Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew nearly 3% to almost $123 million, while pre-tax income declined by $2 million to nearly $11 million, impacted by approximately $4 million in tariffs [5][22] - Year-to-date revenue increased over 8% to over $375 million, with pre-tax income rising by 15% to almost $46 million, also inclusive of about $5 million in tariff impacts [5][22] - Earnings per share (EPS) grew over 24% for the first three quarters of the fiscal year, reflecting strong shareholder returns totaling over $26 million through dividends and buybacks [6][25] Business Line Data and Key Metrics Changes - Direct-to-consumer sales showed solid performance in August and September but declined in October due to external factors, with e-commerce demand down 10.8% for the quarter [23][24] - Commercial revenue, primarily from wholesale sales, grew 4.2% for the quarter and 15.3% year-to-date, with expectations of over 20% growth for the year [24] Market Data and Key Metrics Changes - Domestic store traffic outperformed national benchmarks, although overall traffic saw a slight decline [23] - The company opened 24 net new experience locations, with 70% outside the U.S., bringing total locations to 651 across 33 countries [8][9] Company Strategy and Development Direction - The company aims to expand its experiential retail footprint, advance digital transformation, and leverage brand equity beyond workshops while returning capital to shareholders [7][14] - The introduction of Mini Beans collectibles has been successful, with nearly 3 million units sold and a 60% increase in sales during Q3 [16][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record revenue of over $500 million for fiscal 2025, despite ongoing tariff headwinds [3][27] - The company is focused on mitigating tariff impacts through cost management and strategic initiatives, including diversifying its market presence [35][37] Other Important Information - The company has maintained a strong balance sheet with cash and cash equivalents totaling $27.7 million and no borrowing under its revolving credit facility [25][26] - The company is committed to executing its strategic objectives while delivering consistent value to shareholders through disciplined capital allocation [28] Q&A Session Summary Question: Tariff impact and mitigation strategies - Management acknowledged approximately $10 million in tariff expenses for the year and discussed ongoing efforts to mitigate these costs through partnerships and selective price increases [34][36] Question: Diversification in pricing and customer demographics - Management highlighted the success of Mini Beans and higher-priced items, noting that diversification attracts different customer segments, including teens and adults [40][41] Question: Promotional activity in the quarter - Management stated that promotional activity was managed more stringently, resulting in lower discount rates while focusing on enhancing customer experience [46][47] Question: Trends in Mini Beans sales and new SKU introductions - Management expressed excitement about Mini Beans, noting strong sales and expansion into various retail environments, indicating a successful strategy for growth [48][49] Question: Impact of high-profile movie tie-ins on sales - Management discussed the unpredictability of sales related to movie tie-ins, emphasizing a broader assortment as a key driver for Black Friday success [56][58] Question: Expansion into multiple locations in large malls - Management confirmed that having multiple locations in major malls enhances leverage in lease negotiations and contributes to increased foot traffic [60][61] Question: Customer behavior during government shutdown - Management noted a slowdown in traffic during the government shutdown but reported a rebound in November, indicating resilience in customer spending [68][69] Question: Opportunities in wholesaling Mini Beans - Management identified wholesaling Mini Beans as a significant growth opportunity, with plans to expand into additional retail channels [71][72]

Core Insights - Build-A-Bear Workshop is launching a new Halloween collection for 2025, featuring popular items like the Posable Bat and Spooky Kitty, which have quickly become fan favorites [1][2] - The collection emphasizes nostalgia and trendy designs, appealing to a wide audience including children, families, collectors, and "kidults" [1][2] Product Highlights - The Posable Bat sold out within weeks, indicating strong demand for the new Halloween collection [2] - New characters introduced include Zombie Axolotl and Skelebara, which are designed to appeal across generations [2][3] - The collection features a variety of plush toys such as Pumpkin Glow Teddy Bear and Groovy Goblin, each with unique designs and themes [3] Marketing Strategy - Halloween is positioned as one of the most anticipated seasons for Build-A-Bear, showcasing the brand's ability to innovate and attract customers [2] - The company is leveraging online and local workshops to promote the new collection, enhancing customer engagement [2]