I'm sure when it comes to Build-A-Bear Workshop, Inc. (NYSE: BBW ), investors aren't necessarily looking at the Consumer Discretionary sector ( XLY ) at this very moment due to rising economic uncertainty.Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. ...

Build-A-Bear (BBW) closed the last trading session at $38.84, gaining 1.3% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $54.33 indicates a 39.9% upside potential.The average comprises three short-term price targets ranging from a low of $50 to a high of $58, with a standard deviation of $4.04. While the lowest estimate indicates an increase of 28.7% from the current price level, ...

Financial Data and Key Metrics Changes - Total revenues increased by 3.6% to over $496 million, with pretax income growing by 5.1% to more than $67 million [10][41] - The company returned $42 million in capital to shareholders, including a 10% increase in quarterly dividends to $0.22 per share [35][36] Business Line Data and Key Metrics Changes - Net retail sales for Q4 were $139.5 million, up 4.7%, while commercial revenue rose 20.5% year-over-year [37][38] - The gross margin improved to 56.6%, reflecting a slight expansion in both retail and commercial gross margins [39] Market Data and Key Metrics Changes - Store traffic increased by 3%, significantly outpacing the national average decline of nearly 1% [38] - The company expanded its global footprint with 24 new locations, including 30 partner-operated locations in ten new countries [18][21] Company Strategy and Development Direction - The company focuses on three strategic initiatives: expanding experiential retail locations, advancing digital transformation, and investing in brand strength while returning capital to shareholders [11][26] - Plans for 2025 include opening at least 50 new net locations, primarily partner-operated, to enhance global brand reach [21][45] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, anticipating mid-single-digit revenue growth but potential challenges in pretax income due to tariff concerns [8][46] - The toy industry is viewed as recession-resistant, with a significant portion of sales driven by birthdays and collectors [56][100] Other Important Information - The company has reduced its dependency on China, expecting less than 50% of inventory shipped to North America to come from there in 2025 [70][112] - The introduction of a new retail experience in Orlando, Florida, is planned for 2026, aimed at capitalizing on tourist traffic [19][20] Q&A Session Summary Question: Overall consumer environment and business reaction to a slowdown - Management noted positive quarter-to-date results, with traffic outpacing national averages, indicating resilience in the toy industry [54][56] Question: Progress in e-commerce - Management acknowledged opportunities for improvement in e-commerce and emphasized efforts to integrate omnichannel capabilities [58][62] Question: Tariff impacts and inventory management - The company is proactively managing inventory purchases to mitigate potential tariff impacts and expects to maintain a diversified supply chain [68][70] Question: Revenue guidance and potential offsets - Management provided guidance for mid-single-digit revenue growth, citing macro-level headwinds as potential offsets to a more optimistic outlook [132]

Core Viewpoint - Build-A-Bear (BBW) reported quarterly earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.52 per share, and showing an increase from $1.34 per share a year ago, indicating a positive earnings surprise of 4.61% [1][2] Financial Performance - The company achieved revenues of $150.45 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 2.55% and showing a slight increase from $149.28 million year-over-year [2] - Over the last four quarters, Build-A-Bear has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Build-A-Bear shares have declined approximately 22.9% since the beginning of the year, contrasting with the S&P 500's decline of 4.8% [3] - The current Zacks Rank for Build-A-Bear is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.84 on revenues of $116.3 million, while the estimate for the current fiscal year is $3.88 on revenues of $500.3 million [7] - The trend of estimate revisions for Build-A-Bear is currently mixed, which may change following the recent earnings report [6] Industry Context - The Retail - Miscellaneous industry, to which Build-A-Bear belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Fourth quarter revenues reached $150.4 million, a 0.8% increase on a GAAP basis, and a 5.7% increase when excluding the extra week of operations in the fourth quarter of 2023[4] - Pre-tax income for the fourth quarter was $27.5 million, reflecting a 5.1% year-over-year increase, and a 15.8% increase when excluding the extra week of operations in the fourth quarter of 2023[4] - For fiscal year 2024, total revenues were $496.4 million, a 2.1% increase on a GAAP basis, and a 3.6% increase when excluding the extra week of operations in fiscal 2023[12] - Total revenues for the 52 weeks ended February 1, 2025, were $496,404 thousand, compared to $486,114 thousand for the 53 weeks ended February 3, 2024[29] - Net income for the 13 weeks ended February 1, 2025, was $21,678 thousand, compared to $22,273 thousand for the same period in 2024, reflecting a decrease of 2.7%[27] - Adjusted net income for the year ended February 1, 2025, was $51,349 million, up from $49,546 million in the previous year, representing a growth of 3.6%[37] - Adjusted net income per diluted share (adjusted EPS) increased to $3.77 in 2025 from $3.42 in 2024, marking an increase of 10.3%[37] - Net income for Q1 2025 was $21,678 million, slightly down from $22,273 million in Q1 2024, a decrease of 2.7%[37] Shareholder Returns - The company returned $42.0 million to shareholders in fiscal 2024 through share repurchases and dividends, including a 10% increase in quarterly dividend to $0.22 per share[4] Growth and Expansion - Build-A-Bear opened 64 net new retail units in fiscal 2024, expanding its international presence to over 25 countries[2] - The company had net new unit growth of 24 global experience locations in the fourth quarter, totaling 589 locations at year-end[9] - The company expects mid-single-digit revenue growth and pre-tax income to range from a low-single-digit decline to low-single-digit growth for fiscal 2025[17] Capital Expenditures - Capital expenditures for fiscal 2025 are projected to be between $20 million and $25 million[17] - Capital expenditures for the 13 weeks ended February 1, 2025, were $9,746 thousand, an increase from $7,171 thousand in the prior year[33] Cash and Assets - At fiscal year-end, cash and cash equivalents totaled $27.8 million, down from $44.3 million the previous year, impacted by higher inventory investment[10] - Total current assets decreased to $126,298 thousand as of February 1, 2025, from $127,772 thousand a year earlier[31] E-commerce and Franchise Performance - Consolidated e-commerce demand decreased by 11.6% in the fourth quarter, while commercial and international franchise revenues increased by 20.5%[8] - Net retail sales accounted for $139,499 thousand, representing 92.7% of total revenues for the 13 weeks ended February 1, 2025[27] Profitability Metrics - Consolidated gross profit for the 13 weeks ended February 1, 2025, was $85,144 thousand, up from $84,217 thousand in the previous year[27] - The company reported a retail gross margin of 56.9% for the 13 weeks ended February 1, 2025, slightly up from 56.7% in the previous year[33] - Adjusted income before income taxes for Q1 2025 was $27,486 million, compared to $23,729 million in Q1 2024, reflecting a year-over-year increase of 15.5%[37] - EBITDA for Q1 2025 was reported at $31,138 million, compared to $29,861 million in Q1 2024, indicating a growth of 4.3%[38] - Adjusted EBITDA for the year ended February 1, 2025, was $81,052 million, up from $76,637 million in 2024, reflecting a year-over-year increase of 5.0%[38] Tax and Interest Expenses - The company recorded a valuation allowance of $436 million on its net deferred tax assets in the UK for the year ended February 1, 2025[37] - The interest expense for the year ended February 1, 2025, was $(861) million, compared to $(929) million in 2024, showing a decrease of 7.3%[37] Other Financial Impacts - The impact of the 53rd week on income was estimated at $(2,420) million, affecting both EBITDA and adjusted EBITDA calculations[38] - The company undertook international restructuring, which had a tax impact of $1,102 million in the previous year[37]

Core Insights - Build-A-Bear Workshop is set to launch a new multi-level retail experience at ICON Park in Orlando, Florida, in the first half of 2026, marking a significant expansion in a major tourist destination [1][3] - The company is collaborating with design firm Chute Gerdeman to create an immersive retail space that enhances its existing experiential retail concept [2] - This initiative is part of a broader strategic evolution aimed at expanding Build-A-Bear's global presence, particularly in tourist-heavy areas, building on its nearly 600 locations [3] Company Strategy - The new location will feature a creative interpretation of Build-A-Bear's "make your own" teddy bear concept, targeting a diverse consumer base, including children and adults, with the latter representing 40% of sales [4] - The design will include a prominent facade to attract visitors, leveraging its location on International Drive, close to major attractions like Walt Disney World and Universal's Theme Parks [4] Market Position - ICON Park is recognized as a leading location for entertainment, attracting millions of visitors annually, which aligns with Build-A-Bear's strategy to enhance its brand visibility and consumer engagement [6][9] - The partnership with ICON Park reflects the appeal of doing business in Orange County, emphasizing the potential for high consumer traffic and engagement [5] Financial Overview - Build-A-Bear Workshop reported total revenues of $486.1 million for fiscal 2023, indicating a strong financial position to support its expansion efforts [5]

Core Concept - Build-A-Bear Workshop is launching a new collection of weighted plush toys called Heartwarming Hugs to celebrate National Hug Day, emphasizing the emotional connection and comfort that hugs provide [1][2][3]. Product Launch - The Heartwarming Hugs collection includes a bear and a sloth, each weighing three pounds and featuring a removable heart that can be warmed for added comfort [1][3]. - The collection aims to provide a sense of warmth and connection for all ages, promoting the benefits of hugging, such as stress reduction and increased oxytocin levels [2]. Marketing and Promotions - To celebrate the launch, Build-A-Bear is offering free shipping on online purchases of the Heartwarming Hugs plushes from January 21 to 23, 2025 [3]. - The Heartwarming Hugs Bear will be available in stores and online, while the Heartwarming Hugs Sloth will be exclusively available online [3]. Company Background - Build-A-Bear Workshop has been a multi-generational brand since 1997, focusing on creating personalized stuffed animals and fostering emotional connections with consumers [5]. - The company reported consolidated total revenues of $486.1 million for fiscal 2023, highlighting its strong market presence and growth [5].

Group 1 - Build-A-Bear Workshop has significantly outperformed the S&P 500, with an increase of over 80% in the past year [1]

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Summary of Key Points Core Viewpoint - Build-A-Bear Workshop has shown strong growth in revenue and earnings, while Haverty Furniture Companies has faced significant declines in performance, but both companies have potential for future growth [4][6][12]. Build-A-Bear Workshop - Build-A-Bear reported a strong third quarter with $119 million in revenue and an EPS of 73 cents, exceeding analyst expectations [4]. - The company has opened 17 new locations, including international ones, and plans to increase its total locations by about 25% by 2025 [4]. - New product launches, such as the Mini Beans collection, have contributed to customer growth [4]. - Despite strong performance, Build-A-Bear's web sales have underperformed, leading to a narrowing of full-year revenue guidance [5]. - The company has a Buy rating with a price target of $52.50, indicating an upside potential of nearly 22% [6]. Haverty Furniture Companies - Haverty has experienced a 1-year total return of -37%, attributed to falling revenues, profits, and gross margins [2]. - The company announced a leadership change with Steven Burdette becoming CEO, who previously helped the company achieve significant net income growth during the pandemic [6]. - Haverty's design business reported a 19% year-over-year growth, and the company has a strong cash position of over $121 million with no funded debt [7]. - The firm plans to open three new stores in the fourth quarter and has a dividend yield of 5.78% [7]. Retail Industry Outlook - The retail industry may see transformative changes in 2025, with opportunities for building customer loyalty amid increasing competition and potential supply chain issues [11]. - Maintaining momentum beyond the holiday season will be crucial for retailers, including Build-A-Bear and Haverty [12].