Build-A-Bear Workshop(US:BBW)2024-09-12 20:10Expansion and Retail Locations - Build-A-Bear Workshop opened a net of 23 retail experience locations in the first half of fiscal 2024, with expectations of at least 50 new locations by the end of the fiscal year[82]. - As of August 3, 2024, Build-A-Bear operates 361 corporately-managed stores, 107 partner-operated locations, and 80 international franchised stores[78]. - The company aims to expand its brand reach through innovative experiences, including Build-A-Bear vending machines[82]. - The company has made a concerted effort to shift to non-traditional locations, with over a third of total stores now in such settings[82]. - The company operates in three segments: Direct-to-Consumer, Commercial, and International franchising, sharing the same infrastructure[78]. - The number of third-party retail locations rose to 107, a significant increase from 76, with 15 new stores opened during the period[88]. Financial Performance - The company reported a 2.4% increase in consolidated revenues for the thirteen weeks ended August 3, 2024, primarily driven by a $2.3 million or 47% increase in commercial revenue[93]. - Net retail sales remained flat at $103.5 million for the thirteen weeks ended August 3, 2024, compared to the same period last year[93]. - Retail gross margin increased to 54.2% for the thirteen weeks ended August 3, 2024, compared to 53.5% for the same period last year[92]. - For the twenty-six weeks ended August 3, 2024, total revenues decreased by 1.2%, with a 3.9% decline in North America offset by a 19.7% increase in Europe[100]. - The company experienced a $2.6 million decrease in retail gross margin dollars for the twenty-six weeks ended August 3, 2024, totaling $114.3 million[104]. - EBITDA for the thirteen weeks ended August 3, 2024, increased by $1.5 million, or 10.7%, to $15.0 million from $13.5 million for the same period in 2023[108]. - EBITDA for the twenty-six weeks ended August 3, 2024, decreased by $2.6 million, or 7.4%, to $33.3 million from $35.9 million for the same period in 2023[109]. Shareholder Returns and Capital Management - The company returned $42 million to shareholders through special dividends and has initiated a quarterly dividend program, declaring $0.20 per share for the first two quarters of fiscal 2024[84]. - The company utilized $18.2 million in cash to repurchase 685,027 shares during the twenty-six weeks ended August 3, 2024[122]. - A new share repurchase program of up to $100 million was authorized, expected to be funded by cash on hand[123]. - Capital spending through the twenty-six weeks ended August 3, 2024, totaled $5.7 million, with an expected total of $18 to $20 million on capital expenditures in fiscal 2024[121]. Cash Flow and Inventory - Cash provided by operating activities decreased by $19.4 million for the twenty-six weeks ended August 3, 2024, compared to the same period in 2023[116]. - Total inventory at quarter end was $67.0 million, an increase of $0.6 million or 1% from the end of the fiscal 2023 second quarter[121]. - As of August 3, 2024, the company had a consolidated cash balance of $25.2 million, with 83% domiciled within the U.S.[115]. Economic and Operational Challenges - The company has maintained robust operating margins despite inflationary pressures and supply chain challenges, leading to improved cash flows[84]. - The company expects inflationary pressures to continue throughout fiscal 2024, particularly through wage increases[124]. - SG&A expenses were $49.2 million, or 44.0% of consolidated revenue, for the thirteen weeks ended August 3, 2024, slightly down from 44.2% a year earlier[98]. - Interest income increased to $614,000 for the twenty-six weeks ended August 3, 2024, compared to $243,000 for the same period last year[106]. - The effective tax rate for the twenty-six weeks ended August 3, 2024, was 24.0%, compared to 23.1% for the same period last year[107].