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]

Financial Data and Key Metrics Changes - The company reported record revenue of over $128 million, an increase of 11.9% year-over-year [6][20] - Pretax income grew by 30.6% to nearly $20 million, with an EPS increase of 42.7% to $1.17 [6][20] - The pretax margin rate for Q1 was 15%, compared to 3% in Q1 2019, indicating significant improvement [6][8] Business Line Data and Key Metrics Changes - Net retail sales increased by 10.9% to $119.6 million, with strong performance across all segments [20] - E-commerce demand rose by 0.5%, while commercial revenue, primarily from wholesale sales, grew by 28.3% [22][20] - The Mini Beans collectibles line expanded by 30% year-over-year, with total sales reaching nearly 2 million units [16] Market Data and Key Metrics Changes - Domestic store traffic increased by 3%, significantly outperforming the U.S. national traffic, which declined by 3% [21][20] - The company ended the quarter with over 600 locations, with 30% of those outside the United States [9][10] Company Strategy and Development Direction - The company is focused on three strategic initiatives: expanding experiential retail footprint, advancing digital transformation, and leveraging brand strength through investments [9][14] - Plans include opening at least 50 net new locations in 2025, primarily operated by international partners [25][13] - The company aims to enhance inventory management systems to better respond to market trends and consumer demands [14][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic and geopolitical challenges, reiterating revenue guidance for 2025 [8][18] - The company expects to report record revenue for the year, maintaining strong profitability with double-digit pretax margins [18][26] - Management highlighted the importance of a clean balance sheet and strong cash flow in supporting long-term growth initiatives [9][18] Other Important Information - The company returned over $7 million in capital to shareholders through dividends and share repurchases [6][20] - Inventory at quarter-end was $72.3 million, reflecting an increase due to accelerated purchases of core products [25] Q&A Session Summary Question: How will the company capitalize on movie-related events? - Management noted strong relationships with major film creators and the ability to leverage popular characters like Stitch for broader appeal beyond children [34][35] Question: How will the new inventory management system improve responsiveness to trends? - The new system will enhance real-time inventory visibility and allow for better movement of stock between e-commerce and physical stores, improving responsiveness to demand spikes [38][39] Question: How did the retail stores perform compared to expectations? - Retail stores exceeded expectations with positive traffic, conversion rates, and average unit retail, indicating effective execution by the team [47][48] Question: Who are the partners for operated stores and are there plans for more? - Partners include well-known firms in various markets, and the company is in negotiations for new partnerships while maintaining high standards for partner operations [51][54] Question: What is the impact of tariffs on the updated guidance? - The updated pretax income guidance reflects less than $10 million in tariff impacts, with ongoing efforts to mitigate costs through diversified sourcing [62][63]

Financial Data and Key Metrics Changes - The company reported record revenue of over $128 million, an increase of 11.9% year-over-year [5][17] - Pretax income grew by 30.6% to nearly $20 million, with an EPS increase of 42.7% to $1.17 [5][20] - The pretax margin rate for Q1 was 15%, compared to 3% in Q1 2019, indicating significant improvement [5][6] Business Line Data and Key Metrics Changes - Net retail sales increased by 10.9% to $119.6 million, with strong performance across all segments [17] - E-commerce demand rose by 5%, while commercial revenue, primarily from wholesale sales, grew by 28.3% [19] - The Mini Beans collectibles line expanded by 30% year-over-year, with total sales reaching nearly 2 million units [13] Market Data and Key Metrics Changes - Domestic store traffic increased by 3%, significantly outperforming the U.S. national traffic, which declined by 3% [18][45] - The company ended the quarter with over 600 locations, with 30% of these outside the United States [8] Company Strategy and Development Direction - The company is focused on three strategic initiatives: expanding experiential retail, advancing digital transformation, and leveraging brand strength through investments [7][12] - Plans include opening at least 50 net new locations in 2025, primarily operated by international partners [22][11] - The company aims to maintain its revenue guidance while updating pretax income guidance to a range of $61 million to $67 million, inclusive of current tariff rates [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic and geopolitical challenges, citing a clean balance sheet and strong cash flow [6][15] - The company anticipates continued momentum into Q2 and robust plans for the remainder of 2025, expecting record revenue and strong profitability [15][25] Other Important Information - The company returned over $7 million in capital to shareholders during the quarter [5][17] - Inventory at quarter-end was $72.3 million, reflecting an increase due to accelerated purchases of core products [21] Q&A Session Summary Question: How will the company capitalize on movie-related events? - The company maintains strong relationships with major film creators and has evolved its product lines to appeal to a broader audience, including collectible items for teens and adults [32][34] Question: How will the new inventory management system improve responsiveness to trends? - The new system will enhance inventory visibility and allow for better management of stock levels, enabling the company to respond more effectively to trends [36][37] Question: How did the company’s operated stores perform compared to expectations? - The company reported positive performance across all metrics, with traffic up 3% and conversion rates improving, indicating successful execution of marketing strategies [44][45] Question: Who are the partners for operated stores and are there plans for more? - The company partners with well-known firms in various markets, ensuring they can deliver the Build A Bear experience effectively [48][49] Question: What is the impact of tariffs on the updated guidance? - The updated pretax income guidance reflects less than $10 million in tariff impacts, with ongoing efforts to mitigate costs through diversified sourcing [60][61]

Financial Performance & Growth - Build-A-Bear's total revenue reached $496 million in 2024, a 47% increase compared to 2019 [16] - Net retail sales amounted to $460 million in 2024, reflecting a 42% growth since 2019 [16] - Third-party revenue (Commercial + International Franchise) surged to $36 million in 2024, a 140% increase from 2019 [16] - EBITDA reached $81 million in 2024, a substantial 430% increase compared to 2019 [16] - Free Cash Flow (FCF) was $28 million in 2024, showing a 199% increase from 2019 [16] - The company's Return on Invested Capital (ROIC) was 33% in 2024 [16] Business Diversification & Expansion - Approximately 40% of sales are attributed to teens and adults [20] - Web Demand has grown by approximately 110% from 2019 to 2024 [20] - Build-A-Bear has expanded to 369 corporate stores and 235 third-party stores across multiple formats in 30 countries as of Q1 2025 [23] Store Performance - Discovery store model averages $1578K in store unit volume with a 4-Wall EBITDA of $535K and a 34% margin [55] - Concourse/SIS store model averages $615K in store unit volume with a 4-Wall EBITDA of $152K and a 25% margin [55] Systemwide Sales - Systemwide sales reached $5481 million in 2024 [94]

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].

Core Viewpoint - Build-A-Bear (BBW) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in previous quarters [1][6]. Earnings Performance - Build-A-Bear has consistently exceeded earnings estimates, with an average surprise of 4.45% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $1.59 per share, surpassing the Zacks Consensus Estimate of $1.52 per share by 4.61% [3]. - In the previous quarter, Build-A-Bear reported earnings of $0.73 per share against an expectation of $0.70 per share, resulting in a surprise of 4.29% [3]. Earnings Estimates and Predictions - Recent estimates for Build-A-Bear have been revised upwards, indicating a positive outlook for the company's earnings [6]. - The Zacks Earnings ESP for Build-A-Bear is currently +0.97%, suggesting that analysts are optimistic about the company's earnings prospects [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a high likelihood of another earnings beat [9]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Earnings ESP metric compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [8].