Call it a bare market on a bull run. >> The stock has went from $2 to $67. What is going on.>> Build-a- Bear Workshop, adored by kids for their personalized stuffed animals. >> You can choose your own new furry friends >> is one of the best performers in the stock market this year, rising over 50% since the beginning of the year and over 2,000% in the last 5 years. Build Bear Workshop not only owing its success to the iconic bear in that classic box, but also to collaborations appealing to millennials like ...

Core Insights - Build-A-Bear Workshop is successfully targeting adults, leveraging nostalgia to diversify its portfolio and enhance customer engagement [3][12][14] - The company reported record-breaking revenue of $252.6 million in the first half of fiscal 2025, marking a nearly 12% increase year-over-year [3][4] - Build-A-Bear's stock has risen approximately 60% year-to-date, nearing a $1 billion market cap, despite challenges faced by other retailers [4][10] Financial Performance - The company raised its outlook following effective tariff mitigation strategies, including increased inventory management [4][8] - Build-A-Bear's diverse revenue streams, including new products and demographics, have contributed to its financial resilience [10][11] Market Position and Strategy - The company has expanded beyond traditional retail locations, establishing a presence in cruise ships, amusement parks, and hospitality [5][6] - Build-A-Bear's ability to discreetly raise prices through constant product innovation has helped mitigate tariff impacts [10][11] Consumer Engagement - A recent survey indicated that 92% of adults still own their childhood teddy bears, highlighting the brand's strong nostalgic appeal [14][16] - The experiential nature of Build-A-Bear's offerings fosters deep emotional connections with consumers, enhancing brand loyalty [16][17] Future Outlook - Analysts suggest that Build-A-Bear's international expansion presents significant growth opportunities, with high returns on capital [11] - The brand's focus on personalization and creating memorable experiences positions it well in a competitive retail landscape [9][18]

Group 1 - The meeting is convened to seek shareholder approval for the proposed merger between Platinum Asset Management and First Maven Proprietary Limited, trading as L1 Capital [3] - The meeting is being held in a hybrid format to encourage broader participation among shareholders [3] - The necessary quorum for the meeting has been confirmed, and the notice of the meeting was published on the ASX market announcements platform [2]

Group 1 - Artificial intelligence (AI) is a significant investment trend, with companies like Nvidia providing powerful AI hardware, Comfort Systems USA benefiting from data center construction, and Vistra gaining from increased electricity demand [1][2] - Nvidia, Comfort Systems USA, and Vistra have all seen stock prices increase by 1,000% or more over the last five years, indicating the real impact of the AI trend across various industries [2] - Build-A-Bear Workshop has outperformed these AI-related companies, with a return of 2,150% over the past five years, turning a $10,000 investment into $225,000 [3][5] Group 2 - Build-A-Bear Workshop's revenue grew from $339 million in February 2020 to $496 million by February 2025, representing a compound annual growth rate (CAGR) of approximately 8% [6] - The company has over 600 stores and offers a unique customer experience where patrons can customize plush toys, contributing to its growth [6][7] - Factors driving demand for Build-A-Bear include nostalgia from parents who were customers in the past, successful licensing of popular characters, and effective use of e-commerce [7][8]

Core Insights - A potential Federal Reserve rate cut, strong retail sales, and progress in U.S.-China trade talks may positively impact the broader stock market, but not all stocks are guaranteed to perform well. Investors are advised to use the Driehaus strategy to identify the best momentum stocks [1] Group 1: Driehaus Strategy Overview - The Driehaus strategy emphasizes investing in stocks that are increasing in price rather than those in decline, focusing on strong earnings growth and positive momentum indicators [3][5] - Key criteria for the Driehaus strategy include a positive percentage 50-day moving average and strong earnings growth rates, with a focus on companies that consistently beat earnings estimates [4][5] Group 2: Selected Momentum Stocks - AppLovin Corporation (APP), Build-A-Bear Workshop, Inc. (BBW), and Tenet Healthcare Corporation (THC) have been identified as momentum picks based on the Driehaus strategy [2][8] - AppLovin has a Momentum Score of B and an average trailing four-quarter earnings surprise of 22.4% [10] - Build-A-Bear Workshop also has a Momentum Score of B, with an average trailing four-quarter earnings surprise of 21.3% [11] - Tenet Healthcare, with a Momentum Score of B, boasts an average trailing four-quarter earnings surprise of 31.2% [12]

Market Overview - U.S. stock markets are experiencing a continued upward trend in 2025, with major indexes like the Dow, S&P 500, and Nasdaq Composite near all-time highs [1] - Expectations for the Federal Reserve's first interest rate cut in 2025 have surged, with a 100% probability of a 25-basis-point cut anticipated in the upcoming September FOMC meeting [2] Stock Performance - Several stocks have shown significant price strength, particularly those on a bull run, indicating a high chance of maintaining momentum [2] - Five highlighted stocks include DRDGOLD Ltd. (DRD), Daktronics Inc. (DAKT), NCS Multistage Holdings Inc. (NCSM), Build-A-Bear Workshop Inc. (BBW), and Vishay Precision Group Inc. (VPG) [3] Stock Screening Criteria - Stocks must show a percentage change in price greater than zero over the last four weeks, indicating recent upward movement [5] - A percentage change in price greater than 10% over the last 12 weeks is required to ensure sustained momentum [5] - Stocks must have a Zacks Rank of 1 (Strong Buy) and an average broker rating of 1, indicating strong future performance expectations [6] - Current stock prices must be above $5 and trading near their 52-week highs, with a price/52-week high-low range greater than 85% [7] Individual Stock Highlights - **DRDGOLD Ltd. (DRD)**: Stock price increased by 49.9% in four weeks, with an expected earnings growth rate of 13.3% for the current year and an 80% improvement in earnings estimates [8][9] - **Daktronics Inc. (DAKT)**: Stock price rose by 39.1% in four weeks, with an expected earnings growth rate of 28.2% and a 6.9% increase in earnings forecasts [8][11] - **NCS Multistage Holdings Inc. (NCSM)**: Stock price climbed 38.4% in four weeks, with an expected earnings growth rate of 6.7% and a 62% improvement in earnings estimates [8][13] - **Build-A-Bear Workshop Inc. (BBW)**: Stock price surged 33.1% in four weeks, with an expected earnings growth rate of 6.9% and a 3.9% increase in earnings estimates [8][15] - **Vishay Precision Group Inc. (VPG)**: Stock price rallied 14.4% in four weeks, with an expected earnings growth rate of -27.4% and a 5.8% improvement in earnings estimates [8][18]

Company Performance - Build-A-Bear (BBW) has shown a year-to-date performance increase of approximately 60.7%, significantly outperforming the average gain of 9.7% in the Retail-Wholesale sector [4] - The Zacks Consensus Estimate for BBW's full-year earnings has increased by 5% over the past 90 days, indicating a positive shift in analyst sentiment and an improving earnings outlook [3] Industry Comparison - Build-A-Bear belongs to the Retail - Miscellaneous industry, which includes 17 companies and currently ranks 28 in the Zacks Industry Rank, with an average gain of 8.8% this year, further highlighting BBW's strong performance [5] - In contrast, the Retail - Restaurants industry, which includes Cheesecake Factory (CAKE), has seen a decline of 6.8% this year, ranking 175 among 39 stocks [6]

Core Insights - The article emphasizes the importance of efficiency ratios as indicators of a company's financial health and operational efficiency [1] Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance [2] - **Asset Utilization**: This ratio assesses how effectively a company converts its assets into sales, with higher values suggesting greater efficiency [3] - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold, with higher values reflecting better inventory management [4] - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses relative to sales, with higher values indicating better expense management [5] Screening Process - A screening process was applied to identify stocks with efficiency ratios above industry averages, narrowing down from over 7,906 stocks to 18 [7] - The screening criteria included turnover ratios, asset utilization, and operating margin, along with a favorable Zacks Rank of 1 (Strong Buy) [6][8] Selected Companies - **Post Holdings (POST)**: A consumer-packaged goods holding company with a positive earnings surprise of 21.4% [7] - **BuildABear Workshop (BBW)**: A leading interactive retail-entertainment company with a positive earnings surprise of 21.3% [9] - **Equity Bancshares (EQBK)**: A financial services provider with a positive earnings surprise of 17.9% [10] - **Ardmore Shipping (ASC)**: Engaged in the ownership and operation of tankers, with a positive earnings surprise of 9.6% [11] - **Sally Beauty (SBH)**: An international retailer of beauty supplies with a positive earnings surprise of 8.3% [12]

Company Overview - Build-A-Bear (BBW) currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a high likelihood of outperforming the market [4] Price Performance - Over the past week, BBW shares have increased by 6.27%, significantly outperforming the Zacks Retail - Miscellaneous industry, which rose by 0.78% [6] - In the last month, BBW's price change is 33.87%, compared to the industry's 1.53% [6] - Over the past quarter, BBW shares have risen by 42.06%, and over the last year, they have increased by 138.5%, while the S&P 500 has only moved 9.68% and 20% respectively [7] Trading Volume - BBW's average 20-day trading volume is 416,423 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Estimates - In the past two months, three earnings estimates for BBW have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $3.84 to $4.03 [10] - For the next fiscal year, two estimates have also moved upwards with no downward revisions [10] Conclusion - Considering the strong price performance, positive earnings outlook, and high momentum score, BBW is positioned as a promising investment opportunity [12]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information, including statements, notes, management's discussion, market risk, and controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, and cash flows, along with detailed notes explaining the basis of presentation, revenue recognition, leases, and other financial details for the periods ended August 2, 2025, and August 3, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------- | :------------- | :--------------- | :------------- | | Cash and cash equivalents | $39,108 | $27,758 | $25,163 | | Inventories, net | $81,758 | $69,775 | $66,977 | | Total current assets | $144,418 | $126,298 | $117,473 | | Total Assets | $318,238 | $289,956 | $279,459 | | Total current liabilities | $81,072 | $79,394 | $80,313 | | Total stockholders' equity | $155,395 | $139,082 | $125,791 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section outlines the company's financial performance over specific periods, including revenues, gross profit, net income, and earnings per share Condensed Consolidated Statements of Operations Highlights (Dollars in thousands, except per share data) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Total revenues | $124,247 | $111,798 | $252,642 | $226,528 | | Consolidated gross profit | $71,511 | $60,569 | $144,498 | $122,734 | | Net income | $12,367 | $8,778 | $27,686 | $20,237 | | Basic income per common share | $0.94 | $0.64 | $2.11 | $1.47 | | Diluted income per common share | $0.94 | $0.64 | $2.11 | $1.46 | - Total revenues increased by **11.1%** for the thirteen weeks ended August 2, 2025, and by **11.5%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[14](index=14&type=chunk) - Net income increased by **40.9%** for the thirteen weeks ended August 2, 2025, and by **36.8%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities for the reported periods Condensed Consolidated Statements of Cash Flows Highlights (Dollars in thousands) | Metric | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------- | :------------------------- | | Net cash provided by operating activities | $32,017 | $12,413 | | Net cash used in investing activities | $(6,328) | $(5,700) | | Net cash used in financing activities | $(14,425) | $(25,867) | | Increase/(Decrease) in cash, cash equivalents, and restricted cash | $11,350 | $(19,164) | | Cash, cash equivalents and restricted cash, end of period | $39,108 | $25,163 | - Net cash provided by operating activities increased by **$19.6 million** for the twenty-six weeks ended August 2, 2025, primarily due to increased net income and favorable changes in working capital[17](index=17&type=chunk) - Net cash used in financing activities decreased by **$11.4 million**, mainly due to a reduction in share repurchases compared to the prior year[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Basis of Presentation](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation) This note explains the accounting principles and conventions used in preparing the unaudited condensed consolidated financial statements - The condensed consolidated financial statements are unaudited and prepared in accordance with SEC rules, with certain GAAP disclosures condensed or omitted[19](index=19&type=chunk) - Due to the seasonal nature of operations, results from a single reporting period are not indicative of full-year results[19](index=19&type=chunk) [Note 2. Revenue](index=8&type=section&id=Note%202.%20Revenue) This note details the company's revenue recognition policies and segment-wise revenue breakdown - The Direct-to-Consumer (DTC) segment accounts for **92% of consolidated revenue** for the second quarter of fiscal 2025[23](index=23&type=chunk) - Revenue from gift cards is deferred until redemption, with unredeemed gift card breakage revenue recorded based on historical redemption patterns[26](index=26&type=chunk) - A hypothetical **1% change** in the fiscal 2024 gift card breakage rate would have resulted in a **$1.1 million change** in breakage revenue[26](index=26&type=chunk) [Note 3. Leases](index=10&type=section&id=Note%203.%20Leases) This note provides information on the company's operating lease arrangements, costs, and right-of-use assets Operating Lease Costs (Dollars in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Operating lease costs | $10,765 | $10,021 | $21,208 | $19,605 | | Variable lease costs | $2,509 | $2,464 | $4,889 | $4,655 | | Short term lease costs | $21 | $33 | $49 | $58 | | **Total Operating Lease costs** | **$13,295** | **$12,518** | **$26,146** | **$24,318** | - The weighted-average remaining operating lease term was **6.1 years** as of August 2, 2025, up from 5.6 years in the prior year[38](index=38&type=chunk) - The operating lease right-of-use asset increased to **$101.0 million** as of August 2, 2025, from $94.2 million in the prior year, driven by new stores and longer-term extensions[39](index=39&type=chunk) [Note 4. Other Assets](index=12&type=section&id=Note%204.%20Other%20Assets) This note details the composition of prepaid expenses, other current assets, and other non-current assets Prepaid Expenses and Other Current Assets (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Prepaid occupancy | $3,757 | $2,213 | $3,109 | | Prepaid insurance | $451 | $1,248 | $693 | | Prepaid gift card fees | $388 | $493 | $600 | | Prepaid royalties | $203 | $736 | $195 | | Prepaid taxes | $143 | $1,512 | $526 | | Other | $5,084 | $6,467 | $8,135 | | **Total** | **$10,026** | **$12,669** | **$13,258** | Other Non-Current Assets (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------- | :------------- | :--------------- | :------------- | | Entertainment production asset | $4,336 | $4,222 | $4,562 | | Deferred compensation | $1,549 | $1,684 | $1,017 | | Other | $136 | $195 | $252 | | **Total** | **$6,021** | **$6,101** | **$5,831** | [Note 5. Accrued Expenses](index=12&type=section&id=Note%205.%20Accrued%20Expenses) This note outlines the various categories of accrued expenses, including wages, taxes, and rent Accrued Expenses (Dollars in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Accrued wages, bonuses and related expenses | $12,122 | $13,268 | $9,896 | | Current income taxes payable | $2,156 | $580 | $35 | | Sales and value added taxes payable | $2,597 | $1,359 | $2,372 | | Accrued rent and related expenses | $885 | $1,002 | $1,040 | | Accrued expense - other | $1,350 | $0 | $0 | | **Total** | **$19,110** | **$16,209** | **$13,343** | [Note 6. Stock-based Compensation](index=13&type=section&id=Note%206.%20Stock-based%20Compensation) This note provides details on stock-based compensation expense, unrecognized compensation, and vested shares - Stock-based compensation expense included in SG&A was **$0.7 million** for the thirteen weeks ended August 2, 2025 (vs. $0.6 million in 2024) and **$1.2 million** for the twenty-six weeks ended August 2, 2025 (vs. $1.0 million in 2024)[51](index=51&type=chunk) - As of August 2, 2025, there was **$6.4 million** of total unrecognized compensation expense related to unvested restricted stock awards, expected to be recognized over a weighted-average period of **2.1 years**[51](index=51&type=chunk) - The total fair value of shares vested during the twenty-six weeks ended August 2, 2025, was **$2.5 million**, compared to $2.2 million in the prior year[53](index=53&type=chunk) [Note 7. Income Taxes](index=14&type=section&id=Note%207.%20Income%20Taxes) This note explains the company's effective tax rates and factors influencing tax expense Effective Tax Rates | Period | August 2, 2025 | August 3, 2024 | | :---------------------- | :------------- | :------------- | | 13 weeks ended | 19.3% | 24.0% | | 26 weeks ended | 20.8% | 23.8% | - The fiscal 2025 effective tax rate differed from the statutory rate of **21%** primarily due to state income tax expense offset by the tax impact of equity awards vesting, foreign-derived intangible income deduction, and discrete benefits from a prior period tax position settlement[56](index=56&type=chunk) - The 'One Big Beautiful Bill Act' (OBBB), signed July 4, 2025, is expected to have an immaterial impact on FY25 and FY26 effective tax rates[55](index=55&type=chunk) [Note 8. Stockholders' Equity](index=15&type=section&id=Note%208.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including net income, share repurchases, and dividends Stockholders' Equity Changes (Dollars in thousands) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Balance, beginning | $148,682 | $128,341 | $139,082 | $129,662 | | Net income | $12,367 | $8,778 | $27,686 | $20,237 | | Share repurchase | $(3,115) | $(9,149) | $(7,323) | $(18,347) | | Cash dividends | $(2,905) | $(2,755) | $(5,796) | $(5,565) | | Balance, ending | $155,395 | $125,791 | $155,395 | $125,791 | - The Company utilized **$7.3 million** in cash to repurchase **167,585 shares** during the twenty-six weeks ended August 2, 2025, under its September 2024 Stock Repurchase Program[58](index=58&type=chunk) - As of September 8, 2025, **$80.0 million** remained available for future repurchases under the September 2024 Stock Repurchase Program[58](index=58&type=chunk) [Note 9. Income per Share](index=16&type=section&id=Note%209.%20Income%20per%20Share) This note presents the basic and diluted income per common share for the reported periods Income per Common Share | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :-------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Basic net income per common share | $0.94 | $0.64 | $2.11 | $1.47 | | Diluted net income per common share | $0.94 | $0.64 | $2.11 | $1.46 | [Note 10. Comprehensive Income](index=16&type=section&id=Note%2010.%20Comprehensive%20Income) This note explains the components of comprehensive income, primarily foreign currency translation adjustments - The difference between comprehensive income and net income is solely due to foreign currency translation adjustments on subsidiaries' balance sheets[61](index=61&type=chunk) - There were no reclassifications out of accumulated other comprehensive loss for the thirteen weeks ended August 2, 2025, and August 3, 2024[61](index=61&type=chunk) [Note 11. Segment Information](index=17&type=section&id=Note%2011.%20Segment%20Information) This note provides a breakdown of total revenue by reportable segment and geographic area Total Revenue by Reportable Segment (Dollars in thousands) | Segment | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :------------------------ | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Direct-to-Consumer | $114,635 | $103,455 | $234,224 | $211,323 | | Commercial | $8,629 | $7,294 | $16,251 | $13,278 | | International Franchising | $983 | $1,049 | $2,167 | $1,927 | | **Total Revenue** | **$124,247** | **$111,798** | **$252,642** | **$226,528** | Net Sales to External Customers by Geographic Area (Dollars in thousands) | Geographic Area | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :---------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | North America | $107,066 | $96,766 | $218,339 | $196,217 | | Europe | $15,775 | $14,012 | $31,402 | $28,461 | | Other | $1,406 | $1,020 | $2,901 | $1,850 | | **Total Net Sales** | **$124,247** | **$111,798** | **$252,642** | **$226,528** | [Note 12. Contingencies](index=20&type=section&id=Note%2012.%20Contingencies) This note discusses ongoing legal disputes and their potential financial impact on the company - The Company is involved in an ongoing dispute with the U.K. customs authority (HMRC) regarding duty assessments since 2012[68](index=68&type=chunk) - As of August 2, 2025, the gross receivable balance related to the HMRC matter was **$5.1 million**, with a reserve of **$3.6 million**, resulting in a net receivable of **$1.5 million**[68](index=68&type=chunk) - Management believes the outcome of this dispute will not have a material adverse impact on the Company's results of operations, liquidity, or financial position[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, recent updates, and a detailed analysis of its financial performance for the thirteen and twenty-six weeks ended August 2, 2025, compared to the prior year. It also discusses liquidity, capital resources, seasonality, inflation, and critical accounting estimates [Cautionary Notice Regarding Forward-Looking Statements](index=21&type=section&id=Cautionary%20Notice%20Regarding%20Forward-Looking%20Statements) This section warns that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements subject to risks and uncertainties, which could cause actual results to differ materially[70](index=70&type=chunk) - Key risks include global economic conditions, inflation, consumer spending, tariffs, competition, supply chain disruptions, and the ability to manage store leases and technology[70](index=70&type=chunk) [Business Overview](index=23&type=section&id=Business%20Overview) This section describes the company's brand evolution, strategic focus, and global operational footprint - Build-A-Bear has evolved into a multi-generational brand offering interactive experiences for creating stuffed animals, expanding into e-commerce, licensing, and entertainment content[72](index=72&type=chunk) - The company's strategy focuses on leveraging brand strength to evolve its brick-and-mortar footprint, expand internationally via partner-operated and franchise models, and grow its e-commerce business[74](index=74&type=chunk) - As of August 2, 2025, the company operated **368 corporately-managed stores**, **157 partner-operated locations**, and **102 international franchised stores** globally[75](index=75&type=chunk) [Business Update](index=24&type=section&id=Business%20Update) This section highlights the company's strategic priorities, including global expansion, digital transformation, and capital allocation - Strategic priorities include global expansion of experience locations, accelerating comprehensive digital transformation, and driving profitable growth through investment while returning capital to shareholders[81](index=81&type=chunk) - The company opened a net **29 retail experience locations** during the first twenty-six weeks of fiscal 2025 and expects at least **60 net new units** in fiscal 2025[81](index=81&type=chunk) - Over a third of total stores are now in non-traditional settings, reflecting a shift in location strategy[81](index=81&type=chunk) [Retail Stores](index=25&type=section&id=Retail%20Stores) This section provides an overview of the company's retail store strategy and operational models, including corporately-managed, partner-operated, and international franchise locations [Corporately-Managed Locations](index=25&type=section&id=Corporately-Managed%20Locations) This section details the number and format of stores directly managed by the company across different regions Corporately-Managed Store Count | Region | August 2, 2025 | August 3, 2024 | | :------------- | :------------- | :------------- | | North America | 327 | 321 | | Europe | 41 | 40 | | **Total** | **368** | **361** | - As of August 2, 2025, **53%** of corporately-managed stores were in an updated Discovery format[82](index=82&type=chunk) - Future expansion of the retail store fleet may include more non-traditional locations, such as concourse format shops[82](index=82&type=chunk) [Partner-Operated Locations](index=25&type=section&id=Partner-Operated%20Locations) This section describes the growth and capital-light nature of the company's partner-operated retail locations Partner-Operated Store Count | Metric | August 2, 2025 | August 3, 2024 | | :---------------- | :------------- | :------------- | | Beginning of period | 138 | 92 | | Opened | 19 | 15 | | Closed | 0 | 0 | | **End of period** | **157** | **107** | - The partner-operated model is capital-light for the Company, with partners building and operating the workshops, covering real estate, labor, and inventory costs[83](index=83&type=chunk) - These locations are heavily weighted towards the hospitality industry, advancing the focus on non-traditional and tourist areas[83](index=83&type=chunk) [International Franchise Stores](index=25&type=section&id=International%20Franchise%20Stores) This section outlines the expansion and operational model of the company's international franchise store network International Franchise Store Count | Metric | August 2, 2025 | August 3, 2024 | | :---------------- | :------------- | :------------- | | Beginning of periods | 92 | 83 | | Opened | 15 | 6 | | Closed | (5) | 0 | | **End of period** | **102** | **89** | - The Company leverages new formats developed for corporately-managed locations, such as concourses and shop-in-shops, with its franchisees[86](index=86&type=chunk) - Sourcing fixtures and other supplies for franchisees from China significantly reduces capital and expenses for opening new franchises[86](index=86&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, gross profit, and expenses, for the reported periods [Thirteen weeks ended August 2, 2025 compared to August 3, 2024](index=27&type=section&id=Thirteen%20weeks%20ended%20August%202,%202025%20compared%20to%20August%203,%202024) This section compares the company's financial results for the thirteen-week period, highlighting changes in revenue, gross margin, and SG&A expenses - Consolidated revenues increased by **$12.4 million (11.1%)** to **$124.2 million**, driven by a **$11.2 million (10.8%) increase** in Net Retail sales and a **$1.3 million (18%) increase** in Commercial revenue[88](index=88&type=chunk) - Retail gross margin increased by **$10.3 million** to **$66.1 million**, with the rate improving by **370 basis points** due to improved merchandise margin[93](index=93&type=chunk) - Selling, general and administrative (SG&A) expenses increased to **$56.4 million (45.4% of consolidated revenue)** from $49.2 million (44.0%), primarily due to higher store-level compensation, corporate costs, and general inflationary pressures[94](index=94&type=chunk) [Twenty-six weeks ended August 2, 2025 compared to August 3, 2024](index=29&type=section&id=Twenty-six%20weeks%20ended%20August%202,%202025%20compared%20to%20August%203,%202024) This section compares the company's financial results for the twenty-six-week period, detailing changes in revenue, gross margin, and SG&A expenses - Consolidated revenues increased by **$26.1 million (11.5%)** to **$252.6 million**, driven by a **$22.9 million (10.8%) increase** in Net Retail sales and a **$3.0 million (22%) increase** in Commercial revenue[97](index=97&type=chunk) - Retail gross margin increased by **$19.8 million** to **$134.1 million**, with the rate improving by **320 basis points** due to improved merchandise margin[101](index=101&type=chunk) - SG&A expenses increased to **$110.0 million (43.5% of consolidated revenue)** from $96.8 million (42.7%), driven by higher store-level compensation, corporate costs, and general inflationary pressures[102](index=102&type=chunk) [Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)](index=30&type=section&id=Earnings%20before%20Interest,%20Taxes,%20Depreciation,%20and%20Amortization) This section presents the company's EBITDA and analyzes the factors contributing to its changes for the reported periods EBITDA (Dollars in millions) | Metric | 13 Weeks Ended Aug 2, 2025 | 13 Weeks Ended Aug 3, 2024 | 26 Weeks Ended Aug 2, 2025 | 26 Weeks Ended Aug 3, 2024 | | :------------------------------------------------ | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Income before income taxes (pre-tax) | $15,318 | $11,545 | $34,949 | $26,574 | | Interest income, net | $(206) | $(188) | $(406) | $(614) | | Depreciation and amortization expense | $3,668 | $3,636 | $7,368 | $7,294 | | **Earnings before interest, taxes, depreciation, and amortization** | **$18,780** | **$14,993** | **$41,911** | **$33,254** | - EBITDA increased by **$3.8 million (25.3%)** to **$18.8 million** for the thirteen weeks ended August 2, 2025, and by **$8.7 million (26.0%)** to **$41.9 million** for the twenty-six weeks ended August 2, 2025[105](index=105&type=chunk)[106](index=106&type=chunk) - The increase in EBITDA was driven by gross profit resulting from increased retail and commercial margins, partially offset by higher SG&A expenses[105](index=105&type=chunk)[106](index=106&type=chunk) [Seasonality and Quarterly Results](index=30&type=section&id=Seasonality%20and%20Quarterly%20Results) This section discusses the impact of seasonal factors and other variables on the company's operating results and quarterly performance - Operating results can fluctuate significantly due to factors such as economic conditions, consumer spending, timing of licensed product sales, marketing initiatives, and store operations[107](index=107&type=chunk)[108](index=108&type=chunk) - Sales historically peak in the fourth quarter due to the holiday season, and the timing of holidays and school vacations can impact quarterly results[110](index=110&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, operating cash flows, inventory levels, and planned capital expenditures - As of August 2, 2025, the consolidated cash balance was **$39.1 million**, with **82%** domiciled within the U.S[112](index=112&type=chunk) - Net cash provided by operating activities increased by **$19.6 million** for the twenty-six weeks ended August 2, 2025, primarily due to increased net income and favorable working capital changes[113](index=113&type=chunk) - Total inventory at quarter-end was **$81.8 million**, a **22% increase** from the fiscal 2024 second quarter, driven by additional tariff costs and accelerated purchases for tariff-mitigation plans[120](index=120&type=chunk) - The Company expects to spend approximately **$20 to $25 million** on capital expenditures in fiscal 2025[119](index=119&type=chunk) [Off-Balance Sheet Arrangements](index=33&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements for the company - The Company has no off-balance sheet arrangements[123](index=123&type=chunk) [Inflation](index=33&type=section&id=Inflation) This section addresses the impact of inflationary pressures on the company's costs and its strategies for mitigation - Inflationary pressures, particularly rising store labor costs and tariffs on inventory purchases, are expected to continue into fiscal 2025[124](index=124&type=chunk) - The Company is implementing mitigating actions, such as strategic price increases on highly sought-after products and leveraging distribution costs[124](index=124&type=chunk) - Failure to recover increased costs through price increases or a decrease in consumer spending due to inflation could adversely affect financial results[124](index=124&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section reviews the company's significant accounting policies and estimates that require management's judgment - The Company's accounting policies and estimates, including those related to long-lived assets, leases, revenue recognition, and income taxes, are reevaluated on an ongoing basis[126](index=126&type=chunk) - There have been no material changes to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the year ended February 1, 2025[127](index=127&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding recent accounting pronouncements in the company's annual report - Information on recent accounting pronouncements is disclosed in Note 1 to the Condensed Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended February 1, 2025[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's quantitative and qualitative disclosures about market risk since its last Annual Report on Form 10-K - There have been no material changes to the Company's Quantitative and Qualitative Disclosures About Market Risk as disclosed in its Annual Report on Form 10-K for the fiscal year ended February 1, 2025[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of August 2, 2025. No material changes in internal control over financial reporting occurred during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of August 2, 2025[130](index=130&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter covered by this report[132](index=132&type=chunk) - Control systems provide reasonable, not absolute, assurance and are subject to inherent limitations such as faulty judgments, errors, collusion, or management override[131](index=131&type=chunk) [PART II – OTHER INFORMATION](index=35&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section contains additional information not covered in the financial statements, including risk factors, equity sales, other disclosures, and exhibits [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes to the Company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended February 1, 2025[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases under its September 2024 Stock Repurchase Program during the quarter ended August 2, 2025 Issuer Purchases of Equity Securities (May 4, 2025 - August 2, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value Remaining Under Program | | :-------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------- | | May 4, 2025 - May 31, 2025 | - | $ - | $84,992,834 | | June 1, 2025 - July 5, 2025 | 23,720 | $52.71 | $83,742,469 | | July 6, 2025 - August 2, 2025 | 35,363 | $52.08 | $81,900,801 | | **Total** | **59,083** | **$52.33** | **$81,900,801** | - The September 2024 Stock Repurchase Program, authorized for up to **$100 million**, allows repurchases through September 30, 2028[138](index=138&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading plans by several directors and executive officers for the sale of company common stock - CFO Voin Todorovic adopted a Rule 10b5-1 Trading Plan on June 9, 2025, for the sale of up to **12,744 shares**, expiring December 11, 2025[139](index=139&type=chunk) - President and CEO Sharon John adopted a Rule 10b5-1 Trading Plan on June 13, 2025, for the sale of up to **42,643 shares**, expiring December 5, 2025[139](index=139&type=chunk) - Chairman of the Board Craig Leavitt adopted a Rule 10b5-1 Trading Plan on July 1, 2025, for the sale of up to **8,250 shares**, expiring December 5, 2025[139](index=139&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report on Form 10-Q, including organizational documents, employment agreements, and various certifications - The exhibits include certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, executed by the President and CEO and the CFO[141](index=141&type=chunk) - Various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are filed as part of the report[141](index=141&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section contains the official signatures of the company's President and Chief Executive Officer and Chief Financial Officer, certifying the quarterly report - The report was signed on September 11, 2025, by Sharon John, President and Chief Executive Officer, and Voin Todorovic, Chief Financial Officer[145](index=145&type=chunk)