I first reviewed Build-A-Bear Workshop (NYSE: BBW ) back in January. I gave the company a “Buy” rating, as I liked that this well-known retail brand was growing revenues and expanding both their physical and digital presence. BBW was rewarding investors with dividends, shareAnalyst’s Disclosure:I/we have a beneficial long position in the shares of BBW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation ...

Store Operations and Growth - As of May 3, 2025, the company operated 369 corporately-managed stores globally, 148 partner-operated locations, and 87 international franchised stores[71]. - The company expects net new unit growth of at least 50 locations in fiscal 2025, focusing on non-traditional locations including family-centric tourist sites[77]. - 52% of corporately-managed stores were in an updated Discovery format as of May 3, 2025, with plans to close certain stores in accordance with lease events[78]. - The company has made a concerted effort to shift to asset-light partner-operated and franchise locations, with over a third of total stores now in non-traditional settings[77]. - The number of third-party retail locations increased from 97 to 148, with partnerships including Carnival Cruise Line and Great Wolf Lodge Resorts[79]. - The number of franchised stores grew from 83 to 87, with plans for additional master franchise agreements in the future[81]. Financial Performance - The company reported growth in total revenues and pretax profit in fiscal years 2022, 2023, and 2024, driven by strategic initiatives implemented prior to and during the pandemic[77]. - Total revenues increased by $13.7 million or 11.9% to $129.5 million for the thirteen weeks ended May 3, 2025, compared to the same period in 2024[84]. - Net retail sales rose by $11.7 million or 10.9% to $119.6 million, driven by growth at existing stores and the opening of 51 third-party retail stores[84][85]. - Commercial revenue increased by $1.6 million or 27% to $7.6 million, primarily due to higher sales volume from wholesale accounts[87]. - Retail gross margin increased by $9.5 million to $68.0 million, with the retail gross margin rate improving by 270 basis points to 56.9%[89]. - EBITDA for the thirteen weeks ended May 3, 2025, increased by $4.9 million or 26.7% to $23.1 million, driven by increased retail and commercial margins[93]. Cash Flow and Capital Management - The company’s cash flows have improved significantly, allowing for increased support for key initiatives and returning capital to shareholders through dividends and share repurchases[77]. - Cash provided by operating activities increased by $17.4 million to $27.8 million, attributed to a decrease in accounts receivable and an increase in accounts payable[99]. - As of May 3, 2025, the company had a consolidated cash balance of $44.3 million, with no outstanding borrowings under its $25 million revolving credit agreement[98][102]. - Total capital spending for the thirteen weeks ended May 3, 2025, was $2.9 million, with an expected capital expenditure of approximately $20 to $25 million for fiscal 2025[105]. - Cash utilized for share repurchases was $4.2 million for 108,502 shares during the thirteen weeks ended May 3, 2025, compared to $9.2 million for 343,406 shares during the same period in the previous year[108]. Inventory and Purchase Obligations - Total inventory at quarter end was $72.3 million, reflecting an increase of $8.3 million or 13% from the end of the fiscal 2024 first quarter[106]. - Purchase obligations totaled approximately $100.7 million as of May 3, 2025, with $26.7 million due in the next 12 months[107]. Strategic Initiatives - The company aims to accelerate its digital transformation, enhancing marketing and loyalty programs to increase consumer engagement and expand its total addressable market[77]. - The company’s strategy includes expanding its e-commerce business and developing engaging content to broaden its consumer base beyond children[70]. - The company operates through three segments: Direct-to-Consumer, Commercial, and International franchising, leveraging its brand strength across these channels[73]. - The company’s retail stores serve as mini distribution centers, providing efficient omnichannel support for growing digital demand[74]. Economic and Operational Challenges - Inflation impacted business operations in fiscal 2024, primarily through rising store labor costs, with expectations for continued inflationary pressures into fiscal 2025[110]. - Leases in the U.K. and the Republic of Ireland require rent reviews every five years, with base rents adjusted to current market rates, potentially leading to higher operational costs[104]. - The company has secured longer-term leases with more favorable terms beginning in fiscal 2023, providing flexibility in aligning stores with market trends[103]. - Operating cash flows are believed to be sufficient to meet material cash requirements for at least the next 12 months[107]. - The company accelerated the acquisition of core products in anticipation of cost uncertainties due to potential tariffs[106]. - There have been no material changes to critical accounting estimates disclosed in the 2024 Form 10-K[113].

Core Points - Build-A-Bear launched the "Play It Forward" initiative, donating one plush animal for each make-your-own plush sold, with a goal of donating up to 10,000 bears to children in need [1][2] - The initiative aligns with the International Day of Play, which promotes children's right to play and supports their overall well-being [2][3] - Build-A-Bear Foundation is partnering with First Book, committing over $80,000 to provide educational resources and books focused on health and wellness for children in need [3] Company Overview - Build-A-Bear, established in 1997, is a multi-generational brand that allows guests to create their own stuffed animals, fostering emotional connections with consumers [5] - The company reported consolidated total revenues of $496.0 million for fiscal 2024 [5] - Build-A-Bear Foundation has donated over $25 million and 2 million furry friends to charitable causes since its inception [6]

Core Viewpoint - Build-A-Bear Workshop (NYSE: BBW) may not be the first stock that comes to mind for investors looking for great holding opportunities [1] Group 1 - The company is often overlooked in the investment community despite its potential [1]

Build-A-Bear Workshop (BBW) Q1 2026 Earnings Call May 29, 2025 09:00 AM ET Company Participants Gary Schnierow - Vice President of Investor Relations & Corporate FinanceSharon Price John - President & CEOJ. Christopher Hurt - Chief Operations & Experience OfficerVoin Todorovic - CFOKeegan Cox - Research Associate Conference Call Participants Eric Beder - CEO & Senior Research AnalystGreg Gibas - Vice President & Senior Research AnalystSteve Silver - Senior Equity Research Analyst Operator Greetings, and wel ...

Build-A-Bear Workshop (BBW) Q1 2026 Earnings Call May 29, 2025 09:00 AM ET Speaker0 Greetings, and welcome to the Build A Bear Workshop First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Chinaro, Investor Relations. Thank you, sir. You may begin. Speaker1 Thank you. Good ...

Build-A-Bear Investor Overview May 2025 Important Disclosures Forward-Looking Statements This presentation may contain "forward-looking statements" within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. We generally identify these statements by words or phrases such as "may," "might," "should," "expect," "plan," "anticipate," "believe," "estimate," "intend," "predict," "future," "potential" or "continue," the negative or any derivative of these ter ...

Core Insights - Build-A-Bear (BBW) reported quarterly earnings of $1.17 per share, exceeding the Zacks Consensus Estimate of $0.86 per share, and up from $0.82 per share a year ago, representing a 36.05% earnings surprise [1] - The company achieved revenues of $128.4 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 8.86% and increasing from $114.73 million year-over-year [2] - Build-A-Bear has outperformed consensus EPS estimates three times in the last four quarters and has topped revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $115.21 million, while for the current fiscal year, the estimate is $3.88 on revenues of $511.2 million [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Miscellaneous industry, to which Build-A-Bear belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Financial Performance - Total revenues for Q1 fiscal 2025 reached a record $128.4 million, an increase of 11.9% compared to the same period last year[3] - Pre-tax income for the quarter was a record $19.6 million, reflecting a year-over-year increase of 30.6%[4] - Diluted earnings per share (EPS) increased by 42.7% to $1.17, driven by higher pre-tax income and a reduced share count[10] - Net retail sales amounted to $119.6 million, up 10.9%, while consolidated e-commerce demand grew by 0.5%[4] - EBITDA for the 13 weeks ended May 3, 2025, was $23,131 thousand, compared to $18,261 thousand for the same period in 2024, reflecting a year-over-year increase of 26.5%[30] - Retail gross margin for the 13 weeks ended May 3, 2025, was $68,018 thousand, a 16.5% increase from $58,453 thousand for the same period in 2024, resulting in a gross margin percentage of 56.9%[27] Shareholder Returns - The company returned $7.1 million to shareholders through share repurchases and dividends, with $44.3 million in cash at the end of the quarter[3] Future Guidance - The company expects total revenues to grow on a mid-single-digit percentage basis for fiscal 2025[11] - Pre-tax income guidance for fiscal 2025 is updated to a range of $61 million to $67 million[11] Growth and Expansion - The company had net new unit growth of 15 global experience locations, bringing the total to 604 locations[5] - The number of corporately-managed retail locations increased to 369 in May 2025, up from 357 in May 2024, indicating a growth of 3.4%[27] - The number of franchised stores increased to 87 in May 2025, compared to 77 in May 2024, reflecting a growth of 13.0%[27] Inventory and Assets - Inventory at the end of the quarter was $72.3 million, an increase of 12.9% year-over-year[7] - Total assets increased to $308,303 thousand in May 2025, up from $289,956 thousand in February 2025, representing a growth of 4.6%[25] Capital Expenditures - Capital expenditures for the quarter totaled $2.9 million, compared to $2.4 million in the previous year[8] - Capital expenditures for the 13 weeks ended May 3, 2025, were $2,907 thousand, an increase from $2,430 thousand in the same period of 2024, marking a rise of 19.6%[27] Liabilities and Equity - Total current liabilities increased to $85,351 thousand in May 2025, up from $79,394 thousand in February 2025, representing a rise of 7.4%[25] - The total stockholders' equity increased to $148,682 thousand in May 2025, up from $139,082 thousand in February 2025, representing a growth of 6.0%[25] - Retained earnings rose to $98,243 thousand in May 2025, compared to $89,516 thousand in February 2025, showing an increase of 9.7%[25] Operating Assets - Operating lease right-of-use asset increased to $92,699 thousand in May 2025, compared to $90,200 thousand in February 2025, indicating a growth of 2.8%[25]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Build-A-Bear (BBW) driven by higher revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on May 29, 2025, with a consensus EPS estimate of $0.86, reflecting a +4.9% change year-over-year, and revenues projected at $117.95 million, up 2.8% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 1.61% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +0.97% for Build-A-Bear, suggesting a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - In the last reported quarter, Build-A-Bear exceeded the expected EPS of $1.52 by delivering $1.59, resulting in a surprise of +4.61%. Over the last four quarters, the company has beaten consensus EPS estimates twice [12][13]. Conclusion - Build-A-Bear is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [16].