Build-A-Bear Workshop(BBW) - 2025 Q3 - Quarterly Results

Build-A-Bear Workshop Q3 2024 Earnings Release Financial Highlights and Executive Commentary The company reported record Q3 2024 results with double-digit growth in revenue and pre-tax income, driven by brand evolution and global expansion Q3 2024 Key Metrics | Metric | Q3 2024 | Change YoY | | :--- | :--- | :--- | | Total Revenues | $119.4 million | +11.0% | | Pre-tax Income | $13.1 million | +26.4% | | Diluted EPS | $0.73 | +37.7% | - The company raised its fiscal 2024 guidance for net new unit growth from 50 to at least 65 experience locations globally[3] - CEO Sharon Price John attributed the record performance to the business model's evolution and the brand's strength, highlighting the expansion of its international footprint to over 20 countries[3] - CFO Voin Todorovic noted that strong retail and third-party sales drove profitability, but web demand underperformed, and the company repurchased over 6% of its shares outstanding in the past year[4] Detailed Financial Performance The company achieved strong Q3 growth in revenue and profit, while year-to-date performance showed modest revenue growth and a slight decline in pre-tax income Third Quarter Fiscal 2024 Results Q3 2024 saw an 11% revenue increase to $119.4 million and a 26.4% rise in pre-tax income, driven by strong sales and margin expansion Q3 2024 Revenue Performance | Revenue Stream | Q3 2024 Value | % Change YoY | | :--- | :--- | :--- | | Total Revenues | $119.4 million | +11.0% | | Net Retail Sales | $109.5 million | +9.1% | | E-commerce Demand | N/A | +1.3% | | Commercial & Franchise | $9.9 million | +38.8% | Q3 2024 Profitability Metrics | Profitability Metric | Q3 2024 Value | % Change YoY | | :--- | :--- | :--- | | Pre-tax Income | $13.1 million | +26.4% | | Diluted EPS | $0.73 | +37.7% | | EBITDA | $16.7 million | +25.3% | Nine-Month Fiscal 2024 Results Year-to-date revenue grew 2.7% to $346.0 million, while pre-tax income slightly declined due to higher SG&A expenses Nine-Month 2024 Revenue Performance | Revenue Stream | Nine-Month 2024 Value | % Change YoY | | :--- | :--- | :--- | | Total Revenues | $346.0 million | +2.7% | | Net Retail Sales | $320.8 million | +1.5% | | E-commerce Demand | N/A | -11.8% | | Commercial & Franchise | $25.2 million | +20.5% | Nine-Month 2024 Profitability Metrics | Profitability Metric | Nine-Month 2024 Value | % Change YoY | | :--- | :--- | :--- | | Pre-tax Income | $39.7 million | -1.3% | | Diluted EPS | $2.20 | +4.8% | | EBITDA | $49.9 million | +1.5% | Operational and Balance Sheet Review The company expanded its global store count, maintained a strong debt-free balance sheet, and returned significant capital to shareholders Store Activity The company added 17 net new global locations in Q3, increasing its total store count to 565 Global Store Count (as of Q3 2024 End) | Store Type | Count at Q3 2024 End | | :--- | :--- | | Corporately-managed | 362 | | Partner-operated | 123 | | Franchise | 80 | | Total Global Locations | 565 | Balance Sheet and Cash Flow The company ended Q3 with a 16.8% year-over-year increase in cash to $29.0 million and no outstanding debt Key Balance Sheet Items | Balance Sheet Item | Value at Q3 2024 End | % Change YoY | | :--- | :--- | :--- | | Cash and cash equivalents | $29.0 million | +16.8% | | Inventory | $70.8 million | +9.8% | - The company finished the quarter with no borrowings under its revolving credit facility[10] - Capital expenditures totaled $3.9 million for the third quarter and $9.6 million for the first nine months of fiscal 2024[11] Return of Capital to Shareholders The company returned $31.3 million to shareholders in the first nine months and adopted a new $100 million share repurchase program Capital Return Summary | Capital Return Activity | First Nine Months 2024 | | :--- | :--- | | Share Repurchases | $23.0 million | | Quarterly Dividends | $8.3 million | | Total Capital Returned | $31.3 million | - A new $100.0 million stock repurchase program was adopted on September 11, 2024, with $97.0 million remaining available for future repurchases[14] 2024 Outlook The company updated its fiscal 2024 guidance, raising its net new store growth target and projecting revenue between $489 million and $495 million Fiscal Year 2024 Financial Guidance | FY 2024 Guidance | Updated Range | | :--- | :--- | | Total Revenue | $489M - $495M | | Pretax Income | $65M - $67M | Fiscal Year 2024 Operational Guidance | FY 2024 Other Expectations | Updated Guidance | | :--- | :--- | | Net New Unit Growth | At least 65 locations | | Capital Expenditures | $18M - $20M | | Depreciation & Amortization | $15M - $16M | | Tax Rate | Approx. 24.5% | Financial Statements and Reconciliations This section presents detailed unaudited financial statements, including income statements, balance sheets, and non-GAAP reconciliations Unaudited Condensed Consolidated Statements of Operations The Q3 income statement shows year-over-year growth in revenue and net income, while the nine-month period reflects revenue growth but slightly lower net income Q3 Statement of Operations ($ in thousands) | Q3 Statement of Operations | 13 Weeks Ended Nov 2, 2024 | 13 Weeks Ended Oct 28, 2023 | | :--- | :--- | :--- | | Total Revenues | $119,430k | $107,562k | | Gross Profit | $64,640k | $56,633k | | Net Income | $9,870k | $7,586k | Nine-Month Statement of Operations ($ in thousands) | Nine-Month Statement of Operations | 39 Weeks Ended Nov 2, 2024 | 39 Weeks Ended Oct 28, 2023 | | :--- | :--- | :--- | | Total Revenues | $345,958k | $336,837k | | Gross Profit | $187,374k | $180,172k | | Net Income | $30,107k | $30,532k | Unaudited Condensed Consolidated Balance Sheets The balance sheet as of November 2, 2024, reflects growth in total assets to $285.9 million and an increase in stockholders' equity Consolidated Balance Sheet Highlights ($ in thousands) | Balance Sheet Item | Nov 2, 2024 | Oct 28, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $28,955k | $24,800k | | Inventories, net | $70,774k | $64,466k | | Total Assets | $285,862k | $250,543k | | Total Stockholders' Equity | $128,573k | $111,648k | Unaudited Selected Financial and Store Data This section provides supplementary data showing an improved retail gross margin and detailing the growth in store locations Retail Gross Margin | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Retail Gross Margin % | 54.2% | 52.6% | Store Count by Type | Store Count (End of Period) | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Corporately-managed | 362 | 356 | | Franchised | 80 | 70 | | Third-party retail | 123 | 85 | Reconciliation of GAAP to Non-GAAP figures This section reconciles GAAP pre-tax income to non-GAAP EBITDA, showing year-over-year growth for both Q3 and the nine-month period Reconciliation of Income Before Taxes to EBITDA | EBITDA Reconciliation ($ in thousands) | Q3 2024 | Q3 2023 | Nine-Month 2024 | Nine-Month 2023 | | :--- | :--- | :--- | :--- | :--- | | Income before income taxes | $13,081 | $10,348 | $39,655 | $40,180 | | EBITDA | $16,660 | $13,298 | $49,915 | $49,196 |