form 10-K contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. 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:

~~Since 2019, we have undertaken significant changes to transform our business and adapt to~~ •the ~~dynamic~~Chapter ~~retail~~11 ~~environment~~Cases and the ~~evolving~~Chapter ~~needs~~11 of our customers in order to position ourselves for long-term success. As part of these changes, our management team, led by President and Chief Executive Officer (CEO), Mark Tritton, has been focused on driving an omni-always, customer-inspired strategy to re-establish our authority in the Home, Baby, Beauty & Wellness markets. We have created a more focused portfolio through the divestiture of non-core assets and further strengthened our financial flexibility through key actions such as corporate restructurings and operating expense control to re-set our cost structure and support our ongoing business transformation.process;

We•risks ~~are~~attendant ~~implementing~~to athe ~~growth~~bankruptcy ~~strategy~~process, ~~that~~including ~~will harness~~ the ~~power~~Company’s ofability ~~data and insights~~ to ~~engage~~obtain ~~customers~~court ~~across~~approval ~~our~~from ~~four~~the ~~core~~Bankruptcy ~~banners~~Court (~~Bed~~as ~~Bath~~defined ~~& Beyond, buybuy BABY, Harmon and Decorist~~herein) inwith anrespect ~~enterprise-wide plan~~ to ~~accelerate~~motions ~~our~~or ~~omni-channel~~other ~~transformation.~~requests ~~Our~~made ~~strategy~~to isthe ~~underpinned~~Bankruptcy byCourt ~~five~~throughout ~~key~~the ~~pillars~~course of ~~strategic~~the ~~focus~~Chapter ~~and~~11 ~~investment:~~Cases ~~product,~~(as ~~price,~~defined ~~promise~~herein), ~~place~~including ~~and people. Through this approach, we are becoming a digital-first, customer-focused omni-channel retailer~~ with arespect ~~more~~the ~~curated,~~DIP ~~inspirational~~Facility ~~and~~(as ~~differentiated~~defined ~~product collection across categories, and creating a more convenient and inspirational shopping experience.~~ herein);

~~During 2020 and 2021, as~~ •the ~~world~~effects ~~responded to the unparalleled challenges~~ of the ~~COVID-19~~Chapter ~~pandemic~~11 Cases, weincluding ~~took~~increased ~~thoughtful~~legal ~~steps to safeguard our people~~ and ~~communities~~other ~~while~~professional wecosts ~~continued~~necessary to ~~serve~~execute ~~our customers and drive transformative change throughout~~ the ~~organization.~~Company’s ~~Similar to many other businesses~~reorganization, ~~COVID-19~~on ~~served~~the asCompany’s aliquidity ~~catalyst~~(including ~~to accelerate~~ the ~~pace~~availability of ~~change~~operating ~~and~~capital ~~innovation~~during atthe ~~our~~pendency ~~Company—~~of tothe ~~advance~~Chapter ~~our~~11 ~~ongoing efforts to reset our cost structure and build a modern~~Cases), ~~durable~~results ~~model~~of ~~for~~operations ~~long-term~~or ~~profitable~~business ~~growth.~~prospects;

~~Highlights~~•the effects of ~~our~~the ~~progress~~Chapter in11 ~~Fiscal~~Cases ~~2021~~on ~~include:~~the interests of various constituents and financial stakeholders;

•~~Owned~~the ~~Brands.~~length Weof ~~launched~~time ~~eight~~that ~~new~~the ~~Owned~~Company ~~Brands,~~will ~~which~~operate ~~include~~under anChapter ~~assortment~~11 ofprotection ~~thousands~~and ofthe ~~new~~continued ~~products~~availability ~~across our key destination categories~~ of ~~Bed,~~operating ~~Bath,~~capital ~~Kitchen~~during ~~Food~~the ~~Prep,~~pendency ~~Home~~of ~~Organization~~the ~~and~~Chapter ~~Indoor~~11 ~~Décor:~~Cases;

First Quarter	Second Quarter	Third Quarter
Nestwell™	Our Table™	Studio 3B™
Haven™	Wild Sage™	H For Happy™
Simply Essential™	Squared Away™

•objections to the Company’s Chapter 11 process, or other pleadings filed that could protract the Chapter 11 Cases;

•~~New~~risks ~~York~~associated ~~City~~with ~~Flagship~~third-party ~~Renovation.~~motions ~~We completed the renovation of our Bed Bath & Beyond flagship store~~ in ~~New York City, which reopened in July 2021 after undergoing a complete transformation since closing in December 2020. The renovated flagship store is an expression of~~ the ~~new~~Chapter ~~Bed~~11 ~~Bath & Beyond, with a significant focus on our five key destination categories of bed, bath, kitchen & dining, indoor décor and organization.~~Cases;

•~~Omni-Channel~~the ~~Capabilities.~~Company’s Weability ~~continued~~to ~~our~~comply ~~focus~~with onthe ~~being~~restrictions aimposed ~~digital-first,~~by ~~omni-always~~the ~~retailer:~~terms and conditions of the DIP Credit Agreement (as defined herein) and other financing arrangements;

•risks relating to the delisting of the Company’s common stock from Nasdaq and future quotation of the Company’s common stock;

•the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures, and the potential for material weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; and

•the impact of litigation and regulatory proceedings.

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 Annual Report on Form 10-K 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 this Annual Report on Form 10-K, may cause actual results to differ materially from those

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~~◦We~~indicated ~~announced~~by ~~separate~~our ~~partnerships~~forward-looking ~~with~~statements. ~~DoorDash~~We have no duty, and ~~Uber~~do not intend, to ~~provide~~update or revise the forward-looking statements we make in this Annual Report on Form 10-~~demand~~K ~~delivery~~or ofelsewhere, ~~essential~~except ~~homeware~~as ~~products~~may be required by law. In light of these risks and ~~items~~uncertainties, ~~from~~you ~~more~~should ~~than~~keep ~~700~~in ~~Bed~~mind ~~Bath~~that &the ~~Beyond~~future ~~locations~~events ~~and~~or ~~nearly~~circumstances ~~120~~described ~~BABY~~in ~~locations~~any ~~nationwide~~forward-looking statement we make in this Annual Report on Form 10-K or elsewhere might not occur.

~~◦In~~ITEM ~~November~~1 ~~2021,~~– we launched our new digital marketplace to build on our existing authority in key Home & Baby categories with an assortment of products from a highly curated selection of third-party brand partners that will be integrated into our digital platform.BUSINESS

◦In November 2021, we announced a strategic collaboration to directly offer Kroger customers an extensive selection of the most sought-after goods for the Home & Baby products carried by the Bed Bath & Beyond and buybuy BABY banners through Kroger.com as well as a small-scale physical store pilot at select Kroger Family of Companies stores beginning in Fiscal 2022.Overview

~~•Additional~~The ~~Product~~description ~~Initiatives.~~of ~~Our~~the ~~Bed~~Company’s ~~Bath~~business &contained ~~Beyond~~herein ~~banner~~reflects ~~launched~~ the ~~Home, Happier Team, the brand'~~Company’s ~~first-ever~~operations ~~curated advisory panel~~ of ~~industry~~its ~~experts~~business ~~who~~prior ~~will~~to ~~serve~~the asfiling ~~"host and hostesses~~ of the ~~home,"~~Chapter ~~providing~~11 ~~ideas,~~Cases ~~innovative~~on ~~solutions~~April ~~and~~23, ~~compelling content to help customers personalize their living spaces and make it easy to feel at home~~2023. ~~Our~~As ~~buybuy~~a ~~BABY~~result ~~banner~~of ~~introduced~~the ~~its~~filing ~~"welcome~~of tothe ~~parenthood"~~Chapter ~~program~~11 ~~in-store and online through educational resources~~Cases, ~~reimagined~~the ~~shopping~~Company ~~experiences,~~no alonger ~~revised~~has ~~registry~~operations, ~~new~~other ~~digital~~than ~~offerings~~those ~~and~~relating ~~a new marketing campaign~~ to ~~inspire~~the ~~customers~~wind todown ~~embrace every aspect~~ of ~~parenthood.~~its ~~Additionally,~~business ~~we announced key partnerships with Casper Sleep Inc. (including a first branded shop-in shop in our New York City flagship store),~~ and ~~with~~completion ~~Safely™, an eco-friendly line~~ of ~~home~~the ~~care~~Chapter ~~and~~11 ~~cleaning products which made its retail debut exclusively in Bed Bath & Beyond, buybuy BABY and Harmon stores nationwide~~process.

~~•Supply~~The ~~Chain~~Company ~~Transformation.~~is Inan ~~the~~omni-channel ~~second~~retailer ~~half~~that ofmakes ~~Fiscal~~it ~~2021,~~easy wefor ~~started~~our ~~operations~~customers atto ~~our~~feel ~~first~~at ~~regional~~home. ~~distribution~~We ~~center,~~sell ana ~~approximately~~wide ~~one million~~assortment ~~square~~of ~~foot~~merchandise ~~facility~~ in ~~Frackville~~the Home, ~~Pennsylvania~~Baby, ~~and~~Beauty ~~executed~~& aWellness ~~lease~~markets ~~for~~and ~~our~~operate ~~second~~under ~~regional~~the ~~distribution~~names ~~center~~Bed inBath ~~Jurupa~~& ~~Valley,~~Beyond ~~California,~~and ~~which~~buybuy isBABY ~~expected to be operational by late 2022~~("BABY").

~~•Store~~Our ~~Fleet~~portfolio ~~Optimization.~~of Webanners ~~continue~~consists to believe that our physical store channel is an asset for our transformation into a digital-first company, especially with omni-fulfillment capabilities in BOPIS, Curbside Pickup, Same Day Delivery and fulfill-from-store. During Fiscal 2021of:

~~◦We~~Bed ~~commenced~~Bath ~~renovations~~& onBeyond ~~approximately~~- ~~130~~a ~~stores,~~specialty ofhome ~~which~~retailer ~~approximately~~in 80the ~~were~~U.S ~~completed,~~that tosells ~~bring~~a ~~the~~wide ~~expression~~assortment of ~~the~~domestic ~~new~~merchandise and home furnishings. Bed Bath & Beyond tois ~~our~~a ~~customers~~destination in ~~many~~the ofhome ~~our~~space, ~~markets~~particularly in key product categories including bedding, bath, kitchen food prep, home organization and indoor decor.

~~◦We~~buybuy ~~largely~~BABY ~~completed~~- ~~our~~a ~~initial~~specialty ~~plan~~baby ~~for~~retailer ~~the~~in ~~optimization~~North ofAmerica ~~our~~that ~~store~~sells ~~fleet~~a ~~through~~wide ~~the~~assortment ~~closure~~ of 63baby ~~mostly~~essentials ~~Bed~~and ~~Bath~~nursery &furnishings. ~~Beyond~~BABY ~~stores~~strives ~~during~~to ~~Fiscal~~build ~~2021,~~trust ~~bringing~~with ~~the~~parents ~~total~~by ~~closures~~supporting ~~over~~them ~~the~~with ~~life~~what ofthey ~~the~~need ~~program~~so tofamilies ~~207~~can ascelebrate ofevery ~~February 26,~~milestone ~~2022~~– big and small – together.

We ~~will~~offer ~~continue~~a tobroad ~~build~~assortment onof ~~this~~national ~~strong~~brands ~~foundation~~and asan weassortment ~~execute~~of ~~our~~proprietary ~~three-year~~owned ~~growth~~brands ~~strategy~~(the to“Owned ~~further~~Brands”). ~~elevate~~Owned ~~the~~Brand ~~shopping~~merchandise ~~experience~~in key destination categories including bedding, ~~modernize~~bath, ~~our~~kitchen, ~~operations~~food prep, ~~and~~home ~~unlock~~organization, ~~strong~~indoor ~~and~~décor, ~~sustainable~~baby ~~shareholder~~and ~~value~~personal care.

~~Strategy~~Across our banners, we carry a wide variety of domestics, and home furnishings and baby 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, food prep, fine tabletop, basic housewares, home organization, general home furnishings (including furniture and wall décor), consumables, and certain juvenile products. Our Owned Brands in domestics and home furnishings include Simply Essential™, Nestwell™, Our Table™, Squared Away™, H for Happy™ and Everhome™. Our Owned Brands in baby include Mighty Goods™ and Ever & Ever™.

InWe ~~particular~~operate ~~with~~an ~~respect to strategy, we have embraced a digital-first,~~ omni-~~always~~channel ~~growth~~platform ~~strategy~~consisting ~~that~~of ~~supports~~various ~~our~~websites ~~purpose - to make it easy to feel at home -~~ and ~~our~~applications ~~mission to re-establish our authority~~ and bephysical ~~the~~retail ~~preferred~~stores. ~~omni~~Our e-~~channel~~commerce ~~home~~platforms ~~destination,~~include ~~driven by teams consistently delivering balanced durable growth~~bedbathandbeyond.com ~~The framework of our strategy is based on the principles of being customer inspired, omni-always, people-powered~~ and ~~performance driven~~buybuybaby.com. ~~The~~We ~~business~~operate ~~initiatives~~Bed ~~intended~~Bath to& ~~drive~~Beyond ~~our~~and ~~growth~~buybuy ~~are~~BABY ~~rooted in the following five pillars:~~stores.

~~1.Product:~~ We are ~~refining~~driving a digital-first, omni-always strategy and ~~amplifying~~optimizing anour ~~exciting~~digital and physical store channels to provide our customers with an omni-channel ~~assortment~~shopping ~~that~~experience. ~~rebuilds~~Digital ~~authority~~purchases, including web and ~~preference~~mobile, ~~for~~can ~~Bed~~be ~~Bath~~shipped &to ~~Beyond~~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 ~~creates~~contactless ~~energy~~Curbside Pickup services, as well as return online purchases to a store, or have an order delivered through ~~differentiation~~one ~~and~~of ~~curation~~our delivery partners.

~~2.Price:~~ We ~~are~~operated ~~investing~~872 retail stores, as of February 25, 2023, consisting of 696 Bed Bath & Beyond stores in ~~and~~all ~~clarifying~~50 ~~compelling~~states, ~~value~~the ~~through~~District ~~more~~of ~~choice~~Columbia, ~~with~~Puerto ~~opening~~Rico ~~price~~and ~~points~~Canada, ~~relevant~~131 ~~owned~~BABY ~~brands~~stores in 37 states and ~~clear~~Canada ~~price~~and ~~communications~~45 Harmon stores in ~~order~~2 tostates. ~~sharpen~~During Fiscal 2022, we opened 7 new stores and closed 88 stores. As of February 25, 2023, our ~~value~~total ~~for~~store ~~quality~~square ~~proposition~~footage, net of openings and closings, was approximately 25.5 million square feet. In addition to ~~both~~our ~~acquire~~U.S. and ~~win~~Canadian ~~back~~operations, ~~customers~~we are a partner in a joint venture that operates 5 stores in Mexico under the name Bed Bath & Beyond.

3We account for our operations as one North American Retail reporting segment.~~Place~~ In Fiscal 2020, we accounted for our operations as two operating segments: WeNorth ~~are~~American ~~accelerating~~Retail and ~~optimizing~~Institutional ~~connecting~~Sales, ~~with~~the latter of which did not meet the quantitative thresholds under GAAP and, ~~inspiring~~therefore, was not a reportable segment, and ~~energizing~~which ~~our~~was ~~customers~~divested byin ~~becoming~~October a2020. ~~truly~~Net ~~omni-always~~sales ~~retailer~~outside toof ~~serve~~the ~~their~~U.S. ~~preferred~~were ~~shopping~~not ~~needs~~material for Fiscal 2022, 2021, or 2020.

4.Promise: We are clarifying and deepening our relationship with our customers by connecting, engaging and motivating them to strengthen loyalty and lifetime value.

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~~5.People:~~Recent ~~We are creating and sustaining a talent engine and culture that attracts, retains and develops high-performing teams who consistently deliver operational excellence and business results.~~Developments

~~With~~Chapter ~~these~~11 ~~five pillars as our guide, we are embracing a commitment to reconstruct and modernize our operating model to drive efficiency and effectiveness, charting a new course for our Company.~~Bankruptcy

~~•Product.~~On WeApril ~~are~~23, ~~pursuing~~2023 ~~three~~(the ~~key~~“Petition ~~initiatives~~Date”), ~~across~~the ~~our~~Company ~~product strategy: developing an inspirational~~ and ~~more~~materially ~~productive~~all ~~assortment,~~of ~~working~~its ~~closely~~direct ~~with suppliers to reduce product cost~~ and ~~improving~~indirect ~~inventory~~subsidiaries ~~management. We~~(collectively, ~~are~~the ~~rebuilding~~“Debtors” ~~our~~or ~~authority~~the in“Company ~~destination~~Parties”) ~~categories~~filed ~~such~~voluntary aspetitions ~~bedding,~~(the ~~bath,~~“Chapter ~~kitchen~~11 ~~food~~Cases”) ~~prep~~under ~~and~~Chapter ~~home~~11 ~~organization,~~of ~~including~~ the ~~launch~~U.S. ofBankruptcy ~~eight~~Code ~~new~~(the ~~Owned~~“Bankruptcy ~~Brands~~Code”) ~~during~~in ~~Fiscal~~the ~~2021~~U.S. ~~with~~Bankruptcy ~~several~~Court ~~more~~for ~~planned over~~ the ~~next~~District ~~few years that will address a wide variety~~ of ~~customer~~New ~~needs,~~Jersey ~~including~~(the ~~value,~~“Bankruptcy ~~style and destination categories~~Court”). AtOn the ~~same~~Petition ~~time~~Date, ~~we are elevating~~ the ~~customer~~Company ~~experience~~Parties ~~both~~filed ~~in-store~~a ~~and~~motion ~~online~~with tothe beBankruptcy ~~more~~Court ~~inspirational,~~seeking ~~focusing on destination rooms and making it easier~~ to ~~navigate~~jointly ~~and~~administer ~~more~~the ~~convenient~~Chapter to11 ~~shop~~Cases. On AsApril we24, ~~build~~2023, ~~out~~the ~~our~~Bankruptcy ~~new~~Court ~~assortment,~~entered wean ~~expect~~order toapproving ~~leverage~~joint ~~our~~administration ~~scale~~under ~~and~~the ~~volume~~caption to“In re~~-negotiate~~ ~~lower~~Bed ~~sourcing~~Bath ~~costs~~& ~~from~~Beyond ~~our suppliers~~Inc. ~~In addition~~,” weCase ~~are~~No. ~~strengthening~~23-13359. ~~our~~Certain ~~inventory~~of ~~management~~the ~~capabilities~~Company’s bysubsidiaries ~~moving~~were tonot aincluded ~~centralized~~in ~~ordering~~the ~~and~~Chapter ~~replenishment~~11 ~~system expected to optimize inventory by channel and store, improve markdown management and drive overall productivity~~filing.

~~•Price. Our~~The ~~data~~Company Parties continue to operate their business and manage their properties as “debtors-~~driven~~in-possession" ~~pricing~~under ~~strategy~~the ~~includes~~jurisdiction ~~four~~of ~~key~~the ~~elements:~~Bankruptcy ~~ensuring~~Court ~~our~~and ~~products~~in ~~are~~accordance ~~competitively~~with ~~priced,~~the ~~having~~applicable aprovisions ~~more~~of ~~value-driven~~the ~~assortment~~Bankruptcy ~~across~~Code and orders of the Bankruptcy Court. The Company Parties filed with the Bankruptcy Court motions seeking a variety of ~~price~~“first-day” ~~points~~relief, ~~building~~including ~~more~~authority ~~disciplined~~to ~~processes~~pay employee wages and benefits and to ~~drive~~pay ~~effective~~vendors and ~~efficient~~suppliers ~~promotions,~~for goods and ~~strengthening~~services ~~the~~provided ~~way~~both webefore ~~communicate~~and ~~value~~after tothe ~~our~~Petition ~~customers~~Date. WeIn ~~regularly~~addition, ~~monitor~~the ~~price~~Company ~~levels~~filed atwith ~~our~~the ~~competitors~~Bankruptcy inCourt ~~order~~a tomotion ~~ensure~~seeking ~~that~~approval ~~our~~(“Interim ~~prices~~DIP ~~are~~Order”) of debtor-in-possession ~~accordance~~financing ~~with~~(“DIP ~~our~~Financing”) ~~pricing~~in ~~philosophy.~~the Weform ~~will~~of ~~also~~the ~~continue~~DIP toCredit ~~improve~~Agreement ~~price~~(as ~~competitiveness~~defined ~~across~~and ~~key~~described ~~categories~~below). ~~while~~Following ~~also~~a ~~addressing~~hearing ~~assortment~~held ~~gaps~~on inApril ~~value~~24, ~~tiers~~2023, tothe ~~help~~Bankruptcy usCourt ~~compete~~approved ~~better~~the ~~with~~Company ~~mass~~Parties’ ~~retailers~~motions ~~and~~seeking ~~attract~~a ~~new~~variety ~~customers~~of to“first-day” ~~our~~relief ~~business~~on an interim basis. WeThe ~~will~~Company ~~use~~Parties ~~data-driven~~resolved ~~insights~~numerous toinformal ~~build~~comments ~~discipline~~and ~~into~~many of the ~~use~~"first-day" ofmotions ~~promotions~~were entered on a final basis consensually. A hearing was scheduled on June 14, 2023 for the Bankruptcy Court to ~~increase~~consider ~~return~~final onapproval ~~investment~~of the relief requested in certain first day motions, and ~~reduce~~final ~~ineffective~~approval ~~promotional~~of ~~activity~~the DIP Facility.

~~•Place. Our~~DIP ~~growth~~Credit strategy leads with digital across channels and leverages our stores to our competitive advantage to drive a seamless customer experience. We are enhancing our digital experience through improved storytelling, making our website and mobile site speeds faster, and making it easier for customers to find what they need and place an order more quickly. To create a more seamless experience across channels, we have grown our omni-channel services such as BOPIS, contactless Curbside pickup and Same Day Delivery. We have expanded our ship from store capabilities, leveraging our national footprint and local market proximity to demand, and we are enhancing our store experience through data-driven store remodels and improving the productivity of our stores through a fleet optimization program. Agreement

~~•Promise~~Prior to the Petition Date, the Company Parties and Sixth Street Specialty Lending, Inc., ~~With~~Sixth Street Lending Partners and TAO Talents (the “DIP Parties”) agreed to enter into a ~~large~~senior ~~customer~~secured ~~base~~super-priority debtor-in-possession term loan credit facility in an aggregate principal amount of ~~approximately~~$240,000,000 35subject ~~million~~to the terms and conditions set forth therein (the “DIP Credit Agreement”). On April 25, ~~one~~2023, the Bankruptcy Court entered an order approving entry into the DIP Credit Facility on an interim basis. Pursuant to the DIP Credit Agreement, the DIP Lenders have provided a senior secured super-priority debtor in ~~five~~possession ~~homes~~term loan facility (the “DIP Facility”), consisting of (1) a new money single draw term loan facility in the ~~U.S.~~amount of $40 million, isand (2) a ~~Bed~~roll-up ~~Bath~~of &certain ~~Beyond~~secured ~~home~~obligations under the existing prepetition credit agreement between the Company Parties and the Prepetition FILO Lenders in the amount of $200 million. ~~The~~Borrowings ~~addition~~under the DIP Facility are senior secured obligations of ~~approximately~~the 7Company ~~million~~and ~~new~~certain ~~digital~~Company ~~customers~~Parties, ~~during~~secured by a super priority lien on the collateral under the Amended and Restated Credit Agreement, dated as of August 9, 2021 (as ~~highlights~~amended ~~our~~by ~~strong~~that ~~potential~~certain First Amendment to ~~attract~~Amended and Restated Credit Agreement, ~~retain~~dated as of August 31, 2022, that certain Second Amendment to Amended and ~~drive~~Restated ~~spend~~Credit ~~within~~Agreement ~~the~~and ~~Home~~Waiver, ~~Baby~~dated as of February 7, ~~Beauty~~2023, &that ~~Wellness~~certain ~~markets. As~~Third ~~part~~Amendment to Amended and Restated Credit Agreement and Waiver, dated as of ~~our~~March ~~strategic~~6, ~~growth~~2023, ~~plans~~that certain Fourth Amendment to Amended and Restated Credit Agreement and Waiver, wedated ~~launched~~as aof ~~new~~March ~~customer~~30, ~~value~~2023, ~~proposition~~that certain Fifth Amendment to ~~deepen~~Amended ~~connections~~and ~~with~~Restated ~~five~~Credit ~~core~~Agreement ~~customer~~and ~~segments~~Waiver, dated as of April 6, 2023 and that certain Sixth Amendment to Amended and Restated Credit Agreement, Consent and Waiver, dated as of April 21, 2023, the “Existing Credit Agreement”), as well as all unencumbered assets of the Company Parties (subject to customary exceptions). In ~~addition~~The DIP Credit Agreement has various customary covenants, weas ~~are~~well ~~developing~~as ancovenants ~~enterprise~~mandating compliance by the Debtors with a 13-~~wide~~week ~~strategy~~budget, tovariance ~~unlock~~testing ~~value~~and ~~across~~reporting ~~our~~requirements, ~~core~~among ~~brands~~others. The proceeds of all or a portion of the proposed DIP Credit Agreements may be used for, ~~including~~among ~~plans~~other things, post-petition working capital for athe ~~reinvented~~Company ~~loyalty~~and ~~program~~its subsidiaries, payment of costs to ~~deepen~~administer ~~customer~~the ~~relationships~~Chapter 11 Cases, payment of expenses and ~~motivate~~fees ~~increased~~of ~~shopping~~the ~~across~~transactions ~~categories~~contemplated by the Chapter 11 Cases, ~~channels~~payment of court-approved adequate protection obligations under the DIP Credit Agreements, and ~~banners~~payment of other costs, in each case, subject to an approved budget and such other purposes permitted under the DIP Credit Agreement and the Interim DIP Order or any other order of the Bankruptcy Court.

~~•People.~~The ~~Since~~Company ~~the~~Parties ~~appointment~~are ofseeking ~~our~~final ~~President~~approval ~~and~~of ~~CEO, Mark Tritton, we have recruited highly energetic, experienced and innovative leaders and team members to work together, lead innovation and modernization, drive growth and accelerate~~ the ~~pace~~DIP ofCredit ~~change~~Agreement ~~across~~at ~~our business. We are committed to creating and sustaining~~ a ~~talent~~hearing ~~engine~~before ~~and~~the ~~culture~~Bankruptcy ~~that attracts~~Court, ~~retains~~contemplated ~~and develops high performing team members who consistently deliver operational excellence and business results. As we consider how best~~ to ~~position~~occur ~~associates~~on toor ~~support~~about ~~our~~June ~~business and drive efficiency and effectiveness~~14, ~~we are guided by four principles: to be customer inspired, omni-always, people-powered and performance-driven~~2023.

~~Divestitures~~Nasdaq Delisting Proceedings

~~During~~On ~~Fiscal~~April ~~2020~~24, ~~we divested five non-core banners~~2023, ~~including~~the ~~One~~Company ~~Kings~~received ~~Lane~~written innotice from the ~~first~~Listing ~~quarter,~~Qualifications ~~PersonalizationMall.com~~Department inof the ~~second~~Nasdaq ~~quarter,~~Stock ~~Linen~~Market ~~Holdings~~LLC ~~and~~(“Nasdaq”) ~~Christmas~~notifying ~~Tree~~the ~~Shops~~Company inthat, ~~the~~as ~~third~~a ~~quarter~~result ~~and~~of ~~Cost~~the ~~Plus~~Chapter ~~World~~11 ~~Market~~Cases and in ~~the~~accordance ~~fourth~~with ~~quarter,~~the ~~generating~~Nasdaq ~~approximately~~Listing ~~$534~~Rules ~~million~~5101, in5110(b) ~~net~~and ~~proceeds~~IM-5101-1, ~~which~~Nasdaq ~~were~~had ~~reinvested~~determined inthat ~~our~~the ~~core~~Company’s ~~business~~common ~~operations~~stock towill ~~drive~~be ~~growth,~~delisted ~~fund~~from ~~share~~Nasdaq ~~repurchases~~Trading ~~and~~of ~~reduce~~the ~~our outstanding debt. See "Management~~Company’s ~~Discussion~~common ~~and~~stock ~~Analysis~~was ofsuspended ~~Financial~~at ~~Condition~~the ~~and~~opening ~~Results~~ of ~~Operations"~~business ~~for~~on ~~detailed~~May ~~information~~3, ~~relating to these divestitures~~2023.

~~Impact~~Following delisting from Nasdaq, the Company’s common stock has been quoted in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for existing and potential holders of the ~~COVID-19~~common ~~Pandemic~~stock to trade the Company’s common stock and could further depress the trading price of the common stock. The Company can provide no assurance as to

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Aswhether ~~discussed in more detail throughout this Annual Report on Form 10~~broker-K,dealers ~~the~~will ~~ongoing~~continue ~~coronavirus (COVID-19) pandemic has materially disrupted our operations~~ to ~~date,~~provide ~~most~~public ~~significantly~~quotes ~~in Fiscal 2020. In compliance with relevant government directives, we closed all~~ of ~~our retail banner stores across~~ the ~~U.S.~~common ~~and~~stock ~~Canada~~on asthis ~~of March 23~~market, 2020, except for most stand-alone BABY and Harmon stores, which were categorized as essential given the nature of their products. In May 2020, we announced a phased approach to re-open our stores in compliance with relevant government directives, and as of the end of July 2020, nearly all of our stores reopened. During portions of Fiscal 2021, a limited number of stores in Canada either closed temporarily or ~~continued~~whether ~~to operate under restrictions in compliance with local governmental orders. As of February 26, 2022, all of~~ the ~~Company's~~trading ~~stores~~volume ~~were operating without restriction subject to compliance with applicable mask and vaccine requirements. As~~ of ~~February 26, 2022, our BOPIS, contactless Curbside Pickup and Same Day Delivery services are in place at~~ the ~~vast~~common ~~majority~~stock ~~of our stores. We cannot predict, however, whether our stores~~ will ~~remain~~be ~~open,~~sufficient ~~particularly~~to ifprovide ~~the~~for ~~regions~~an inefficient ~~which~~trading ~~we operate experience potential resurgences of reported new cases of COVID-19 or increased rates of hospitalizations, or become subject to additional governmental regulatory actions~~market.

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section 12(b) of the Exchange Act, which will become effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may determine, from the date of the Form 25 filing.

Appointment of Chief Restructuring Officer

Effective on April 22, 2023, the Company appointed Holly Etlin to serve as the Chief Restructuring Officer (“CRO”) of the Company for such a term and in accordance with the terms and conditions of that certain engagement letter, dated as of April 21, 2023 by and among and the Company and AP Services, LLC (the “AP Engagement Letter”). As further set forth in the AP Engagement Letter, Ms. Etlin’s authority as CRO includes, in coordination with the Company’s advisors and management, (a) overseeing the Chapter 11 Cases and court-supervised liquidation and sale process, (b) overseeing cash management and liquidity forecasting, (c) the development of, or revisions to, the Company’s business plan, and (d) engagement with creditors and other stakeholders. Ms. Etlin shall serve at the direction of an ad hoc committee of the Board of Directors of the Company and its subsidiaries comprised of Carol Flaton, Pamela Corrie, Jonathan Foster, and Joshua Schechter, in accordance with the terms and conditions of the AP Engagement Letter.

Divestiture of Non-Core Assets

During Fiscal 2020, we divested five non-core banners, including One Kings Lane in the first quarter, PersonalizationMall.com in the second quarter, Linen Holdings and Christmas Tree Shops in the third quarter and Cost Plus World Market in the fourth quarter, generating approximately $534 million in net proceeds. See "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for detailed information relating to these divestitures.

Fiscal 2022 Strategic Transformation

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. 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.

•Change in leadership and strategy: We realigned our organizational structure, which included the creation of Brand President roles for Bed Bath & Beyond and buybuy BABY to lead merchandising, planning, brand marketing, site merchandising and stores for each banner.

•Owned Brands: We exited 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™).

•Introduction of Welcomes Rewards: During the second quarter of fiscal 2022, we launched our cross-banner customer loyalty program, Welcome Rewards™, which allows members to earn points for each qualifying purchase at its retail banners either online or in its stores. Points earned are then converted to rewards upon reaching certain thresholds.

•Right-sizing cost structure and store fleets to better serve customers: We increased our focus on strategic investments in technologies, capabilities and services, store maintenance, and the expansion of digital offerings and services. We also initiated a strategic revaluation of store remodel plans and returns given changes in customer shopping and service.

•Supporting the growth of buybuy BABY: We began to expand as we worked to become a solution for parents from pre-natal to pre-school. During Fiscal 2022, we launched the first two exclusive buybuy Baby brands, Mighty Goods™ and Ever & Ever™ which are available exclusively at buybuy BABY stores and online at buybuyBABY.com.

Store Closings

In support of the Company’s transformation, the Company reduced its store footprint and closed 88 stores during Fiscal 2022. Additionally, as of the commencement of Chapter 11 Case the Company has begun the closing of the remaining stores, and the

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Company Parties are actively seeking to market and sell real property leases in order to capture substantial value and avoid significant costs associate with such leases.

Rebalancing our Merchandise

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 a third 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™).

Exit from Harmon, Decorist and Canadian Operations

We have continued to create a more focused portfolio, including through the exit of unprofitable businesses such as our Harmon, Decorist and Canada operations. On September 26, 2022, we announced Decorist, an e-design platform we acquired in 2017, would wind down existing projects by October 12, 2022. On January 30, 2023, we announced plans to close all of our Harmon beauty product stores. During the fourth quarter of Fiscal 2022, we begun the exit of our Canadian operations.

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5 million the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”) did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its leased retail stores and premises.

Financial Position Realignment

The description of the Company’s business contained herein reflects the Company’s operations of its business prior to the filing of the Chapter 11 Cases on April 23, 2023. As a result of the filing of the Chapter 11 Cases, the Company no longer has operations, other than those relating to the wind down of its business and completion of the Chapter 11 process.

The Company focused on its financial position with the following efforts prior to the filing of the Chapter 11 Cases:

•Right-sizing cost structure and infrastructure to reflect business operations: We initiated a strategic revaluation of our overall expense and operational structure to align with business performance and target profitability.

•Organizational changes to drive key focus areas: We realigned our executive leadership team and streamlined our organizational structure to focus on immediate priorities and important changes to operations. In conjunction with these changes, the Company has eliminated the Chief Operating Officer, Chief Stores Officer, Chief Merchandising Officer, Chief Customer Officer and Chief Growth Officer roles.

•Supply chain optimization: We completed a supply chain network study to improve cost to serve and time to deliver for our customers by streamlining fulfillment center and distribution center operations.

•Supporting our supplier and vendor partners: The Company’s teams worked closely with supplier and vendor partners to ensure customers have access to a strong assortment of their favorite brands across both store and digital channels. The customer experience is our top priority and we made meaningful progress to improve our business and calibrate to customer demand. In addition to leveraging our recent capital to reinvest in high demand inventory, we also worked to develop a third-party consignment program to allow us to fortify our product assortments by expanding merchandise availability from key supplier partners.

•Obtaining additional capital: On February 7, 2023, the Company consummated an underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii) warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock Warrants”). The gross proceeds received for the Series A was $225.0 million and there was no additional consideration received for the Common Stock Warrants and Preferred Stock Warrants issued. Between February 7, 2023 and March 27, 2023, a holder exercised 14,212 Series A Convertible Preferred Stock Warrants to

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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 Warrants in the future and receive cash proceeds therefore, on March 30, 2023, the Company and such holder entered into an exchange agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the Company exchanged the warrants to purchase Series A Convertible Preferred Stock to purchase 70,004 shares of Series A Convertible Preferred Stock, par value $0.01 per share and stated value of $10,000 per share for 10,000,000 shares of common stock and rights to receive 5,000,000 shares of common stock upon the effectuation of a reverse stock split. The Series A Convertible Preferred Stock Warrants were terminated pursuant to the Exchange Agreement.

•Amending the credit facility to enable strategic initiatives:

◦On February 7, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to that certain Amended and Restated Credit Agreement, dated as of August 9, 2021 (the “Credit Agreement” and as further amended, the “Amended Credit Agreement”), with certain of the Company’s US and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), Sixth Street Specialty Lending, Inc., as FILO agent (the “FILO Agent”), and the lenders party thereto. Pursuant to the Second Amendment, the lenders agreed to (i) waive any outstanding defaults or events of default under the existing Credit Facilities consisting of an asset-based revolving credit facility (the “ABL Facility”) and a first-in-last-out term loan credit facility (the “FILO Facility” and, together with the ABL Facility, the “Credit Facilities”) and (ii) rescind the implementation of the acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the existing Credit Facilities and the default interest on the outstanding obligations under the existing Credit Facilities.

◦On March 6, 2023, the Company entered into a waiver and amendment (the “Third Amendment”) to the Amended Credit Agreement. The Third Amendment waived certain defaults and events of default under the Amended Credit Agreement related to negative and affirmative covenants, including relating to the timely approval of the Company’s budget, which impacted the receipt of equity proceeds pursuant to the Equity Commitment Documents by the then Required Funding Date (as defined in the Amended Credit Agreement) and subsequently triggered the required satisfaction of the springing fixed charge coverage ratio.

◦On March 30, 2023, the Company entered into a waiver and amendment (the “Fourth Amendment”) to the Amended Credit Agreement. The Fourth Amendment waived certain events of default under the Amended Credit Agreement related to negative and affirmative covenants. The Fourth Amendment also revised provisions of the Amended Credit Agreement relating to the Equity Commitment (as defined in the Amended Credit Agreement) to reflect the Company’s entry into an at-the-market sales agreement, dated March 30, 2023, by and between the Company and B. Riley Securities, Inc. (the “ATM Agreement”) and the Purchase Agreement and the Common Stock Purchase Agreement entered into with BRPC II on March 30, 2023 (the “Purchase Agreement”) to provide additional capital to the Company. Simultaneously, the Company terminated its previous public equity offering and all outstanding warrants for Series A Convertible Preferred Stock associated with that offering.

◦On April 6, 2023, the Company entered into an amendment (the “Fifth Amendment”) to the Amended Credit Agreement. The Fifth Amendment permitted the entry into an amendment to the Consignment Agreement, dated as of April 4, 2023 (the “Consignment Agreement”), by and among the Company, certain of its subsidiaries and Restore Capital (BBB), LLC. The Fifth Amendment also added an Event of Default under the Amended Credit Agreement in the event that the Consignment Agreement is not extended at least fifteen days prior to the termination date therein.

Competition

We operate in a highly competitive business environment and compete with other national, regional, and local physical and online retailers that may carry similar lines of merchandise, including department stores, specialty stores, off-price stores, mass merchandise stores and online only retailers. We believe that the key to competing in our industry is to provide best-in-class customer service and customer experiences in stores and online, which includes providing compelling price and value; high-quality and differentiated products, services and solutions; convenience; technology; personalization; and appealing and experiential store environments.

Suppliers

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. As we continue to expand our assortment of Owned Brand merchandise, the portion of our merchandise that we purchase directly from overseas sources is increasing, and represented approximately 22% of our total purchases in Fiscal 2021.

Further developing our direct importing and direct sourcing capabilities will allow for a higher penetration of sourced and developed Owned Brands in our merchandise assortment; however, this also exposes 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. See Item 1A "Risk Factors - Disruptions of our supply chain could have an adverse effect on our operating and financial" results for additional information.10

InTable ~~Fiscal 2021, we purchased our merchandise from approximately 4,600 suppliers with our largest supplier accounting for approximately 5%~~ of our merchandise purchases and the ten largest suppliers accounting for approximately 23% of such purchases. We have no long-term contracts for the purchases of merchandise. We believe that most merchandise, other than brand name goods, is available from a variety of sources and that most brand name goods can be replaced with comparable merchandise.Contents

In Fiscal 2022, we purchased our merchandise from approximately 3,700 suppliers with our largest supplier accounting for approximately 5% of our merchandise purchases and the ten largest suppliers accounting for approximately 27% of such purchases. We have no long-term contracts for the purchases of merchandise.

Distribution

A substantial portion of our merchandise is shipped to stores through a combination of third-party facilities, including cross dock locations, or through our operated distribution facilities that are located throughout the United States. The remaining merchandise is shipped directly from vendors. Merchandise is shipped directly to customers from one of our distribution facilities, stores or from vendors. The majority of our shipments are made by contract carriers depending upon location. During Fiscal 2021, we started operations at our first regional distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, and executed a lease for our second regional distribution center in Jurupa Valley, California, which is expected to be operational by late 2022. Ryder Systems, Inc. will operate these two regional distribution centers under a strategic partnership, with the objective of reducing product replenishment times and improving the customer experience. See "Item 2 – Properties" for additional information regarding our distribution facilities.

As of February 25, 2023, we had distribution facilities totaling approximately 4.4 million square feet, including our first regional distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, which became operational during Fiscal 2021. Ryder Systems, Inc. operated this regional distribution center under a strategic partnership, with the objective of reducing product replenishment times and improving the customer experience. All of these capabilities allow us to better serve customers across our omni-channel network. During Fiscal 2021, we also executed a lease for our second regional distribution center in Jurupa Valley, California, which became operational during the second half of Fiscal 2022. As part of the optimization and transformation initiatives during the fourth quarter of Fiscal 2022, the Company decided to no longer use the Jurupa Valley, California distribution center. As of February 25, 2023, the Company had not fully exited the distribution center or reached a final negotiation with Ryder Systems, Inc. See "Item 2 - Properties" for additional information regarding our distribution facilities.

Marketing

We employ a digital-first, omni-channel approach to marketing that is strategically designed to deliver maximum consumer engagement. The customer-inspired marketing mix includes a comprehensive range of touchpoints, including social, search, mobile SMS, email, digital video, display, content and influencer marketing, online affiliate programs and public relations, as well as traditional broadcast and print media, circulars, catalogs and our well-known "big blue" coupons. ~~We also continue to invest in~~

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and promote our Beyond+ membership program, which provides members with discounts on purchases, as well as free standard shipping for online purchases, exclusive offers and other benefits.

We continue to invest in new technology tools that we expect will allow us to make significant strides in integrating our extensive customer data with relevant third-party data, in order to better scale, tailor and personalize marketing communications for our key customer segments.

Customer Care

Our omni-always strategy is rooted in elevating the end-to-end experience for our customers across all channels, brands and banners. Through a customer inspired lens, we invest in capabilities necessary to continuously evolve and deliver afor ~~seamless experience to~~ our customers. Our digital-first customer care ~~makes~~made it easy for customers to connect with us through chat, phone and our digital properties including ~~our newly relaunched~~ mobile apps that ~~offer~~offered quick access to self-serve capabilities. Our holistic approach to customer care iswas designed to make it convenient for our customers to access help wherever and whenever they need it.

Tradenames, Service Marks and Domain Names

We use the service marks "Bed Bath & Beyond," and "buybuy BABY," ~~"Harmon," "Face Values" and "Decorist"~~ in connection with our retail services. We have registered trademarks and service marks ~~or are seeking registrations for these and other trademarks and service marks~~ (including for our Owned Brands) with the United States Patent and Trademark Office. In addition, we have registered or have applications pending with the trademark registries of several foreign countries, including the "Bed Bath & Beyond" name and logo registered in Canada and Mexico and the "buybuy BABY" name and logo registered in Canada. We also own a number of product trademarks. We file patent applications and seek copyright registrations where we deem such to be advantageous to the business. We believe that our name recognition and service marks are important elements of our merchandising strategy.

We also own a number of domain names, including bedbathandbeyond.com, ~~bedbathandbeyond.ca,~~and buybuybaby.com~~, buybuybaby~~.~~ca,~~ ~~harmondiscount.com, facevalues.com and decorist.com.~~

People & Culture

~~Our~~At ~~strategic~~Bed ~~transformation~~Bath is& ~~based~~Beyond onInc., ~~five~~we ~~key~~strived ~~pillars:~~to ~~product,~~create ~~price,~~an ~~promise,~~environment ~~place~~where ~~and~~all ~~people.~~Associates ~~The~~can ~~people~~thrive ~~pillar~~by ofoffering ~~our~~resources ~~transformation~~that ~~strategy~~support ~~communicates~~their ~~our~~physical, ~~commitment~~mental, tosocial, ~~creating~~ and ~~sustaining~~emotional awell-being. ~~talent~~In ~~engine~~Fiscal ~~and~~2022, ~~culture~~we ~~that~~specifically ~~attracts,~~focused ~~retains~~on ~~and~~providing ~~develops~~a ~~high~~sense ~~performing~~of ~~team~~continuity ~~members~~and ~~who~~stability ~~consistently~~as ~~deliver~~we ~~operational~~navigated ~~excellence~~a ~~and~~dynamic ~~business results~~environment. ~~Our~~At ~~associates~~the ~~are~~same ~~our greatest asset~~time, and wein ~~are~~light ~~committed~~of tosignificant ~~creating~~senior aleadership ~~workforce~~turnover ~~where~~initiated ~~all~~by ~~associates~~the ~~thrive.~~Board Byand ~~supporting~~ our ~~associates’~~new ~~physical~~CEO, ~~mental,~~it ~~social,~~was ~~and~~essential ~~emotional well-being, we strive~~ to ~~establish~~maintain an ~~engaging workplace~~ environment ~~with~~optimizing ~~opportunities~~retention and ~~other~~maximizing ~~tools,~~our ~~such~~ability ~~as access~~ to ~~Headspace,~~recruit anew ~~leading meditation and mindfulness app, and leadership development programs for future success~~talent.

~~Our~~As ~~Board~~ of ~~Directors~~February 25, ~~through the People~~2023, ~~Culture~~we &had ~~Compensation~~approximately ~~Committee (formerly referred to as the Compensation Committee)~~20,000 ~~oversees our people and culture programs~~associates, including ~~cultural~~approximately ~~initiatives~~17,000 ~~associate~~store ~~engagement~~associates and ~~diversity,~~approximately ~~equity and inclusion ("DE&I") program~~2,200 ~~policies~~supply ~~and~~chain ~~initiatives~~associates.

As of February 26, 2022, we had approximately 32,000 associates, including approximately 26,000 store associates and approximately 3,500 supply chain associates. We invest a great deal of time and effort in our relationship with our associates, and consider that relationship to be good.11

We are committed to continuous listening through regular engagement surveys and pulse surveys to ensure we have open channels to gather frequent feedback from our associates. Our engagement survey process is in addition to other two-way communication vehicles we will continue, such as listening circles.

Associate Engagement and Retention

Associate engagement and retention require an understanding of the needs of our teams. In furtherance of our goal to create an equitable, inclusive work environment where all associates feel at home and can thrive, we prioritize associate engagement. We want all associates to be proud to work at Bed Bath & Beyond. We promote a culture of listening and learning and offer opportunities for all associates to provide feedback. In 2021, we engaged associates through our first enterprise-wide associate survey, resulting in more than 70% associate participation, We shared the results from the survey – including key themes, top strengths, priority areas and next steps - with our Board of Directors, senior management, and associates to continue the dialogue and respond to the feedback we heard.

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As a result of our engagement activities, we strive to develop key programs and policies to support and retain our critical talent. This includes certain associate benefits and workplace programs, such as 100% paid parental leave, our flexible time off policy and dedicated wellness spaces in our corporate offices. We also held listening circles in response to social issues that arose throughout the year to provide a platform for our associates to share their experiences as well as provide ideas for how we can better support them.

Associate Development & Training

We strive to maintain an engaging workplace culture that provides development opportunities for associates as well as a performance management process that includes discussions of goals to set up our associates for future success.

We are building a comprehensive learning and development offering, which will include an expansion of our skill development programs and upskilling training courses designed to provide associates with technical and competency-based skills applicable across a range of career paths. We have also developed strategic partnerships with learning partners to produce development content on daily tools and provide on-demand learnings on topics such as meeting and communication effectiveness.

Our regional and district store leaders, as well as supply chain leaders, participate in a newly-launched Foundational Leadership Course, which supports their career development and provides them with the tools and resources needed to lead associates and create a strong culture in our stores and our Distribution/Fulfillment facilities Our role framework, completed in 2021, provides the foundation for career path options which in addition to performance management, serves as to further clarify the development and advancement opportunities for associates.

In addition, associates receive annual training on a variety of topics, which is targeted based on their roles and job function and focus on our commitment to high ethical standards and fostering a culture of honesty, integrity, and compliance.

Diversity, Equity, and Inclusion

We embrace DE&I and strive to model a culture of trust and accountability where all associates know they belong. By building upon our recruitment, development, and promotion practices, we are committed to equitably distributing opportunities and achieving a workforce that reflects the world we live in and the customers we serve. We monitor the representation of women and racially or ethnically diverse associates at all levels of our organization and continue to make progress toward our 2030 goals of 50% female and 25% racial and ethnic diversity at each level. In 2021, we appointed a Chief DE&I Officer, implemented educational programming to increase awareness, empathy and understanding and launched several associate resource groups aimed at building community, providing a platform for meaningful discussion and advancing a culture of DE&I to create safe and supportive spaces for our associates.

Compensation and Benefits

To support associate recruitment and retention, we recently redesigned our total rewards program to provide incentives, recognition and benefit programs that reflect the changing needs of our associates, with an emphasis on supporting the financial, physical, mental, social, and emotional well-being of our associates. Our compensation packages include, but are not limited to, competitive wage rates, an annual short-term incentive program, long-term incentive program, a 401(k) plan with matching contributions, paid vacation and holidays, a flexible time off policy, health, dental and vision insurance, paid parental leave, disability insurance, life insurance, health savings and flexible spending accounts, free health and wellness subscriptions and support via an associate relief fund. Eligibility for, and the level of, benefits vary depending on associates’ full-time or part-time status, work location, role, and tenure.

Associate Health & Safety

The health and wellbeing of our customers and associates is one of our top priorities. We implement health, safety, and security programs and strive to maintain a safe and secure environment for our associates and customers. We tailor our programs to address potential risks in all our workplaces, from stores, distribution centers, and corporate offices, to business travel. This includes our safety and security standards and policies, emergency response and crisis management protocol and associate training related to the risks and exposures in their areas of responsibility.

In response to the COVID-19 pandemic, we expanded our policies to include a new vaccination time policy, and sick time policies as required by state and local law, associate rapid response programs with COVID-19 protocols and safety tips and a new store safety plan, which includes requirements with respect to masks, social distancing and cleaning measures, among others. We’ve also introduced other remote work benefits including a hybrid corporate office schedule and dedicated weekly focus time to create time to innovate.

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Government Regulations

We believe that we are in compliance with all applicable government regulations, including environmental regulations. We do not anticipate any material effects on our capital expenditures, earnings or competitive position as a result of our efforts to comply with applicable government regulations.

Seasonality

Our business is subject to seasonal influences. Generally, our sales volumes are higher in the calendar months of August (back to school/college), November and December (holiday), and lower in February.

Available Information

We make available as soon as reasonably practicable after filing with the Securities and Exchange Commission ("SEC"), free of charge, through our websites, www.bedbathandbeyond.com, and http://bedbathandbeyond.gcs-web.com/financial-information/sec-filings, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, electronically filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We may also use our websites as a distribution channel of material information about us including through press releases, investor presentations, and notices of upcoming events. We intend to utilize the investor relations section of our website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. We also intend to use certain social media channels, including, but not limited to, Twitter, Facebook and LinkedIn, as means of communicating with the public, our customers and investors about us, our products, and other matters. While not all the information that we post to our website and social media channels may be deemed to be of a material nature, some information may be, and we therefore encourage investors, the media and others interested in us to review the information we make public in these locations.

ITEM 1A – RISK FACTORS

~~MACROECONOMIC~~An ~~AND~~investment ~~INDUSTRY~~in ~~RISKS~~our common stock involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our common stock.

~~General~~RISKS ~~economic~~RELATED ~~factors~~TO ~~beyond~~THE ~~our~~CHAPTER ~~control,~~11 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.CASES

~~General~~On ~~economic~~April ~~factors that are beyond our control have materially adversely affected~~23, ~~and could continue to materially adversely affect~~2023, ~~our~~we ~~business,~~voluntarily ~~results~~filed ofthe ~~operations,~~Chapter ~~financial~~11 ~~condition and liquidity~~Cases. ~~These~~The ~~factors~~Company ~~include,~~Parties ~~but~~continue ~~are not limited~~ to, ~~recent~~operate ~~supply~~their ~~chain~~business ~~disruptions, labor shortages, wage pressures, rising inflation~~ and ~~the~~manage ~~ongoing~~their ~~military~~properties ~~conflict between Russia and Ukraine,~~ as ~~well~~“debtors-in-possession” asunder ~~housing markets, consumer credit availability, consumer debt levels, fuel and energy costs (for example,~~ the ~~price~~jurisdiction of ~~gasoline), interest rates, tax rates and policy, unemployment trends,~~ the ~~impact~~Bankruptcy ofCourt ~~natural disasters such as pandemics, civil disturbances~~ and ~~terrorist~~in ~~activities,~~accordance ~~foreign~~with ~~currency exchange rate fluctuations, conditions affecting~~ the ~~retail~~applicable ~~environment~~provisions ~~for~~of ~~products sold by us and other matters that influence consumer spending and preferences. Changes in~~ the ~~economic~~Bankruptcy ~~climate~~Code and ~~the~~orders ~~impact~~ of the ~~COVID-19~~Bankruptcy 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 liquidityCourt.

~~The~~We ~~COVID-19~~may ~~pandemic~~not ~~continues~~be toable ~~cause ongoing disruptions~~ to ~~our~~obtain ~~business.~~confirmation As the COVID-19 pandemic evolves, national and local governments in regions in which we operate have enacted various measures, including travel restrictions or bans, restrictions on events and gatherings, temporary closure of non-essential businesses, "social distancing" requirements, vaccine and mask mandates and various other requirements designed to slow the spread of COVID-19. While several of these measures have been eased, the extent, severity and overall duration of the COVID-19 pandemic, including its phases of resurgence and the introduction of new variants, some of which may be more transmissible or virulent, are unknown, and COVID-19 has had, and may continue to have, a ~~material~~Chapter ~~adverse~~11 ~~effect,~~plan ~~on our business and could also result in the recording~~ of ~~additional non-cash impairment charges~~reorganization. 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.

~~The~~To ~~impacts~~complete ~~and~~our ~~potential~~Chapter ~~impacts~~11 ~~from~~bankruptcy process, we must meet certain statutory requirements with respect to adequacy of disclosure with respect to a Chapter 11 plan of reorganization, solicit and obtain the ~~COVID-19~~requisite ~~pandemic~~acceptances of such a plan and ~~associated~~fulfill ~~protective~~other ~~measures~~statutory ~~that~~conditions ~~have~~for ~~had~~confirmation of such a plan. The precise requirements and evidentiary showing for confirming a plan, ~~continue~~notwithstanding toits ~~have~~rejection by one or ~~could~~more ~~directly~~impaired classes of claims or ~~indirectly~~equity ~~have~~interests, adepends ~~material~~upon ~~adverse~~a ~~effect~~number onof ~~our~~factors ~~business~~including, ~~results~~without ~~of operations~~limitation, ~~financial~~the ~~condition~~status and ~~liquidity~~seniority ~~also~~of ~~include,~~the ~~but~~claims ~~are~~or ~~not~~equity ~~limited~~interests ~~to:~~in the rejecting class.

There is no assurance that the Company will be able to successfully consummate a Chapter 11 plan, creating substantial doubt about the Company’s ability to continue as a going concern.

~~Table~~The Company's ability to continue as a going concern is contingent upon, among other things, its ability to, subject to the Bankruptcy Court’s approval, implement a Chapter 11 plan, successfully emerge from the Chapter 11 Cases and establish a sustainable capital structure upon emergence. Our ability to consummate a Chapter 11 plan is subject to risks and uncertainties many of ~~Contents~~which are beyond our control. These factors, together with the Company’s recurring losses from operations and accumulated deficit, create substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the Company will be able to successfully create and implement a Chapter 11 plan, or realize all or any of the expected benefits from such Chapter 11 plan.

~~•Store~~The ~~and~~Company ~~distribution~~has ~~center~~sought ~~closures~~the inprotection ~~compliance~~of ~~with~~the ~~certain~~Bankruptcy ~~regulations~~Court, ~~orders~~which orsubjects ~~advisories~~it ~~and increased costs related~~ to the ~~operation~~risks ~~of our stores~~ and ~~distribution~~uncertainties ~~centers.~~associated Inwith ~~particular,~~bankruptcy ~~in Fiscal 2020, we temporarily closed all retail store locations (other than BABY~~ and ~~Harmon~~may ~~Face~~harm ~~Values),~~its ~~which have since been reopened;~~business.

•Potential inability of third parties on which we rely, including our suppliers, commercial banks and other external business partners, to meet their obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, or by travel restrictions and border closures;

•Negative impact on our employees. The spread of COVID-19 has caused us to modify our business practices (including, at times, employee travel and work locations, cancellation of physical participation in meetings, events and conferences, and temporary furloughs), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees;

•Potential impact on our ability to meet our obligations to business partners, including under our secured asset-based revolving credit facility (the "ABL Facility"), which contains a springing minimum fixed charge coverage ratio, customary representations, warranties and affirmative and negative covenants, and under our current lease obligations. We have renegotiated and may continue to renegotiate payment terms for goods, services and rent. Similar to other retailers, in Fiscal 2020, we had also withheld portions of and/or delayed payments to certain of our business partners as we negotiate revisions to our payment terms, in order to further maintain liquidity given the temporary store closures. There can be no assurance that we will continue to be able to successfully renegotiate payment terms with all such business partners, and the ultimate outcome of these activities, including the responses of all business partners, is not yet known;

•Significant reductions in demand or significant volatility in demand for our products, which have been and may continue to be caused by, among other things, the temporary inability or reluctance of consumers to shop at our stores or buy our products due to illness, quarantine or other travel restrictions, unemployment or other financial hardship, and change in consumer preferences and shifts in demand away from one or more of our more discretionary or higher priced products to lower priced products;

•Disruptions in the financial markets may materially adversely affect the value of our common stock and availability and cost of credit, which could negatively affect our liquidity;

•Delays, interruptions and disruptions in our supply chain and higher shipping charges have impacted, and could continue to impact our ability to maintain supplies of products and the costs associated with obtaining products;

•Labor shortages, wage pressures and competition for talent;

•The extent of dissemination and public acceptance of COVID-19 vaccines and their effectiveness against COVID-19 and its evolving strains, some of which may be more transmissible or virulent than the initial strain;

•Additional widespread resurgences in COVID-19 infections; and

•Evolving safety protocols such as mask mandates and requirements for proof of vaccination or regular testing in certain of our markets, including as may be set forth by the Occupational Safety and Health Administration.

The COVID-19 pandemic continues to evolve rapidly, and the extent of the adverse impact of COVID-19 on the economy and us will depend, in part, on the length and severity of the measures taken to limit the spread of the virus, and, in part, on the nature and effectiveness of the compensating measures taken by governments. The full extent of the impact of the COVID-19 pandemic on our business, financial position, and results of operations will depend on future developments, many of which are outside of our control, including the duration and spread of the COVID-19 pandemic, the emergence of variant strains, the availability, adoption, and effectiveness of the COVID-19 vaccines and COVID-19 testing, and government actions, which are uncertain and cannot be predicted. We are closely monitoring the potential effects and impact of the COVID-19 pandemic on our business, results of operations, financial condition and liquidity; however, the fluidity and evolving nature of the COVID-19 pandemic limits our ability to predict the ultimate impact on our business, financial condition, and financial performance, which could be material.

For more information on the impact of COVID-19 on our business, see "Item 1 - Business - Impact of the COVID-19 Pandemic."

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WeThe ~~operate~~Company inhas sought the ~~highly~~protection ~~competitive~~of ~~retail~~the Bankruptcy Court and as a result our operations and ability to develop and execute its business ~~where~~plan, and its ability to continue as a going concern, are subject to the ~~use~~risks and uncertainties associated with bankruptcy. As such, seeking Bankruptcy Court protection could have a material adverse effect on our business, financial condition, results of ~~emerging~~operations ~~technologies~~and asliquidity. ~~well~~Senior asmanagement ~~unanticipated~~has ~~changes~~been inrequired to spend a significant amount of time and effort attending to the ~~pricing~~Chapter 11 Cases instead of focusing exclusively on our business operations. Bankruptcy Court protection also might make it more difficult to retain management and other ~~practices~~employees ofnecessary ~~competitors~~to ~~may~~the ~~adversely~~success ~~affect~~and growth of our ~~performance~~business.

~~The~~Other ~~retail~~significant ~~business~~risks isinclude ~~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.following:

~~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 competitorsCompany’s ~~actions,~~ability ~~customers' adoption of new technology and related changes in customer behavior, and presents a specific risk in the event that we are unable~~ to ~~successfully~~create ~~execute our plans or adjust them over time as needed. Further, unanticipated changes in pricing~~ and ~~other~~implement 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~~Chapter ~~competitive~~11 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. For more information on our strategy, see "Item 1 - Business - Strategy."plan;

~~Our~~•the ~~failure~~high tocosts ~~anticipate and respond in a timely fashion to changes in consumer preferences and demographic factors may adversely affect our business, results~~ of ~~operations~~bankruptcy and ~~financial~~related ~~condition.~~fees;

~~Our~~•the ~~success~~imposition ~~depends~~of onrestrictions ~~our~~or ~~ability~~obligations toon 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~~Company ~~focus~~by onregulators ~~environmental,~~related ~~social and governance ("ESG") matters, climate change, and sustainable products, and appropriately manage our brand~~ to ~~promote~~ the ~~right~~bankruptcy ~~product lines (including our Owned Brands), drive customer loyalty~~ and ~~protect~~emergence ~~our~~from ~~reputation.~~Chapter 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.11;

~~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~~Company’s ~~and~~ability 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~~obtain ~~rapidly~~sufficient tofinancing ~~new or changing trends and preferences. These extended lead times may also increase our exposure~~ to ~~the~~allow ~~effects~~us ~~of global supply chain disruptions, increasing the risk that merchandise is not received when originally planned. As a result, we are vulnerable~~ to ~~demand~~emerge ~~and~~from ~~pricing~~bankruptcy ~~shifts~~ and toexecute ~~misjudgments~~its ~~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~~plan ~~of operations and financial condition may be negatively impacted.~~post-emergence;

~~Our~~•Bankruptcy ~~business~~Court isrulings ~~seasonal~~ in ~~nature,~~the ~~which~~Chapter ~~could~~11 ~~negatively~~Cases ~~affect~~as ~~our~~well ~~results~~as the outcome of ~~operations~~all other pending litigation and ~~financial~~the ~~performance.~~outcome of the Chapter 11 Cases in general

~~Our business is subject to seasonal influences, with a significant portion of sales and revenues historically realized during~~ •the ~~back~~Company’s toability ~~school/college and holiday seasons. We must carry a significant amount of inventory during this time, and if we are not able~~ to ~~sell~~maintain ~~the~~its ~~inventory,~~relationships wewith ~~may~~our ~~be required to take significant inventory markdowns or write-offs~~suppliers, ~~which~~service ~~could reduce profitability. Similarly~~providers, ~~if we do not adequately stock or restock popular products~~customers, ~~particularly during the back to school and holiday seasons~~employees, and ~~fail~~other tothird ~~meet customer demand, revenue and customer loyalty may be adversely impacted.~~parties;

~~In addition, our financial results during~~ •the ~~holiday~~Company’s ~~season~~ability 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,~~maintain ~~and~~contracts ~~results~~that ~~from any quarter~~ are ~~not~~critical ~~necessarily~~to ~~indicative~~its ~~of the results that may be achieved for a full fiscal year.~~operations;

~~STRATEGY~~•and ~~RISKS~~the actions and decisions of the Company’s debtholders and other third parties who have interests in the Company’s Chapter 11 Cases that may be inconsistent with the Company’s plans.

WeDelays ~~may~~in ~~face~~the ~~challenges~~Chapter in11 ~~executing~~Cases could increase the risks of our ~~omni-channel~~being unable to reorganize the Company’s business and ~~transformation~~emerge ~~strategy~~from bankruptcy and increase costs associated with the bankruptcy process.

The Debtors will be subject to the risks and uncertainties associated with the Chapter 11 Cases.

For the duration of the Chapter 11 Cases, the Debtors’ ability to operate, develop, and execute a business plan, and continue as a going concern, will be subject to the risks and uncertainties associated with bankruptcy. These risks include the following: (a) ability to obtain Bankruptcy Court approval with respect to motions filed in the Chapter 11 Cases from time to time; (b) ability to maintain contracts that are critical to the Debtors’ operations; (c) ability of third parties to seek and obtain Bankruptcy Court approval to terminate contracts and other agreements with the Debtors; (d) ability of third parties to seek and obtain Bankruptcy Court approval to terminate or shorten the exclusivity period for the Debtors to propose and confirm a Chapter 11 plan, to appoint a Chapter 11 trustee, or to convert the Chapter 11 Cases to Chapter 7 proceedings; and (e) the actions and decisions of the Debtors’ creditors and other third parties who have interests in the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

These risks and uncertainties could affect the Debtors’ businesses and operations in various ways. For example, the Debtors will need the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business, which may limit the Debtors’ ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with the Chapter 11 Cases, the Debtors cannot accurately predict or quantify the ultimate impact of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

The Chapter 11 Cases may be converted to cases under Chapter 7 of the Bankruptcy Code or one or more of the Chapter 11 Cases may be dismissed.

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the debtor in a Chapter 11 case, the Bankruptcy Court may convert a Chapter 11 bankruptcy case to a case under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate the debtor’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to creditors than those provided for in a Chapter 11 plan because of (a) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time, rather than reorganizing or selling the business as a going concern at a later time in a controlled manner, (b) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (c) additional expenses and claims, some of which would be entitled to priority, that

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~~During~~would ~~Fiscal~~be ~~2020,~~generated weduring ~~began executing on elements of our transformation strategy. Our ability to implement our strategic direction is based on a number of key assumptions regarding~~ the ~~future economic environment and our ability to meet certain ambitions~~liquidation, ~~goals and targets, among other things. If any of these assumptions (~~including ~~but~~claims ~~not~~resulting ~~limited~~from ~~to our ability to meet certain ambitions, goals and targets) prove inaccurate in whole or in part, our ability to achieve some or all of~~ the ~~expected~~rejection ~~benefits~~ of ~~this~~unexpired ~~strategy~~leases ~~could be limited, including our ability to meet our stated financial objectives~~ and ~~retain key employees. Factors beyond our control, including but not limited to market and economic conditions, execution risk related to the implementation of our strategy and~~ other ~~challenges~~executory ~~and~~contracts ~~risk factors discussed~~ in ~~this~~connection ~~annual~~with ~~report,~~cessation ~~could limit our ability to achieve some or all~~ of the expected benefits of this strategy. If we are unable to implement this strategy successfully in whole or in part or should the components of the strategy that are implemented fail to produce the expected benefits, our business, results of operations~~, financial condition and financial performance may be materially and adversely affected~~.

Additionally, anif ~~important~~the ~~part~~Bankruptcy ofCourt ~~our~~finds ~~strategy~~that ~~involves providing customers with a seamless omni-channel shopping experience. Customer expectations about~~ the ~~methods~~Debtors byhave ~~which~~incurred ~~they~~substantial ~~purchase~~or ~~and~~continuing ~~receive~~loss ~~products~~ or ~~services~~diminution ~~are~~to ~~evolving, including as a result of~~ the ~~COVID-19~~estate ~~pandemic,~~ and ~~they~~lack ~~are increasingly using technology to compare and purchase products. Once products are purchased, customers are seeking alternate options for delivery~~ of ~~those~~a ~~products.~~reasonable ~~The~~likelihood ~~coordinated operation~~ of ~~our~~rehabilitation ~~network~~ of ~~physical~~the ~~stores~~Debtors ~~and~~or ~~online platforms is fundamental to~~ the ~~success of our omni-channel strategy, and our~~ ability to ~~compete~~otherwise ~~and~~determines ~~meet~~that ~~customer~~cause ~~expectations may suffer if we are unable to provide relevant customer-facing technology and omni-channel experiences. In addition~~exists, ~~execution of our omni-channel strategy and~~ the ~~expansion~~Bankruptcy ofCourt ~~our~~may ~~e-commerce~~dismiss ~~business~~one ~~will~~or ~~require~~more ~~significant investments in technology. If we are unable to successfully implement our omni-channel strategy, our business, results~~ of ~~operations,~~the ~~financial~~Chapter ~~condition~~11 ~~and financial performance could be materially adversely affected~~Cases.

~~Our~~The ~~strategy~~Debtors ~~also~~cannot ~~involves~~predict the ~~introduction~~amount of ~~certain~~time ~~new~~spent Owned Brand merchandise, and the associated removal from our existing product assortment of existing third-party merchandise. These Owned Brands and 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~~bankruptcy. In addition, maintaining a larger assortment of Owned Brand products exposes us to additional reputational and regulatory risks, including those related to compliance with product safety and marketing requirements.

~~For~~While the Debtors have made efforts to minimize the length of the Chapter 11 Cases, it is impossible to predict with certainty the amount of time that the Debtors may spend in bankruptcy. There is a risk, due to uncertainty about the Debtors’ futures that, among other things: employees could be distracted from performance of their duties or more ~~information~~easily onattracted ~~our~~to ~~strategy~~other career opportunities; and suppliers, ~~see~~vendors, ~~"Item~~or 1other -business ~~Business~~partners -could ~~Strategy~~terminate their relationship with the Debtors or demand financial assurances or enhanced performance, any of which could impair the Debtors’ prospects and ability to generate stable, recurring cash flows."

~~Successful~~Lengthy ~~execution~~Chapter of11 ~~our~~Cases ~~omni-channel~~also ~~and~~would ~~transformation~~involve ~~strategy~~additional ~~is dependent~~expenses, inputting ~~part,~~strain on ~~our~~the ~~ability~~Debtors’ toliquidity ~~establish~~position, and ~~profitably~~divert ~~maintain~~ the ~~appropriate~~attention ~~mix~~ of ~~digital~~management ~~and~~from ~~physical~~the ~~presence~~operation inof the ~~markets~~Debtors’ ~~we serve~~businesses.

~~Successful~~The ~~execution~~disruption ofthat ~~our~~the ~~omni-channel~~bankruptcy ~~strategy~~process ~~depends,~~would inhave ~~part,~~ on ~~our~~the ~~ability~~Debtors’ tobusinesses ~~develop~~could ~~our~~increase ~~digital capabilities in conjunction~~ with ~~optimizing~~the ~~our~~length ~~physical store operations and market coverage, while maintaining profitability. Our ability to develop these capabilities will depend on a number~~ of ~~factors,~~time ~~including~~it ~~our~~takes ~~assessment and implementation of emerging technologies and our ability~~ to ~~manage~~complete ~~a changing mix of in-store and online orders (including as a result of~~ the ~~COVID-19~~Chapter ~~pandemic)~~11 ~~as well as our ability to drive store traffic~~Cases. ~~The~~Further, ~~success~~the ofDebtors ~~our~~may ~~omni-channel~~be ~~strategy~~forced ~~is also dependent on our ability~~ to ~~effectively~~operate ~~manage~~in ~~inventory~~bankruptcy ~~across~~for ~~our~~an ~~physical~~extended ~~stores~~period ~~and online channels. Our ability to optimize our store operations and market coverage requires active management~~ of ~~our~~time ~~real~~while ~~estate~~they ~~portfolio~~try ~~in a manner that permits store sizes, layouts, locations and offerings~~ to ~~evolve~~develop ~~over time, which to the extent it involves the relocation of existing stores, store remodels or the opening of additional stores will depend on~~ a ~~number~~plan of ~~factors,~~reorganization ~~including~~that ~~our~~can ~~identification~~be ~~and~~confirmed. ~~availability~~A ofprotracted ~~suitable~~bankruptcy ~~locations;~~case ~~our~~could ~~success~~increase inboth ~~negotiating leases on acceptable terms; and our timely development of new stores, including~~ the ~~availability~~probability ~~of construction materials~~ and ~~labor and~~ the ~~absence~~magnitude of ~~significant construction and other delays based on weather or other events. These factors could potentially increase~~ the ~~cost~~adverse ofeffects ~~doing~~described ~~business and the risk that our business practices could result in liabilities that may adversely affect our performance, despite the exercise of reasonable care~~above.

~~There~~Even ~~are~~if ~~risks~~a ~~associated~~Chapter ~~with~~11 ~~our~~plan ~~store~~is ~~fleet optimization strategies~~approved, ~~pursuant~~the toreorganized ~~which~~Debtors wemay ~~have~~not ~~closed~~be ~~207~~able ~~mostly~~to ~~Bed~~achieve ~~Bath~~their &projected ~~Beyond~~financial ~~stores as of the end of Fiscal 2021~~results.

AsEven ~~part~~if ~~of our ongoing business transformation, we have been executing~~ a ~~store~~Chapter ~~fleet~~11 ~~optimization~~plan ~~program~~is ~~that~~approved, ~~included~~ the ~~closure~~reorganized ofDebtors ~~approximately~~may ~~200~~not ~~mostly~~be ~~Bed~~able ~~Bath~~to &achieve ~~Beyond~~their ~~stores~~projected byfinancial ~~the end of Fiscal 2021~~results. InIf ~~connection~~the ~~with~~reorganized ~~this~~Debtors ~~program,~~do wenot ~~incurred~~achieve ~~approximately~~their ~~$92.4 million~~projected infinancial ~~costs~~results ~~including~~or ~~contract~~are ~~termination~~unable ~~costs,~~to ~~employee-related~~procure ~~costs,~~sufficient ~~professional~~exit ~~fees~~financing ~~and~~to ~~non-cash~~effectuate ~~impairment~~a ~~charges,~~Chapter of11 ~~which approximately $47.9 million was incurred in Fiscal 2021. The store fleet optimization program involves numerous risks~~plan, ~~including,~~the ~~without~~value ~~limitation,~~of the ~~diversion~~Company’s ofsecurities ~~our~~may ~~attention~~be ~~from~~negatively ~~our~~affected ~~businesses~~ and ~~operations.~~the ~~These~~reorganized orDebtors ~~other factors~~ may ~~impair~~lack ~~our~~sufficient ~~ability~~liquidity to ~~realize~~continue ~~the~~operating ~~anticipated~~as ~~benefits~~planned ofafter the ~~program,~~effective ~~which~~date. ~~may materially adversely affect our business~~Moreover, ~~results~~the ~~of operations,~~ financial condition and ~~liquidity.~~results Asof operations of ~~February 26,~~the ~~2022,~~reorganized ~~207~~Debtors ~~mostly~~from ~~Bed~~and ~~Bath~~after &the ~~Beyond~~effective ~~stores~~date ~~have~~may ~~been~~not ~~closed.~~be Wecomparable ~~may~~to ~~also~~the ~~determine~~financial ~~that~~condition ~~additional~~or ~~store~~results ~~closures~~of ~~are~~operations ~~warranted~~reflected in the ~~future.~~Debtors’ historical financial statements.

The Debtors may not be able to accurately report or timely file their financial results.

We have recently experienced significant turnover in our senior management team and reductions in our workforce. Our ability to retain key employees in the long-term is affected by Chapter 11 Cases and our financial situation. 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 and internal controls. 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.

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. However, internal controls over financial reporting may not prevent or detect misstatements or omissions in the Debtors’ financial statements because of their significant turnover in senior management, inherent limitations, including the possibility of human error, and the circumvention or overriding of controls or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If the Company fails to maintain the adequacy of their internal controls, the Debtors may be unable to provide financial information in a timely and reliable manner within the time periods required under the terms of the agreements governing the Debtors’ indebtedness. Further, the Debtors may discover other internal control deficiencies in the future and/or fail to adequately correct previously identified control deficiencies, which could materially adversely affect the Debtors’ businesses, results of operations, and financial condition.

The Company Parties may be adversely affected by potential litigation, including litigation arising out of the Chapter 11 Cases.

In the future, the Company Parties may become parties to litigation. In general, litigation can be expensive and time consuming to bring or defend against. Such litigation could result in settlements or damages that could significantly affect the reorganized Debtors’ financial results. It is also possible that certain parties will commence litigation with respect to the treatment of their claims under the Chapter 11 plan. It is not possible to predict the potential litigation that the Company Parties may become party to nor the final resolution of such litigation. The impact of any such litigation on the reorganized Debtors’ businesses and financial stability, however, could be material.

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~~Acquisitions,~~We ~~partnerships~~may orbe ~~investments,~~subject ~~divestitures~~to orclaims ~~other dispositions could negatively impact our business, and contingent liabilities from businesses~~ that weare ~~have~~not ~~sold~~discharged ~~could~~in ~~adversely~~the ~~affect~~Chapter ~~our~~11 ~~financial statements~~Cases.

AsThe ~~part~~Bankruptcy Code provides that the effectiveness of ~~our~~a ~~business~~Chapter ~~transformation~~11 ~~and~~plan ~~omni-channel~~discharges ~~strategy,~~a wedebtor ~~may~~from ~~make~~substantially ~~significant~~all ~~investments~~debts arising prior to petition date, other than as provided in ~~technology~~the applicable Chapter 11 plan. With few exceptions, ~~acquire~~all ~~businesses~~claims ~~aligned~~against ~~with~~us ~~our~~that ~~strategy~~arose ~~and~~prior ~~growth~~to ~~objectives~~the filing of the Cases or ~~enter~~before ~~into~~consummation ~~strategic~~of ~~partnerships.~~a IfChapter we11 ~~are~~plan ~~unable~~(i) towould ~~successfully~~be ~~integrate~~subject to compromise and/or ~~develop~~treatment ~~acquired~~under ~~businesses,~~a ~~establish~~Chapter 11 plan and/or ~~manage~~(ii) ~~investments~~would be discharged in accordance with the US Bankruptcy Code and ~~partnerships~~the orterms ifof ~~such~~a ~~activities~~Chapter do11 ~~not~~plan. ~~provide~~Subject to the ~~anticipated~~terms ~~benefits~~of ora ~~desired~~Chapter ~~rates~~11 plan and orders of ~~return~~the Bankruptcy Court, ~~our~~any ~~financial~~claims ~~condition~~not orultimately ~~results~~discharged ofpursuant ~~operation~~to ~~may~~a Chapter 11 plan could be ~~adversely~~asserted ~~affected.~~against the reorganized entities and may have an adverse effect on our liquidity and financial condition.

WeThe ~~continually~~Company’s ~~assess~~ability ~~shareholder~~to ~~value~~use ~~and~~net ~~strategic~~operating ~~fit~~loss ofcarryforwards ~~our~~(“NOLs”) ~~existing businesses, and~~ may ~~divest~~become orsubject ~~otherwise dispose of businesses that are deemed not~~ to ~~fit~~limitation, ~~with our strategic plan~~ or ~~are~~may ~~not~~be ~~achieving~~reduced ~~the desired shareholder value~~ or ~~return on investment. Such transactions pose risks and challenges that could negatively impact our business~~eliminated, ~~including,~~in ~~but~~connection ~~not~~with ~~limited to, not being able to achieve~~ the ~~desired~~implementation ~~strategic~~of ~~and~~a ~~financial~~Chapter ~~benefits~~11 ~~or obtain satisfactory terms within our anticipated timeframe or at all~~plan. ~~Even~~The ~~after~~bankruptcy ~~reaching~~court ahas ~~definitive~~entered ~~agreement~~an toorder ~~sell~~that ~~or dispose a business, the sale~~ is ~~typically~~designed ~~subject~~ to ~~satisfaction~~protect ~~of pre-closing conditions which may not become satisfied. In addition, divestitures or other dispositions may dilute~~ our ~~earnings~~NOLs ~~per~~until ~~share~~a orplan adversely impact corporate overhead contribution/allocation associated with divested brands, have other adverse financial and accounting impacts and distract management or result in disputes with buyers. We may also be required to indemnify buyers against known and unknown contingent liabilities related to any businesses we have sold or disposed. The resolution of ~~these~~reorganization ~~contingencies~~is ~~may have a material effect on our financial statements~~consummated.

~~In addition~~Generally, ~~uncertainty~~a ~~about~~company ~~the~~generates ~~effect~~NOLs ofif ~~any~~the ~~potential~~operating ~~divestiture~~expenses onit ~~employees,~~has ~~business~~incurred ~~partners,~~exceed ~~suppliers~~the ~~and~~revenues ~~vendors~~it ~~may~~has ~~have~~earned anduring ~~adverse~~a ~~effect~~single ontax usyear. ~~These~~A ~~uncertainties~~company may ~~impair~~apply, ~~our~~or ~~ability~~“carry ~~to retain and motivate key personnel and could cause business partners~~forward,” ~~suppliers,~~NOLs ~~vendors and others that deal with us~~ to ~~defer~~reduce orfuture ~~decline~~tax ~~entering~~payments ~~into~~(subject ~~contracts with us or seek~~ to ~~change~~certain ~~existing~~conditions ~~business relationships with us. In addition, if key employees depart because of uncertainty about their future roles~~ and ~~the potential complexities of any potential divestiture, our business could be harmed~~limitations). IfTo ~~we are unable to divest any such businesses~~date, ~~we may not be able to find another buyer on~~ the ~~same~~Company ~~terms~~has ~~and~~generated ~~will~~a ~~continue~~significant toamount ~~be subject to the risks~~ of ~~operating such businesses~~U.S. ~~For~~federal ~~more information on our strategy and recent divestitures, see "Item 1 - Business~~NOLs."

~~OPERATIONAL~~We ~~RISKS~~expect that we may undergo an ownership change under Section 382 of the Code in connection with the consummation of a Chapter 11 plan. Nevertheless, we believe these NOLs are a valuable asset for us, particularly in the context of the Chapter 11 Cases.

AIn ~~major~~addition, ~~disruption~~our ~~of,~~NOLs or(and ~~failure~~other tax attributes) may be subject to ~~successfully~~use ~~implement~~in connection with the implementation of any bankruptcy Chapter 11 plan or ~~make~~reduction ~~changes~~as ~~to,~~a ~~our~~result ~~information~~of ~~technology~~any ~~systems~~cancellation ~~could~~of ~~negatively~~indebtedness ~~impact~~income ~~results~~arising in connection with the implementation of ~~operations~~any bankruptcy Chapter 11 plan. As such, at this time, there can be no assurance that we will have NOLs to offset future taxable income.

~~Our~~We ~~results~~are ofcurrently ~~operations~~out ~~could be negatively impacted by a major disruption~~ of ~~our~~compliance ~~information technology systems. We rely heavily on these systems to process transactions~~ with ~~customers~~the ~~and~~Nasdaq ~~vendors,~~Listing ~~manage~~Rules ~~inventory replenishment, summarize results~~ and ~~control distribution of products. Despite numerous safeguards and careful contingency planning, these systems~~ are ~~still~~at ~~subject~~risk ~~to power outages, telecommunication failures, cybercrimes, cybersecurity attacks and other catastrophic events. A major disruption~~ of ~~the~~Nasdaq ~~systems~~delisting 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~~common ~~condition, results of operations or reputation~~stock.

InOn ~~addition,~~April ~~in the ordinary course of business~~24, we ~~regularly~~received ~~evaluate~~written ~~and~~notice ~~make~~from ~~changes~~Nasdaq ~~and~~notifying ~~upgrades~~us toCompany ~~our~~that, ~~information~~as ~~systems.~~a Asresult ~~part~~ of ~~our~~the ~~transformation~~Chapter ~~strategy,~~11 weCases ~~have~~and ~~commenced~~in aaccordance ~~multi-year~~with ~~effort~~the toNasdaq ~~evaluate~~Listing ~~and,~~Rules ~~where appropriate~~5101, ~~upgrade~~5110(b) and~~/or~~ ~~replace certain of our information systems~~IM-5101-1, ~~including~~Nasdaq ~~systems~~had ~~for~~determined ~~inventory~~that ~~management, order management and~~ our ~~finance~~common ~~systems.~~stock ~~These~~would ~~system~~be ~~changes~~delisted ~~and~~from ~~upgrades~~Nasdaq. ~~can~~Trading ~~require significant capital investments, dedication~~ of ~~resources~~the ~~and~~Company’s ~~time~~common tostock ~~fully~~was ~~implement.~~suspended ~~During~~at ~~this~~the ~~transition,~~opening weof ~~may~~business ~~need to continue to operate~~ on ~~legacy~~May ~~infrastructure~~3, ~~which~~2023. ~~has~~Delisting ~~had,~~would ~~and could continue to~~ have, aan ~~material~~ adverse ~~impact~~effect on ~~our~~the ~~business~~liquidity ~~operations~~of ~~and~~our ~~financial~~common ~~results.~~stock ~~While~~and, weas ~~follow~~ a ~~disciplined~~result, ~~methodology~~the ~~when~~market ~~evaluating~~price ~~and~~for ~~making~~our ~~such~~common ~~changes,~~stock ~~there~~might ~~can~~become bemore novolatile. ~~assurances~~Delisting ~~that~~could wealso ~~will~~reduce ~~successfully~~the ~~implement~~number ~~such~~of ~~changes,~~investors ~~that~~willing ~~such~~to ~~changes~~hold ~~will~~or ~~occur~~acquire ~~without disruptions to~~ our ~~operations~~common orstock ~~that~~and ~~the~~negatively ~~new~~impact orour ~~upgraded~~ability ~~systems~~to ~~will~~access ~~achieve~~equity ~~the~~markets ~~desired~~and ~~business~~obtain ~~objectives~~financing.

~~Security~~We ~~breaches~~expect ~~and~~Nasdaq ~~other~~to ~~disruptions~~file a Form 25 with the SEC to delist our ~~information~~common ~~technology~~stock ~~infrastructure~~from ~~(including~~trading ~~third-party~~on ~~service~~Nasdaq ~~providers~~and to remove it from registration under Section 12(b) ~~could~~of ~~interfere~~the ~~with~~Exchange ~~our~~Act. ~~operations~~The delisting became effective 10 days after such filing. ~~These~~In ~~disruptions~~accordance ~~can~~with ~~lead~~Rule to12d2-2 ~~unplanned~~of ~~remediation~~the ~~costs~~Exchange toAct, ~~address~~the ~~enhancements~~de-registration toof our ITcommon ~~systems~~stock ~~and~~under ~~result~~Section in12(b) ~~loss~~ of ~~consumer~~the ~~confidence~~Exchange ~~and~~Act ~~other~~will ~~negative~~become ~~consequences~~effective 90 days, ~~which~~or such shorter period as the SEC may ~~include~~determine, ~~litigation~~from ~~and~~the ~~regulatory~~date ~~penalties~~of the Form 25 filing.

WeFollowing ~~collect,~~delisting ~~process~~from Nasdaq, ~~transmit~~the ~~and~~Company’s ~~store~~common ~~relevant~~stock ~~information~~has ~~about~~been ~~our~~quoted ~~customers~~in the OTC Pink Open Market under the symbol “BBBYQ”. The OTC Pink Open Market is a significantly more limited market than Nasdaq, and ~~employees~~quotation inon the ~~ordinary~~OTC ~~course~~Pink ofOpen ~~business~~Market likely results in ~~connection~~a ~~with~~less ~~certain~~liquid ~~activities,~~market ~~including,~~for ~~without~~existing ~~limitation~~and ~~credit~~potential ~~card~~holders ~~processing,~~of ~~website~~the ~~hosting,~~common ~~data~~stock ~~encryption~~to trade the Company’s common stock and ~~software~~could ~~support~~further depress the trading price of the common stock. AsThe aCompany ~~result,~~can weprovide ~~face~~no ~~risks~~assurance ~~associated~~as ~~with~~to ~~unauthorized~~whether ~~access~~broker-dealers will continue to ~~our~~provide public quotes of the common stock on this market, or ~~our~~whether ~~third-party~~the ~~service~~trading ~~providers’~~volume of the common stock will be sufficient to provide for an efficient trading market.

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~~information~~RISKS ~~technology~~RELATED ~~systems,~~TO ~~loss~~THE orECONOMY ~~destruction~~AND ofINDUSTRY 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 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~~General ~~example,~~economic infactors ~~October~~beyond ~~2019~~our control, weincluding ~~discovered~~the ~~that~~impact aof ~~third party acquired e~~COVID-~~mail~~19, and ~~password~~changes ~~information~~in ~~from~~the aeconomic ~~source~~climate ~~outside~~have ofmaterially ~~our~~adversely ~~systems~~affected, ~~that~~and ~~was~~could ~~used~~continue to ~~access~~materially ~~our~~adversely ~~online~~affect, ~~customer~~our ~~accounts. On October 29~~business, ~~2019,~~results ~~we sent notifications to certain customers as required by applicable legal requirements. None~~ of ~~our~~operations, ~~online~~financial ~~customers’~~condition ~~payment~~and ~~cards were compromised as a result of this incident~~liquidity.

~~Globally,~~General ~~the~~economic ~~sophistication,~~factors ~~frequency~~that ~~and~~are ~~severity~~beyond ofour ~~the~~control ~~techniques~~have ~~used~~materially toadversely ~~obtain unauthorized access to systems~~affected, ~~sabotage~~and ~~systems~~could ~~or degrade system performance~~ continue to ~~evolve~~materially ~~and~~adversely ~~become~~affect, ~~harder~~our tobusiness, ~~detect.~~results Weof ~~are~~operations, ~~continuously~~financial ~~evaluating~~condition and ~~enhancing~~liquidity. ~~our~~These ~~cybersecurity~~factors ~~and~~include, ~~information~~but ~~security~~are ~~systems~~not ~~and~~limited ~~creating~~to, ~~new~~recent ~~systems~~supply ~~and~~chain ~~processes. However~~disruptions, ~~there~~labor ~~can~~shortages, bewage nopressures, ~~assurance~~rising ~~that~~inflation ~~these~~and ~~measures will be effective in preventing or limiting~~ the ~~impact~~ongoing ofmilitary ~~future~~conflict ~~cybersecurity~~between ~~incidents.~~Russia ~~As techniques used to breach security grow in frequency~~ and ~~sophistication~~Ukraine, ~~and~~as ~~are~~well ~~generally~~as ~~not~~housing ~~recognized~~markets, ~~until~~consumer ~~launched~~credit ~~against a target~~availability, ~~we,~~consumer ordebt ~~our third-party service providers~~levels, ~~may~~fuel ~~not~~and beenergy ~~able~~costs to(for ~~promptly~~example, ~~detect~~the ~~that~~price aof ~~cyber~~gasoline), ~~breach~~interest ~~has occurred or~~rates, ~~implement~~tax ~~security~~rates ~~measures~~and inpolicy, aunemployment ~~timely~~trends, ~~manner~~the orimpact ~~ensure~~of ~~that~~natural ~~any~~disasters such ~~security~~as ~~measures~~pandemics, ~~will~~civil bedisturbances ~~effective.~~and Ifterrorist weactivities, ~~experience~~foreign acurrency ~~material~~exchange ~~cybersecurity~~rate ~~incident~~fluctuations, ~~impacting~~conditions affecting the ~~confidentiality~~retail ~~and~~environment ~~integrity~~for ofproducts ~~our~~sold ~~data~~by orus ~~operations~~and ofother ~~systems~~matters ~~this~~that ~~could~~influence ~~interfere~~consumer ~~with~~spending ~~our operations~~ and ~~cause~~preferences. usChanges toin ~~incur~~the ~~unplanned~~economic ~~significant~~climate ~~remediation~~and ~~costs~~the toimpact ~~address~~of ~~enhancements~~the toCOVID-19 ~~our IT resources~~pandemic, ~~affect~~including ~~our~~on ~~ability~~global tosupply ~~carry out our businesses~~chains, ~~impair~~labor ~~the~~markets ~~trust of our customers or potential customers~~ and ~~expose~~economic usactivity, tohave ~~increased~~materially ~~risk~~adversely ~~of lawsuits~~affected, ~~regulatory penalties~~ and ~~damage~~could ~~relating~~continue to ~~loss~~materially ofadversely ~~proprietary information~~affect, ~~any of which could have a material adverse effect on~~ our business, ~~financial~~ results ~~and~~of ~~our~~operations, ~~brand~~financial condition and ~~reputation~~liquidity.

~~Damage~~We tooperate ~~our~~in ~~reputation~~the inhighly ~~any~~competitive ~~aspect~~retail business where the use of ~~our~~emerging ~~operations~~technologies ~~could~~as ~~potentially~~well ~~impact~~as ~~our~~unanticipated ~~operating~~changes in the pricing and ~~financial~~other ~~results~~practices of competitors may adversely affect our performance.

~~Our~~The ~~reputation~~retail business is ~~based~~highly competitive. We compete for customers, inemployees, ~~part~~locations, onmerchandise, ~~perceptions~~technology, services and other important aspects of ~~subjective~~the ~~qualities~~business with many other local, soregional ~~incidents~~and ~~involving~~national ~~our~~retailers. ~~brand,~~These ~~our~~competitors ~~Owned~~range ~~Brands~~from specialty retailers to department stores and discounters as well as online and multichannel retailers, ~~our~~some ~~products~~of orwhich ~~the~~are ~~retail~~larger ~~industry~~than inus ~~general~~with ~~that~~significantly ~~erode~~greater ~~customer~~financial ~~trust~~resources. orIn ~~confidence~~recent ~~could~~years, ~~adversely~~competition ~~affect~~has ~~our~~further ~~reputation~~intensified as a result of reduced discretionary consumer spending, increased promotional activity and ~~our~~deep ~~business.~~price discounting.

AsRapidly evolving technologies are also altering the manner in which we ~~increase~~and our competitors communicate and transact with customers. Our execution of the ~~number~~elements of ~~items~~our ~~available~~transformation strategy is designed to beadapt ~~shipped~~to ~~directly~~these ~~from~~changes, ain ~~vendor~~the tocontext aof competitors’ actions, customer's ~~for~~adoption ~~home~~of ~~delivery~~new ortechnology and related changes in~~-home~~ ~~assembly~~customer behavior, weand ~~increasingly~~presents ~~rely~~a onspecific risk in the ~~performance~~event ofthat ~~these~~we ~~third-party~~are ~~merchandise~~unable ~~vendors~~to ~~and~~successfully ~~service~~execute ~~providers.~~our ~~Our~~plans ~~focus~~or onadjust ~~executing~~them ~~strategic~~over ~~partnerships~~time ~~also~~as ~~means~~needed. ~~that~~Further, weunanticipated ~~will~~changes ~~rely~~in onpricing ~~the~~and ~~performance~~other practices of ~~those~~our ~~partners~~competitors, including promotional activity (particularly during back-to-school/college and/or holiday periods), reduced thresholds for ~~activities~~free ~~that~~shipping ~~directly~~and ~~impact~~rapid ~~the~~price ~~customer~~fluctuation ~~experience.~~enabled ~~Any~~by ~~deficiencies~~technology, inmay adversely affect our performance. byIf ~~these~~we ~~third~~are ~~parties~~unable orto ~~partners~~adapt ~~could~~effectively ~~have~~and quickly to a ~~material~~changing ~~adverse~~competitive ~~effect~~landscape onand maintain our ~~reputation~~competitive position, ~~despite~~we could experience downward pressure on prices, lower demand for our ~~monitoring~~merchandise, ~~controls~~reduced sales and ~~procedures~~margins, inability to take advantage of new business opportunities and loss of market share.

~~Federal,~~Our ~~state~~failure ~~and local governments, our customers and consumers and shareholders are becoming increasingly sensitive~~ to ~~environmental~~anticipate and ~~other~~respond sustainability issues. In response, we have committed to an ambitious ESG strategy. In order to reach these ambitions and goals, we will need to incorporate ESG considerations into our business strategy, products and services, and may incur significant cost and effort in ~~doing so. Failure to manage and successfully execute our ESG strategy or address ESG matters appropriately (or being able to do so only at~~ a ~~significant~~timely ~~expense~~fashion to ~~our~~changes ~~business),~~in orconsumer ~~failure~~preferences ~~to adapt our strategy~~ and ~~business~~demographic tofactors ~~the changing regulatory requirements and market expectations,~~ may ~~result in reputational damage and materially and~~ adversely affect our business, results of operations and financial ~~results~~condition.

InOur ~~addition,~~success ~~challenges~~depends toon our ~~compliance~~ability ~~with~~to ~~various~~anticipate ~~regulations~~and respond in a timely manner to changing merchandise trends, ~~rules~~customer demands and ~~laws,~~demographics ~~including~~in ~~but~~order ~~not~~to ~~limited~~maintain and attract customers. We must continue to, ~~those~~monitor ~~related~~and react to ~~social~~consumer expectations, ~~product~~such as the increased focus on environmental, ~~labor~~social and ~~environmental~~governance ("ESG") matters, ~~could~~climate ~~also~~change, ~~jeopardize~~and ~~our~~sustainable ~~reputation~~products, and ~~lead~~appropriately manage our brand to ~~adverse~~promote ~~publicity~~the right product lines (including our Owned Brands), ~~especially~~drive incustomer ~~the~~loyalty ~~rapidly~~and ~~changing~~protect ~~media~~our ~~environment~~reputation. ~~The~~Our ~~increased~~failure ~~use~~to ofanticipate, ~~digital~~identify ~~platforms,~~or ~~such~~react asappropriately ~~social~~to ~~media~~changes in customer tastes, bypreferences, usshopping and ~~consumers~~spending ~~has~~patterns ~~also~~and ~~increased~~other ~~the~~life ~~risk~~interest ~~that~~decisions, ~~our~~including ~~reputation~~as a result of COVID-19, could belead ~~negatively~~to, ~~impacted~~among byother ~~information~~things, ~~about~~excess inventories, a shortage of products or ~~affecting~~reputational usdamage, ~~that~~and ismay ~~easily~~adversely ~~accessible~~affect our business, results of operations and ~~rapidly~~financial ~~disseminated~~condition.

~~Damage~~In toaddition, we must manage our ~~brand~~inventory effectively and ~~reputation~~commensurately ~~could~~with ~~potentially~~customer ~~impact~~demand. ~~our~~Often, ~~operating~~we need to order merchandise, and ~~financial~~enter ~~results~~into contracts for the purchase and manufacturing of such merchandise, ~~diminish~~multiple ~~customer~~seasons ~~trust~~in advance of and ~~generate~~frequently ~~negative~~before customer ~~sentiment~~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, asincreasing ~~well~~the asrisk ~~require~~that ~~additional~~merchandise ~~resources~~is not received when originally planned. As a result, we are vulnerable to ~~rebuild~~demand and pricing shifts and to misjudgments in the selection and timing of merchandise purchases. If we do not accurately predict our ~~reputation~~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.

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Our ~~success~~business is ~~dependent,~~subject into ~~part~~seasonal influences, onwith ~~managing~~a ~~costs~~significant portion of ~~labor,~~sales ~~merchandise~~and revenues historically realized during the back to school/college and ~~other~~holiday ~~expenses~~seasons. ~~that~~We must carry a significant amount of inventory during this time, and if we are ~~subject~~not able to ~~factors~~sell ~~beyond~~the ~~our~~inventory, ~~control~~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.

~~Our~~In ~~success depends~~addition, ~~in part, on~~ our ~~ability~~financial toresults ~~manage~~during ~~operating~~the ~~costs~~holiday ~~and~~season tomay ~~look~~fluctuate ~~for~~significantly ~~opportunities~~based toon ~~reduce~~many ~~costs. Our ability to meet our labor needs while controlling costs is subject to external~~ factors ~~such as unemployment levels~~, ~~prevailing~~including ~~wage~~holiday ~~rates,~~spending ~~minimum~~patterns ~~wage legislation, labor organizing activities~~ and ~~changing~~weather ~~demographics.~~conditions, ~~Our ability to find qualified merchandise vendors~~ and ~~service~~any ~~providers~~such ~~and~~fluctuation ~~obtain~~could ~~access~~have ~~to products in~~ a ~~timely,~~disproportionate ~~efficient~~effect ~~and~~on ~~cost-effective~~our ~~manner~~results ~~can~~of beoperations ~~adversely~~for ~~affected~~the byentire ~~trade~~Fiscal ~~restrictions,~~year. ~~political~~Because ~~instability,~~of ~~financial~~the ~~instability~~seasonality of ~~suppliers~~our business, ~~suppliers’~~our ~~noncompliance~~operating ~~with~~results ~~applicable~~vary ~~laws,~~considerably ~~transportation~~from ~~costs,~~quarter ~~disruptions~~ to ~~our supply chain network serving our stores~~quarter, ~~distribution facilities~~ and ~~customers~~results ~~due~~from toany ~~labor~~quarter ~~disturbances~~are ~~and~~not ~~other~~necessarily ~~items,~~indicative ~~and~~of ~~other~~the ~~factors~~results ~~beyond~~that ~~our~~may ~~control,~~be ~~including~~achieved ~~the~~for ~~impact~~a offull ~~the~~fiscal ~~COVID-19 pandemic~~year.

~~Disruptions~~RISKS ofRELATED ~~our~~TO ~~supply~~LEGAL ~~chain~~AND ~~could have an adverse effect on our operating and financial results.~~REGULATORY

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. As we continue to expand our assortment of proprietary Owned Brand merchandise, the portion of our merchandise that we purchase directly from overseas sources is increasing, and represented approximately 22% of our total purchases in Fiscal 2021.

We have experienced in 2021, and expect to continue to experience in 2022, 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. 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 BOPIS or Curbside, Same Day Delivery, and Ship from Store. The first of these facilities began operations in the second half of Fiscal 2021. 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 impact of COVID-19 may increase uncertainty in the global financial markets, as well as the possibility of high inflation and extended economic downturn, which could reduce our ability to incur debt or access capital and impact our results of operations and financial condition even after these conditions improve.

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

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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.

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 rain storms, hurricanes, floods, tornados, earthquakes, wild fires, 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.

CAPITAL RISKS

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

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(including as a result of the COVID-19 pandemic), we cannot be assured that we will not experience losses on our deposits, and it may negatively impact the availability and cost of capital.

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, in part due to factors such as those mentioned in this Item 1A. 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 stockholders 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, such as the impact of the COVID-19 pandemic on our stock price. 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. We recommenced share repurchase programs on October 28, 2020 and in Fiscal 2020 entered into accelerated share repurchase programs on October 28, 2020 and January 7, 2021 (as amended on January 29, 2021), totaling $375.0 million. In Fiscal 2021, we announced that we intended to complete our $1 billion three year repurchase plan by the end of Fiscal 2021, two years ahead of schedule, and completed share repurchases of $574.9 million, bringing cumulative repurchases under this plan to approximately $950.0 million through February 26, 2022. An additional approximately $40.0 million was repurchased in March of 2022. For more information on our dividends and share repurchase programs, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

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

We have incurred indebtedness under senior unsecured notes and have entered into the ABL Facility. 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 potential adverse effects of the COVID-19 pandemic, for example, we may be unable to maintain compliance with the springing minimum fixed charge coverage ratio covenant under the ABL Facility in future periods, to the extent the covenant is applicable under the terms of the ABL Facility, which would among other things, result in an event of default under the ABL Facility.

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 capital; reducing or delaying our business activities, or selling assets. There can be no assurance that any such measures would be successful.

LEGAL AND REGULATORY RISKS

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.

19Our product offerings to 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.

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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.

As part of our business transformation and strategy, we have expanded our product offerings to include a selection of Owned Brands. This expansion brings additional regulatory and compliance requirements, which require new resources and the development of new policies and procedures. Our failure to properly manage our 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.

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.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

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ITEM 2 – PROPERTIES

Most of our stores are located in suburban areas of medium and large-sized cities. These stores are situated in strip and power strip shopping centers, as well as in major off-price and conventional malls, and in free standing buildings.

As of February 2625, ~~2022~~2023, our ~~953~~872 stores are located in all 50 states, the District of Columbia, Puerto Rico and Canada and range in size from approximately 4,000 to 84,000 square feet, but are predominantly between 18,000 and 50,000 square feet. Approximately 85% to 90% of store space is used for selling areas.

20The table below sets forth the locations of our stores as of February 25, 2023:


STORE LOCATIONS

Alabama	12	New York	54
Alaska	1	North Carolina	25
Arizona	18	North Dakota	2
Arkansas	6	Ohio	21
California	74	Oklahoma	9
Colorado	22	Oregon	10
Connecticut	11	Pennsylvania	23
Delaware	4	Rhode Island	2
Florida	62	South Carolina	14
Georgia	23	South Dakota	2
Hawaii	1	Tennessee	18
Idaho	6	Texas	74
Illinois	23	Utah	7
Indiana	13	Vermont	2
Iowa	6	Virginia	22
Kansas	9	Washington	15
Kentucky	7	West Virginia	1
Louisiana	11	Wisconsin	10
Maine	4	Wyoming	2
Maryland	14	District of Columbia	1
Massachusetts	18	Puerto Rico	1
Michigan	24	Alberta, Canada	17
Minnesota	8	British Columbia, Canada	11
Mississippi	4	Manitoba, Canada	2
Missouri	15	New Brunswick, Canada	2
Montana	6	Newfoundland and Labrador, Canada	1
Nebraska	5	Nova Scotia, Canada	2
Nevada	8	Ontario, Canada	27
New Hampshire	9	Prince Edward Island, Canada	1
New Jersey	63	Saskatchewan, Canada	2
New Mexico	5	Total	872

We lease substantially all of our existing stores. The leases provide for original lease terms that generally range from 10 to 15 years and most leases provide for a series of 5 year renewal options, often at increased rents, the exercise of which is at our sole discretion. We evaluate leases on an ongoing basis which may lead to renegotiated lease provisions, including rent and term duration, or the possible relocation or closing of stores. We have approximately 145 store leases that are up for renewal in 2023, which provide opportunity to evaluate additional store closures and relocations. Certain leases provide for scheduled rent increases (which, in the case of fixed increases, we account for on a straight-line basis over the committed lease term, beginning when we obtain possession of the premises) and/or for contingent rent (based upon store sales exceeding stipulated amounts).

We have distribution facilities, which ship merchandise to stores and customers, totaling approximately 5.6 million square feet, including our first regional distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, which became operational during Fiscal 2021. We also executed a lease for our second regional distribution center in Jurupa Valley, California, with approximately one million square feet, which became operational in late 2022. As part of the optimization

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~~The~~and ~~table~~transformation ~~below~~initiatives ~~sets~~during ~~forth~~ the ~~locations~~fourth quarter of ~~our~~Fiscal ~~stores~~2022, asthe Company decided to no longer use the Jurupa Valley, California distribution center. As of February 26 25, ~~2022:~~2023, the Company had not fully exited the distribution center or reached a final negotiation with Ryder Systems, Inc. See "Item 2 - Properties" for additional information regarding our distribution facilities.

STORE LOCATIONS
Alabama	12	New York	60
Alaska	1	North Carolina	26
Arizona	22	North Dakota	2
Arkansas	6	Ohio	25
California	87	Oklahoma	9
Colorado	20	Oregon	11
Connecticut	14	Pennsylvania	25
Delaware	4	Rhode Island	2
Florida	69	South Carolina	13
Georgia	25	South Dakota	2
Hawaii	1	Tennessee	18
Idaho	6	Texas	76
Illinois	31	Utah	7
Indiana	13	Vermont	2
Iowa	8	Virginia	26
Kansas	10	Washington	18
Kentucky	8	West Virginia	1
Louisiana	12	Wisconsin	9
Maine	4	Wyoming	2
Maryland	14	District of Columbia	1
Massachusetts	21	Puerto Rico	2
Michigan	30	Alberta, Canada	17
Minnesota	9	British Columbia, Canada	11
Mississippi	5	Manitoba, Canada	2
Missouri	15	New Brunswick, Canada	2
Montana	6	Newfoundland and Labrador, Canada	1
Nebraska	5	Nova Scotia, Canada	2
Nevada	9	Ontario, Canada	27
New Hampshire	9	Prince Edward Island, Canada	1
New Jersey	70	Saskatchewan, Canada	2
New Mexico	5	Total	953

As of February 25, 2023, we have approximately 706,000 square feet within 6 leased and owned facilities for corporate office functions.

WeThe ~~lease~~Company ~~substantially~~closed ~~all~~88 ofstores ~~our~~during ~~existing~~Fiscal ~~stores~~2022. ~~The~~Additionally, ~~leases~~the ~~provide~~Company ~~for~~commenced ~~original~~the ~~lease~~closure ~~terms~~of ~~that~~331 ~~generally~~additional ~~range~~stores ~~from~~as ~~10 to 15 years and most leases provide for a series~~ of 5February ~~year renewal options~~25, ~~often at increased rents, the exercise of which is at our sole discretion~~2023. We ~~evaluate~~may ~~leases~~close onour anremaining ~~ongoing~~stores ~~basis~~as ~~which~~part ~~may~~of ~~lead~~the toChapter ~~renegotiated~~11 ~~lease provisions~~Cases, ~~including rent~~ and ~~term duration, or~~ the ~~possible~~Company ~~relocation~~Parties ~~or closing of stores. We have approximately 150 store leases that~~ are upactively ~~for~~seeking ~~renewal in 2022, which provide opportunity~~ to ~~evaluate~~market ~~additional store closures~~ and ~~relocations.~~sell ~~Certain~~real property leases ~~provide for scheduled rent increases (which,~~ in ~~the~~order ~~case~~to ofcapture ~~fixed~~substantial ~~increases,~~value ~~we account for on a straight-line basis over the committed lease term, beginning when we obtain possession of the premises)~~ and~~/or~~ ~~for~~avoid ~~contingent~~significant ~~rent~~costs ~~(based~~associate ~~upon~~with ~~store~~such ~~sales exceeding stipulated amounts)~~leases.

We have distribution facilities, which ship merchandise to stores and customers, totaling approximately 4.4 million square feet, including our first regional distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, which became operational during Fiscal 2021. We also executed a lease for our second regional distribution center in Jurupa Valley, California, which is expected to be operational by late 2022. Ryder Systems, Inc. will operate these two regional distribution centers under a strategic partnership, with the objective of reducing product replenishment times and improving the customer experience.19

As of February 26, 2022, we have approximately 704,000 square feet within 9 leased and owned facilities for corporate office functions.

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ITEM 3 – LEGAL PROCEEDINGS

AChapter putative securities class action was filed on April 14, 2020 against our Company and three of our officers and/or directors (Mark Tritton, Mary Winston (the Company’s former Interim Chief Executive Officer) and Robyn D’Elia (the Company’s former Chief Financial Officer and Treasurer)) in the United States District Court for the District of New Jersey (the "New Jersey federal court"). The case, which is captioned Vitiello v. Bed Bath & Beyond Inc., et al., Case No. 2:20-cv-04240-MCA-MAH, asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of our securities from October 2, 2019 through February 11, 2020. The Complaint alleges that certain of our disclosures about financial performance and certain other public statements during the putative class period were materially false or misleading. A similar putative securities class action, asserting the same claims on behalf of the same putative class against the same defendants, was filed on April 30, 2020. That case, captioned Kirkland v. Bed Bath & Beyond Inc., et al., Case No. 1:20-cv-05339-MCA-MAH, is also pending in the United States District Court for the District of New Jersey. On August 14, 2020, the court consolidated the two cases and appointed Kavin Bakhda as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (as consolidated, the "Securities Class Action"). Lead plaintiff and additional named plaintiff Richard Lipka filed an Amended Class Action Complaint on October 20, 2020, on behalf of a putative class of purchasers of the Company’s securities from September 4, 2019 through February 11, 2020. Defendants moved to dismiss the Amended Complaint on December 21, 2020.Bankruptcy

~~After~~On aApril ~~mediation~~23, ~~held~~2023 in(the ~~August~~“Petition ~~2021~~Date”), athe ~~settlement~~Company inand ~~principle~~materially ~~was~~all ~~reached~~of ~~between~~its direct and indirect subsidiaries (collectively, the “Debtors” or the “Company ~~and~~Parties”) ~~lead~~filed ~~plaintiff~~voluntary inpetitions (the ~~Securities~~“Chapter ~~Class~~11 ~~Action~~Cases”) under Chapter 11 of the U.S. ~~The~~Bankruptcy ~~settlement~~Code ~~has~~(the ~~been~~“Bankruptcy ~~executed~~Code”) ~~and~~in ~~was~~the ~~preliminarily~~U.S. ~~approved~~Bankruptcy byCourt for the District of New Jersey ~~Federal~~(the “Bankruptcy Court”). inOn ~~February~~the ~~2022.~~Petition IfDate, the ~~settlement~~Company isParties ~~granted~~filed ~~final~~a ~~approval,~~motion with the ~~Securities~~Bankruptcy ~~Class~~Court ~~Action~~seeking ~~will~~to bejointly ~~fully~~administer ~~resolved~~the ~~and~~Chapter ~~the~~11 ~~matter~~Cases. On ~~will~~April be24, ~~dismissed.~~2023, ~~The~~the ~~Company~~Bankruptcy ~~has~~Court ~~recorded~~entered aan ~~liability~~order ~~for~~approving joint administration under the ~~Securities~~caption ~~Class~~“In ~~Action~~re Bed Bath & Beyond Inc.,” ~~based~~Case onNo. 23-13359. Certain of the ~~agreed~~Company’s ~~settlement~~subsidiaries ~~amount~~were ~~and~~not ~~insurance~~included ~~coverage~~in ~~available~~the Chapter 11 filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the Bankruptcy Court motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers for goods and services provided both before and after the Petition Date. In addition, the Company filed with the Bankruptcy Court a motion seeking approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on an interim basis. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis consensually. A hearing is scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day motions, and final approval of the DIP Facility.

Effect of Automatic Stay upon filing under Chapter 11 of the Bankruptcy Code

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against or on behalf of the Company Parties. Subject to certain exceptions under the Bankruptcy Code, the filing of the Company Parties’ Chapter 11 Cases automatically stayed the continuation of most legal proceedings or the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estates, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim. Notwithstanding the general application of the automatic stay described above, governmental authorities may determine to continue actions brought under their police and regulatory powers. See “Item 1 — Business — Recent Developments” for further discussion of the Chapter 11 Cases and our going concern evaluation.

Legal Proceedings

On April 23, 2023, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As a result of such bankruptcy filings, substantially all proceedings pending against the Debtors have been stayed by operation of Section 362(a) of the Bankruptcy Code.

A putative securities class action was filed on April 14, 2020 against our Company and three of our officers and/or directors (Mark Tritton (the Company's former President and Chief Executive Officer), Mary Winston (the Company’s former Interim Chief Executive Officer) and Robyn D’Elia (the Company’s former Chief Financial Officer and Treasurer)) in the United States District Court for the District of New Jersey (the "New Jersey federal court"). The case, which is captioned Vitiello v. Bed Bath & Beyond Inc., et al., Case No. 2:20-cv-04240-MCA-MAH, asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of our securities from October 2, 2019 through February 11, 2020. The Complaint alleges that certain of our disclosures about financial performance and certain other public statements during the putative class period were materially false or misleading. A similar putative securities class action, asserting the same claims on behalf of the same putative class against the same defendants, was filed on April 30, 2020. That case, captioned Kirkland v. Bed Bath & Beyond Inc., et al., Case No. 1:20-cv-05339-MCA-MAH, is also pending in the United States District Court for the District of New Jersey. On August 14, 2020, the court consolidated the two cases and appointed Kavin Bakhda as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995 (as consolidated, the "Securities Class Action"). Lead plaintiff and additional named plaintiff Richard Lipka filed an Amended Class Action Complaint on October 20, 2020, on behalf of a putative class of purchasers of the Company’s securities from September 4, 2019 through February 11, 2020. Defendants moved to dismiss the Amended Complaint on December 21, 2020.

After a mediation held in August 2021, a settlement in principle was reached between the Company and lead plaintiff in the Securities Class Action. The settlement has been executed and was preliminarily approved by the New Jersey Federal Court in February 2022. The court granted final approval to the settlement and dismissed the Securities Class Action on June 2, 2022. The

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Company had previously recorded a liability for the Securities Class Action, based on the agreed settlement amount and insurance coverage available and this amount was paid by the insurance company in the second fiscal quarter of 2022.

On July 10, 2020, the first of three related shareholder derivative actions was filed in the New Jersey federal court on behalf of our Company against various present and former directors and officers. The case, which is captioned Salu v. Tritton, et al., Case No. 2:20-cv-08673-MCA-MAH (D.N.J.), asserts claims under §§ 10(b) and 20(a) of the Exchange Act and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets under state law arising from the events underlying the securities class actions described above and from our repurchases of our own shares during the class period pled in the securities cases. The two other derivative actions, which assert similar claims, are captioned Grooms v. Tritton, et al., Case No. 2:20-cv-09610-SDW-RDW (D.N.J.) (filed July 29, 2020), and Mantia v. Fleming, et al., Case No. 2:20-cv-09763-MCA-MAH (D.N.J.) (filed July 31, 2020). On August 5, 2020, the court signed a stipulation by the parties in the Salu case to stay that action pending disposition of a motion to dismiss in the Securities Class Action, subject to various terms outlined in the stipulation. The parties in all three derivative cases have moved to consolidate them and to apply the Salu stay of proceedings to all three actions. The court granted the motion on October 14, 2020, but the stay was subsequently lifted. On January 4, 2022, the defendants filed a motion to dismiss this case.

On August 28, 2020, another related shareholder derivative action, captioned Schneider v. Tritton, et al., Index No. 516051/2020, was filed in the Supreme Court of the State of New York, County of Kings. The claims pled in the Schneider case are similar to those pled in the three federal derivative cases, except that the Schneider complaint does not plead claims under the Exchange Act. On September 21, 2020, the parties filed a stipulation seeking to stay that action pending disposition of a motion to dismiss in the securities class action, subject to various terms and conditions.

On June 11, 2021, an additional related derivative action was filed on behalf of the Company against certain present and former directors and officers. This Complaint is entitled Michael Anthony v Mark Tritton et. al., Index No. 514167/2021 and was filed in the Supreme Court of the State of New York, Kings County. The claims are essentially the same as in the other two derivative actions. On October 26, 2021, the court consolidated the Schneider and Anthony actions, and the plaintiffs subsequently filed a consolidated complaint. On January 10, 2022, the defendants filed a motion to dismiss this case.

The derivative cases were not included in the August 2021 settlement referred to above, but after mediation, a settlement in principle was reached ~~subsequent~~in tothe ~~year-end~~first quarter of Fiscal 2022. The settlement ~~remains~~has ~~subject~~been toexecuted ~~documentation~~ and ~~must~~was bepreliminarily approved by the New York State Court in June 2022. The court granted final approval to the settlement on September 21, 2022 and the settlement amount has been paid by the Company’s insurer.

On August 23, 2022, a putative securities class action and shareholder derivative action was filed against the Company, Gustavo Arnal (the Company's former Chief Financial Officer), and certain third parties in the United States District Court for the District of Columbia. The case, which is captioned Si v. Bed Bath & Beyond Corp., et al., Case No. 2:22-cv-02541, asserts claims of breach of fiduciary duty, negligent misrepresentation, and violations of §§ 10(b) and 20(a) of the Exchange Act on behalf of a putative class of purchasers of our securities from March 25, 2022 through August 18, 2022. The Complaint alleges that certain of our disclosures about the Company's revenue and proposed divestments, as well as other disclosures made by certain of our investors about their holdings, during the putative class period were materially false or misleading. The Complaint was amended in November 2022 and again in January 2023 and a Lead Plaintiff was appointed by the Court. The Second Amended Complaint removes Mr. Arnal as a defendant, adds Sue Gove as a defendant, and shortens the class period and reduced the claims against the Company. The matter is now entitled In re Bed Bath & Beyond Corporation Securities Litigation. Based on current knowledge the Company believes the claims are without merit and has filed a Motion to Dismiss the Complaint.

While no assurance can be given as to the ultimate outcome of these matters, we do not believe that the final resolution will have a material adverse effect on the Company’s consolidated financial position, results or liquidity. We are also a party to various legal proceedings arising in the ordinary course of business, which we do not believe to be material to the Company’s consolidated financial position, results of operations or liquidity.

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ITEM 4 – MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Our common stock is traded on The~~ Nasdaq ~~Global~~Delisting Select Market under the symbol BBBY. On March 26, 2022, there were approximately 1,600 shareholders of record of the common stock (without including individual participants in nominee security position listings). On March 26, 2022, the last reported sale price of the common stock was $22.59.Proceedings

~~During~~On ~~Fiscal~~April ~~2016~~24, ~~our~~2023, ~~Board~~the ofCompany ~~Directors~~received ~~authorized~~written anotice ~~quarterly~~from ~~dividend~~the ~~program.~~Listing ~~During~~Qualifications ~~Fiscal~~Department ~~2021,~~of ~~2020,~~the ~~and~~Nasdaq ~~2019,~~Stock ~~total~~Market ~~cash~~LLC ~~dividends~~(“Nasdaq”) ofnotifying ~~$0.7~~the ~~million,~~Company ~~$23.1 million~~that, ~~and~~as ~~$85.5 million were paid, respectively. As~~ a result of the ~~COVID-19~~Chapter ~~pandemic,~~11 inCases ~~Fiscal~~and ~~2020~~in weaccordance ~~suspended~~with ~~our~~the ~~quarterly~~Nasdaq ~~cash~~Listing ~~dividend~~Rules ~~payments~~5101, to5110(b) ~~support~~and ~~plans to build long~~IM-~~term~~5101-1, ~~shareholder~~Nasdaq ~~value~~had ~~and~~determined ~~further~~that ~~strengthen~~the ~~our~~Company’s ~~financial~~common ~~flexibility.~~stock ~~Any~~will ~~quarterly~~be ~~cash~~delisted ~~dividends~~from toNasdaq. beTrading ~~paid~~of in the ~~future~~Company’s ~~are~~common ~~subject~~stock towas ~~the~~suspended ~~determination~~at by the ~~Board~~opening of ~~Directors,~~business ~~based~~ on anMay ~~evaluation of our earnings~~3, ~~financial condition and requirements, business conditions and other factors~~2023.

~~Since~~Following ~~2004~~delisting ~~through~~from Nasdaq, the ~~end~~Company’s ofcommon ~~Fiscal~~stock ~~2021,~~has webeen ~~have~~quoted ~~repurchased~~in ~~approximately~~the ~~$11~~OTC Pink Open Market under the symbol “BBBYQ”.~~685~~ ~~billion~~The OTC Pink Open Market is a significantly more limited market than Nasdaq, and quotation on the OTC Pink Open Market likely results in a less liquid market for existing and potential holders of ~~our~~the common stock ~~through~~to ~~share~~trade ~~repurchase~~the ~~programs~~Company’s common stock and could further depress the trading price of the common stock. ~~Our~~The ~~purchases~~Company can provide no assurance as to whether broker-dealers will continue to provide public quotes of ~~our~~the common stock ~~during~~on this market, or whether the ~~fourth~~trading ~~quarter~~volume of ~~Fiscal~~the ~~2021~~common ~~were~~stock aswill ~~follows:~~be sufficient to provide for an efficient trading market.

Period	Total Number ofShares Purchased (1)	Average PricePaid per Share		Total Number ofShares Purchased asPart of PubliclyAnnounced Plansor Programs (1)	Approximate DollarValue of Sharesthat May Yet BePurchased Underthe Plans or Programs (1) (2)
November 28, 2021 - December 25, 2021	5,386,300	$	17.93	5,386,300	$	1,401,159,241
December 26, 2021 - January 22, 2022	2,431,100	$	14.26	2,431,100	$	1,366,479,614
January 23, 2022 - February 26, 2022	6,547,200	$	15.14	6,547,200	$	1,267,377,844
Total	14,364,600	$	16.04	14,364,600	$	1,267,377,844

We expect Nasdaq to file a Form 25 with the SEC to delist our common stock from trading on Nasdaq and to remove it from registration under Section 12(b) of the Exchange Act. The delisting became effective 10 days after such filing. In accordance with Rule 12d2-2 of the Exchange Act, the de-registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may determine, from the date of the Form 25 filing. See “Item 1 — Business — Recent Developments” for further discussion of the Chapter 11 Cases.

~~(1)~~Our ~~Between December 2004 and April 2021, our Board of Directors authorized, through several share repurchase programs, the repurchase of $12.950 billion of our shares of~~ common stock. Weis ~~have~~traded ~~authorization~~on toThe ~~make~~Nasdaq ~~repurchases~~Global ~~from~~Select ~~time~~Market tounder ~~time in~~ the ~~open~~symbol ~~market~~BBBY. orAs ~~through other parameters approved by the Board~~ of ~~Directors~~April ~~pursuant~~20, ~~to existing rules and regulations. Shares purchased~~2023, asthere ~~indicated~~were inapproximately ~~this table~~2,700 ~~include~~shareholders ~~shares~~of ~~withheld~~record toof ~~cover~~the ~~employee~~common ~~related taxes on vested restricted shares, restricted~~ stock ~~units~~(without ~~and~~including ~~performance~~individual ~~stock~~participants ~~unit~~in ~~awards,~~nominee assecurity ~~well~~position ~~as shares purchased pursuant to accelerated share repurchase agreements~~listings). ~~Our~~On ~~share~~April ~~repurchase~~20, ~~program could change~~2023, ~~and any future share repurchases will be subject to~~ the ~~determination~~last ofreported ~~the~~sale ~~Board~~price of ~~Directors, based on an evaluation of our earnings, financial condition and requirements, business and market conditions and other factors, including~~ the ~~restrictions~~common onstock ~~share~~was ~~repurchases under our secured asset-based revolving credit facility~~$0. 30.

~~(2)~~During ~~Excludes~~Fiscal ~~brokerage~~2016, ~~commissions~~our Board of Directors authorized a quarterly dividend program. In fiscal 2022, no cash dividends were paid. During Fiscal 2021, and 2020, total cash dividends of $0.7 million, and $23.1 million were paid, respectively. As a result of the COVID-19 pandemic, in Fiscal 2021 and fiscal 2022 we suspended our quarterly cash dividend payments to support plans to build long-term shareholder value and further strengthen our financial flexibility. Any quarterly cash dividends to be paid in the future are subject to the determination by usthe Board of Directors, ifbased ~~any~~on an evaluation of our earnings, financial condition and requirements, business conditions and other factors.

24Since 2004 through the end of Fiscal 2022, we have repurchased approximately $11.731 billion of our common stock through share repurchase programs. Our purchases of our common stock during the fourth quarter of Fiscal 2022 were as follows:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2)
November 27, 2022 - December 24, 2022	6,500	$	3.27	6,500	$	1,221,452,538
December 25, 2022 - January 21, 2023	7,000	$	3.05	7,000	$	1,221,431,212
January 22, 2023 - February 25, 2023	23,900	$	7.38	23,900	$	1,221,254,788
Total	37,400	$	5.86	37,400	$	1,221,254,788

(1) Between December 2004 and April 2021, our Board of Directors authorized, through several share repurchase programs, the repurchase of $12.950 billion of our shares of common stock. We have authorization to make repurchases from time to time in the open market or through other parameters approved by the Board of Directors pursuant to existing rules and regulations. Shares purchased, as indicated in this table, include shares withheld to cover employee related taxes on vested restricted shares, restricted stock units and performance stock unit awards, as well as shares purchased pursuant to accelerated share repurchase agreements. Our share repurchase program could change, and 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 and market

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conditions and other factors, including the restrictions on share repurchases under our secured asset-based revolving credit facility.

(2) Excludes brokerage commissions paid by us, if any.

Stock Price Performance Graph

The graph shown below compares the performance of our common stock with that of the S&P 500 Index, the S&P Retail Composite Index and the S&P 500 Specialty Retail Index over the same period (assuming the investment of $100 in our common stock and each of the three Indexes on February 25, 2017, and the reinvestment of dividends, if any).

2523

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ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

~~Bed~~The ~~Bath~~description &of ~~Beyond Inc. and subsidiaries (~~the "Company",’s ~~"we",~~business ~~"our",~~contained ~~"us",~~herein orreflects ~~"ourselves")~~the isCompany’s anoperations ~~omni-channel~~of ~~retailer~~its ~~that~~business ~~makes~~prior ~~it easy for our customers~~ to ~~feel~~the atfiling ~~home. We sell a wide assortment~~ of ~~merchandise in~~ the ~~Home,~~Chapter ~~Baby,~~11 ~~Beauty~~Cases &on ~~Wellness~~April ~~markets and operate under the names Bed Bath & Beyond~~23, ~~buybuy~~2023. ~~BABY~~As ~~("BABY"),~~a ~~and~~result ~~Harmon,~~of ~~Harmon~~the ~~Face~~filing ~~Values,~~of orthe ~~Face~~Chapter ~~Values~~11 ~~(collectively~~Cases, ~~"Harmon").~~the WeCompany ~~also~~no ~~operate~~longer ~~Decorist,~~has ~~an online interior design platform that provides personalized home design services. In addition~~operations, weother ~~are~~than athose ~~partner~~relating into athe ~~joint~~wind ~~venture,~~down ~~which~~of ~~operates~~its ~~retail~~business ~~stores~~and incompletion ~~Mexico~~of ~~under~~ the ~~name~~Chapter ~~Bed~~11 ~~Bath & Beyond~~process.

WeBed ~~account~~Bath ~~for~~& ~~our~~Beyond ~~operations~~Inc. asand ~~one~~subsidiaries ~~North~~(the ~~American~~"Company", ~~Retail~~"we", ~~reporting~~"our", ~~segment.~~"us", ~~For~~or ~~Fiscal~~ourselves") ~~2020~~are ~~and~~an ~~2019,~~omni-channel weretailer ~~accounted~~that ~~for~~makes ~~our~~it ~~operations~~easy asfor ~~two~~our ~~operating~~customers ~~segments:~~to ~~North~~feel ~~American~~at ~~Retail~~home. ~~and~~We ~~Institutional~~sell ~~Sales,~~a ~~the~~wide ~~latter~~assortment of ~~which~~merchandise ~~did~~in ~~not meet~~ the ~~quantitative~~Home ~~thresholds~~and ~~under~~Baby ~~GAAP~~markets and, ~~therefore,~~operate ~~was~~under ~~not~~the anames ~~reportable~~Bed ~~segment,~~Bath ~~and~~& ~~which~~Beyond ~~was~~and ~~divested~~buybuy ~~in October 2020~~BABY.

We ~~are~~offer ~~driving~~ a ~~digital-first,~~broad ~~omni-always~~assortment ~~growth~~of ~~strategy~~national ~~and~~brands ~~optimizing our digital~~ and ~~physical~~an ~~store~~assortment ~~channels~~of toproprietary ~~provide~~Owned ~~our~~Brand ~~customers~~merchandise ~~with~~in akey ~~seamless~~destination ~~omni-channel~~categories ~~shopping experience. Digital purchases,~~ including ~~web and mobile~~bedding, ~~can be shipped to a customer from our distribution facilities~~bath, ~~directly~~kitchen ~~from~~food ~~vendors~~prep, orhome ~~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~~organization, ~~from~~indoor ~~a vendor~~décor, orbaby ~~from another store. Customers can also choose to pick up orders using our BOPIS~~ and ~~contactless~~personal ~~Curbside Pickup services, as well as return online purchases to a store~~care. Customers can also make purchases through one of our customer contact centers and in-store through The Beyond Store, our proprietary web-based platform. These capabilities allow us to better serve our customers across various channels.

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.

We operate a 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.

~~Business~~We ~~Transformation~~are driving a digital-first, omni-always growth strategy and ~~Restructuring~~optimizing our digital and physical store channels to provide our customers with a 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.

~~Since~~Voluntary ~~2019,~~Petition ~~we have undertaken significant 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~~Bankruptcy ~~success. As part of these changes, our management team, led by President~~ and ~~Chief~~Going Executive Officer (CEO) Mark Tritton, has been focused on driving an omni-always, customer-inspired strategy to re-establish our authority in the Home, Baby, Beauty & Wellness markets. We have created a more focused portfolio through the divestiture of non-core assets and further strengthened our financial flexibility through key actions such as corporate restructurings and operating expense control to re-set our cost structure and support our ongoing business transformation.Concern

WeOn ~~are~~April ~~implementing~~23, a2023 ~~growth~~(the ~~strategy~~“Petition ~~that~~Date”), ~~will~~the ~~harness~~Company ~~the~~and ~~power~~materially all of ~~data~~its direct and ~~insights~~indirect tosubsidiaries ~~engage~~(collectively, ~~customers~~the ~~across~~"Debtors" ~~our~~or ~~four~~the ~~core~~“Company ~~banners~~Parties”) filed voluntary petitions (~~Bed~~the ~~Bath~~“Chapter &11 ~~Beyond,~~Cases”) ~~buybuy~~under ~~BABY,~~Chapter ~~Harmon~~11 ~~and~~of ~~Decorist~~the U.S. Bankruptcy Code (the “Bankruptcy Code”) in anthe ~~enterprise-wide~~U.S. ~~plan~~Bankruptcy toCourt ~~accelerate~~for ~~our~~the ~~omni-channel~~District ~~transformation~~of New Jersey (the “Bankruptcy Court”). ~~Our~~On ~~strategy~~the isPetition ~~underpinned~~Date, bythe ~~five~~Company ~~key~~Parties ~~pillars~~filed ofa ~~strategic~~motion ~~focus~~with ~~and~~the ~~investment:~~Bankruptcy ~~product,~~Court ~~price,~~seeking ~~promise,~~to ~~place~~jointly ~~and~~administer ~~people~~the Chapter 11 Cases. ~~Through~~On ~~this~~April ~~approach~~24, we2023, ~~are~~the ~~becoming~~Bankruptcy aCourt ~~digital-first,~~entered ~~customer-focused~~an ~~omni-channel~~order ~~retailer~~approving ~~with~~joint aadministration ~~more~~under ~~curated,~~the ~~inspirational~~caption ~~and~~“In ~~differentiated~~re: ~~product~~Bed ~~collection~~Bath ~~across~~& ~~categories~~Beyond Inc.,” ~~and~~Case ~~creating~~No. a23-13359. ~~more~~Certain ~~convenient~~of ~~and~~the ~~inspirational~~Company’s ~~shopping~~subsidiaries ~~experience~~were not included in the Chapter 11 filing.

InThe ~~March~~Company ~~2021~~Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company Parties filed with the Bankruptcy Court motions seeking a variety of “first-day” relief, weincluding ~~announced~~authority ~~our~~to ~~plan~~pay employee wages and benefits and to ~~introduce~~pay atvendors ~~least~~and ~~eight~~suppliers ~~new~~for ~~Owned~~goods ~~Brands~~and ~~during~~services ~~Fiscal~~provided ~~2021~~both before and after the Petition Date. ~~During~~In ~~Fiscal~~addition, ~~2021~~the Company filed with the ~~following~~Bankruptcy ~~Owned~~Court ~~Brands~~a motion seeking approval (“Interim DIP Order”) of debtor-in-possession financing (“DIP Financing”) in the form of the DIP Credit Agreement (as defined and described below). Following a hearing held on April 24, 2023, the Bankruptcy Court approved the Company Parties’ motions seeking a variety of “first-day” relief on an interim basis. The Company Parties resolved numerous informal comments and many of the "first-day" motions were ~~launched:~~entered on a final basis consensually. A hearing was scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day motions, and final approval of the DIP Facility.

First Quarter	Second Quarter	Third Quarter
Nestwell™	Our Table™	Studio 3B™
Haven™	Wild Sage™	H For Happy™
Simply Essential™	Squared Away™

On April 25, 2023, the Bankruptcy Court provided approval on an interim basis for the Company Parties and Sixth Street Specialty Lending, Inc., Sixth Street Lending Partners and TAO Talents (the “DIP Parties”) to enter into a senior secured super-priority debtor-in-possession term loan credit facility in an aggregate principal amount of $240.0 million subject to the terms and conditions set forth therein (the “DIP Credit Agreement”). On April 21, 2023, prior to the Petition Date, the DIP Lenders (in their capacity as Prepetition FILO Lenders) and the Prepetition ABL Lenders approved an emergency over advance of $54 million to

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~~The~~ensure ~~assortment~~payment ~~for these Owned Brands includes thousands~~ of ~~new~~critical ~~products~~expenses ~~across our key destination categories of Bed~~including, ~~Bath,~~among ~~Kitchen~~other ~~Food Prep~~things, ~~Home~~the ~~Organization~~Company's’ ~~and~~payroll ~~Indoor Decor. We also continue to redefine certain of our existing Owned Brands, such as Bee & Willow™~~ and ~~Marmalade™,~~tax ~~including~~obligations ~~new~~(the ~~brand~~“Emergency ~~imagery~~Rescue ~~and packaging as well as refined product assortment and presentation~~Loan”).

WeAs ~~will~~a ~~continue~~result toof ~~build~~the onCompany’s ~~this~~assessment ~~strong~~of ~~foundation~~going asconcern weconsiderations, ~~execute~~management ~~our~~has ~~three-year~~determined ~~growth~~that ~~strategy~~the liquidity condition, our need to ~~further~~satisfy ~~elevate~~certain ~~the~~financial ~~shopping~~and ~~experience,~~other ~~modernize~~covenants in our ~~operations~~debtor-in-possession financing, our need to implement a Chapter 11 plan and ~~unlock~~the ~~strong~~costs, risks and ~~sustainable~~uncertainties ~~shareholder~~surrounding ~~value~~the Chapter 11 Cases raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the issuance of the financial statements.

AsBusiness ~~part~~Transformation ofand our business transformation plan, we are also pursuing a comprehensive cost restructuring program, to drive improved financial performance. We expect to reinvest a portion of the expected cost savings into future growth initiatives. Key components of the expected financial improvement include:Restructuring

~~•Approximately~~Beginning ~~$100~~in ~~million~~the inthird ~~annual~~quarter ~~savings~~of ~~from~~Fiscal 2022, we underwent significant strategic and management changes to transform our ~~previously~~business ~~disclosed~~and ~~store~~adapt ~~fleet~~to ~~optimization~~the ~~program~~dynamic ~~which~~retail ~~included~~environment and the ~~planned~~evolving ~~closure~~needs of ~~approximately~~our ~~200~~customers ~~mostly~~in ~~Bed~~order ~~Bath~~to &position ~~Beyond~~ourselves ~~stores~~for long-term success. ~~This~~Beginning ~~program~~in ~~was~~the ~~largely~~third ~~completed~~quarter of Fiscal 2022, the Company began to execute a comprehensive strategic plan led by ~~February 26~~our new President and Chief Executive Officer, Sue Gove, who was appointed in October 2022 after serving as Interim Chief Executive Officer. ~~During~~This ~~Fiscal~~plan ~~2021~~focused on strengthening the Company’s financial position through additional liquidity and a reduction of our cost structure, webetter ~~closed~~serving 63our ~~stores~~customers ~~(bringing~~through ~~the~~merchandising, ~~total~~inventory ~~store~~and ~~closures~~customer toengagement, ~~207~~and ~~since~~regaining our authority in the ~~program's~~Home ~~inception)~~and Baby markets. WeTo ~~continue~~accelerate tothese ~~believe~~strategic ~~that~~initiatives, the Company realigned our ~~physical~~organizational ~~store~~structure, ~~channel~~which isincluded anthe ~~asset~~creation ~~for~~of ~~our~~Brand ~~transformation~~President ~~into~~roles afor ~~digital-first~~Bed ~~company,~~Bath ~~especially~~& ~~with~~Beyond ~~new~~and ~~omni-fulfillment~~bubybuy ~~capabilities~~BABY into ~~BOPIS~~lead merchandising, ~~Curbside Pickup~~planning, ~~Same~~brand ~~Day~~marketing, ~~Delivery~~site merchandising and ~~fulfill-from-store~~stores for each banner.

~~•Approximately~~In ~~$200~~conjunction ~~million~~with inthe ~~annual~~Company’s ~~savings~~new ~~from~~strategic ~~product~~focus ~~sourcing~~areas, ~~through~~the ~~renegotiations~~Company executed plans to rebalance our merchandise assortment to align with ~~existing~~customer ~~vendors~~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 a third 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™).

~~•Approximately~~We ~~$100~~exited tothe ~~$150~~unprofitable ~~million~~businesses inof ~~annual~~Harmon ~~selling,~~and ~~general~~Decorist and ~~administrative~~began ~~expense~~the ~~savings~~exit ~~from continued optimization of our corporate overhead cost structure and reductions~~ in ~~other discretionary expense. During~~ the ~~second~~fourth quarter of ~~Fiscal~~our ~~2020,~~Canada weoperations. ~~implemented~~We ahave ~~workforce~~also ~~reduction~~executed ofkey ~~approximately~~actions ~~2,800~~such ~~roles~~as ~~from across our~~ corporate ~~headquarters~~restructurings and ~~retail~~operating ~~stores,~~expense ~~designed~~control to ~~further~~re-set ~~reduce~~our ~~layers~~cost atstructure ~~the~~and ~~corporate~~to ~~level,~~advance ~~significantly~~our ~~reposition~~ongoing ~~field~~efforts ~~operations~~ to ~~better~~reset ~~serve~~our ~~customers~~cost instructure ~~a digital-first environment~~ and ~~realign~~build ~~our~~a ~~technology~~modern, ~~supply~~durable ~~chain~~model ~~and~~for ~~merchandising~~long-term ~~teams~~profitable ~~to support our strategic~~ growth ~~initiatives~~.

•In connection with the ~~fourth~~above ~~quarter~~restructuring ofand transformation initiatives, during Fiscal ~~2021~~2022, we ~~announced~~recorded ~~that~~total weexpense ~~are~~of ~~pursuing~~$407.7 million ~~additional~~including ~~expense~~$77.7 million ~~optimization~~in ~~measures~~cost of ~~approximately~~sales, ~~$100~~primarily associated with $330.0 million ~~annualized~~in ~~that~~restructuring ~~will~~and ~~explore~~transformation ~~areas~~initiative ~~such~~expenses for costs associated with our planned store closures as ~~additional~~part of the store fleet optimization program and other transformation initiatives as well as workforce reduction and leadership changes. We also recorded impairment charges of approximately $1.29 billion, ~~fixed~~primarily ~~costs~~related to store assets. At this point, we are unable to estimate the amount or range of amounts expected to be incurred in connection with future restructuring and ~~discretionary~~transformation ~~savings~~initiatives, ~~opportunities~~including further store closures, and will provide such estimates as they become available.

In connection with the above restructuring and transformation initiatives, during Fiscal 2021, we recorded total expense of $281.2 million including $137.2 million in cost of sales, primarily associated with the transition of our product assortment to Owned Brands and, to a lesser extent, to redefine certain existing Owned Brands, as well as $144.0 million in restructuring and transformation initiative expenses for costs associated with our planned store closures as part of the store fleet optimization program and other transformation initiatives. We also recorded impairment charges of approximately $36.5 million, primarily related to store assets. At this point, we are unable to estimate the amount or range of amounts expected to be incurred in connection with future restructuring and transformation initiatives, including additional Owned Brand introductions and further store closures, and will provide such estimates as they become available.

Additionally, as part of these efforts, we completed the divestitures of the following banners:

•In December 2020, we entered into a definitive agreement to sell Cost Plus World Market to Kingswood Capital Management.

•In October 2020, we entered into definitive agreements to sell Christmas Tree Shops ("CTS") to Handil Holdings LLC.

•In October 2020, we entered into a definitive agreement to sell Linen Holdings to The Linen Group, LLC, an affiliate of Lion Equity Partners.

•In February 2020, we entered into a definitive agreement to sell PersonalizationMall.com ("PMall") to 1-800-FLOWERS.COM.

•During the first quarter of Fiscal 2020, we also sold One Kings Lane to a third party.

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The net proceeds from these transactions have been reinvested in our core business operations to drive growth, fund share repurchases and reduce our outstanding debt.

During Fiscal 2021, we recognized a charge of approximately $18.2 million in loss on sale of businesses in the consolidated statement of operations, primarily associated with the Fiscal 2021 settlement of the CTS pension plan (see "Employee Benefit Plans," Note 11 to the accompanying consolidated financial statements) and certain working capital and other adjustments related to the above divestitures. During Fiscal 2020, we recognized a loss of approximately $1.1 million on the sale of businesses related to certain of the above divestitures.

Executive Summary

The following represents a summary of key financial results and related business developments for the periods indicated:

•Net sales for Fiscal ~~2021~~2022 were $75.~~868~~34 billion, a decrease of approximately 1432.81% as compared with Fiscal ~~2020~~2021.

•~~Excluding~~Change in leadership and strategy: Beginning in the ~~impact~~third quarter of Fiscal 2022, the ~~business~~Company ~~divestitures~~began ~~described~~to ~~above~~execute a comprehensive strategic plan led by our new President and Chief Executive Officer, ~~which~~Sue ~~represented~~Gove, ~~net~~who ~~sales~~was ofappointed $1in October 2022 after serving as Interim Chief Executive Officer since June 2022.~~290~~ ~~billion~~This ~~for~~plan ~~Fiscal~~included ~~2020~~a significant rebalancing of the merchandise assortment, ~~net~~including ~~sales~~the ~~for~~discontinuation ~~our~~of ~~four~~several ~~core~~Owned ~~banners~~Brands, ~~for~~and ~~Fiscal~~the ~~2021~~implementation ~~decreased~~of bycost ~~approximately~~reduction 1%and ~~compared~~and ~~with~~cash ~~Fiscal~~preservation ~~2020~~actions, including the closing of underperforming stores and reductions in force.

•~~During~~Organizational ~~Fiscal~~changes ~~2021~~to drive key focus areas: We realigned our executive leadership team and streamlined our organizational structure to focus on immediate priorities and important changes to operations. This included the creation of Brand President roles for Bed Bath & Beyond and BABY to lead merchandising, weplanning, ~~continued~~brand marketing, site merchandising and stores for each banner and will report directly to ~~execute~~the ~~against~~CEO. ~~key~~In ~~initiatives~~conjunction ~~under~~with ~~our~~these ~~transformation~~changes, ~~program~~the Company has eliminated the Chief Operating Officer, ~~including:~~Chief Stores Officer, Chief Merchandising Officer, Chief Customer Officer and Chief Growth Officer roles.

•Owned Brands. We launched eight new Owned Brands, under which there are thousands of new products across our key Destination Categories of Bed, Bath, Kitchen Food Prep, Home Organization and Indoor Decor.25

First Quarter	Second Quarter	Third Quarter
Nestwell™	Our Table™	Studio 3B™
Haven™	Wild Sage™	H For Happy™
Simply Essential™	Squared Away™

•New York City Flagship Renovation. We completed the renovation of our Bed Bath & Beyond flagship store in New York City, which reopened in July 2021 after undergoing a complete transformation since closing in December 2020. The renovated flagship store is an expression of the new Bed Bath & Beyond, with a significant focus on our five core destination categories of bed, bath, kitchen & dining, indoor décor and organization.

◦Omni-Channel Capabilities. We continued our focus on being a digital-first, omni-always retailer:

▪We announced separate partnerships with DoorDash and Uber to provide on-demand delivery of essential homeware products and items from more than 700 Bed Bath & Beyond locations and nearly 120 BABY locations nationwide.

▪In November 2021, we launched our new digital marketplace to build on our existing authority in key Home & Baby categories, with an assortment of products from a highly curated selection of third-party brand partners that will be integrated into our digital platform.

▪In November 2021, we announced a strategic collaboration to directly offer Kroger customers an extensive selection of the most sought-after goods for the Home & Baby products carried by the Bed Bath & Beyond and buybuy BABY banners through Kroger.com as well as a small-scale physical store pilot at select Kroger Family of Companies stores beginning in Fiscal 2022.

•Additional Product Initiatives. Our Bed Bath & Beyond banner launched the Home, Happier Team, the brand's first-ever curated advisory panel of industry experts who will serve as "host and hostesses of the home," providing ideas, innovative solutions and compelling content to help customers personalize their living spaces and make it easy to feel at home. Our buybuy BABY banner introduced its "welcome to parenthood" program in-store and online through educational resources, reimagined shopping experiences, a revised registry, new digital offerings and a new marketing campaign to inspire customers to embrace every aspect of parenthood. Additionally, we announced key partnerships with Casper Sleep Inc. (including a first branded shop-in shop in our New York City flagship store), and with Safely™, an eco-friendly line of home care and cleaning products which made its retail debut exclusively in Bed Bath & Beyond, buybuy BABY and Harmon stores nationwide.

•Supply Chain Transformation. In the second half of Fiscal 2021, we started operations at our first regional distribution center, an approximately one million square foot facility in Frackville, Pennsylvania, and executed a lease for our second regional distribution center in Jurupa Valley, California, which is expected to be operational by late 2022. Ryder

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~~Systems,~~•Reduction ~~Inc.~~of ~~will~~Owned ~~operate~~Brands: ~~these~~We ~~two~~exited ~~regional~~a ~~distribution~~third ~~centers~~of ~~under~~our aOwned ~~strategic partnership~~Brands, ~~with~~including the ~~objective~~discontinuation of ~~reducing~~three ~~product~~of ~~replenishment~~our ~~times~~nine labels (Haven™, Wild Sage™ and ~~improving~~Studio 3B™). We also expect to reduce the ~~customer~~breadth ~~experience~~and depth of inventory across our six remaining Owned Brands (Simply Essential™, Nestwell™, Our Table™, Squared Away™, H for Happy™ and Everhome™).

•~~Store~~Right-sizing ~~Fleet~~cost ~~Optimization.~~structure Weand ~~continue~~infrastructure to ~~believe~~reflect ~~that~~business ~~our~~operations: ~~physical~~We ~~store~~initiated ~~channel~~a isstrategic anrevaluation ~~asset~~of ~~for~~ our ~~transformation~~overall ~~into~~expense aand ~~digital-first~~operational ~~company,~~structure ~~especially~~to align with ~~omni-fulfillment~~business ~~capabilities~~performance ~~in BOPIS, Curbside Pickup, Same Day Delivery~~ and ~~fulfill-from-store~~target profitability. During Fiscal ~~2021~~2022, we:

◦WeRealigned ~~commenced~~store ~~renovations~~footprint onby ~~approximately~~closing ~~130~~88 ~~stores,~~Bed ofBath ~~which~~& ~~approximately~~Beyond 80stores ~~were~~and ~~completed,~~commenced ~~to bring~~ the ~~expression~~closure of ~~the~~331 ~~new~~additional ~~Bed~~stores ~~Bath~~by &the ~~Beyond~~end ~~to our customers in many~~ of ~~our~~the ~~markets.~~fiscal year;

◦WeClosed ~~largely completed the planned optimization of~~ our ~~store~~Harmon ~~fleet~~Face ~~through~~Values ~~the closure of 63 mostly Bed Bath & Beyond stores during Fiscal 2021, bringing total store closures for the overall program to 207 as of February 26, 2022.~~business;

We◦Begun ~~plan~~the toexit ~~continue~~of toall ~~actively~~Canada ~~manage~~operations; ~~our real estate portfolio to permit store sizes, layouts, locations~~ and ~~offerings to evolve over time to optimize market profitability and to renovate, remodel or reposition stores within markets as appropriate.~~

~~•In~~◦Initiated ~~connection~~cost ~~with~~reductions ~~these~~across ~~restructuring~~corporate ~~and transformation initiatives~~headquarters, ~~during~~including ~~Fiscal~~overhead ~~2021, we recorded total~~ expense ~~of $281.2 million including $137.2 million in cost of sales~~ and ~~$144~~headcount.0 million in restructuring and transformation initiative expenses in the consolidated statement of operations, as well as $36.5 million of impairments and $18.2 million of losses on sales of businesses.

•~~During~~Supply ~~Fiscal~~chain ~~2021,~~optimization: weWe ~~announced~~completed ~~plans~~a tosupply ~~complete~~chain ~~our~~network $1study ~~billion~~to ~~three-year~~improve ~~repurchase~~cost ~~plan~~to byserve ~~the~~and ~~end~~time ofto ~~Fiscal~~deliver ~~2021,~~for ~~which was two years ahead of schedule. During Fiscal 2021, we repurchased approximately 27.7 million shares of~~ our ~~common~~customers ~~stock under the share repurchase plan approved~~ by ~~our~~streamlining ~~Board~~fulfillment ofcenter ~~Directors,~~and atdistribution acenter ~~total cost of approximately $574~~operations.9 million, which combined with the accelerated share repurchase programs entered into in Fiscal 2020 totaling $375.0 million, resulted in the repurchase of $950.0 million shares under this plan as of February 26, 2022. An additional approximately $40.0 million was repurchased in March of 2022.

•~~Net~~In ~~loss~~connection ~~for~~with ~~Fiscal~~these ~~2021~~restructuring ~~was~~and ~~$559.6~~transformation ~~million~~initiatives, orduring ~~$5.64~~Fiscal ~~per diluted share~~2022, ~~compared~~we ~~with~~recorded ~~net~~total ~~loss~~expense of $~~150~~407.8 7 million, orincluding $177.247 million ~~per~~in ~~diluted~~cost ~~share,~~of ~~for~~sales ~~Fiscal~~and ~~2020. Net loss for Fiscal 2021 included a net unfavorable impact of~~ $4330.660 million ~~per~~in ~~diluted share associated with~~ restructuring and ~~other~~ transformation ~~initiatives,~~initiative ~~non-cash~~expenses ~~impairments,~~in ~~loss~~the onconsolidated ~~sale~~statement of ~~business and loss on debt extinguishment~~operations, as well as ~~the~~$1.29 ~~impact~~billion of ~~recording~~impairments ~~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)~~$98.6 ~~Net~~million ~~loss for Fiscal 2020 included a net unfavorable impact~~ of ~~$0.23~~losses ~~per diluted share associated with the loss~~ on ~~sale of business, non-cash impairments and charges recorded in connection with~~ the ~~restructuring~~deconsolidation ~~program and transformation initiatives offset by a gain on extinguishment~~ of ~~debt~~our ~~and~~Canada ~~decrease in the incremental inventory reserve for future markdowns recorded in Fiscal 2019, as well as the associated tax effects~~business.

•Financial transactions to support our business strategies: we pursued several financial transactions during Fiscal 2022 with the intention of optimizing our financial position. These included:

◦Entered into an amendment to our Credit Agreement for more than $500.0 million of new additional financing commitments within our expanded ABL Facility and new FILO Facility on August 31, 2022.

◦Privately negotiated senior notes exchanges with existing holders of 2024 Notes, 2034 Notes, and 2044 Notes, respectively, under which the Company issued shares of common stock to the existing holders in exchange for the exchange notes and cash.

◦An at the market equity distribution program (the "ATM Program"), under which we offered and sold shares of common stock pursuant to prospectus supplements registering (i) 12 million shares on August 31, 2022, and (ii) up to $150.0 million on October 28, 2022.

◦An underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii) warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock Warrants”) for gross proceeds of $225.0 million.

Impact of the COVID-19 Pandemic

InAs ~~March~~discussed ~~2020,~~in ~~the~~more ~~World~~detail ~~Health~~in ~~Organization~~our ~~declared~~previous ~~the~~filings ~~COVID-19~~with ~~outbreak~~the ~~a global pandemic. That same month~~SEC, ~~as a result of~~ the coronavirus (COVID-19) pandemic, wematerially ~~began~~disrupted toour ~~temporarily~~operations, ~~close~~most ~~certain~~significantly ~~store~~in ~~locations~~Fiscal ~~that~~2020. ~~did~~In ~~not~~compliance ~~have~~with arelevant ~~health~~government ~~and personal care department~~directives, ~~and~~we asclosed ~~of March 23, 2020,~~ all of our retail banner stores across the U.S. and Canada ~~were~~as ~~temporarily~~of ~~closed~~March 23, 2020, except for most stand-alone ~~buybuy~~ BABY and Harmon stores, ~~subject~~which towere ~~state~~categorized ~~and~~as ~~local~~essential ~~regulations~~given the nature of their products. In May 2020, we announced a phased approach to re-open our stores in compliance with relevant government directives, and as of the end of July 2020, nearly all of our stores ~~re-opened~~reopened. During portions of Fiscal 2021, a limited number of stores in Canada either closed temporarily or continued to operate under restrictions in compliance with local governmental orders. As of February 26 25, ~~2022~~2023, all of ~~our~~the Company’s stores were operating without restriction subject to compliance with applicable mask and vaccine requirements. As of February 25, 2023, our BOPIS, contactless Curbside Pickup and Same Day Delivery services are in place at the vast majority of our stores. We cannot predict,

The COVID-19 pandemic materially adversely impacted our results of operations and cash flows for Fiscal 2021. We are continuing to closely monitor the impact of the COVID-19 pandemic on our business, results of operations, and financial results, as numerous significant uncertainties continue to surround the pandemic and its ultimate impact on us, including but not limited to: 26

•the timing and extent of recovery in consumer traffic and spending;

•potential delays, interruptions and disruptions in our supply chain, including higher freight charges;

•labor shortages, wage pressures and competition for talent;

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~~•the~~however, ~~extent~~whether ofour ~~dissemination~~stores ~~and~~will ~~public~~remain ~~acceptance~~open, ofparticularly ~~COVID-19~~if ~~vaccines~~the ~~and~~regions ~~their~~in ~~effectiveness~~which ~~against~~we ~~COVID-19~~operate ~~and~~experience ~~its~~potential ~~evolving~~resurgences ~~strains,~~of ~~some~~reported new cases of ~~which~~COVID-19 ~~may~~or beincreased ~~more~~rates ~~transmissible~~of hospitalizations or ~~virulent~~become ~~than~~subject ~~the~~to ~~initial~~additional ~~strain;~~governmental regulatory actions.

•additional widespread resurgences in COVID-19 infections; and

•evolving safety protocols such as requirements for proof of vaccination or regular testing in certain of our markets.

Further discussion of the risks and uncertainties posed by the COVID-19 pandemic is included in "Risk Factors" under "Part I, Item 1A" of this Form 10-K.

RESULTS OF OPERATIONS

The fiscal years discussed below were each comprised of 52 weeks.

Net Sales

Fiscal Year Ended

Change from Prior Year

(in millions)

February 2625, ~~2022~~2023

February 2726, ~~2021~~2022

February 2927, ~~2020~~2021

February 2625, ~~2022~~2023

February 2726, ~~2021~~2022

Net sales

75,~~867~~344.87

97,~~233~~867.08

119,~~158~~233.60

(12,~~365~~523.21)

(~~14.8~~32)

$(1,365.3)

~~(1,925.6)~~

(~~17.3~~15)

Sales from divested banners

—

~~1,290.1~~—

21,~~151~~290.1

~~(1,290.1)~~—

~~(100.0)~~—

(~~861~~1,290.01)

(40100.0)

~~Excluding~~For ~~the~~Fiscal ~~impact~~2022, ofnet ~~the~~sales ~~divestitures~~decreased ~~described~~by ~~above~~approximately $2.52 billion or 32% compared with Fiscal 2021 across all banners, ~~which~~collectively. ~~represented~~The change in net sales resulted from a decrease of $1.~~290~~55 billion ~~for~~in ~~Fiscal~~sales ~~2020,~~through ~~net~~our stores and $977.7 million in sales ~~for~~through our ~~four~~e-commerce ~~core~~platforms ~~banners~~- ~~for~~both ~~Fiscal~~as ~~2021~~a result of decreased bycustomer ~~approximately~~demand 1%and ~~compared~~declines ~~with~~in ~~Fiscal~~customer ~~2020,~~traffic asand inventory availability. The Company closed 88 stores during the year with net sales ~~improvements~~of $234.1 million in ~~the~~Fiscal ~~first~~2022 ~~half~~and $357.2 million of net sales during Fiscal 2021, ~~including~~resulting ~~due~~in toa ~~the~~$123.1 million ~~impact~~decrease. ofThe Company commenced the ~~COVID-19~~closure ~~pandemic~~of inan ~~the~~additional ~~first~~331 ~~quarter~~stores as of ~~2020~~February 25, ~~were~~2023. ~~offset~~Such bystores ~~the~~had ~~impact~~net sales of ~~traffic~~$1.06 ~~declines~~billion in Fiscal 2022 and ~~the~~$1.35 ~~supply~~billion ~~chain~~in ~~disruptions~~Fiscal 2021, resulting in ~~the~~a ~~second~~$296.0 million ~~half~~decrease ofyear ~~the~~over year. ~~Store~~The ~~closures~~remaining asdecrease of $1.13 billion in net sales, relates to stores that the Company plans to continue to operate in Fiscal 2023 and was driven by lower customer traffic and conversion, in part due to consumer spending patterns and demand, a lack of ~~our~~inventory ~~store~~availability ~~fleet~~and ~~optimization~~assortment ~~program~~in ~~also~~key ~~contributed~~product toareas, specifically within the ~~decline~~Company's inOwned Brands and National Brands product mix, along with additional discounting on sales resulting from ~~Fiscal~~the ~~2020~~exiting toof ~~Fiscal~~Owned ~~2021~~Brands and closing stores.

The decrease in net sales for Fiscal ~~2020~~2021 was primarily due to the impact of ~~the~~traffic ~~COVID-19~~declines ~~pandemic~~and ~~during~~supply ~~the~~chain ~~first~~disruptions. ~~quarter~~Store ofclosures ~~Fiscal 2020,~~ as ~~well~~part ~~as the impact~~ of our ~~transformation initiatives, primarily our~~ store fleet optimization program ~~and~~also ~~the~~contributed ~~business~~to ~~divestitures~~the ~~described~~decline ~~above~~in ~~(see Business Transformation and Restructuring)~~sales.

During Fiscal ~~2021~~2022, Fiscal ~~2020~~2021 and Fiscal ~~2019~~2020, net sales consummated through digital channels represented approximately 37%, 3837% and 1738%, 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.

AsComparable aSales* ~~result~~for of the ~~extended~~year ~~closure~~ended February 25, 2023 decreased by approximately 29.7%. Management attributes a portion of this decline to the ~~majority~~impact of ~~our~~lower ~~stores~~traffic indue ~~the~~to ~~first~~macro-economic ~~quarter~~factors, such as steep inflation, and fluctuations in ~~June~~purchasing patterns of ~~Fiscal~~the ~~2020~~consumer. ~~due~~Also contributing to the ~~COVID-19~~comparable ~~pandemic~~sales ~~and~~decline ~~our~~was ~~policy~~the lack of ~~excluding~~inventory ~~extended~~availability ~~store~~and ~~closures~~assortment ~~from~~in ~~our~~key ~~comparable~~product ~~sales calculation~~areas, wedue ~~believe~~to ~~that~~vendor ~~comparable~~constraints sales*and credit line decreases. For the year ended February 26, 2022, Comparable Sales was not a meaningful metric ~~for~~as ~~the~~a ~~first~~result ~~quarter~~ of ~~Fiscal~~the ~~2020~~impact asof ~~well~~the asextended ~~for~~closure of the ~~month~~majority of ~~June~~our instores ~~Fiscal~~during ~~2020~~a ~~and,~~portion ~~therefore,~~of ~~are~~the ~~not~~comparable ayear ~~meaningful~~ended ~~metric~~February ~~for~~27, ~~Fiscal~~ 2021 ~~and~~due ~~Fiscal~~to ~~2020~~the COVID-19 pandemic.

* Comparable sales normally include sales consummated through all retail channels that have been operating for twelve full months following the opening period (typically six to eight weeks), excluding the impact of store fleet optimization program. We are an omni-channel retailer with capabilities that allow a customer to use more than one channel when making a purchase, including in-store, online, with a mobile device or through a customer contact center, and have it fulfilled, in most cases, either through in-store customer pickup or by direct shipment to the customer from one of our distribution facilities, stores or vendors.

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

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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 3735.48%, 3437.74%, and 3534.27%, of net sales in Fiscal ~~2021~~2022, ~~2020~~2021 and ~~2019~~2020, respectively. Sales of home furnishings accounted for approximately 6264.62%, 6562.36% and 6465.83% of net sales, respectively, for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020.

Gross Profit

	Fiscal Year Ended									Change from Prior Year
(in millions)	February 2625, ~~2022~~2023			February 2726, ~~2021~~2022			February 2927, ~~2020~~2021			February 2625, ~~2022~~2023					February 2726, ~~2021~~2022
Gross profit	$	21,~~483~~214.59		$	32,~~118~~483.15		$	3,~~541~~118.71		$	(~~634~~1,268.6)		(2050.43)	%	$	(~~423~~634.6)		(1220.04)	%
Gross profit percentage	3122.67		%	3331.86		%	3133.78		%	(28.25)		%	(626.59)	%	(2.1%2)		%	(6.65)	%

Gross profit in Fiscal ~~2021~~2022 was ~~negatively~~$1.21 ~~impacted~~billion, byor ~~markdown~~22.7% ~~activity~~of ~~associated~~net sales, compared with ~~inventory~~$2.48 ~~being~~billion, ~~removed~~or ~~from~~31.6% ~~our~~of ~~assortment~~net sales in ~~connection~~Fiscal ~~with~~2021. ~~the~~The ~~launches~~decrease ofin ~~new~~gross ~~Owned~~profit ~~Brands~~percentage ~~and,~~was primarily attributable to amarkdown ~~lesser~~and ~~extent~~promotional activity associated with the general economic environment, clearance activity related to the ~~redefinition~~exiting of certain ~~existing~~ Owned Brands, asand ~~well~~Owned asBrands ~~markdown~~inventory assortment, and activity associated with store closures ~~as part of our store fleet optimization program~~. Gross profit for Fiscal ~~2021~~2022 included the impact of charges of $~~137~~91.2 6 million ~~for~~associated ~~these~~with ~~higher markdowns on inventory sold, as well as an adjustment to reduce~~ the ~~cost~~markdown of inventory onbeing ~~hand to be~~ removed from ~~the~~our ~~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~~connection ~~due to industry wide, global supply chain challenges, negatively impacted gross margin in Fiscal 2021 compared~~ with ~~Fiscal 2020, which offset~~ the ~~favorable~~clearance ~~impact~~ of acertain ~~shift in product assortment toward new~~ Owned ~~Brands~~Brand ~~and a more normalized mix of digital sales~~merchandise.

The ~~increase~~decrease in the gross ~~margin~~profit percentage between Fiscal ~~2020~~2021 and Fiscal ~~2019~~2020 was primarily attributable to a ~~shift~~markdown inactivity ~~product~~associated ~~mix~~with ~~and~~inventory being removed from our assortment in connection with the ~~leverage~~launches of ~~distribution~~new ~~and~~Owned ~~fulfillment~~Brands ~~costs~~and, ~~partially~~to ~~offset~~a bylesser extent, the ~~impact~~redefinition of ~~channel~~certain ~~mix~~existing Owned Brands, ~~including~~as ~~higher~~well ~~net-direct-to-customer~~as ~~shipping~~markdown ~~expense.~~activity Inassociated ~~addition,~~with store closures as part of our ~~gross~~store ~~margin~~fleet optimization program. Gross profit for Fiscal ~~2020~~2021 included the impact of acharges ~~net benefit~~ of $20137.2 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 ~~reduction~~product assortment as part of ~~incremental~~these ~~markdown~~initiatives ~~reserves~~to ~~taken~~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 ~~2019~~2021 compared with Fiscal 2020, ~~partially~~which offset bythe ~~restructuring~~favorable impact of a shift in product assortment toward new Owned Brands and ~~transformation~~a ~~initiatives~~more normalized mix of digital sales.

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Selling, General and Administrative Expenses

	Fiscal Year Ended									Change from Prior Year
(in millions)	February 2625, ~~2022~~2023			February 2726, ~~2021~~2022			February 2927, ~~2020~~2021			February 2625, ~~2022~~2023					February 2726, ~~2021~~2022
Selling, general and administrative expenses	$	2,~~692~~373.30		$	32,~~224~~692.43		$	3,~~732~~224.54		$	(~~532~~319.13)		(1611.59)	%	$	(~~508~~532.1)	(1316.65)	%
As a percentage of net sales	3444.24		%	34.92		%	3334.49		%	(010.7)2		%	(229.0)8	%	1(0.57)%		4(2.50)	%

The $319.3 million decrease in SG&A expenses for Fiscal ~~2021~~2022 was primarily attributable to cost ~~reductions~~reduction ~~resulting~~initiatives, ~~from~~including ~~our~~the ~~transformation~~store ~~initiatives~~fleet optimization, ~~including~~supply chain reductions, in corporate overhead, ~~divestitures~~reductions ofand ~~non-core~~reductions ~~assets~~in marketing spend. The cost reduction initiatives and ~~lower~~the ~~rent~~closing of 70 and ~~occupancy~~88 ~~expenses~~stores asduring aFiscal ~~result~~2021 ofand ~~our~~Fiscal ~~store~~2022, ~~fleet~~respectively, ~~optimization~~led ~~program.~~to ~~The~~a decrease in ~~SG&A~~payroll and payroll-related expenses asof approximately $172.0 million (primarily salaries) and a ~~percentage~~decrease of ~~net~~approximately ~~sales~~$70.1 ~~for~~million ~~Fiscal~~in ~~2021~~rent and occupancy expenses. Additionally, there was ~~also~~a ~~largely~~decrease ~~due~~of toapproximately ~~the~~$38.1 ~~factors~~million ~~above~~of other operating expenses related to supplies, asmaintenance, ~~well~~and asother ~~the~~operating ~~de-leveraging~~fees ~~effect~~resulting ~~caused~~from bythe ~~sales~~significant ~~declines~~decrease in stores that operated during Fiscal ~~2020~~2022. asThe adecrease ~~result~~was also driven by cost reductions in marketing spend of ~~the~~approximately ~~COVID-19~~$39.1 ~~pandemic~~million.

For Fiscal ~~2020~~2021, the ~~increase~~decrease was primarily attributable to ~~increases~~cost reductions resulting from our transformation initiatives, including reductions in ~~fixed~~corporate ~~costs~~overhead, ~~such~~divestitures asof non-core assets and lower rent and occupancy ~~and~~expenses ~~depreciation,~~as ~~and~~a ~~consulting~~result ~~costs~~of ~~related~~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 ~~our~~the ~~strategic~~factors ~~initiatives~~above, ~~partially~~as ~~offset~~well as the de-leveraging effect caused by ~~decreases~~sales declines in ~~payroll~~Fiscal ~~and~~2020 ~~payroll-related~~as ~~expenses~~a ~~and~~result ~~advertising~~of the COVID-19 pandemic.

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

Goodwill and other impairments were $361.529 ~~million~~billion for Fiscal ~~2021~~2022, $~~127~~36.35 million in Fiscal ~~2020~~2021 and $~~509~~127.23 million in Fiscal ~~2019~~2020. For Fiscal ~~2021~~2022, impairment charges included $301.828 ~~million~~billion related to certain store-level, distribution facilities and corporate assets (including leasehold improvements, other property and equipment and operating lease assets) and tradename impairments of $52.79 million. For Fiscal ~~2020~~2021, impairment charges included $9230.98 million related to certain store-level assets (including leasehold improvements and operating lease assets) and tradename impairments of $355.17 million. For Fiscal ~~2019~~2020, impairment charges included ~~goodwill~~ impairments of $391.1 million ~~(primarily~~related asto ~~the~~certain ~~result~~store-level ofassets a(including ~~sustained~~leasehold ~~decline~~improvements inand ~~our~~operating ~~market~~lease ~~capitalization~~assets), and tradename impairments of $4135.~~8 million, long-lived assets impairments of $75.~~1 million ~~and other impairments of $1~~.~~2 million.~~

Restructuring and Transformation Initiative Expenses

During Fiscal ~~2021 and Fiscal 2020~~2022, we recorded charges of $~~144~~407.0 7 million ~~and~~for ~~$102.2~~costs ~~million,~~associated ~~respectively, in connection~~ with ~~our~~ restructuring and other transformation initiatives, of which approximately $77.7 million Inis ~~Fiscal~~included ~~2021,~~in ~~these~~cost ~~charges~~of ~~were~~sales. ~~primarily~~In ~~for~~addition, ~~costs~~approximately ~~associated~~$330.0 ~~with~~million, ~~the~~was ~~store~~recorded ~~fleet~~in ~~optimization~~restructuring ~~program~~and ~~described~~transformation ~~above,~~initiative ~~including~~expenses ~~for~~in the ~~termination~~consolidated statements of ~~facility leases~~operations, aswhich ~~well~~included asapproximately ~~technology~~$156.9 ~~transformation~~million ~~and~~of ~~business~~accelerated ~~strategy~~depreciation ~~and~~related ~~operating~~to ~~model~~closing ~~transformation~~facilities ~~programs~~and ~~across~~information ~~core~~technology ~~functions~~systems, ~~including~~$101.5 ~~merchandising,~~million ~~supply~~of ~~chain~~other restructuring and ~~finance.~~transformation ~~In Fiscal 2020, these~~ costs ~~primarily~~and ~~related~~$58.1 million toof severance costs ~~recorded~~related into ~~connection with our~~ workforce reduction, ~~and~~ store ~~fleet~~closures ~~optimization~~and ~~programs~~leadership aschanges. ~~well~~The asCompany ~~other~~also ~~restructuring~~recorded ~~activities~~approximately ~~(see~~$13.5 million ~~"Restructuring~~for lease related and ~~Transformation~~other ~~Activities~~costs," ~~Note~~including 3in toconnection ~~the~~with ~~accompanying~~store ~~consolidated financial statements).~~closures,

32In Fiscal 2021, we recorded charges of $144.0 million, of which 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. (see "Restructuring and Transformation Activities," Note 3 to the accompanying consolidated financial statements).

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Loss on Sale of Businesses

During Fiscal 2022, the Company did not have any businesses classified as held for sale. 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~~2021 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

	Fiscal Year Ended									Change from Prior Year
(in millions)	February 2625, ~~2022~~2023			February 2726, ~~2021~~2022			February 2927, ~~2020~~2021			February 2625, ~~2022~~2023					February 2726, ~~2021~~2022
Operating Loss	$	(~~407~~2,775.6)		$	(~~336~~407.96)		$	(~~700~~336.19)		$	(702,368.71)		21581.0	%	$	~~363~~(70.27)	~~(51~~21.9)0	%
As a percentage of net sales	(551.29)		%	(35.62)		%	(6.3.6)		%	(119.67)		%	44378.48	%	2(1.76)%		~~(42~~44.9)4	%

Operating loss for Fiscal ~~2021~~2022 ~~included~~was ~~the impact of pre-tax charges of~~ $~~137.~~2.78 ~~million~~billion ~~included~~or in51.9% ~~gross~~of ~~profit~~net ~~primarily~~sales, ~~associated~~compared with ~~the~~an ~~transition~~operating loss of ~~our~~$407.6 ~~product~~million ~~assortment~~or to5.2% ~~Owned~~of ~~Brands~~net ~~and,~~sales tofor aFiscal ~~lesser~~2021. ~~extent,~~Operating ~~our~~loss ~~store~~for ~~fleet~~Fiscal ~~optimization~~2022 ~~program,~~included ~~as well as~~ $~~144~~407.07 million associated with restructuring and other transformation initiatives, and $361.~~5 million~~29 billion for non-cash ~~impairments~~impairment ~~and~~charges ~~$18.2 million for loss on sale of business~~ (each as ~~described~~discussed above). The change in operating loss as a percentage of net sales between Fiscal ~~2021~~2022 and ~~2020~~2021 was primarily due to the decline in sales and gross ~~margin~~profit percentage, as discussed above, as well as higher restructuring and transformation expenses and higher impairment charges in Fiscal ~~2021~~2022 compared to Fiscal ~~2020~~2021.

~~The~~Operating ~~favorable~~loss ~~change~~for inFiscal ~~operating~~2021 ~~loss~~included asthe aimpact ~~percentage~~ of ~~net~~pre-tax ~~sales~~charges ~~between~~of ~~Fiscal~~$137.2 ~~2020~~million ~~and~~included ~~Fiscal~~in ~~2019~~gross ~~was~~profit primarily ~~due~~associated towith anthe ~~increase~~transition inof ~~the~~our ~~gross~~product ~~margin,~~assortment ~~lower~~to ~~goodwill~~Owned Brands and, ~~other~~to ~~impairments~~a ~~compared~~lesser toextent, ~~the~~our ~~prior~~store ~~year~~fleet ~~period~~optimization program, ~~partially~~as ~~offset~~well byas ~~increased~~$144.0 ~~SG&A~~million ~~expenses~~associated ~~and~~with restructuring and other transformation ~~initiative~~initiatives, ~~expenses~~$36.5 asmillion ~~well~~for asnon-cash ~~the~~impairments ~~impact~~and of$18.2 ~~reductions~~million for loss on sale of ~~net~~business ~~sales,~~(each ~~which~~as ~~reflected~~described ~~the~~above). ~~impact~~The ofchange ~~the~~in ~~temporary~~operating ~~nationwide~~loss ~~closure~~as a percentage of ~~the~~net ~~majority~~sales ofbetween ~~our~~Fiscal ~~stores~~ 2021 and 2020 was primarily due to ~~COVID-19,~~the ~~nearly~~decline ~~all~~in ofgross ~~which~~profit ~~reopened~~percentage, as ofdiscussed ~~July 2020~~above, ~~and~~as ofwell ~~the~~as ~~divestitures~~higher ~~discussed~~restructuring ~~above~~and ~~(see~~transformation ~~Business~~expenses ~~Transformation~~in ~~and~~Fiscal ~~Restructuring)~~2021 compared to Fiscal 2020.

Interest Expense, net

Interest expense, net was $64110.7 5 million, $7664.97 million, and $6476.89 million in Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, 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~~2022, the increase in interest expense, net ~~was~~of ~~primarily~~$45.8 ~~driven~~million bywas ~~lower~~primarily ~~interest~~due ~~income~~to ~~on investments and~~ increased ~~interest~~borrowings ~~costs~~under ~~attributable to~~ our ~~revolving credit facilities, primarily relating to the~~ ABL Facility ~~entered~~as ~~into~~well inas ~~Fiscal~~entering ~~2020,~~into ~~partially~~the ~~offset~~$375.0 bymillion ~~lower~~FILO ~~interest~~term ~~costs~~loan ~~for~~entered ~~our~~into ~~senior~~in ~~unsecured~~August ~~notes,~~2022 ~~primarily~~and ~~related~~entering tointo ~~the~~another ~~repurchase~~FILO ofterm aloan ~~portion~~ of ~~the~~$100.0 ~~senior~~million ~~unsecured notes~~ in ~~August~~February ~~2020~~2023. For Fiscal ~~2019~~2021, the decrease in interest expense, net ~~primarily~~of ~~related~~$12.2 tomillion ~~interest~~was onprimarily ~~the~~driven ~~senior~~by ~~unsecured notes issued in July 2014.~~

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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.

Loss on Preferred Stock Warrants and Derivative Liabilities

During Fiscal 2022, we recorded a $639.4 million loss on preferred stock warrants and derivative liabilities. During the fourth quarter of Fiscal 2022, the Company issued the Series A Convertible Preferred Stock, Common Stock Warrants, and Preferred Stock Warrants when the Company was in distress, and as a result the Company determined the offering was not an orderly transaction and the gross proceeds of $225.0 million did not represent fair value. As a result, the Company used a model-derived valuation to estimate the fair value of the Series A derivative liability, Preferred Stock Warrants and Common Stock Warrants in which the most significant value driver is the as-converted value utilizing the Company’s common stock price as the input. At issuance, the fair value of the Series A embedded features derivative liability, Common Stock Warrants, and Preferred Stock Warrants was $300.5 million, $186.6 million, and $615.5 million, respectively. The Company recorded a $877.6 million loss for the fair value in excess of proceeds of $225.0 million in loss on preferred stock warrants and derivative liabilities in its consolidated statement of operations for the year ended. The loss is partially offset by a gain of $244.5 million related to the change in fair value associated with these derivative liabilities for the year ended February 25, 2023. Issuance costs of $6.3 million were expensed as incurred and recognized as part of the loss on preferred stock warrants and derivative liabilities.

Loss on Deconsolidation of Subsidiaries

For these reasons, we concluded that BBBI had lost control of BBB Canada, and no longer had significant influence over BBB Canada during the pendency of the bankruptcy. Therefore, the Company deconsolidated BBB Canada on the date of the bankruptcy filing. In order to deconsolidate BBB Canada, the carrying values of the assets and certain liabilities of BBB Canada were removed from our consolidated balance sheet as of February 25, 2023, and we recorded our investment in BBB Canada at its estimated fair value of $0. The deconsolidation resulted in the recognition of a loss of $98.6 million during the year ended February 25, 2023.

(Loss) Gain on Extinguishment of Debt

During Fiscal ~~2021~~2022, we recorded a $094.4 million ~~loss~~gain onrelated ~~the~~to ~~partial~~approximately ~~repayment~~$102.8 ofmillion ~~senior~~recorded ~~unsecured~~for ~~notes.~~the ~~During~~privately ~~Fiscal~~negotiated ~~2020,~~exchange weoffers ~~recorded~~completed ain ~~$77 million~~November ~~gain~~2022, onpartially ~~the~~offset ~~repurchase~~by ofthird-party ~~$75 million~~costs ~~principal amount~~ of 4approximately $8.~~915%~~0 ~~senior~~million ~~unsecured~~incurred ~~notes~~with ~~due~~the ~~August~~Exchange 1,Offers ~~2034~~ and $~~225~~ 0.4 million ~~principal~~ of ~~5.165%~~unamortized ~~senior~~debt ~~unsecured~~financing ~~notes~~costs ~~due~~written-off ~~August~~related 1,to ~~2044~~the extinguished notes. (see "~~Long Term~~ Debt," Note 7 to the accompanying consolidated financial statements).

During Fiscal 2021, we recorded a $0.4 million loss on the partial repayment of senior unsecured notes.

During Fiscal 2020, we recorded a $77.0 million gain on the repurchase of $75.0 million principal amount of 4.915% senior unsecured notes due August 1, 2034 and $225.0 million principal of 5.165% senior unsecured notes due August 1, 2044.

Income Taxes

The effective tax rate was ~~(18~~0.4)9% for Fiscal ~~2021~~2022, 55(18.24)% for Fiscal ~~2020~~2021, and 1955.72% for Fiscal ~~2019~~2020.

For Fiscal 2022, the effective tax rate reflects maintaining a valuation allowance against our U.S. federal and state deferred tax assets (discussed below) and benefits from amended returns related to prior fiscal years from changes in the Company's approach to deducting charitable contributions on certain federal returns and carrying back net operating losses in certain state jurisdictions.

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%.

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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~~2022, we concluded that, based on our evaluation of available objective positive and negative evidence, it iscontinues noto ~~longer~~be more likely than not that our net U.S. federal and state deferred tax assets ~~are~~will not be recoverable. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included our cumulative ~~taxable~~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~~ability ~~initiatives~~to ~~and~~continue ~~their expected associated benefits. Accordingly, we recorded a charge of $181.5 million in the third quarter of Fiscal 2021~~ as a ~~reserve~~going ~~against our net U~~concern.S. ~~federal and state deferred tax assets.~~ As of February 26 25, ~~2022~~2023, the total valuation allowance relative to U.S. federal and state deferred tax assets was $~~224~~851.38 million.

~~The~~On ~~amount~~March of27, 2020, the ~~deferred~~CARES Act was enacted in the United States, which provided for certain changes to tax ~~assets~~laws ~~considered~~which ~~realizable~~impacted our results of operations, financial position and ~~the~~cash ~~associated~~flows. ~~valuation~~We ~~allowance~~implemented certain provisions of the CARES Act, ~~could~~such beas ~~adjusted~~deferring inemployer apayroll ~~future~~taxes ~~period~~and ifutilizing ~~estimates~~the ofability ~~future~~to ~~taxable~~carry back and deduct losses to offset prior income ~~change~~in orpreviously iffiled ~~objective~~tax ~~negative~~returns. ~~evidence~~There was no benefit from the CARES Act recorded in the ~~form~~provision during the year ended February 25, 2023. As of ~~cumulative~~February 26, ~~losses~~2022 isand noFebruary ~~longer~~27,2021, ~~present~~under the CARES Act, we recorded income tax benefits of $18.7 million and ~~additional~~$152.0 ~~weight~~million, isrespectively, ~~given~~as a result of the Fiscal 2020 and Fiscal 2019 net operating losses were carried back to ~~subjective~~prior ~~evidence~~years ~~such~~during aswhich ~~projections~~the ~~for~~federal ~~future~~tax ~~growth~~rate was 35%.

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.

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

As a result of the factors described above, the net loss for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, was $~~559~~3.650 ~~million~~billion, $~~150~~559.86 million, and $~~613~~150.8 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

We ~~ended~~have ~~Fiscal~~incurred ~~2021~~significant inlosses aover ~~solid cash and liquidity position, which we anticipate maintaining, to provide us~~ the ~~flexibility~~past tofew ~~fund our ongoing initiatives and act upon other opportunities that may arise~~years. As of February 2625, ~~2022~~2023, we had approximately $~~439~~65.59 million in cash and cash equivalents, a decrease of approximately $~~913~~373.56 million as compared with February 2726, ~~2021~~2022, 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

34Credit Facilities

In the second quarter of fiscal 2021, the Company amended its asset-based credit agreement (the “Credit Agreement”) among the Company, certain of the Company’s U.S. and Canadian subsidiaries party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Agent”), and the lenders party thereto. The Credit Agreement provides for an asset based revolving credit facility (the “ABL Facility”) with aggregate revolving commitments established at closing of $1.0 billion, including a swingline sub facility and a letter of credit sub facility. The Credit Agreement has an uncommitted expansion feature which allows the borrowers to request, at any time following the delivery of an initial field exam and appraisal, an increase in aggregate revolving commitments under the ABL Facility or elect to enter into a first-in-last-out loan facility (“FIFO Facility”), collectively, in an aggregate amount of up to $375.0 million, subject to certain customary conditions.

On August 31, 2022, the Company entered into an amendment (the “First Amendment”) to the Credit Agreement, dated as of August 9, 2021 (as amended by the Amendment, the “First Amended Credit Agreement”), for more than $500.0 million of new additional financing commitments, including its newly expanded $1.130 billion ABL Facility, which provides for an increase of $130.0 million in aggregate revolving commitments for the time periods set forth in the Amendment, and a new $375.0 million FILO Facility (the “Initial FILO Loan”, together with the ABL Facility, the “Credit Facilities”), with JPMorgan Chase Bank, N.A., as administrative agent and Sixth Street Specialty Lending, Inc., as agent and lender for the FILO Facility. The ABL Facility and FILO Facility mature on August 9, 2026, and August 31, 2027, respectively, unless required to mature earlier pursuant to the terms of the Amendment.

On February 7, 2023, the Company entered into a second amendment (the “Second Amendment”) to the Credit Agreement. Pursuant to the Amendment, the lenders agreed to (i) waive any outstanding defaults or events of default under the existing Credit Facilities and (ii) rescind the implementation of the acceleration of obligations under the existing Credit Facilities, the requirement to cash collateralize letters of credit obligations under the existing Credit Facilities and the default interest on the

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~~base~~outstanding ~~availability.~~obligations ~~Borrowing~~under ~~base~~the ~~availability~~existing ~~under~~Credit ~~the~~Facilities. ~~ABL~~The ~~Facility~~Amendment is(i) ~~based~~decreased ~~upon~~the atotal ~~specified~~revolving ~~borrowing~~commitment ~~base~~from ~~consisting~~$1.13 ofbillion ato ~~percentage~~$565.0 ofmillion, ~~our~~(ii) ~~eligible~~result ~~inventory~~in ~~and~~an ~~credit~~increased ~~card~~outstanding ~~receivables~~principal amount as ~~defined~~a inresult of the ~~ABL~~call ~~Facility,~~protection ~~net~~make-whole amount of ~~applicable~~$53.9 ~~reserves~~million ~~(see~~being ~~"Long~~capitalized ~~Term~~as ~~Debt,"~~principal ~~Note 7~~ to the ~~accompanying~~Initial ~~consolidated~~FILO ~~financial~~Loan ~~statements~~and (iii). Asprovide offor ~~February 26,~~an ~~2022,~~additional ~~the~~$100 ~~Company~~million ~~had~~of noFILO loans ~~outstanding~~(the “2023 FILO Loan” and ~~had~~together ~~outstanding~~with ~~letters~~the ofInitial ~~credit~~FILO ofLoan, ~~$96.4~~the ~~million~~“FILO ~~under~~Facility”, and together with the ABL Facility, the “Credit Facilities”).

InAs ~~Fiscal~~a ~~2020,~~result ~~similar~~of tothese ~~other~~events ~~retailers, we withheld portions~~ of ~~and/or~~default, ~~delayed~~the ~~payments~~Company toclassified ~~certain~~its ofoutstanding ~~our~~borrowings ~~business~~under ~~partners~~its asasset-based werevolving ~~sought~~credit tofacility ~~renegotiate~~(the ~~payment~~“ABL ~~terms,~~Facility) inand ~~order~~its toFILO ~~further~~Facility ~~maintain~~as ~~liquidity~~current ~~during~~in the ~~period~~consolidated ofbalance ~~temporary~~sheet ~~store~~as ~~closures.~~of ~~In some instances~~February 25, ~~the~~2023. ~~renegotiations~~The ofCompany’s ~~lease~~outstanding ~~terms~~borrowings ~~have~~under ~~led~~its toABL ~~agreements~~Facility ~~with~~and ~~landlords~~FILO ~~for~~Facilities ~~rent~~were ~~abatements or rental deferrals~~$191.3 ~~Total~~million ~~payments withheld~~ and~~/or~~ ~~delayed~~$528.9 ormillion, ~~deferred~~respectively, as of February 2625, ~~2022 were approximately $1~~2023.9 ~~million~~In ~~and are included in current liabilities. During Fiscal 2021~~addition, wethe ~~recognized~~Company ~~reduced~~had ~~rent expense of~~ $2126.79 million ~~related~~in toletters ~~rent abatement concessions. Additional negotiations~~ of ~~payment~~credit ~~terms~~outstanding ~~are~~under ~~still~~its inABL ~~process,~~Facility ~~and~~as ~~there~~of ~~can be no assurance that we will be able to successfully renegotiate payment terms with all such business partners~~February 25, ~~and the ultimate outcome of these activities including the responses of certain business partners are not yet known~~2023. WeThe ~~are~~Company also ~~executing~~had on$1.030 ~~our~~billion ~~business~~in ~~transformation~~senior ~~program,~~notes ~~which~~(excluding ~~includes~~deferred ~~the~~financing ~~closure,~~costs) outstanding as of February 2625, ~~2022,~~2023. ofFor ~~207~~information ~~mostly~~regarding ~~Bed Bath & Beyond stores under our store fleet optimization program and~~ the ~~introduction~~Company's ofborrowings, ~~new~~see ~~Owned~~Note ~~Brand products in a number of categories~~7.

~~Our~~The ~~liquidity~~filing ~~may~~of ~~continue to be negatively impacted by~~ the ~~uncertainty~~Chapter ~~regarding~~11 ~~the~~Cases ~~spread~~constituted ofan ~~COVID-19~~event ~~and the timing~~ of ~~economic~~default ~~recovery~~that ~~(see~~accelerated ~~"Item~~our 1Aobligations -under ~~Disruptions in~~ the ~~financial~~Senior ~~markets~~Notes ~~could~~and ~~have a material adverse effect on~~ the ~~Company’s~~Credit ~~ability to access our cash and cash equivalents")~~Facilities.

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.

ATM Program

On August 31, 2022, we established an at the market equity distribution program (the "ATM Program") (see “Shareholders' (Deficit) Equity,” Note 8 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 ATM Program at an aggregate sales price of up to $150.0 million. The net proceeds, after commissions and offering costs, from the 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. During Fiscal 2022, we sold approximately 22.2 million shares for approximately $115.4 million of net proceeds under the Company's ATM Programs.

Series A Preferred Stock and Warrants

During the year ended February 25, 2023, 5,000 Preferred Stock Warrants were exercised for gross proceeds of $47.5 million.

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The filing of the Chapter 11 Cases constitutes a Bankruptcy Trigger Event of the Series A, as a result of which mandatory cash redemption provisions contained are triggered. In addition, the filing of the Chapter 11 Cases triggers a holder's ability to convert the preferred stock at the Alternate Conversion Price, which could result in a conversion price of lesser than $0.7160.

Capital Expenditures

Capital expenditures for Fiscal ~~2021~~2022 were $~~354~~332.2 9 million, ~~and~~which ~~for~~includes ~~Fiscal~~the ~~2022~~entering ~~are~~into ~~projected~~use toof beaccrued ~~approximately~~capital ~~$390.0 million~~expenditures toof $~~410~~63.0 4 million. ~~Our~~which ~~capital~~were ~~expenditures~~recorded in ~~Fiscal~~fiscal 2021. ~~were~~As ~~related~~the toCompany ~~digital~~executes ~~and~~its ~~omni-channel~~new ~~capabilities,~~strategic ~~store~~plans ~~remodels~~ and ~~investments~~refine incapital ~~technology~~resources ~~across~~to aimprove ~~number~~liquidity, ofcapital ~~areas~~expenditures ~~including~~are ~~supply~~related ~~chain~~to maintenance, ~~merchandising~~and investments in technology and ~~finance~~digital offerings.

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 the first quarter of Fiscal ~~2021~~2022, we repurchased approximately 282.39 million shares of our common stock, at a total cost of approximately $~~589~~46.41 million, which included approximately 272.73 million shares at a total cost of approximately $~~574~~40.94 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~~Between ~~Fiscal~~December 2004 and April 2021, wethe ~~announced~~Company’s ~~that~~Board weof ~~intended~~Directors toauthorized, ~~complete~~through ~~our~~several $1share ~~billion~~repurchase ~~three-year~~programs, ~~share~~the repurchase ~~plan~~of ~~two~~up ~~years~~to ~~ahead~~$12.950 billion of ~~schedule~~its shares of common stock. ~~The~~Since ~~repurchases~~2004 ~~made~~through ~~during~~the end of Fiscal ~~2021~~2022, ofthe Company has repurchased approximately $~~574~~11.9731 ~~million,~~billion ~~combined~~of ~~with~~its ~~the~~common ~~accelerated~~stock through share repurchase programs. ~~entered~~The ~~into~~Company inalso ~~Fiscal~~acquires ~~2020~~shares ~~totaling~~of ~~$375.0 million~~its ~~(discussed~~common ~~below)~~stock to cover employee related taxes withheld on vested restricted stock, ~~resulted~~restricted stock units and performance stock unit awards. Since the initial authorization in December 2004, the ~~repurchase~~aggregate total of ~~$950.0~~common stock repurchased is approximately 265.1 million ~~under~~shares ~~this~~for ~~plan~~a astotal cost of ~~February~~approximately ~~26,~~$11.731 ~~2022~~billion. AnThe ~~additional~~Company had approximately $401.0221 ~~million~~billion ~~was~~remaining ~~repurchased~~of inauthorized ~~March~~share repurchases as of ~~2022~~February 25, 2023.

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 its 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 its 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 its 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.

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Between December 2004 and April 2021, the Company’s Board of Directors authorized, through several share repurchase programs, the repurchase of $12.950 billion of its shares of common stock. Since 2004 through the end of Fiscal 2021, the Company has repurchased approximately $11.685 billion of its common stock through share repurchase programs. The Company also acquires shares of its 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, such as the impact of the COVID-19 pandemic on our business operations or stock price. 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

~~During~~There ~~Fiscal~~were ~~2021~~no wedebt ~~purchased~~repurchases ~~approximately~~made ~~$11.0~~during ~~million~~the ~~aggregate~~year ~~principal~~ended ~~amount of our outstanding 3.749% senior unsecured notes due August~~February 125, ~~2024~~2023. During Fiscal ~~2020~~2021, we purchased approximately $~~300~~11.0 million aggregate principal amount of our outstanding 43.~~915~~749% ~~Senior~~senior ~~Notes~~unsecured notes due ~~2034~~August 1, ~~and 5~~2024.~~165%~~ ~~Senior Notes due 2044.~~

Cash flow from operating activities

Net cash ~~provided~~used byin operating activities for Fiscal ~~2021~~2022 was $17991.90 million, compared with net cash provided by operating activities of $~~268~~17.19 million in Fiscal ~~2020~~2021. 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. For Fiscal 2021, the decrease in cash provided by operating activities 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.

Retail inventory, which includes inventory in our distribution facilities for direct to customer shipments, was approximately $1817.~~725~~6 ~~billion~~million at February 2625, ~~2022~~2023, ana ~~increase~~decrease of 352.26% compared with retail inventory at February 2726, ~~2021~~2022. We continue to focus on our inventory assortment changes and other merchandising strategies. In Fiscal 2022, the Company's in-stock levels were lower than anticipated due to supplier constraints and vendor credit line decreases. 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 2726, ~~2021~~2022 ~~decreased~~increased approximately 18.0% compared to retail inventory at February 2927, ~~2020~~2021, which was primarily related to the ~~Fiscal~~focus ~~2020~~on ~~divestitures~~our inventory optimization strategies while also responding to the potential impact of global supply chain disruptions on product availability.

Cash flow from investing activities

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 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.34

Cash flow from financing activities

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

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~~share~~Net ~~repurchase~~cash ~~agreement~~used ~~with~~in ~~JPMorgan~~investing ~~Chase~~activities ~~Bank~~for Fiscal 2022 was $298.7 million, ~~National~~compared ~~Association~~with ~~entered~~net ~~into~~cash used in ~~October~~investing ~~2020~~activities of $349.2 million in Fiscal 2021. For Fiscal 2022, ~~repurchases~~net ofcash ~~our~~used ~~common~~in ~~stock~~investing ofactivities included $332.59 million of capital expenditures, ~~payments~~a of$10.5 ~~deferred~~million ~~financing~~cash ~~costs~~outflow related to the deconsolidation of Canadian subsidiaries, $718.79 million of cash proceeds from the sale of available-for-sale investment securities, and ~~dividend~~$25.8 ~~payments~~million of proceeds from a note receivable. For Fiscal 2021, net cash used in investing activities included $23354.1 2 million of capital expenditures.

Cash flow from financing activities

Net cash provided by financing activities for Fiscal 2022 was $967.0 million, compared with net cash used in financing activities of $606.0 million in Fiscal 2021. Net cash provided by financing activities for Fiscal 2022 was comprised of $1.6 billion of borrowings under the Credit Facilities, partially offset by repayments of $926.2 million, $272.5 million of proceeds from the issuance and exercising of derivative liabilities, net proceeds from issuances of common stock and ATM Program offerings of $119.0 million, repurchases of common stock of $46.1 million, of which $40.4 million is related to our share repurchase program, payments of deferred financing costs of $24.2 million, payments of Exchange Offer costs of $8.0 million, $6,3 million of payments for issuance costs related to derivative liabilities, repayments of finance leases of $3.2 million, and dividend payments of $0.3 million. Net cash provided by 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.

Contractual Obligations

Our contractual obligations as of February 2625, ~~2022~~2023 consist mainly of (i) principal and interest related to our ~~senior~~debt ~~unsecured notes~~ (see "Long -Term Debt," Note 7 to the Consolidated Financial Statements), (ii) leases for stores, offices, distribution facilities and equipment (see "Leases," Note 109 to the Consolidated Financial Statements) and (iii) purchase obligations, primarily under purchase orders issued for merchandise and for certain capital expenditures. Total capital expenditures for Fiscal ~~2021~~2022 were $~~354~~332.29 million~~, and for Fiscal 2022 are projected to be approximately $390~~.~~0 million to $410.0 million.~~

Approximately $~~284~~215.4 million in principal amount of our senior unsecured notes are due August 1, 2024, with the remaining principal balances due August 1, 2034 and August 1, 2044. Our lease obligations include both operating and finance leases, and have various terms extending through 2041, with approximately $~~451~~385.95 million in minimum lease payments due in Fiscal ~~2022~~2023, and declining amounts due each year thereafter.

These obligations are considered as part of our overall capital allocation and liquidity management processes referred to above.

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 February.

INFLATION

In Fiscal ~~2021~~2022, we experienced inflationary pressures in various parts of our business, including, but not limited to, product cost pressure as well as increased freight and shipping costs across our supply chain. We continue to monitor the impact of inflation on the costs of materials, labor, and other costs required to manage our business in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. There can be no assurance, however, that our operating results will not be affected by inflation in the future. See also Risk Factor "Rising inflation may adversely affect us by increasing costs of materials, labor and other costs beyond what we can recover through price increases".

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.35

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, including the duration and severity of the COVID-19 pandemic.

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WeUnder ~~estimate~~the ~~our~~retail ~~reserve~~inventory ~~for~~method, ~~shrinkage throughout~~ the ~~year~~valuation ~~based~~of oninventories ~~historical~~at ~~shrinkage~~cost and ~~any~~the ~~current~~resulting ~~trends,~~gross ifmargins ~~applicable.~~are ~~Actual~~calculated ~~shrinkage~~by isapplying ~~recorded~~a atcost-to-retail ~~year~~ratio ~~end~~to ~~based upon~~ the ~~results~~retail values of ~~our~~inventories. ~~physical~~The ~~inventory~~inputs ~~counts~~associated ~~for~~with ~~locations~~determining atthe ~~which~~cost-to-retail ~~counts~~ratio ~~were~~include: ~~conducted.~~merchandise ~~For~~purchases, ~~locations~~net ~~where~~of ~~physical~~returns ~~inventory~~to ~~counts were not conducted in the fiscal year~~vendors, andiscounts ~~estimated~~and ~~shrink~~volume ~~reserve~~and isincentive ~~recorded~~rebates; ~~based~~inbound onfreight ~~historical~~expenses; ~~shrinkage~~import ~~and any current trends~~charges, ifincluding ~~applicable. Historically~~duties, ~~our~~insurance ~~shrinkage~~and ~~has not been volatile~~commissions.

WeThe ~~accrue~~retail ~~for~~inventory ~~merchandise~~method incontains ~~transit~~certain ~~once~~management wejudgments ~~take~~that ~~legal~~may ~~ownership~~affect ~~and~~inventory ~~title~~valuation. At any one time, inventories include items that have been written down to the Company’s best estimate of their realizable value. Judgment is required in estimating realizable value and factors considered are the age of merchandise;, asanticipated demand based on factors such as customer preferences and fashion trends, anand ~~estimate~~anticipated ~~for~~changes in product assortment (including related to the launch of Owned Brands) as well as anticipated markdowns to reduce the price of merchandise infrom ~~transit~~its recorded retail price to a retail price at which it is ~~included~~expected to be sold in ~~our~~the ~~merchandise~~future. ~~inventories~~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.

For the fiscal years ended February 26, 2022 and February 27, 2021 the Company estimated its reserve for inventory shrinkage throughout the year based on historical shrinkage and any current trends, if applicable. Actual shrinkage was recorded based upon the results of the Company’s 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 was recorded based on historical shrinkage and any current trends, if applicable.

For the fiscal year-ended February 25, 2023 the Company performed store physical inventory counts at or near fiscal year-end using a statistical sampling approach based on a stratified random sample. The full population of store inventory was estimated and recorded based on an extrapolation using the direct projection method. The Company estimated a reserve for inventory shrinkage for inventory held at other locations based on historical shrinkage and current trends.

The Company accrues for merchandise in transit once it takes legal ownership and title to the merchandise; as such, an estimate for merchandise in transit is included in the Company’s 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 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~~2022, ~~2020~~2021, and ~~2019~~2020, we recorded $301.828 ~~million~~billion, $9230.98 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. OfAt ~~the~~February ~~stores~~25, ~~impaired during Fiscal 2021~~2023, ~~partial~~the ~~impairments~~required ~~were~~step ~~recorded~~one atrecoverability 50test ~~stores~~resulted ~~resulting~~ in aestimation ~~remaining~~uncertainty ~~net~~regarding ~~book~~the ~~value~~ability ofto ~~long-lived~~achieve ~~assets~~future atlocation ~~risk of $46.4 million as of February 26, 2022, inclusive of leasehold improvements~~ and ~~right-of-use~~enterprise ~~assets.~~level Wepositive ~~will~~undiscounted ~~continue~~cash ~~to monitor these stores closely~~flows. IfAs ~~actual~~such, ~~results differ from~~ the ~~estimated~~Company ~~undiscounted~~moved ~~future~~forward ~~cash~~with ~~flows~~preparing ora ~~the~~step ~~estimated~~two ~~price~~impairment ~~market~~test ~~participants~~for ~~would~~its belong-lived ~~willing~~assets toat ~~pay~~all ~~to sublease~~ store, ~~operating~~distribution ~~leases~~facility and ~~acquire~~corporate ~~remaining~~locations. ~~store~~The ~~assets,~~Company ~~which~~used ~~among~~market ~~other~~approach ~~factors~~models, ~~may~~including beorderly ~~impacted~~liquidation ~~by the duration and severity of the COVID-19 pandemic~~value, ~~we may be exposed~~ to ~~additional~~estimate ~~impairment losses that may be material. If events or market conditions affect~~ the ~~estimated~~ fair value toof ~~the~~store, ~~extent~~distribution ~~that~~facility aand corporate location long-lived ~~asset is impaired~~assets, wecomparing ~~will adjust~~ the ~~carrying~~fair ~~value~~values ofto ~~these~~the ~~long-lived~~net ~~assets~~book invalues, ~~the~~and ~~period~~calculating ~~in which~~ the impairment ~~occurs~~charge.

~~Other~~In ~~Indefinite Lived Intangible Assets: We review other intangibles that have indefinite lives for impairment annually as of~~ the ~~end~~future, ofif ~~the fiscal year or when~~ events or ~~changes~~market inconditions ~~circumstances~~affect ~~indicate~~ the ~~carrying~~estimated ~~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~~the ~~future~~extent ~~cash~~that ~~flows,~~a ~~determining~~long-lived ~~appropriate~~asset ~~discount~~is ~~rates~~impaired, ~~margins,~~the ~~growth~~Company ~~rates,~~will ~~and~~adjust ~~other assumptions, to estimate~~ the ~~fair~~carrying value of ~~indefinite~~these long-lived ~~intangible~~ assets~~. Although~~ wein ~~believe that~~ the ~~assumptions~~period ~~and~~in ~~estimates~~which ~~made~~the ~~are~~impairment ~~reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results~~occurs.

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, which, among other factors, may be impacted by the duration and severity of the COVID-19 pandemic, 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.

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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 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, 2022.36

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Mezzanine Equity and Derivatives: The Company also issues various financial instruments, including preferred stock and warrants. We account for instruments containing redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control are classified as redeemable or mezzanine equity. We also evaluate whether the contingent redemption provisions are probable of becoming redeemable to determine whether the carrying value of the redeemable convertible preferred units are required to be remeasured to their respective redemption values. All instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g. more equity-like or debt-like). Features identified as freestanding instruments or bifurcated embedded derivatives that are material are recognized separately as a derivative asset or liability, recorded at fair value each reporting period in the consolidated financial statements.

The Company uses a model-derived valuation in determining the fair value of the derivative liabilities. Significant assumptions used in the model include the conversion ratio and stock price of the Company. Significant changes in these assumptions could lead to significant changes in the fair value of the derivative liabilities.

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~~2022, we concluded that, based on our evaluation of available objective positive and negative evidence, itwe iscontinue noto ~~longer~~be more likely than not that our net U.S. federal and state deferred tax assets ~~are~~will not be 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~~ability ~~initiatives~~to ~~and~~continue ~~their expected associated benefits. Accordingly, we recorded a charge of $181.5 million in the third quarter of Fiscal 2021~~ as a ~~reserve~~going ~~against our net U~~concern.S. ~~federal and state deferred tax assets.~~ As of February 26 25, ~~2022~~2023, the total valuation allowance relative to U.S. federal and state deferred tax assets was $~~224~~851.38 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.

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.

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The Company also accrues for certain other taxes as required by its 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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FORWARD-LOOKING STATEMENTS

This Form 10-K and Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934 including, but not limited to, our progress and anticipated progress towards our long-term objectives, as well as more generally the status of our future liquidity and financial condition and our outlook for our 2022 Fiscal year. ~~Many~~These ~~of these forward-looking~~ statements ~~can~~may be identified by the use of ~~words~~forward-looking terminology such as ~~may~~“anticipate,” ~~will~~“believe,” ~~expect~~“continue,” ~~anticipate~~“could,” ~~approximate~~“estimate,” ~~estimate~~“expect,” ~~assume~~“intend,” ~~continue~~“may,” ~~model~~“might,” ~~project~~“our vision,” “plan,” ~~goal~~“potential,” “preliminary,” ~~and~~“predict,” ~~similar~~“should,” ~~words~~“will,” ~~and~~or ~~phrases,~~“would” ~~although~~or the ~~absence~~negative ofthereof ~~those~~or ~~words~~other ~~does~~variations ~~not~~thereof ~~necessarily~~or ~~mean~~comparable ~~that~~terminology. These forward-looking statements are ~~not~~subject ~~forward-looking.~~to ~~Our~~a ~~actual~~number ~~results~~of factors and ~~future~~uncertainties ~~financial~~that ~~condition~~could ~~may~~cause the Company’s actual results to differ materially from those expressed in ~~any~~or ~~such~~contemplated by the forward-looking statements ~~as a result of many factors~~. Such factors include, ~~without~~but ~~limitation~~are not limited to: ~~general~~risks ~~economic~~attendant ~~conditions~~to the bankruptcy process, including the ~~recent~~Company’s ~~supply~~ability ~~chain~~to ~~disruptions,~~obtain ~~labor~~court ~~shortages,~~approval ~~wage~~from ~~pressures,~~the ~~rising~~Bankruptcy ~~inflation~~Court ~~and~~with ~~the~~respect ~~ongoing~~to ~~military~~motions ~~conflict~~or ~~between~~other ~~Russia~~requests ~~and~~made ~~Ukraine; a~~to ~~challenging~~the ~~overall~~Bankruptcy ~~macroeconomic~~Court ~~environment~~throughout ~~and~~the acourse ~~highly~~of ~~competitive~~the ~~retailing~~Chapter ~~environment;~~11 ~~risks~~Cases, ~~associated~~including with respect the ~~ongoing~~DIP ~~COVID-19~~Facility; ~~pandemic~~the ~~and~~effects of the ~~governmental~~Chapter ~~responses~~11 ~~to it~~Cases, including ~~its~~increased ~~impacts~~legal ~~across~~and ~~our~~other ~~businesses~~professional oncosts ~~demand~~necessary ~~and~~to ~~operations,~~execute asthe ~~well~~Company’s asreorganization, on the ~~operations~~Company’s ofliquidity ~~our~~(including ~~suppliers~~the ~~and~~availability ~~other~~of ~~business~~operating ~~partners,~~capital ~~and~~during the ~~effectiveness~~pendency of ~~our~~the ~~and~~Chapter ~~governmental~~11 ~~actions~~Cases), ~~taken~~results inof ~~response~~operations toor ~~these~~business ~~risks~~prospects; ~~changing~~the ~~consumer~~effects ~~preferences,~~of ~~spending~~the ~~habits~~Chapter ~~and~~11 ~~demographics;~~Cases ~~demographics~~on ~~and~~the ~~other~~interests ~~macroeconomic~~of ~~factors~~various ~~that~~constituents ~~may~~and ~~impact~~financial stakeholders; the ~~level~~length of ~~spending~~time ~~for~~that the ~~types~~Company ofwill ~~merchandise~~operate ~~sold~~under byChapter ~~us;~~11 ~~challenges~~protection ~~in executing our omni-channel~~ and ~~transformation~~the ~~strategy,~~continued ~~including~~availability ~~our~~of ~~ability~~operating tocapital ~~establish~~during ~~and profitably maintain~~ the ~~appropriate~~pendency ~~mix~~ of ~~digital~~the ~~and~~Chapter ~~physical~~11 ~~presence~~Cases; inobjections to the ~~markets~~Company’s werestructuring ~~serve;~~process, ~~our~~DIP ~~ability~~Facilities, toor ~~successfully~~other ~~execute~~pleadings ~~our~~filed ~~store~~that ~~fleet~~could ~~optimization~~protract ~~strategies,~~the ~~including~~Chapter ~~our~~11 ~~ability~~Cases; torisks ~~achieve~~associated ~~anticipated~~with ~~cost~~third-party ~~savings~~motions ~~and~~in tothe ~~not~~Chapter ~~exceed~~11 ~~anticipated costs~~Cases; ~~our~~Bankruptcy ~~ability~~Court torulings ~~execute~~in onthe ~~any~~Chapter ~~additional~~11 ~~strategic~~Cases ~~transactions~~ and ~~realize~~ the ~~benefits~~outcome of ~~any~~the ~~acquisitions,~~Chapter ~~partnerships,~~11 ~~investments~~Cases orin ~~divestitures~~general; ~~disruptions~~the toCompany’s ~~our~~ability ~~information~~to ~~technology~~comply ~~systems,~~with ~~including~~the ~~but~~restrictions ~~not~~imposed ~~limited~~by tothe ~~security~~terms ~~breaches~~and conditions of ~~systems~~the ~~protecting~~DIP ~~consumer~~Credit Agreement and other financing arrangements; employee ~~information~~attrition orand ~~other~~the ~~types~~Company’s ofability ~~cybercrimes~~to orretain ~~cybersecurity~~senior ~~attacks;~~management ~~damage~~and toother ~~our~~key ~~reputation~~personnel indue ~~any~~to ~~aspect~~the ofdistractions ~~our~~and ~~operations~~uncertainties; the ~~cost~~Company’s ofability ~~labor~~to maintain relationships with suppliers, ~~merchandise~~customers, ~~logistical~~employees ~~costs~~ and other ~~costs~~third parties and ~~expenses;~~regulatory ~~potential~~authorities ~~supply~~as ~~chain~~a ~~disruption~~result ~~due~~of tothe ~~trade~~Chapter ~~restrictions~~11 orCases; ~~otherwise,~~the impact and ~~other~~timing ~~factors~~of ~~such~~any ascost-savings ~~natural~~measures ~~disasters,~~and ~~pandemics,~~related ~~including~~local ~~the~~law ~~COVID-19~~requirements ~~pandemic,~~in ~~political~~various ~~instability,~~jurisdictions; ~~labor~~finalization ~~disturbances,~~of ~~product~~the ~~recalls,~~Company’s annual and quarterly financial orstatements ~~operational~~(including ~~instability~~finalization of ~~suppliers~~the orCompany’s ~~carriers~~impairment tests), completion of standard annual and ~~other~~quarterly-close ~~items~~processes; ~~inflation~~risks ~~and~~relating to the ~~related~~delisting ~~increases~~of inthe ~~costs~~Common ofStock ~~materials,~~from ~~labor~~Nasdaq and ~~other~~future ~~costs~~quotation of the Company’s common stock; ~~inefficient~~the ~~management~~effectiveness of ~~relationships~~the ~~and~~Company’s ~~dependencies~~internal oncontrol ~~third-party~~over ~~service~~financial ~~providers;~~reporting ~~our~~and ~~ability~~disclosure tocontrols ~~attract~~and procedures, and ~~retain~~the ~~qualified~~potential ~~employees~~for inadditional ~~all~~material ~~areas~~weaknesses ofin the ~~organization;~~Company’s ~~unusual~~internal ~~weather~~controls ~~patterns~~over ~~and~~financial ~~natural~~reporting ~~disasters,~~or ~~including~~other ~~the~~potential ~~impact~~weaknesses of ~~climate~~which ~~change;~~the ~~uncertainty~~Company ~~and~~is ~~disruptions~~not incurrently ~~financial~~aware ~~markets;~~or ~~volatility~~which inhave not been detected; the ~~price~~impact of ~~our~~litigation ~~common~~and ~~stock~~regulatory ~~and~~proceedings; ~~its~~the ~~effect,~~impact and ~~the~~timing ~~effect~~ of ~~other~~any ~~factors,~~cost-savings ~~including~~measures; ~~the~~and ~~COVID-19~~other ~~pandemic,~~factors ondiscussed ~~our~~in ~~capital~~this ~~allocation~~Annual ~~strategy;~~Report ~~changes~~on toForm ~~statutory,~~10-K. ~~regulatory~~These risks and ~~other~~uncertainties ~~legal~~may ~~requirements~~cause orthe ~~deemed~~Company’s ~~noncompliance~~actual ~~with~~results, ~~such~~performance, ~~requirements;~~liquidity ~~changes~~or achievements to ~~accounting~~differ ~~rules,~~materially ~~regulations~~from ~~and~~any ~~tax~~future ~~laws~~results, performance, liquidity or ~~new~~achievements ~~interpretations~~expressed ofor ~~existing~~implied ~~accounting~~by ~~standards~~these orforward-looking ~~tax~~statements. ~~laws;~~In ~~new~~addition, orin ~~developments~~light inof ~~existing,~~these ~~litigation,~~risks ~~claims~~and oruncertainties, ~~assessments;~~the ~~and~~matters areferred ~~failure~~to ofin ~~our~~the ~~business~~forward-looking ~~partners~~statements tocontained ~~adhere~~in tothis ~~appropriate~~report ~~laws,~~may ~~regulations~~not orin ~~standards~~fact occur. Except as required by law, we do not undertake any obligation to update our forward-looking statements.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk ~~for~~is ~~changes~~primarily inrelated to variable interest ~~rates~~rate ~~relates~~changes ~~primarily~~associated towith our investment securities and the ~~ABL~~Credit ~~Facility.~~Facilities, Aswhich ofincludes ~~February 26,~~our ~~2022,~~asset ~~our~~based ~~investments~~revolving ~~include~~credit ~~cash~~facility ~~and~~(the ~~cash~~“ABL ~~equivalents~~Facility”) ofand ~~approximately~~a ~~$439.5~~first-in-last-out ~~million,~~term ~~restricted~~loan ~~cash~~facility of(the ~~$31~~“FILO Facility”).4 ~~million,~~Our ~~and~~Credit ~~long~~Facilities ~~term~~are ~~investments~~based inon ~~auction~~the ~~rate~~Secured ~~securities~~Overnight ofFinancing ~~approximately~~Rate ~~$19~~(“SOFR”).2 ~~million~~During Fiscal 2022, atthe ~~weighted~~Company ~~average~~sold ~~interest~~its ~~rates~~long-term available-for-sale investment securities of 0$20.~~01%~~3 ~~and~~million ~~0.30%,~~for ~~respectively~~$18.9 ~~The~~million ~~book~~resulting ~~value~~in ofa ~~these~~realized ~~investments~~loss isreclassified ~~representative~~out of ~~their~~accumulated ~~fair~~other ~~values~~comprehensive loss.

~~Our~~As ~~senior~~of ~~unsecured~~February ~~notes~~25, ~~have~~2023, ~~fixed~~our ~~interest~~investments ~~rates~~include cash and ~~are~~cash ~~not~~equivalents ~~subject~~of toapproximately ~~interest rate risk~~$65.9 Asmillion ofand ~~February 26,~~restricted ~~2022,~~cash ~~the fair value~~ of ~~the senior unsecured notes was~~ $~~956~~81.0 5 million, ~~which~~at isweighted ~~based~~average oninterest ~~quoted~~rates ~~prices~~of in3.34% and ~~active~~0.34%, ~~markets~~respectively. ~~for~~The ~~identical~~book ~~instruments~~value ~~compared~~of tothese ~~the~~investments ~~carrying~~is ~~value~~representative of ~~approximately~~their $1fair values.~~184 billion.~~

40As of February 25, 2023, we had a variable interest rate debt outstanding under our Credit Facilities of $720.2 million. The weighted average interest rate on the outstanding amounts under our Credit Facilities was 11.66%. The carrying amount of the Credit Facilities approximates fair value as the interest charged is based on the current market rate.

Our senior unsecured notes have fixed interest rates and are not subject to interest rate risk. As of February 25, 2023, the fair value of the senior unsecured notes was $176.3 million, which is based on quoted prices in active markets for identical instruments compared to the carrying value of approximately $1.030 billion.

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ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following are included herein:

1) Consolidated Balance Sheets as of February 2625, ~~2022~~2023 and February 2726, ~~2021~~2022 2) Consolidated Statements of Operations for the fiscal years ended February 2625, ~~2022~~2023, February 2726, ~~2021~~2022, and February 2927, ~~2020~~2021 3) Consolidated Statements of Comprehensive Loss for the fiscal years ended February 2625, ~~2022~~2023, February 2726, ~~2021~~2022, and February 2927, ~~2020~~2021 4) Consolidated Statements of Shareholders’ (Deficit) Equity for the fiscal years ended February 2625, ~~2022~~2023, February 2726, ~~2021~~2022, and February 2927, ~~2020~~2021 5) Consolidated Statements of Cash Flows for the fiscal years ended February 2625, ~~2022~~2023, February 2726, ~~2021~~2022, and February 2927, ~~2020~~2021 6) Notes to Consolidated Financial Statements 7) Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185)

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share data)

	February 26,2022		February 27,2021
	February 25,2023		February 26,2022
Assets
Current assets:
Cash and cash equivalents	$	~~439~~65,~~496~~853	$	1439,~~352,984~~496
Merchandise inventories	1,725,410		1,671,909
Restricted cash	66,242		—
Prepaid expenses and other current assets	198,248		595,152
Merchandise inventories	817,553		1,725,410
Total current assets	2,363,154		3,620,045
Prepaid expenses and other current assets	147,261		198,248
Long term investment securities	19,212		19,545
Total current assets	1,096,909		2,363,154
Property and equipment, net	1,027,387		918,418
Long-term restricted cash	15,262		31,388
Operating lease assets	1,562,857		1,587,101
Long-term investment securities	—		19,212
Other assets	157,962		311,821
Property and equipment, net	50,143		1,027,387
Total assets	$	5,130,572	$	6,456,930
Operating lease assets	965,882		1,562,857
Liabilities and Shareholders' Equity
Other assets	97,021		126,574
Total assets	$	2,225,217	$	5,130,572
Liabilities, Mezzanine Equity, and Shareholders' (Deficit) Equity
Current liabilities:
Accounts payable	$	872,445	$	986,045
Current portion of long-term debt	$	646,005	$	—
Accrued expenses and other current liabilities	529,371		636,329
Accounts payable	457,924		872,445
Merchandise credit and gift card liabilities	326,465		312,486
Accrued expenses and other current liabilities	244,432		529,371
Current operating lease liabilities	346,506		360,061
Merchandise credit and gift card liabilities	272,277		326,465
Total current liabilities	2,074,787		2,294,921
Current operating lease liabilities	301,194		346,506
Other liabilities	102,438		82,279
Preferred stock warrant liabilities	404,441		—
Operating lease liabilities	1,508,002		1,509,767
Derivative liabilities	169,611		—
Income taxes payable	91,424		102,664
Total current liabilities	2,495,884		2,074,787
Long term debt	1,179,776		1,190,363
Other liabilities	131,500		102,438
Total liabilities	4,956,427		5,179,994
Operating lease liabilities	1,278,467		1,508,002
Shareholders' equity:
Income taxes payable	93,241		91,424
Long-term debt	1,026,133		1,179,776
Total liabilities	5,025,225		4,956,427
Mezzanine equity
Convertible Preferred Stock, Series A, $0.001 par value, authorized - 1,000,000 shares authorized; issued 23,685 shares and outstanding 15,142 shares	—		—
Shareholders' (deficit) equity:
Preferred stock - $0.01 par value; authorized - 1,000 shares; no shares issued or outstanding	—		—
Common stock - $0.01 par value; authorized - 900,000 shares; issued 344,146 and 343,241, respectively; outstanding 81,979 and 109,621 shares, respectively	3,441		3,432
Common stock - $0.01 par value; authorized - 900,000 shares; issued 382,353 and 344,146, respectively; outstanding 259,033 and 81,979 shares, respectively	3,823		3,441
Additional paid-in capital	2,~~235~~428,~~894~~439		2,~~152~~235,~~135~~894
Retained earnings	9225,~~666,091~~058		109,~~225~~666,~~253~~091
Treasury stock, at cost; 262,167 and 233,620 shares, respectively	(11,685,267)		(11,048,284)
Treasury stock, at cost; 123,320 and 262,167 shares, respectively	(5,457,379)		(11,685,267)
Accumulated other comprehensive loss	(46,014)		(55,600)
Accumulated other comprehensive income (loss)	51		(46,014)
Total shareholders' equity	174,145		1,276,936
Total shareholders' (deficit) equity	(2,800,008)		174,145
Total liabilities and shareholders' equity	$	5,130,572	$	6,456,930
Total liabilities, mezzanine equity, and shareholders' (deficit) equity	$	2,225,217	$	5,130,572

See accompanying Notes to Consolidated Financial Statements.

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share data)

	Fiscal Year Ended
	February 26, 2022		February 27, 2021		February 29, 2020
	February 25, 2023		February 26, 2022		February 27, 2021
Net sales	$	75,~~867~~344,~~778~~685	$	97,~~233~~867,~~028~~778	$	119,~~158~~233,~~580~~028
Cost of sales	54,~~384~~129,~~287~~802		65,~~114~~384,~~947~~287		76,~~616~~114,~~920~~947
Gross profit	21,~~483~~214,~~491~~883		32,~~118~~483,~~081~~491		3,~~541~~118,~~660~~081
Selling, general and administrative expenses	2,~~692~~372,~~292~~969		32,~~224~~692,~~363~~292		3,~~732~~224,~~498~~363
Impairments, including on assets held for sale	36,531		127,341		509,226
Impairments	1,287,529		36,531		127,341
Restructuring and transformation initiative expenses	~~144~~330,~~025~~024		~~102~~144,~~202~~025		—102,202
Loss on sale of businesses	~~18,221~~—		118,~~062~~221		—1,062
Operating loss	(~~407~~2,~~578~~775,639)		(~~336~~407,~~887~~578)		(~~700~~336,~~064~~887)
Interest expense, net	64110,~~702~~497		7664,~~913~~702		6476,~~789~~913
Loss (gain) on extinguishment of debt	376		(77,038)		—
Loss on preferred stock warrants and derivative liabilities	639,444		—		—
Loss before provision (benefit) from income taxes	(472,656)		(336,762)		(764,853)
Loss on deconsolidation of subsidiaries	98,633		—		—
Provision (benefit) from income taxes	86,967		(185,989)		(151,037)
Loss (gain) on extinguishment of debt	(94,343)		376		(77,038)
Net loss	$	(559,623)	$	(150,773)	$	(613,816)
Loss before provision (benefit) from income taxes	(3,529,870)		(472,656)		(336,762)
Net loss per share - Basic	$	(5.64)	$	(1.24)	$	(4.94)
Provision (benefit) from income taxes	(31,069)		86,967		(185,989)
Net loss per share - Diluted	$	(5.64)	$	(1.24)	$	(4.94)
Net loss	$	(3,498,801)	$	(559,623)	$	(150,773)
Weighted average shares outstanding - Basic	99,249		121,446		124,352
Net loss per share - Basic	$	(36.03)	$	(5.64)	$	(1.24)
Weighted average shares outstanding - Diluted	99,249		121,446		124,352
Net loss per share - Diluted	$	(36.03)	$	(5.64)	$	(1.24)
Dividends declared per share	$	—	$	—	$	0.68
Weighted average shares outstanding - Basic	97,106		99,249		121,446
Weighted average shares outstanding - Diluted	97,106		99,249		121,446

See accompanying Notes to Consolidated Financial Statements.

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss

(in thousands)

Fiscal Year Ended

February 26, 2022

February 27, 2021

February 29, 2020

February 25, 2023

February 26, 2022

February 27, 2021

Net loss

(~~559~~3,~~623~~498,801)

(~~150~~559,~~773~~623)

(~~613~~150,~~816~~773)

Other comprehensive (loss) income:

Change in temporary impairment of auction rate securities, net of tax

~~(251)~~866

(~~617~~251)

~~276~~(617)

Pension adjustment, net of tax

~~(1,562)~~—

(1,~~396~~562)

(41,~~791~~396)

Reclassification adjustment on settlement of the pension plan, net of tax

~~9,938~~—

19,~~522~~938

—1,522

Currency translation adjustment

145,~~461~~199

91,~~800~~461

(19,~~784)~~800

Other comprehensive income (loss)

9,586

9,309

(6,299)

Other comprehensive income

46,065

9,586

9,309

Comprehensive loss

(~~550~~3,~~037~~452,736)

(~~141~~550,~~464~~037)

(~~620~~141,~~115~~464)

See accompanying Notes to Consolidated Financial Statements.

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Mezzanine Equity and Shareholders' (Deficit) Equity

(in thousands)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock				Accumulated Other Comprehensive Loss		Total
	Mezzanine Equity			Common Stock				Additional Paid-in Capital		Retained Earnings		Treasury Stock				Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares		Amount		~~Shares~~		~~Amount~~		Shares		Amount
Balance at March 2, 2019	342,582	$	3,426	$	2,118,673	$	11,112,887	(210,349)		$	(10,616,045)	$	(58,610)	$	2,560,331
Balance at February 29, 2020	—	—		343,683		$	3,436	$	2,167,337	$	10,374,826	(217,155)		$	(10,715,755)	$	(64,909)	$	1,764,935
Net loss	—	—		—		~~(613,816)~~—		—		—(150,773)		—		~~(613,816)~~—		—		(150,773)
Other comprehensive loss, net of tax	—	—		—		—		—		—		~~(6,299)~~—		~~(6,299)~~—		9,309		9,309
Effect of Adoption of ASU 2016-02	—	—		—		(40,700)		—		—		—		(40,700)
Dividends forfeited	—	—		—		—		—		1,200		—		—		—		1,200
Dividends declared	—	—		—		(83,545)		—		—		—		(83,545)
Forfeiture of restricted shares, net	—	—		(786)		(8)		8		—		—		—		—		—
Shares sold under employee stock option plans, net of tax	139	1		2,345		—		—		—		—		2,346
Payment and vesting of performance stock units	—	—		344		4		(4)		—		—		—		—		—
Issuance of restricted shares, net	370	4		(4)		—		—		—		—		—
Stock-based compensation expense, net	—	—		—		—		32,344		—		—		—		—		32,344
Payment and vesting of performance stock units	580	5		(5)		—		—		—		—		—
Accelerated share repurchase program	—	—		—		—		(47,550)		—		(15,833)		(327,450)		—		(375,000)
Stock-based compensation expense, net	—	—		46,159		—		—		—		—		46,159
Repurchase of common stock, including fees	—	—		—		—		—		—		(632)		(5,079)		—		(5,079)
Director fees paid in stock	12	—		169		—		—		—		—		169
Balance at February 27, 2021	—	—		343,241		3,432		2,152,135		10,225,253		(233,620)		(11,048,284)		(55,600)		1,276,936
Repurchase of common stock, including fees	—	—		—		—		(6,806)		(99,710)		—		(99,710)
Net loss				—		—		—		(559,623)		—		—		—		(559,623)
Balance at February 29, 2020	343,683	3,436		2,167,337		10,374,826		(217,155)		(10,715,755)		(64,909)		1,764,935
Other comprehensive income, net of tax	—	—		—		—		—		—		—		—		9,586		9,586
Net loss	—	—		—		(150,773)		—		—		—		(150,773)
Dividends forfeited	—	—		—		—		—		461		—		—		—		461
Other comprehensive income, net of tax	—	—		—		—		—		—		9,309		9,309
Issuance of restricted shares, net	—	—		624		6		(6)		—		—		—		—		—
Dividends forfeited	—	—		—		1,200		—		—		—		1,200
Payment and vesting of performance stock units	—	—		274		3		(3)		—		—		—		—		—
Forfeiture of restricted shares, net	(786)	(8)		8		—		—		—		—		—
Stock-based compensation expense, net	—	—		—		—		36,080		—		—		—		—		36,080
Payment and vesting of performance stock units	344	4		(4)		—		—		—		—		—
Accelerated share repurchase program	—	—		—		—		47,550		—		(200)		(47,550)		—		—
Stock-based compensation expense, net	—	—		32,344		—		—		—		—		32,344
Director fees paid in stock	—	—		7		—		138		—		—		—		—		138
Accelerated share repurchase program	—	—		(47,550)		—		(15,833)		(327,450)		—		(375,000)
Repurchase of common stock, including fees	—	—		—		—		—		—		(28,347)		(589,433)		—		(589,433)
Repurchase of common stock, including fees	—	—		—		—		(632)		(5,079)		—		(5,079)
Balance at February 26, 2022	—	—		344,146		3,441		2,235,894		9,666,091		(262,167)		(11,685,267)		(46,014)		174,145
Balance at February 27, 2021	343,241	3,432		2,152,135		10,225,253		(233,620)		(11,048,284)		(55,600)		1,276,936
Net loss	—	—		—		—		—		(3,498,801)		—		—		—		(3,498,801)
Net loss	—	—		—		(559,623)		—		—		—		(559,623)
Other comprehensive income, net of tax	—	—		—		—		—		—		—		—		46,065		46,065
Other comprehensive income, net of tax	—	—		—		—		—		—		9,586		9,586
Dividends forfeited	—	—		—		—		—		235		—		—		—		235
Dividends forfeited	—	—		—		461		—		—		—		461
Issuance of restricted shares, net	—	—		178		2		(2)		—		—		—		—		—
Issuance of restricted shares, net	624	6		(6)		—		—		—		—		—
Vesting of restricted stock units	—	—		1,163		12		(12)		—		—		—		—		—
Payment and vesting of performance stock units	~~274~~—	3—		~~(3)~~177		—2		—(2)		—		—		—		—		—
Stock-based compensation expense, net	—	—		~~36,080~~—		—		—20,212		—		—		~~36,080~~—		—		20,212
Accelerated share repurchase program	—	—		47,550		—		(200)		(47,550)		—		—
Director fees paid in stock	—	—		11		—		145		—		—		—		—		145
Director fees paid in stock	7	—		138		—		—		—		—		138
Issuance of common stock and At-the-Market offering, net of offering costs	—	—		36,678		366		172,204		—		—		—		—		172,570
Repurchase of common stock, including fees	—	—		—		—		~~(28,347)~~—		~~(589,433)~~—		—(2,888)		(~~589~~46,~~433~~146)		—		(46,146)
Balance at February 26, 2022	344,146	$	3,441	$	2,235,894	$	9,666,091	(262,167)		$	(11,685,267)	$	(46,014)	$	174,145
Issuance of Series A convertible preferred stock	23,685			—		—		—		—		—		—		—		—
Conversion of Series A convertible preferred stock	(13,543)	—		—		—		—		(2,980,160)		70,911		3,135,100		—		154,940
Exercise of Preferred Stock Warrants	5,000			—		—		—		—		—		—		—		—
Exercise of Common Stock Warrants	—	—		—		—		—		(2,962,307)		70,824		3,138,934		—		176,627
Balance at February 25, 2023	15,142	—		382,353		$	3,823	$	2,428,439	$	225,058	(123,320)		$	(5,457,379)	$	51	$	(2,800,008)

See accompanying Notes to Consolidated Financial Statements.

~~See accompanying Notes to Consolidated Financial Statements.~~43

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BED BATH & BEYOND INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)


	Fiscal Year Ended
	February 25, 2023		February 26, 2022		February 27, 2021
Cash Flows from Operating Activities:
Net loss	$	(3,498,801)	$	(559,623)	$	(150,773)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	427,087		293,626		340,912
Impairments	1,287,529		36,531		127,341
Loss on preferred stock warrants and derivative liabilities	639,444		—		—
Stock-based compensation	19,394		35,061		31,594
Realized loss on available-for-sale investment securities	1,411		—		—
Deferred income taxes	(37,586)		125,711		148,741
Loss on sale of businesses	—		18,221		1,062
Loss on deconsolidation of subsidiaries	98,633		—		—
(Gain) loss on debt extinguishment	(94,343)		376		(77,038)

Other	2,827		(8,298)		(396)
Decrease (increase) in assets:
Merchandise inventories	874,237		(53,339)		64,947

Other current assets	46,453		387,746		(387,172)
Other assets	11,355		607		1,519
Increase (decrease) in liabilities:
Accounts payable	(365,772)		(132,785)		168,556
Accrued expenses and other current liabilities	(262,530)		(100,356)		15,538
Merchandise credit and gift card liabilities	(53,837)		13,981		(12,110)
Income taxes payable	2,300		(11,257)		54,958
Operating lease assets and liabilities, net	(86,785)		(14,162)		(32,813)
Other liabilities	(1,995)		(14,186)		(26,758)
Net cash (used in) provided by operating activities	(990,979)		17,854		268,108
Cash Flows from Investing Activities:
Purchases of held-to-maturity investment securities	—		(29,997)		—
Redemption of held-to-maturity investment securities	—		30,000		386,500
Proceeds from sale of available-for-sale investment securities	18,864		—		—
Deconsolidation of subsidiaries cash, cash equivalents and restricted cash	(10,545)		—		—
Proceeds received from note receivable	25,832		—		—
Net proceeds from sales of businesses	—		—		534,457
Net proceeds from sales of property	—		5,000		—

Capital expenditures	(332,886)		(354,185)		(183,077)
Net cash (used in) provided by investing activities	(298,735)		(349,182)		737,880
Cash Flows from Financing Activities:
Borrowings of debt	1,590,000		—		236,400
Repayments of debt	(926,199)		(11,360)		(457,827)
Repayments of finance leases	(3,206)		(1,033)		—
Repurchase of common stock, including fees	(46,146)		(589,433)		(332,529)
Issuance of common stock and At-the-Market offering, net of offering costs	118,975		—		—
Proceeds from issuance of Series A and preferred and common stock warrants	225,008		—		—
Proceeds from exercise of preferred stock warrants	47,500		—		—
Payment of dividends	(329)		(749)		(23,108)
Payment of Exchange Offer costs	(7,992)		—		—
Payment of issuance costs related to Series A and preferred and common stock warrants	(6,334)		—		—
Payment of deferred financing fees	(24,242)		(3,443)		(7,690)
Prepayment under share repurchase agreement	—		—		(47,550)
Net cash provided by (used in) financing activities	967,035		(606,018)		(632,304)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(848)		1,006		5,075
Net (decrease) increase in cash, cash equivalents and restricted cash	(323,527)		(936,340)		378,759
Change in cash balances classified as held-for-sale	—		—		4,815

	Fiscal Year Ended
	February 26, 2022		February 27, 2021		February 29, 2020
Cash Flows from Operating Activities:
Net loss	$	(559,623)	$	(150,773)	$	(613,816)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	293,626		340,912		342,511
Impairments, including on assets held for sale	36,531		127,341		509,226
Stock-based compensation	35,061		31,594		45,676
Deferred income taxes	125,711		148,741		(145,543)
Loss on sale of businesses	18,221		1,062		—
Loss (gain) on debt extinguishment	376		(77,038)		—
Loss on sale leaseback transaction	—		—		27,357
Other	(8,298)		(396)		(3,446)
Decrease (increase) in assets:
Merchandise inventories	(53,339)		64,947		506,334
Other current assets	387,746		(387,172)		(4,781)
Other assets	607		1,519		239
Increase (decrease) in liabilities:
Accounts payable	(132,785)		168,556		(124,206)
Accrued expenses and other current liabilities	(100,356)		15,538		61,864
Merchandise credit and gift card liabilities	13,981		(12,110)		1,154
Income taxes payable	(11,257)		54,958		(22,783)
Operating lease assets and liabilities, net	(14,162)		(32,813)		(2,899)
Other liabilities	(14,186)		(26,758)		14,054
Net cash provided by operating activities	17,854		268,108		590,941
Cash Flows from Investing Activities:
Purchases of held-to-maturity investment securities	(29,997)		—		(443,500)
Redemption of held-to-maturity investment securities	30,000		386,500		545,000
Net proceeds from sales of businesses	—		534,457		—
Net proceeds from sales of property	5,000		—		—
Proceeds from sale-leaseback transaction	—		—		267,277
Capital expenditures	(354,185)		(183,077)		(277,401)
Net cash (used in) provided by investing activities	(349,182)		737,880		91,376
Cash Flows from Financing Activities:
Borrowing of long-term debt	—		236,400		—
Repayments of long-term debt	(11,360)		(457,827)		—
Repayments of finance leases	(1,033)		—		—
Prepayment under share repurchase agreement	—		(47,550)		—
Repurchase of common stock, including fees	(589,433)		(332,529)		(99,710)
Payment of dividends	(749)		(23,108)		(85,482)
Payment of deferred financing fees	(3,443)		(7,690)		—
Proceeds from exercise of stock options	—		—		2,346
Net cash used in financing activities	(606,018)		(632,304)		(182,846)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	1,006		5,075		(977)
Net (decrease) increase in cash, cash equivalents and restricted cash	(936,340)		378,759		498,494
Change in cash balances classified as held-for-sale	—		4,815		(4,815)
Net (decrease) increase in cash, cash equivalents and restricted cash	(936,340)		383,574		493,679
Cash, cash equivalents and restricted cash:
Beginning of period	1,407,224		1,023,650		529,971
End of period	$	470,884	$	1,407,224	$	1,023,650

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Net (decrease) increase in cash, cash equivalents and restricted cash	(323,527)		(936,340)		383,574
Cash, cash equivalents and restricted cash:
Beginning of period	470,884		1,407,224		1,023,650
End of period	$	147,357	$	470,884	$	1,407,224

See accompanying Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements

Bed Bath & Beyond Inc. and Subsidiaries

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

A. Nature of Operations

Bed Bath & Beyond Inc. and subsidiaries (the "Company") is an omni-channel retailer that makes it easy for its customers to feel at home. The Company sells a wide assortment of merchandise in the Home, and Baby, ~~Beauty & Wellness~~ markets and operates under the names Bed Bath & Beyond ("BBB"), and buybuy BABY ("BABY")~~, and Harmon, Harmon Face Values, or Face Values (collectively, "Harmon")~~. Customers can purchase products either in-store, online, with a mobile device or through a customer contact center. The Company generally has the ability to have customer purchases picked up in-store, curbside or shipped direct to the customer from the Company’s distribution facilities, stores or vendors. ~~The~~ ~~Company also operates Decorist ("Decorist"), an online interior design platform that provides personalized home design services.~~ In addition, the Company is a partner in a joint venture which operates retail stores in Mexico under the name Bed Bath & Beyond.

We ~~offer~~account afor ~~broad~~our ~~assortment~~operations ofas ~~national~~one ~~brands~~North American Retail reporting segment. In Fiscal 2020, we accounted for our operations as two operating segments: North American Retail and aInstitutional ~~growing~~Sales, ~~assortment~~the latter of ~~proprietary~~which ~~Owned~~did ~~Brand~~not ~~merchandise~~meet –the ~~including~~quantitative ~~eight~~thresholds ~~new~~under ~~Owned~~GAAP ~~Brands~~and, ~~launched~~therefore, inwas ~~Fiscal~~not ~~2021~~a –reportable segment, and which was divested in ~~key~~October ~~destination~~2020. ~~categories~~Net ~~including~~sales ~~bedding~~outside of the U.S. for the Company were not material for Fiscal 2022, ~~bath~~2021, ~~kitchen~~and ~~food~~2020. ~~prep,~~As ~~home~~the ~~organization,~~Company ~~indoor~~operates ~~décor~~in the retail industry, ~~baby~~its results of operations are affected by general economic conditions and ~~personal~~consumer ~~care~~spending habits.

WeOn ~~account~~April ~~for~~23, ~~our~~2023 ~~operations~~(the as“Petition ~~one~~Date”), ~~North~~Bed ~~American~~Bath ~~Retail~~and ~~reporting~~Beyond, ~~segment~~Inc. In(the ~~Fiscal~~“Company”) ~~2020~~and materially all of its direct and ~~2019~~indirect subsidiaries (collectively, wethe ~~accounted~~"Debtors" ~~for~~or ~~our~~the “Company ~~operations~~Parties”) asfiled ~~two~~a ~~operating~~voluntary ~~segments:~~petition ~~North~~(the ~~American~~“Chapter ~~Retail~~11 ~~and~~Cases”) ~~Institutional~~under ~~Sales,~~Chapter 11 of the ~~latter~~U.S. ofBankruptcy ~~which~~Code ~~was~~(the ~~divested~~“Bankruptcy Code”) in ~~October~~the ~~2020,~~U.S. ~~did~~Bankruptcy ~~not~~Court ~~meet~~for the ~~quantitative~~District ~~thresholds~~of ~~under~~New ~~GAAP~~Jersey ~~and,~~(the ~~therefore~~“Bankruptcy Court”). On the Petition Date, ~~was~~the ~~not~~Company Parties filed a ~~reportable~~motion ~~segment.~~with ~~Net~~the ~~sales~~Bankruptcy ~~outside~~Court ofseeking ~~the~~to ~~U.S.~~jointly ~~for~~administer the ~~Company~~Chapter ~~were~~11 ~~not~~Cases. ~~material~~On ~~for~~April ~~Fiscal 2021~~24, ~~2020~~2023, ~~and~~the ~~2019.~~Bankruptcy AsCourt ~~the~~entered ~~Company~~an ~~operates~~order inapproving joint administration under the ~~retail~~caption ~~industry~~“In re: Bed Bath & Beyond Inc.,” ~~its~~Case ~~results~~No 23-13359. Certain of ~~operations~~the ~~are~~Company’s ~~affected~~subsidiaries bywere ~~general~~not ~~economic~~included ~~conditions~~in ~~and~~the ~~consumer~~Chapter ~~spending~~11 ~~habits~~filing.

The Company Parties continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Following a hearing held on April 24, 2023, the Bankruptcy Court approved, on an interim basis, the Company Parties’ motions seeking a variety of “first-day” relief, including authority to pay employee wages and benefits and to pay vendors and suppliers for goods and services provided both before and after the Petition Date. The Company Parties resolved numerous informal comments and many of the "first-day" motions were entered on a final basis consensually. A hearing was scheduled on June 14, 2023 for the Bankruptcy Court to consider final approval of the relief requested in certain first day motions, and final approval of the DIP Facility.

B. Fiscal Year

The Company’s Fiscal year is comprised of the 52 or 53-week period ending on the Saturday nearest February 28th. Accordingly, Fiscal ~~2021~~2022, Fiscal ~~2020~~2021, and Fiscal ~~2019~~2020 represented 52 weeks and ended on February 2625, ~~2022~~2023, February 2726, ~~2021~~2022, and February 2927, ~~2020~~2021, respectively.

C. Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company accounts for its investment in the joint venture referred to above under the equity method.

All significant intercompany balances and transactions have been eliminated in consolidation.

~~D. Recent Accounting Pronouncements~~46

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendment provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by this update, but does not expect the adoption of this guidance to have a material impact to the financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes, to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocations, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes, enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. The Company adopted this standard in Fiscal 2021; upon adoption, this guidance did not have a material impact on its consolidated financial statements.

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D. Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendment provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships and other transactions that reference LIBOR. These updates are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company adopted this standard in Fiscal 2022; upon adoption, this guidance did not have a material impact on its consolidated financial statements.

E. Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company 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. The Company bases its estimates on historical experience and on other assumptions that it believes 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, impairment of auction rate securities, goodwill and other indefinite lived intangible assets, accruals for self-insurance, litigation, store opening, expansion, relocation and closing costs, the provision for sales returns, vendor allowances, derivatives, stock-based compensation and income and certain other taxes. Actual results could differ from these estimates.

F. Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $4724.95 million and $6447.09 million as of February 2625, ~~2022~~2023 and February 2726, ~~2021~~2022, respectively.

Short-term restricted cash was ~~zero and~~ $566.02 million as of February 2625, ~~2022~~2023 and ~~February 27, 2021, respectively, and~~ is included in ~~prepaid expenses and other~~ current assets on the consolidated balance sheet. The Company had no short-term restricted cash as of February 26, 2022. Long-term restricted cash of $3115.43 million and $4931.24 million as of February 2625, ~~2022~~2023 and February 2726, ~~2021~~2022, respectively, is included in ~~other~~total ~~long-term~~ assets on the consolidated balance sheet.

G. Investment Securities

Investment securities consist primarily of auction rate securities, which are securities with interest rates that reset periodically through an auction process, and U.S. Treasury Bills, when outstanding. The U.S. Treasury Bills with original maturities of greater than three months were classified as short -term held-to-maturity securities and stated at their amortized cost which approximated fair value. Auction rate securities are classified as available-for-sale and are stated at fair value, which had historically been consistent with cost or par value due to interest rates which reset periodically, typically every 7, 28 or 35 days. As a result, there generally were no cumulative gross unrealized holding gains or losses relating to these auction rate securities. However, during the global financial crisis of 2008 the auction process for the Company’s auction rate securities failed and continues to fail. These failed auctions result in a lack of liquidity in the securities and affect their estimated fair values at February 26, 2022 ~~and February 27~~, ~~2021,~~ but do not affect the underlying collateral of the securities ~~(see "Fair Value Measurements," Note 4 and "Investment Securities," Note 5)~~. ~~All income from these investments is recorded as interest income.~~

Those investment securities which the Company ~~has~~had the ability and intent to hold until maturity are classified as held-to-maturity investments and are stated at amortized cost.

Premiums are amortized and discounts are accreted over the life of the security as adjustments to interest income using the effective interest method. Dividend and interest income are recognized when earned.

During Fiscal 2022, the Company sold its long-term available-for-sale investment securities of $20.3 million for $18.9 million resulting in a $1.4 million realized loss, of which $1.1 million was reclassified out of accumulated other comprehensive loss.

As of February 26, 2021, the Company’s long-term available-for-sale investment securities represented approximately $20.3 million par value of auction rate securities, less temporary valuation adjustments of approximately $1.1 million. Since these

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valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net of a related tax benefit, and did not affect the Company’s net earnings.

The Company had no short-term available-for-sale investment securities as of February 25, 2023 or February 26, 2022.

H. 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; and import charges, including duties, insurance and commissions.

48The 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 the Company’s 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 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.

~~Table~~For the fiscal years ended February 26, 2022 and February 27, 2021, the Company estimated its reserve for inventory shrinkage throughout the year based on historical shrinkage and any current trends, if applicable. Actual shrinkage was recorded based upon the results of ~~Contents~~the Company’s 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 was recorded based on historical shrinkage and any current trends, if applicable.

~~The~~For ~~retail~~the ~~inventory~~fiscal ~~method~~year-ended ~~contains~~February ~~certain management judgments that may affect inventory valuation. At any one time~~25, ~~inventories~~2023 ~~include items that have been written down to~~ the Company’s ~~best~~performed ~~estimate~~store ofphysical ~~their~~inventory ~~realizable~~counts ~~value.~~at ~~Judgment~~or isnear ~~required~~fiscal inyear-end ~~estimating~~using ~~realizable~~a ~~value~~statistical ~~and~~sampling ~~factors~~approach ~~considered are the age of merchandise, anticipated demand~~ based on ~~factors~~a ~~such~~stratified asrandom ~~customer~~sample. The ~~preferences~~full ~~and~~population ~~fashion~~of ~~trends,~~store ~~and~~inventory ~~anticipated~~was ~~changes~~estimated inand ~~product~~recorded ~~assortment~~based ~~(including~~on ~~related~~an toextrapolation ~~the~~using ~~launch of Owned Brands) as well as anticipated markdowns to reduce~~ the ~~price~~direct ofprojection ~~merchandise~~method. The ~~from~~Company ~~its~~estimated ~~recorded retail price to~~ a ~~retail~~reserve ~~price~~for atinventory ~~which~~shrinkage itfor isinventory ~~expected~~held toat beother ~~sold~~locations ~~in the future. These estimates are~~ based on historical ~~experience~~shrinkage and current ~~information about future events which are inherently uncertain~~trends. Actual realizable value could differ materially from this estimate based upon future customer demand or economic conditions, including uncertainty related to the ongoing COVID-19 pandemic (see "Impact of the COVID-19 Pandemic," Note 2).

The Company estimates its reserve for inventory shrinkage throughout the year based on historical shrinkage and any current trends, if applicable. Actual shrinkage is recorded at fiscal year end based upon the results of the Company’s 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, the Company’s shrinkage has not been volatile.

I. Property and Equipment

Property and equipment are stated at cost and are depreciated primarily using the straight-line method over the estimated useful lives of the assets (4039 years for buildings; 57 to 20 years for furniture, fixtures and equipment; and 3 to 10 years for computer equipment and software). Leasehold improvements are amortized using the straight-line method over the lesser of their estimated useful life or the life of the lease. Depreciation expense is primarily included within selling, general and administrative expenses. (see "Property and Equipment," Note 610).

The cost of maintenance and repairs is charged to earnings as incurred; significant renewals and betterments are capitalized. Maintenance and repairs amounted to $8034.07 million, $~~117~~80.70 million, and $~~133~~117.97 million for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, respectively.

J. Impairment of Long-Lived Assets

The Company reviews 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 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 asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale are separately presented in the appropriate asset and liability sections of the balance sheet (see "Assets Held for Sale and Divestitures," Note 16). In Fiscal ~~2021~~2022 and Fiscal ~~2020~~2021, the Company recorded non-cash pre-tax impairment charges of $301.828 ~~million~~billion and $9230.98 million, respectively, for certain store-level assets, including leasehold improvements and operating lease assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs.

~~K Goodwill and Other Indefinite Lived Intangible Assets~~48

Included within other assets in the accompanying consolidated balance sheets as of February 26, 2022 and February 27, 2021, respectively, are $16.3 million and $22.0 million for indefinite lived tradenames and trademarks.

The Company reviews its intangible assets 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 and terminal growth rates, and other assumptions, to estimate the fair value of goodwill and indefinite lived intangible assets. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results.

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~~Other indefinite lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. The Company values its tradenames using a relief-from-royalty approach~~respectively, 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 the fiscal years ended February 26, 2022, February 27, 2021, and February 29, 2020, the Company completed a quantitative impairment analysis for certain ~~other indefinite lived intangible assets, by comparing the fair value of the tradenames to their carrying value and recognized non~~store-~~cash pre-tax tradename impairment charges of $5.7 million~~level, ~~$35.1~~distribution ~~million~~facilities, ~~and $41.8 million~~corporate assets, ~~respectively,~~including ~~within~~leasehold ~~goodwill and other impairments in the consolidated statement of operations. As of February 26~~improvements, ~~2022, for the remaining~~ other ~~indefinite~~property ~~lived intangible assets, the Company assessed qualitative factors in order to determine whether any events~~ and ~~circumstances~~equipment ~~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~~operating nolease such events or circumstances existed which would require an impairment test be performed. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets ~~in the period in which the impairment occurs~~.

AsAt ofFebruary ~~June 1~~25, ~~2019~~2023, the ~~Company~~required ~~completed~~step aone ~~quantitative~~recoverability ~~impairment~~test ~~analysis~~resulted ofin ~~goodwill~~estimation ~~related~~uncertainty toregarding ~~its reporting units by comparing~~ the ~~fair~~ability ~~value~~to ofachieve afuture ~~reporting~~location ~~unit~~and ~~with~~enterprise ~~its~~level ~~carrying~~positive ~~amount.~~undiscounted ~~The Company performed a discounted~~ cash ~~flow analysis and market multiple analysis for each reporting unit~~flows. As ~~Based upon the analysis performed~~such, the Company ~~recognized~~moved ~~non-cash~~forward ~~pre-tax~~with ~~goodwill~~preparing ~~impairment~~a ~~charges~~step oftwo ~~$391.1~~impairment ~~million~~test for ~~the~~its ~~North~~long-lived ~~American~~assets ~~Retail~~at ~~reporting~~all ~~unit. Cumulatively~~store, ~~the~~distribution ~~Company~~facility ~~has~~and ~~recognized~~corporate ~~non-cash pre-tax goodwill impairment charges of $676~~locations.2 ~~million~~The ~~and~~Company ~~$40.1~~used ~~million~~market ~~for~~approach ~~the~~models, ~~North~~including ~~American~~orderly ~~Retail~~liquidation ~~and Institutional Sales reporting units~~value, ~~respectively.~~to ~~The~~estimate ~~Institutional~~the ~~Sales~~fair ~~unit~~value ~~was~~of ~~divested~~store, indistribution ~~October~~facility ~~2020.~~and Ascorporate oflocation ~~February 26,~~long-lived ~~2022 and February 27~~assets, ~~2021,~~comparing the ~~Company~~fair ~~did~~values ~~not~~to ~~have~~the ~~any~~net ~~goodwill~~book ~~recorded~~values, onand ~~its~~calculating ~~consolidated~~the ~~balance~~impairment ~~sheet~~charge.

In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs.

K. Goodwill and Other Indefinite Lived Intangible Assets

Included within other assets in the accompanying consolidated balance sheets as of February 25, 2023 and February 26, 2022, respectively, are $13.2 million and $16.3 million for indefinite lived tradenames and trademarks.

Other indefinite lived intangible assets were recorded as a result of acquisitions and primarily consist of tradenames. The Company values its 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 the fiscal years ended February 25, 2023, February 26, 2022, and February 27, 2021, the Company completed a quantitative impairment analysis for certain other indefinite lived intangible assets, by comparing the fair value of the tradenames to their carrying value and recognized non-cash pre-tax tradename impairment charges of $2.9 million, $5.7 million, and $35.1 million, respectively, within goodwill and other impairments in the consolidated statement of operations. As of February 25, 2023, for the remaining other indefinite lived intangible assets, the Company assessed qualitative factors 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. In the future, if events or market conditions affect the estimated fair value to the extent that an asset is impaired, the Company will adjust the carrying value of these assets in the period in which the impairment occurs.

As of February 25, 2023 and February 26, 2022, the Company did not have any goodwill recorded on its consolidated balance sheet.

L. Self-Insurance

The Company utilizes a combination of 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 its employees). Liabilities associated with the risks that the Company retains are not discounted and are estimated by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Although the Company’s claims experience has not displayed substantial volatility in the past, actual experience could materially vary from its historical experience 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 the Company concludes an adjustment to self-insurance accruals is required, the liability will be adjusted accordingly.

Beginning in the fourth quarter of Fiscal 2020, the Company began insuring portions of its workers' compensation and medical insurance through a wholly owned captive insurance subsidiary (the "Captive") to enhance its risk financing strategies. The Captive is subject to regulations in Vermont, including those relating to its levels of liquidity and other requirements. The Captive was in compliance with all regulations as of February 2625, ~~2022~~2023.

~~M. Shareholders’ Equity~~49

N. Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long term debt and certain other liabilities. The Company’s investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost, and auction rate securities consisting of preferred shares of closed end municipal bond funds, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company’s long term debt, is representative of their fair values (see "Fair Value Measurements," Note 4).

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M. Shareholders' (Deficit) Equity and Mezzanine Equity

The Company has authorization to make repurchases of its common shares from time to time in the open market or through other programs approved by the Board of Directors pursuant to existing rules and regulations. Common stock purchased for treasury is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock, with cost determined on a weighted-average basis (see "Shareholders' (Deficit) Equity and Mezzanine Equity", Note 8).

The Company issues various financial instruments, including preferred stock. Instruments containing redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control are classified as redeemable or mezzanine equity. The Company evaluates whether the contingent redemption provisions are probable of becoming redeemable to determine whether the carrying value of the redeemable convertible preferred units are required to be remeasured to their respective redemption values. All instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g. more equity-like or debt-like). Features identified as freestanding instruments or bifurcated embedded derivatives that are material are recognized separately as a derivative asset or liability in the consolidated financial statements (see "Shareholders' (Deficit) Equity and Mezzanine Equity", Note 8).

N. Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, investment securities, accounts payable, long-term debt, derivatives, and certain other liabilities. The Company’s investment securities consist primarily of U.S. Treasury securities, which are stated at amortized cost, and auction rate securities consisting of preferred shares of closed end municipal bond funds, which are stated at their approximate fair value. The book value of the financial instruments, excluding the Company’s long-term debt, is representative of their fair values (see "Fair Value Measurements," Note 5).

O. Leases

The Company determines if an arrangement is a lease or contains a lease at the inception of the contract. The Company’s leases generally contain fixed and variable components. Variable components are primarily contingent rents based upon store sales exceeding stipulated amounts. Lease agreements may also include non-lease components, such as certain taxes, insurance and common area maintenance, which the Company combines with the lease component to account for both as a single lease component. Lease liabilities, which represent the Company’s obligation to make lease payments arising from the lease, and corresponding right-of-use assets, which represent the Company’s right to use an underlying asset for the lease term, are recognized at the commencement date of the lease, which is typically the date the Company obtains possession of the leased premises, based on the present value of fixed future payments over the lease term. The Company utilizes the lease term for which it is reasonably certain to use the underlying asset, including consideration of options to extend or terminate the lease. Incentives received from landlords are recorded as a reduction to the lease right-of-use assets. The Company does not recognize lease right-of-use assets and corresponding lease liabilities for leases with initial terms of 12 months or less.

The Company calculates the present value of future payments using the discount rate implicit in the lease, if available, or its incremental borrowing rate. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The Company determined discount rates based on the rates of its unsecured borrowings, which are then adjusted for the appropriate lease term and effects of full collateralization. In determining the Company's operating lease assets and operating lease liabilities, the Company applied these incremental borrowing rates to the minimum lease payments within each lease agreement.

For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term and lease expense relating to variable payments is expensed as incurred. For finance leases, the amortization of the asset is recognized over the shorter of the lease term or useful life of the underlying asset (see "Leases," Note 109).

P. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets in the accompanying consolidated balance sheets as of February 2625, ~~2022~~2023 and February 2726, ~~2021~~2022, respectively, are $~~198~~147.23 million and $~~595~~198.2 million, which includes income tax receivables as of February 2625, ~~2022~~2023 and February 2726, ~~2021~~2022 of $2616.51 million and $~~318~~26.15 million, respectively (see "Provision for Income Taxes," Note 812).

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Q. Revenue Recognition

Sales are recognized upon purchase by customers at the Company’s retail stores or upon delivery for products purchased from its websites. The value of point-of-sale coupons and point-of-sale rebates that result in a reduction of the price paid by the customer are recorded as a reduction of sales. Shipping and handling fees that are billed to a customer in a sale transaction are recorded in sales. Taxes, such as sales tax, use tax and value added tax, are not included in sales.

Revenues from gift cards, gift certificates and merchandise credits are recognized when redeemed. Gift cards have no provisions for reduction in the value of unused card balances over defined time periods and have no expiration dates. In Fiscal ~~2021~~2022 and Fiscal ~~2020~~2021, the Company recognized net sales for gift card and merchandise credit redemptions of approximately $7276.37 million and $9872.03 million, respectively, which were included in merchandise credit and gift card liabilities on the consolidated balance sheet as of February 2726, ~~2021~~2022 and February 2927, ~~2020~~2021, respectively.

~~Sales~~During ~~returns~~the ~~are~~second ~~provided~~quarter ~~for~~of infiscal 2022, the ~~period~~Company ~~that~~launched ~~the~~its ~~related~~cross-banner ~~sales~~customer ~~are~~loyalty ~~recorded~~program, ~~based~~Welcome onRewards™, ~~historical~~which ~~experience.~~allows ~~Although~~members ~~the~~to ~~estimate~~earn points for ~~sales~~each ~~returns~~qualifying ~~has~~purchase ~~not~~at ~~varied~~its ~~materially~~retail ~~from~~banners ~~historical~~either ~~provisions,~~online ~~actual~~or ~~experience~~in ~~could~~its ~~vary~~stores. ~~from~~Points ~~historical~~earned ~~experience~~are inthen ~~the~~converted ~~future~~to ifrewards ~~the~~upon ~~level~~reaching ofcertain ~~sales~~thresholds. ~~return~~These ~~activity~~rewards ~~changes~~may ~~materially.~~then Inbe ~~the~~redeemed on future, ifmerchandise ~~the~~purchases at its retail banners. The Company ~~concludes~~defers ~~that~~a anportion ~~adjustment~~of isthe ~~required~~revenue ~~due~~related to ~~material~~the ~~changes~~points inearned at the ~~returns~~time ~~activity,~~of the ~~liability~~original transaction and revenue is recognized for ~~estimated~~these ~~returns~~performance ~~and~~obligations ~~the~~upon ~~corresponding~~redemption ~~right~~or expiration of ~~return~~points ~~asset~~or ~~will~~rewards beearned ~~adjusted~~by ~~accordingly~~the customer. As of February 2625, ~~2022 and February 27~~2023, ~~2021,~~ the ~~liability~~Company ~~for~~recorded ~~estimated returns of~~ $234.62 million ~~and~~of ~~$36.2 million~~loyalty isprogram ~~included~~liabilities in accrued expenses and other current liabilities ~~and~~on the ~~corresponding~~consolidated ~~right~~balance ~~of return asset for merchandise of $14~~sheet.~~6 million and $23.4 million, respectively, is included in prepaid expenses and other current assets, respectively.~~

~~The~~Sales ~~Company~~returns ~~sells~~are aprovided ~~wide~~for ~~assortment~~in ofthe ~~domestics~~period ~~merchandise~~that ~~and~~the ~~home~~related ~~furnishings~~sales are recorded based on historical experience. ~~Domestics~~Although ~~merchandise~~the ~~includes~~estimate ~~categories~~for ~~such~~sales asreturns ~~bed~~has ~~linens~~not ~~and~~varied ~~related~~materially ~~items~~from historical provisions, ~~bath~~actual ~~items~~experience ~~and~~could ~~kitchen~~vary ~~textiles.~~from ~~Home~~historical ~~furnishings~~experience ~~include~~in ~~categories~~the ~~such~~future asif ~~kitchen~~the ~~and~~level ~~tabletop~~of ~~items,~~sales ~~fine~~return ~~tabletop~~activity changes materially. In the future, ~~basic~~if ~~housewares~~the Company concludes that an adjustment is required due to material changes in the returns activity, ~~general~~the ~~home~~liability ~~furnishings~~for ~~(including~~estimated ~~furniture~~returns and ~~wall~~the ~~décor)~~corresponding right of return asset will be adjusted accordingly. As of February 25, ~~consumables~~2023 and ~~certain~~February 26, ~~juvenile~~2022, ~~products~~the liability for estimated returns of $6.9 ~~Sales~~million and $23.6 million is included in accrued expenses and other current liabilities and the corresponding right of ~~domestics~~return asset for merchandise of $4.8 million and ~~home~~$14.6 million, ~~furnishings~~respectively, ~~accounted~~is ~~for~~included ~~approximately~~in prepaid expenses and other current assets, respectively.

51The Company sells a wide assortment of domestics merchandise and home furnishings. 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. Sales of domestics merchandise and home furnishings accounted for approximately 35.8% and 64.2% of net sales, respectively, for Fiscal 2022, 37.4% and 62.6% of net sales, respectively, for Fiscal 2021 and 34.7% and 65.3% of net sales, respectively, for Fiscal 2020.

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37.4% and 62.6% of net sales, respectively, for Fiscal 2021, 34.7% and 65.3% of net sales, respectively, for Fiscal 2020 and 35.2% and 64.8% of net sales, respectively, for Fiscal 2019.

R. Cost of Sales

Cost of sales includes the cost of merchandise, buying costs and costs of the Company’s distribution network including inbound freight charges, import charges (including duties), distribution facility costs, receiving costs, internal transfer costs and shipping and handling costs.

S. Vendor Allowances

The Company receives allowances from vendors in the normal course of business for various reasons including direct cooperative advertising, purchase volume and reimbursement for other expenses. Annual terms for each allowance include the basis for earning the allowance and payment terms, which vary by agreement. All vendor allowances are recorded as a reduction of inventory cost, except for direct cooperative advertising allowances which are specific, incremental and identifiable. The Company recognizes purchase volume allowances as a reduction of the cost of inventory in the quarter in which milestones are achieved. Advertising costs were reduced by direct cooperative allowances of $3524.80 million, $2835.98 million, and $3028.9 million for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, respectively.

T. Store Opening, Expansion, Relocation and Closing Costs

Store opening, expansion, relocation and closing costs, including markdowns, asset residual values and projected occupancy costs, are charged to earnings as incurred.

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U. Advertising Costs

Advertising expenses related to direct response advertising are expensed on the first day of the direct response advertising event. All other advertising expenses associated with store advertising are charged to earnings as incurred. Net advertising costs amounted to $~~407~~393.17 million, $~~347~~407.81 million, and $~~478~~347.58 million for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, respectively.

V. Stock-Based Compensation

The Company measures all employee stock-based compensation awards using a fair value method and records such expense, net of estimated forfeitures, in its consolidated financial statements. The Company’s stock-based compensation relates to restricted stock awards, stock options, restricted stock units and performance stock units. The Company’s restricted stock awards are considered nonvested share awards (see "Stock-Based Compensation," Note 1511).

W. Income Taxes

The Company files a consolidated federal income tax return. Income tax returns are also filed with each taxable jurisdiction in which the Company conducts business.

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 its deferred tax assets, the Company evaluates 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 the Company will realize a benefit, a valuation allowance is established. A valuation allowance is a non-cash charge, and does not limit the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts against future taxable income.

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X. Earnings per Share

The Company presents earnings per share on a basic and diluted basis. Basic earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding, including the dilutive effect of stock-based awards as calculated under the treasury stock method. For Fiscal 2022, Fiscal 2021 and Fiscal 2020, the Company reported a net loss and therefore, the potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.

Stock-based awards of approximately 21.97 million, 2.49 million, and 52.4 million shares were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive for Fiscal ~~2021~~2022, ~~2020~~2021, and ~~2019~~2020, respectively. Additionally, Series A preferred stock and warrant liabilities of approximately 15.7 million shares were excluded from the computation of diluted earnings per share as the effect would be anti-dilutive for Fiscal 2022.

2. ~~IMPACT~~LIQUIDITY OFAND ~~THE~~GOING ~~COVID-19 PANDEMIC~~CONCERN

In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. That same month, as a result of the COVID-19 pandemic, the Company began to temporarily close certain store locations that did not have a health and personal care department, and as of March 23, 2020, all of the Company's retail stores across the U.S. and Canada were temporarily closed except for most stand-alone buybuy BABY and Harmon stores, subject to state and local regulations. In May 2020, the Company announced a phased approach to re-open its stores in compliance with relevant government directives, and as of the end of July 2020, nearly all of its stores re-opened. During portions of Fiscal 2021, a limited number of stores in Canada either closed temporarily or continued to operate under restrictions in compliance with local governmental orders. As of February 26, 2022, all of the Company's stores were operating without restriction subject to compliance with applicable mask and vaccine requirements.52

In the first half of Fiscal 2020, the Company had also suspended its plans for debt reduction and postponed share repurchases, but lifted the debt repurchase suspension in August 2020 and the postponement of share repurchases in October 2020.

Similar to other retailers, the Company also withheld portions of and/or delayed payments to certain of its business partners as the Company negotiated revisions to its payment terms, in order to further maintain liquidity given the temporary store closures (see "Leases," Note 10).

Further, on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted in the United States. The CARES Act is an emergency economic aid package to help mitigate the impact of the COVID-19 pandemic. Among other things, the CARES Act provides certain changes to tax laws, which may impact the Company's results of operations, financial position and cash flows. The Company is currently implementing certain provisions of the CARES Act such as deferring employer payroll taxes. As of February 27, 2021, the Company had deferred $3.1 million of employer payroll taxes, which were deposited by December 2021. In addition, during Fiscal 2021 and 2020, the Company recorded credits of approximately $7.8 million and $33.3 million, respectively, as an offset to selling, general and administrative expenses as a result of the employee retention credits and rent and property expense support made available under the CARES Act for U.S. employees and under the Canada Emergency Wage Subsidy for Canadian employees and the Canada Emergency Rent Subsidy.

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~~During~~Under the ~~Fiscal~~accounting ~~years~~guidance ~~ended~~related ~~February 26~~to the presentation of financial statements, ~~2022~~when preparing financial statements for each annual and ~~February 27,~~interim ~~2021~~reporting period, ~~under~~the Company has the ~~CARES~~responsibility ~~Act~~to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ~~recorded~~ability ~~income~~to ~~tax~~continue ~~benefits~~as ofa ~~$18.7 million~~going ~~and~~concern ~~$152~~within one year after the date that the financial statements are issued.~~0 million,~~ ~~respectively,~~The asaccompanying consolidated financial statements have been prepared on a ~~result~~going ofconcern basis, which contemplates the ~~Fiscal~~realization ~~2020~~of assets and ~~Fiscal~~the ~~2019~~satisfaction ~~net~~of ~~operating losses~~liabilities ~~that~~in ~~were~~the ~~carried~~normal ~~back~~course toof ~~prior~~business. ~~years~~The ~~during~~financial ~~which~~statements do not include any adjustments that might be necessary should the ~~federal~~Company ~~tax~~be ~~rate~~unable ~~was~~to ~~35%~~continue as a going concern.

~~The~~We ~~COVID-19~~considered ~~pandemic~~our ~~materially~~current ~~adversely~~financial ~~impacted~~condition ~~the~~and ~~Company’s~~liquidity ~~results~~sources, ofincluding ~~operations~~current ~~and~~funds available, forecasted future cash flows ~~for~~and ~~the~~our ~~fiscal~~conditional ~~year~~and ~~ended~~unconditional ~~February 27,~~obligations ~~2021.~~due ~~Numerous~~over ~~uncertainties~~the ~~continue~~next totwelve ~~surround~~months. ~~the~~Based ~~pandemic~~on recurring losses from operations and ~~its~~negative ~~ultimate~~cash ~~impact~~flows onfrom ~~the~~operations ~~Company.~~in ~~Further~~the ~~discussion~~amount of $991.0 million for the ~~risks~~twelve months ended February 25, 2023, as well as current cash and ~~uncertainties~~liquidity ~~posed~~projections, bywe ~~the~~have ~~COVID-19~~concluded ~~pandemic~~that issubstantial ~~disclosed~~doubt inexists ~~"Risk~~about ~~Factors"~~our ~~under~~ability ~~Part~~to I,continue ~~Item~~as 1Aa ofgoing ~~this~~concern ~~Form~~for ~~10-K~~the next twelve months.

In view of restructuring our existing debt, we filed the Chapter 11 Cases on April 23, 2023. The filing of the Chapter 11 Cases constituted an event of default that allowed the respective lenders to accelerate all of our debt obligations under (i) the Existing Credit Agreement and (ii) the Indenture, dated as of July 17, 2014, as amended by the First Supplemented Indenture, dated as of July 17, 2014, relating to the 3.749% senior unsecured notes due 2024 (the “3.749% Senior Notes”), the 4.915% senior unsecured notes due 2034 (the “4.915% Senior Notes”) and the 5.165% senior unsecured notes due 2044 (the “5.165% Senior Notes” and, together with the 3.749% Senior Notes and the 4.915% Senior Notes, the “Notes”) between the Company and The Bank of New York Mellon, as trustee.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against or on behalf of the Company Parties, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Company Parties’ property. For more information on the automatic stay, including of any events of default, during the pendency of the Chapter 11 Cases, see “See “Item 3 — Legal Proceedings — Effect of Automatic Stay upon filing under Chapter 11 of the Bankruptcy Code.” The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty of us being able to continue as a going concern.

Given the risks, unknown results and inherent uncertainties associated with a bankruptcy process and the correlation between the Chapter 11 Cases and our ability to satisfy our financial obligations and to develop and execute our business plan, our ability to continue as a going concern is contingent upon, among other things, our ability to successfully emerge from the Chapter 11 Cases and establish a sustainable capital structure through the restructuring process, subject to the Bankruptcy Court’s approval, the effect of the DIP Facility and the DIP Credit Agreement. The outcome of the Chapter 11 Cases is subject to a high degree of uncertainty and is dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court and the company’s creditors. There can be no assurance that the Company will be able to consummate a Chapter 11 plan with respect to the Chapter 11 Cases. As a result of risks and uncertainties related to events of default under our debt obligations, the delisting of our common stock. and the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business, financing and operational relationships, together with the Company’s recurring losses from operations and accumulated deficit, substantial doubt exists regarding our ability to continue as a going concern for the next 12 months. See "Subsequent Events," Note 17, for additional details on the Chapter 11 Cases.

3. RESTRUCTURING AND TRANSFORMATION ACTIVITIES

Fiscal 2022 Restructuring and Transformation Initiative Expenses

During Fiscal 2022, we recorded charges of $407.7 million for costs associated with restructuring and other transformation initiatives, of which approximately $77.7 million is included in cost of sales. In addition, approximately $330.0 million, was recorded in restructuring and transformation initiative expenses in the consolidated statements of operations, which included approximately $156.9 million of accelerated depreciation related to closing facilities and information technology systems, $101.5 million of other restructuring and transformation costs and $58.1 million of severance costs related to workforce reduction, store closures and leadership changes. The Company also recorded approximately $13.5 million for lease related and other costs, including in connection with store closures.

Fiscal 2021 Restructuring and Transformation Initiative Expenses

The Company recorded $281.2 million in its consolidated statements of operations for the fiscal year ended February 26, 2022 for costs associated with restructuring and other transformation initiatives, of which approximately $137.2 million is included in cost of sales and approximately $144.0 million is included in restructuring and transformation initiative expenses in the consolidated ~~statements of operations. These charges were comprised of, and classified in the Company’s consolidated statement of operations, as follows:~~

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statements of operations. These charges were comprised of, and classified in the Company’s consolidated statement of operations, as follows:

Cost of Sales

•$125.2 million primarily related to the Company’s initiatives to introduce certain new Owned Brand merchandise and, to a lesser extent, to redefine certain existing Owned Brands and to rationalize product assortment across the Bed Bath & Beyond banner store base. The costs incurred in connection with these activities included higher markdowns on inventory sold in Fiscal 2021, as well as an adjustment to reduce to its estimated realizable value inventory on hand that will be removed from the product assortment as part of these initiatives.

•$12.0 million related to store closures for which the closing process had commenced, related primarily to higher markdowns on inventory sold during the period between final announcement of closing and the final closure of the store.

Restructuring and Transformation Initiative Expenses

•Store Closures. During Fiscal 2021, the Company closed 63 mostly Bed Bath & Beyond stores as part of its real estate and store fleet optimization program which commenced in Fiscal 2020 and included the closure of 207 mostly Bed Bath & Beyond stores through the end of Fiscal 2021 (including the 144 stores closed in Fiscal ~~2020~~2021). For the fiscal year ended February 26, 2022, the Company recorded costs associated with store closures for which the store closing process has commenced of $2.4 million of severance costs and $45.5 million of lease-related and other costs within restructuring and transformation initiative expenses in its consolidated statements of operations. At this point, the Company is unable to estimate the amount or range of amounts expected to be incurred in connection with future store closures.

•Other transformation initiatives. During the fiscal year ended February 26, 2022, the Company recorded costs of $96.1 million which include costs recorded in connection with other transformation initiatives, including technology transformation and business strategy and operating model transformation programs across core functions including merchandising, supply chain and finance.

Fiscal 2020 Restructuring Charges

The Company recorded $149.3 million within cost of sales and restructuring and transformation initiative expenses in its consolidated statement of operations for Fiscal 2020 for costs associated with its planned store closures as part of the fleet optimization plan for which the store closure process has commenced, workforce reduction and other transformation initiatives.

As part of the Company's ongoing business transformation, on July 6, 2020, the Board of Directors of the Company approved the planned closure of approximately 200 mostly Bed Bath & Beyond stores by the end of Fiscal 2021 as part of the Company's store fleet optimization program, 144 of which were closed as of February 27, 2021. In Fiscal 2020, the Company recorded costs associated with its planned store closures for which the store closing process has commenced of $21.0 million within cost of sales, $5.3 million of severance costs and $39.2 million of lease-related and other costs within restructuring and transformation initiative expenses in its consolidated statements of operations.

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$5.3 million of severance costs and $39.2 million of lease-related and other costs within restructuring and transformation initiative expenses in its consolidated statements of operations.

In addition, during the second quarter of Fiscal 2020, the Company announced a realignment of its organizational structure as part of its transformation initiative, to further simplify the Company's operations, support investment in its strategic growth plans, and provide additional financial flexibility. In connection with the organizational realignment, the Company implemented a workforce reduction of approximately 2,800 roles from across its corporate headquarters and retail stores. During the second quarter of Fiscal 2020, the Company recorded pre-tax restructuring charges of approximately $23.1 million within restructuring and transformation initiative expenses in its consolidated statements of operations, related to severance and associated costs for this workforce reduction, all of which have been paid during Fiscal 2020.

During Fiscal 2020, the Company also recorded costs of approximately $26.1 million within cost of sales and $34.6 million within restructuring and transformation initiative expenses in its consolidated statements of operations related to other transformation initiatives.

~~Fiscal~~As ~~2019~~of ~~Restructuring~~February 25, ~~Charges~~2023 and February 26, 2022, the remaining accrual for all severance and associated costs relating to restructuring and transformation initiatives was $31.6 million and $12.8 million, respectively.

During Fiscal 2019, the Company expensed pre-tax restructuring charges of approximately $102.5 million, primarily for severance and related costs in conjunction with its transformation initiatives and extensive leadership changes, within selling, general and administrative expenses in its consolidated statement of operations.54

AsTable of ~~February 26, 2022 and February 27, 2021, the remaining accrual for severance and related costs related to these various initiatives was $15.0 million and $23.0 million, respectively.~~Contents

4. ~~FAIR~~DECONSOLIDATION ~~VALUE~~— ~~MEASUREMENTS~~CANADIAN OPERATIONS

On February 10, 2023 (the “Canadian Petition Date”), BBB Canada Limited made an application with the Ontario Superior Court of Justice (the “Canadian Court”). BBB Canada Limited was granted an order, which, among other provisions, provides a stay of proceedings pursuant to the Companies’ Creditors Arrangement Act (the “CCAA”). The CCAA is a Federal Act that allows financially troubled corporations that owe their creditors in excess of $5.0 million the opportunity to restructure their affairs. Although Bed Bath & Beyond Canada L.P. (“BBB LP” and together with BBB Canada Limited, “BBB Canada”) did not file an application with the Canadian Court, the stay of proceedings under the CCAA and other benefits were extended to BBB LP. BBB Canada initiated a wind-down of Bed Bath & Beyond and Buy Buy Baby Stores in Canada under the CCAA. A monitor was appointed by the Canadian Court on February 10, 2023 to oversee the orderly liquidation of its remaining inventory with assistance from a third-party professional liquidator and vacate its leased retail stores and premises.

BBB Canada was a consolidated operating subsidiary of the Company. The Company lost control of BBB Canada as material decisions were subject to review by the Canadian Court. For these reasons, we concluded that the Company had lost control of BBB Canada, and no longer had significant influence over BBB Canada during the pendency of bankruptcy. Therefore, we deconsolidated BBB Canada on the Canadian Petition Date.

In order to deconsolidate BBB Canada, the carrying values of the assets and certain liabilities of BBB Canada were removed from our consolidated balance sheet as of February 25, 2023, and we recorded our investment in BBB Canada at its estimated fair value of $0. The deconsolidation resulted in the recognition of a loss of $98.6 million during the year ended February 25, 2023, recognized as a non-operating loss in the consolidated statement of operations.

5. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The hierarchy for inputs used in measuring fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability must be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows:

•Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

•Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

•Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company’s financial instruments include cash and cash equivalents, investment securities, other long-term investments, accounts payable, ~~long~~short-term and long-term debt, derivative liabilities, and certain other liabilities. The book value of the Company's financial instruments, excluding long -term debt, is representative of their fair values. The Company’s investment securities at February 26, 2022 consisted primarily of U.S. Treasury securities, which are stated at amortized cost and are based on quoted prices in active markets for identical instruments (Level 1 valuation). As of February 26, 2022 and February 27, 2021, the fair value of the Company’s long -term ~~debt~~investments ~~was approximately $956.0 million~~ and ~~$1.118 billion,~~derivative ~~respectively~~liabilities, ~~which~~are isrepresentative ~~based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared to the carrying value~~ of ~~approximately~~their ~~$1.184~~fair ~~billion and $1~~values.~~195 billion,~~ ~~respectively.~~

The Company’s ~~did~~investment ~~not~~securities ~~have~~at ~~any~~February ~~financial~~26, ~~assets~~2022 ~~utilizing~~consisted ~~Level~~primarily 2of ~~inputs~~U.S. ~~Financial~~Treasury ~~assets~~securities, ~~utilizing~~which ~~Level~~are 3carried ~~inputs~~at ~~included~~amortized ~~long~~cost ~~term~~and ~~investments~~the infair ~~auction~~values ~~rate~~are ~~securities~~based ~~consisting~~on ofquoted ~~preferred~~prices ~~shares~~in ofactive ~~closed~~markets ~~end~~for ~~municipal~~identical ~~bond~~instruments ~~funds~~ (~~see~~Level ~~"Investment~~1 ~~Securities," Note 5~~valuation).

As of February 25, 2023 and February 26, 2022, the fair value of the Company’s senior unsecured notes was approximately $176.3 million and $956.0 million, respectively, which is based on quoted prices in active markets for identical instruments (i.e., Level 1 valuation), compared to the carrying value of approximately $1.030 billion and $1.184 billion, respectively.

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5Short-term debt is measured utilizing Level 2 inputs included the ABL Facility and FILO Facility. ~~INVESTMENT~~ ~~SECURITIES~~As of February 25, 2023, the carrying amount of the ABL Facility and FILO Facility approximates fair value as interest charged is based on the current market rate and are secured on a first priority basis (subject to customary exceptions) on substantially all assets of the Company and its subsidiaries that are borrowers or guarantors under the ABL Facility and FILO Facility.

AsOther ~~of both February 26, 2022 and February 27, 2021, the Company’s~~ long -term ~~available-for-sale~~investments ~~investment~~utilizing ~~securities~~Level ~~represented approximately $20.~~3 ~~million~~inputs ~~par~~included ~~value of~~ auction rate securities, ~~less~~consisting ~~temporary valuation adjustments~~ of ~~approximately~~preferred ~~$1.1 million~~shares ~~and $0.8 million, respectively. Since these valuation adjustments are deemed to be temporary, they are recorded in accumulated other comprehensive loss, net~~ of aclosed ~~related~~end ~~tax~~municipal ~~benefit,~~bond ~~and did not affect the Company’s net earnings~~funds. ~~The Company had no short-term available-for-sale investment securities as of February 26, 2022 or February 27, 2021.~~

On February 7, 2023, the Company consummated an underwritten public offering of (i) shares of Series A Convertible Preferred Stock (“Series A”), (ii) warrants to purchase shares of the Company’s Common Stock (“Common Stock Warrants”), and (iii) warrants to purchase shares of the Company’s Series A Convertible Preferred Stock (“Preferred Stock Warrants”). The gross proceeds received for the Series A was $225.0 million and there was no additional consideration received for the Common Stock Warrants and Preferred Stock Warrants issued. A total of $6.3 ~~PROPERTY~~million ~~AND~~issuance ~~EQUIPMENT~~costs were incurred as part of the underwritten public offering and are recognized in loss on preferred stock warrants and derivative liabilities in the consolidated statement of operations.

~~Property~~The Company determined the Common Stock Warrants and ~~equipment~~Preferred ~~consist~~Stock ofWarrants ~~the~~are ~~following:~~derivative liabilities initially recorded at fair value with changes in fair value recorded in earnings (see “Derivatives”, Note 6). The Series A is contingently redeemable which results in mezzanine equity classification and has bifurcated embedded derivative features accounted for as a derivative liability (see “Shareholders' (Deficit) Equity and Mezzanine Equity”, Note 8).

(in thousands)	February 26, 2022		February 27, 2021
Land and buildings	$	21,597	$	24,840
Furniture, fixtures and equipment (1)	594,443		502,869
Leasehold improvements	746,365		721,039
Computer equipment and software	1,494,457		1,355,758
Total	2,856,862		2,604,506
Less: Accumulated depreciation (1)	(1,829,475)		(1,686,088)
Property and equipment, net	$	1,027,387	$	918,418

As the Series A, Common Stock Warrants, and Preferred Stock Warrants were issued when the Company was in distress, the Company determined the offering was not an orderly transaction and the gross proceeds of $225.0 million did not represent fair value. As a result, the Company used a model-derived valuation to estimate the fair value of the Series A embedded derivative liability, Preferred Stock Warrants and Common Stock Warrants in which the most significant value driver is the as-converted value utilizing the Company’s common stock price as the input. At issuance, the fair value of the Series A embedded derivative liability, Common Stock Warrants, and Preferred Stock Warrants was $300.5 million, $186.6 million, and $615.5 million, respectively, and no fair value was allocated to the Series A exclusive of the embedded derivative liability. The Company recorded a $877.6 million loss for the total fair value of $1,102.6 million of the financial instruments issued in excess of proceeds of $225.0 million in loss on preferred stock warrants and derivative liabilities in its consolidated statement of operations for the year ended February 25, 2023. The loss is partially offset by a gain of $244.5 million related to the change in fair value associated with these derivative liabilities for the quarter ended February 25, 2023. Issuance costs of $6.3 million were expensed as incurred.

~~(1)~~As ~~Furniture~~of February 25, ~~fixtures~~2023, ~~and~~the ~~equipment~~fair ~~includes~~value ~~$39.0~~of ~~million~~the inSeries ~~assets~~A ~~held~~embedded ~~under~~derivative ~~finance~~liability, ~~leases~~Common asStock ~~of February 26~~Warrants, ~~2022.~~and ~~Accumulated~~Preferred ~~depreciation~~Stock ~~includes~~Warrants was $0166.29 million, in$2.7 ~~accumulated~~million, ~~depreciation~~and ~~for~~$404.4 ~~assets held under finance leases as of February 26~~million, ~~2022~~respectively.

~~Depreciation~~On ~~expense~~March ~~was~~30, ~~$292.3~~2023, ~~million~~the Company entered into the Exchange Agreement with the holders of the remaining Preferred Stock Warrants (see “Derivatives”, ~~$338~~Note 6).7 ~~million~~As a result of the exchange, the Company will recognize a gain of approximately $~~339~~353.06 million induring ~~Fiscal~~the ~~2021,~~first ~~2020,~~quarter ~~and~~of ~~2019,~~fiscal ~~respectively~~2023.

7. LONG TERM DEBT

Senior Unsecured Notes

On July 17, 2014, the Company issued $300.0 million aggregate principal amount of 3.749% senior unsecured notes due August 1, 2024, $300.0 million aggregate principal amount of 4.915% senior unsecured notes due August 1, 2034 and $900.0 million aggregate principal amount of 5.165% senior unsecured notes due August 1, 2044 (collectively, the "Notes"). Interest on the Notes is payable semi-annually on February 1 and August 1 of each year.

The Notes were issued under an indenture (the "Base Indenture"), as supplemented by a first supplemental indenture (together, with the Base Indenture, the "Indenture"), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture. The Company was in compliance with all covenants related to the Notes as of February 26, 2022.

During Fiscal 2021, the Company purchased approximately $11.0 million aggregate principal amount of its outstanding 3.749% senior unsecured notes due August 1, 2024. The total consideration paid for the notes accepted for purchase of $11.4 million during the fiscal year ended February 26, 2022 included accrued and unpaid interest up to, but not including, the early settlement date. The Company recorded a loss on extinguishment of debt of $0.4 million in its consolidated statement of operations for the fiscal year ended February 26, 2022, including the write off of unamortized debt financing costs related to the extinguished portion of the notes accepted for purchase and reacquisition costs.

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~~During Fiscal 2020, the Company purchased $75~~6.0 million aggregate principal amount of its outstanding 4.915% senior unsecured notes due 2034 and approximately $225.0 million aggregate principal amount of its outstanding 5.165% senior unsecured notes due 2044. The total consideration paid for the notes accepted for purchase of $220.9 million included an early tender premium of $50 per $1,000 principal amount of the notes accepted for purchase, plus accrued and unpaid interest up to, but not including, the early settlement date. The Company recorded a gain on extinguishment of debt of $77.0 million in its consolidated statement of operations for the fiscal year ended February 27, 2021, including the write off of unamortized debt financing costs related to the extinguished portion of the notes accepted for purchase and reacquisition costs. The Company did not purchase any of its outstanding unsecured notes during Fiscal 2019.DERIVATIVES

AsPreferred ofStock February 26, 2022 and February 27, 2021, unamortized deferred financing costs associated with the Company’s 3.749% senior unsecured notes due 2024, 4.915% senior unsecured notes due 2034 and 5.165% senior unsecured notes due 2044 were $4.6 million and $5.0 million, respectively, and are included in long-term debt in the Company's consolidated balance sheets.Warrants

~~Asset-Based~~On ~~Credit~~February 7, ~~Agreement~~2023, the Company issued 84,216 Preferred Stock Warrants to acquire up to 84,216 shares of Series A at a price of $9,500 per share. Additionally, in the event the holder holds a Common Stock Warrant, upon exercise of the Preferred Stock Warrant, there is an increase to the amount of common stock issuable upon exercise of the Common Stock Warrant. The Preferred Stock Warrants are exercisable at any time and expire one year after issuance. The terms allow the Company to force the holders to exercise the Preferred Stock Warrants after every 20 trading day period provided there are no equity condition failures.

OnDuring ~~August 9, 2021,~~ the ~~Company~~year ~~amended~~ended ~~its asset-based credit agreement (the "Amended Credit Agreement") among the Company~~February 25, ~~certain of the Company’s U.S. and Canadian subsidiaries party thereto~~2023, ~~JPMorgan Chase Bank~~5,000 ~~N.A.,~~Preferred asStock ~~administrative~~Warrants ~~agent~~were ~~and~~exercised ~~collateral~~for ~~agent~~gross ~~(in~~proceeds ~~such~~of ~~capacity, the "Agent"), and the lenders party thereto, which replaced the Company's previous~~ $~~850~~47.05 million ~~Credit Agreement which was due to mature on June 19, 2023~~.

The ~~Amended~~Preferred ~~Credit~~Stock ~~Agreement~~Warrants ~~provides~~are ~~for~~classified anas ~~asset-based~~a ~~revolving~~liability ~~credit~~in ~~facility~~accordance ~~(the "ABL Facility")~~ with ~~aggregate~~ASC ~~revolving~~480 ~~commitments~~and ~~established~~initially recorded at ~~closing~~fair ofvalue ~~$1.0~~with ~~billion,~~subsequent ~~including~~changes ain ~~swingline~~fair ~~subfacility~~value ~~and~~recorded ain ~~letter of credit subfacility~~earnings. The ~~Amended~~Company ~~Credit~~recognizes ~~Agreement has an uncommitted expansion feature which allows~~ the ~~borrowers~~Preferred toStock ~~request,~~Warrants atin ~~any~~Derivative ~~time~~liabilities ~~following~~on the ~~delivery~~consolidated ofbalance ansheet ~~initial field exam~~ and ~~appraisal,~~subsequent anchanges ~~increase~~ in ~~aggregate~~fair ~~revolving~~value ~~commitments~~in ~~under~~loss ~~the~~on ~~ABL~~preferred ~~Facility~~stock orwarrants ~~elect~~and toderivative ~~enter~~liabilities ~~into a first-~~in~~-last-out~~ ~~loan~~the ~~facility,~~consolidated ~~collectively,~~statement ~~in an aggregate amount~~ of ~~up to $375~~operations.~~0 million, subject to certain customary conditions. The Amended Credit Agreement matures on August 9, 2026.~~

AsOn March 7, 2023, 9,212 Preferred Stock Warrants were exercised for gross proceeds of ~~February 26~~$87.5 million. On March 13, ~~2022~~2023, the Company ~~had~~entered nointo ~~loans~~an ~~outstanding~~amendment ~~under~~to the ~~ABL~~Preferred ~~Facility~~Stock Warrants in which the holder elected to reduce equity condition thresholds, ~~but~~including ~~had~~certain ~~outstanding~~common ~~letters~~stock ofprice ~~credit~~and ofvolume ~~$96.4~~requirements ~~million~~such that the Preferred Stock Warrants could still be callable by the Company.

~~The~~On ~~ABL~~March 30, ~~Facility~~2023, isthe ~~secured~~Company onand aholder ~~first~~entered ~~priority~~into ~~basis~~the ~~(subject~~Exchange toAgreement, ~~customary~~as ~~exceptions)~~the onCompany ~~all~~anticipated ~~accounts~~that ~~receivable~~it ~~(including~~would ~~credit~~not ~~card~~be ~~receivables),~~able ~~inventory,~~to ~~certain~~meet ~~deposit~~the ~~accounts~~conditions ~~and~~to ~~securities~~force ~~accounts,~~the ~~and~~exercise ~~certain~~of ~~related~~the ~~assets,~~Preferred ofStock Warrant in the ~~Company~~future and ~~its~~receive ~~subsidiaries~~cash ~~that~~proceeds. ~~are~~Pursuant ~~borrowers~~to orthe ~~guarantors~~Exchange ~~under~~Agreement, the ~~ABL~~Company ~~Facility.~~exchanged ~~Amounts~~the ~~available~~remaining to70,004 bePreferred ~~drawn~~Stock ~~from~~Warrants ~~time~~for to10,000,000 ~~time~~shares ~~under~~of ~~the~~common ~~ABL~~stock and ~~Facility~~rights ~~(including,~~to inreceive ~~part~~5,000,000 inshares of common stock upon the ~~form~~receipt of ~~letters~~shareholder approval of ~~credit)~~a ~~are~~proposal ~~equal~~ to effectuate a reverse stock split of the ~~lesser~~Company’s commons stock to be presented to shareholders at a forthcoming special meeting of shareholders (i)as ~~outstanding~~discussed ~~revolving~~in ~~commitments~~“Shareholders' ~~under~~(Deficit) ~~the~~Equity ~~Amended~~and ~~Credit~~Mezzanine ~~Agreement~~Equity”, ~~and~~Note ~~(ii~~8). aThe ~~borrowing~~Company ~~base~~also ~~equal~~granted to the ~~sum~~holder ~~of (~~a) ~~90%~~right ofto ~~eligible~~participate, ~~credit~~subject ~~card~~to ~~receivables~~the ~~plus~~terms ~~(b)~~set ~~90%~~forth ofin ~~eligible~~the ~~inventory~~Exchange Agreement, ~~valued~~in atcertain ~~the~~future ~~lower~~equity ofor ~~cost~~equity-linked orofferings ~~market~~of ~~value,~~the ~~determined~~Company onfor a ~~weighted~~period ~~average~~of ~~cost~~two ~~basis,~~years ~~minus~~from ~~(c)~~the ~~customary~~date ~~reserves~~of the Exchange Agreement.

~~Subject~~Common toStock ~~customary~~Warrants exceptions and restrictions, the Company may voluntarily repay outstanding amounts under the ABL Facility at any time without premium or penalty. Any voluntary prepayments made will not reduce commitments under the ABL Facility. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the aggregate revolving commitments and (ii) the borrowing base, the Company will be required to prepay outstanding amounts or cash collateralize letter of credit obligations under the ABL Facility.

~~Outstanding~~On ~~amounts~~February 7, ~~under~~2023, the ~~Amended~~Company ~~Credit~~issued ~~Agreement~~95,387,533 ~~bear~~Common ~~interest~~Stock atWarrants ato ~~rate~~acquire ~~per~~up ~~annum equal~~ to, atapproximately ~~the~~95 ~~applicable~~million ~~borrower’s~~shares ~~election: (i) in the case~~ of ~~loans~~common ~~denominated~~stock inat ~~U.S.~~a ~~dollars,~~strike ~~such~~price ~~loans shall be comprised entirely~~ of ~~Alternate~~$6.15 ~~Base~~per ~~Rate~~share. ~~("ABR")~~The ~~loans~~Common ~~and~~Stock ~~London~~Warrants ~~Inter-Bank~~are ~~Offered~~exercisable ~~("LIBO")~~at ~~Rate~~any ~~loans~~time and ~~(ii)~~expire infive ~~the~~years ~~case~~after ofissuance. ~~loans~~The ~~denominated~~terms inprovide ~~Canadian~~for ~~dollars, such loans shall be comprised entirely of Canadian Prime Rate loans and Canadian Dollar Offered Rate ("CDOR") loans, in each case as set forth in the Amended Credit Agreement, plus~~ an ~~interest~~alternate ~~rate~~cashless ~~margin~~exercise ~~based~~that onallows ~~average quarterly availability ranging from (i) in~~ the ~~case~~holder ofto ~~ABR~~receive ~~loans and Canadian Prime Rate loans,~~ 0.~~25%~~65 toshares ~~0.75%;~~of ~~provided~~common ~~that~~stock iffor ~~ABR~~each orshare underlying the ~~Canadian~~Common ~~Prime~~Stock ~~Rate is less than 1.00%~~Warrant, ~~such~~for ~~rate~~a ~~shall~~total beof ~~deemed~~up to be62 million ~~1.00%,~~shares ~~as applicable, and (ii) in the case~~ of ~~LIBO~~common ~~Rate~~stock ~~loans~~at ~~and~~no ~~CDOR Loans, 1~~cost.~~25%~~ ~~to 1.75%; provided that if the CDOR or LIBO Rate is less than 0.00%, such rate shall be deemed to be 0.00%, as applicable.~~

~~The~~During ~~Amended~~the ~~Credit~~year ~~Agreement~~ended ~~contains customary representations and warranties~~February 25, ~~events of default and financial~~2023, ~~affirmative and negative covenants for facilities of this type~~5,000 ~~including~~Preferred ~~but~~Stock ~~not~~Warrants ~~limited~~were toexercised aresulting ~~springing~~in ~~financial~~an ~~covenant~~increase ~~relating~~of to16.3 amillion ~~fixed~~shares ~~charge~~of ~~coverage~~common ~~ratio,~~stock ~~and~~issuable ~~restrictions~~upon onexercise ~~indebtedness,~~of ~~liens,~~Common ~~investments~~Stock ~~and acquisitions, asset dispositions, restricted payments~~ Warrants.

The Common Stock Warrants are classified as a liability in accordance with ASC 815-40 and initially recorded at fair value with subsequent changes in fair value recorded in earnings. The Commons Stock Warrants are recorded at fair value in Derivative liabilities in the consolidated balance sheets and subsequent changes in fair value are recorded in loss on preferred stock warrants and derivative liabilities in the consolidated statement of operations.

During the year ended February 25, 2023, 109.0 million Common Stock Warrants were exercised and shares were reissued out of treasury stock at a weighted-average cost of $44.27 per share, for a total cost of $3.1 billion. The difference between the cost of the treasury stock and the fair value of common stock issued upon exercise is recorded as a reduction to retained earnings on the consolidated balance sheet and is included within the equity roll forward.

On March 7, 2023, 9,212 Preferred Stock Warrants were exercised resulting in an increase of 37.3 million shares of common stock issuable upon exercise of Common Stock Warrants.

See “Fair Value Measurements,” Note 5, for fair value measurements related to the Common Stock Warrants and Preferred Stock Warrants.

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~~and prepayment of certain indebtedness~~7. ~~The Company was in compliance with all covenants related to the Amended Credit Agreement as of February 26, 2022.~~DEBT

AsSenior ofUnsecured February 26, 2022 and February 27, 2021, unamortized deferred financing costs associated with the Company's revolving credit facilities were $7.4 million and $6.1 million, respectively, and were recorded in other assets in the Company's consolidated balance sheets. Notes

~~The~~On July 17, 2014, the Company ~~amortizes~~issued ~~deferred~~$300.0 ~~financing~~million ~~costs~~aggregate ~~for~~principal ~~the~~amount ~~Notes~~of ~~and~~3.749% senior unsecured notes due August 1, 2024 (the ~~ABL~~"2024 ~~Facility~~Notes"), ~~over~~$300.0 ~~their~~million ~~respective~~aggregate ~~terms~~principal ~~and~~amount ~~such~~of ~~amortization~~4.915% issenior ~~included~~unsecured innotes ~~interest~~due ~~expense~~August 1, ~~net~~2034 in (the ~~consolidated~~"2034 ~~statements~~Notes"), ofand ~~operations~~$900.0 ~~Interest~~million ~~expense~~aggregate ~~related~~principal toamount ~~the~~of ~~Notes~~5.165% ~~and~~senior ~~the~~unsecured ~~revolving~~notes ~~credit~~due ~~facilities~~August 1, ~~including~~2044 (the ~~commitment~~"2044 ~~fee~~Notes" and, ~~the~~collectively ~~amortization~~with ofthe ~~deferred~~2024 ~~financing~~Notes ~~costs,~~and ~~was~~the ~~approximately~~2034 ~~$64.1 million~~Notes, ~~$73.6~~the ~~million,~~"Existing ~~and $73~~Notes").0 ~~million~~Interest ~~for~~on the ~~fiscal~~Notes ~~years~~is ~~ended~~payable ~~February 26,~~semi-annually ~~2022,~~on February ~~27,~~ ~~2021,~~1 and ~~February 29,~~August ~~2020,~~1 ~~respectively~~of each year.

~~8. PROVISION~~The ~~FOR~~Existing ~~INCOME~~Notes ~~TAXES~~were issued under an indenture (the "Base Indenture"), as supplemented by a first supplemental indenture (together, with the Base Indenture, the "Indenture"), which contains various restrictive covenants, which are subject to important limitations and exceptions that are described in the Indenture.

~~The~~On ~~components~~February 1, of2023, the Company missed interest payments due on the Company’s 3.749% Senior Notes due 2024, 4.915% Senior Notes due 2034 and 5.165% Senior Notes due 2044 (~~benefit~~collectively, the "Existing Notes") ~~provision~~and ~~for~~had ~~income~~a ~~taxes~~30-day ~~are~~grace asperiod ~~follows:~~to pay these interest payments. On February 28, 2023, the Company paid off interest on the Existing Notes.

Filing Compare · 20230930-DK-Butterfly-1, Inc.