Build-A-Bear Workshop Reports Third Quarter Fiscal 2025 Results and Reaffirms Annual Guidance

Core Insights - Build-A-Bear Workshop reported record revenues for the third quarter and first nine months of fiscal year 2025, driven by strong store performance and double-digit growth in the Commercial segment [2][5][13] - The company reaffirmed its guidance for fiscal 2025, expecting mid-to-high-single-digit revenue growth [12][14] Financial Performance - Total revenues for Q3 reached $122.7 million, a 2.7% increase from $119.4 million in the previous year [5][6] - For the first nine months, total revenues were $375.3 million, up 8.5% from $346.0 million [5][13] - Pre-tax income for Q3 was $10.7 million, down from $13.1 million, impacted by approximately $4 million in tariffs [5][6] - Nine-month pre-tax income was $45.7 million, compared to $39.7 million in the prior year [5][13] - Diluted earnings per share (EPS) for Q3 was $0.62, a decrease of 15.1% from $0.73 [5][6] - Nine-month diluted EPS increased to $2.73 from $2.20, reflecting a 24.1% growth [5][13] Operational Highlights - The company opened over 50 net new units year-to-date, including entries into seven new countries [2][3] - As of the end of Q3, Build-A-Bear operated 651 locations globally, comprising 375 corporately-managed, 168 partner-operated, and 108 franchise locations [7][30] Cost and Expenses - The third quarter saw a pre-tax margin of 8.7%, down from 11.0% in the prior year, attributed to tariff impacts and increased SG&A expenses [6][25] - SG&A expenses rose due to higher store-level compensation and inflationary pressures [6][13] Balance Sheet and Capital Management - Cash and cash equivalents at the end of Q3 totaled $27.7 million, a decrease of 4.2% year-over-year [8][29] - Inventory increased by 17.7% to $83.3 million, primarily due to tariffs and product pull-forward strategies [9][29] - The company returned $26.1 million to shareholders through share repurchases and dividends in the first nine months [5][10] Future Outlook - The company expects to maintain its revenue and pre-tax income guidance for fiscal 2025, factoring in tariff impacts and inflationary challenges [12][14][19]