Build-A-Bear Workshop Reports Mixed Financial Results, Expands Retail Footprint

Build-A-Bear Workshop Inc. reported its financial results for the thirteen and twenty-six weeks ended August 3, 2024, showing a mixed performance compared to the previous fiscal period. Total revenues for the thirteen weeks reached $111.8 million, a 2.4% increase from $109.2 million in the same period last year. This growth was primarily driven by a 47% increase in commercial revenue, which rose to $7.3 million from $5.0 million, attributed to higher sales volume from wholesale accounts. However, net retail sales remained flat at $103.5 million, unchanged from the prior year, reflecting a decline in web demand offset by new store sales.

For the twenty-six weeks, total revenues decreased by 1.2%, with net retail sales falling to $211.3 million from $215.6 million. The decline was influenced by a 3.9% decrease in North America, while European sales increased by 19.7%. The company reported net income of $20.2 million for the twenty-six weeks, down from $22.9 million in the previous year, with basic net income per share decreasing to $1.47 from $1.59.

Gross profit for the thirteen weeks was $60.6 million, yielding a gross margin of 54.2%, an improvement from 53.5% in the prior year. Operating expenses increased to $49.2 million, representing 44.0% of consolidated revenue, driven by higher wage rates and inflationary pressures. The effective tax rate for the quarter was 23.8%, slightly higher than the previous year’s 20.4%.

As of August 3, 2024, Build-A-Bear's total assets increased to $279.5 million from $258.4 million a year earlier, while total stockholders' equity rose to $125.8 million from $107.9 million. The company reported cash and cash equivalents of $25.2 million, a decrease from $32.6 million in the prior year, reflecting reduced cash from operating activities, which fell to $12.4 million from $31.8 million.

Strategically, Build-A-Bear continues to expand its retail footprint, having opened a net of 23 new locations in the first half of fiscal 2024, with plans for at least 50 new locations by year-end. The company is also transitioning to non-traditional retail settings, with over a third of its stores now located in family-centric tourist destinations. Additionally, a new stock repurchase program of up to $100 million was authorized in September 2024, following previous repurchase initiatives totaling $75 million.

Overall, while Build-A-Bear faced challenges in retail sales and profitability, it demonstrated resilience through strategic growth initiatives and a strong commercial segment performance.