Build-A-Bear Workshop Inc.

12/04/2025 | Press release | Distributed by Public on 12/04/2025 16:24

Amendment to Current Report (Form 8-K/A)

BUILD-A-BEAR WORKSHOP REPORTS THIRD QUARTER FISCAL 2025 RESULTS AND REAFFIRMS ANNUAL GUIDANCE

ST. LOUIS, MO (December 4, 2025) - Build-A-Bear Workshop, Inc. (NYSE: BBW) today announced results for the third quarter of fiscal year 2025 ended November 1, 2025.

●

Total revenues were a third-quarter record $122.7 million, compared to $119.4 million, and for the first nine months, total revenues were also a record $375.3 million, compared to $346.0 million

●

Pre-tax income for the third quarter was $10.7 million, compared to $13.1 million, with an approximate $4 million tariff and related cost impact, and for the first nine months, pre-tax income was $45.7 million, compared to $39.7 million, with an approximate $5 million tariff and related cost impact

●

Third-quarter diluted earnings per share of $0.62, compared with $0.73, and nine-month diluted earnings per share of $2.73, compared with $2.20

●

Through the first nine months of fiscal 2025, the Company returned $26.1 million to shareholders through share repurchases and quarterly dividends

●

The Company reaffirms its guidance for fiscal 2025

"We are pleased to report record third-quarter and first-nine-months revenue, driven by continued strong store performance in our Direct-to-Consumer segment, and double-digit revenue growth for our Commercial segment. These achievements were further reinforced by opening over 50 net new units on a year-to-date basis, inclusive of our entry into seven additional countries. Based on this, and our continued momentum, we are reaffirming guidance for the year," commented Sharon Price John, President and Chief Executive Officer of Build-A-Bear Workshop. "Looking ahead, we remain focused on advancing our long-term strategic initiatives, particularly the global expansion of our partner-operated model, while continuing to navigate a dynamic economic environment," concluded Ms. John.

Voin Todorovic, Chief Financial Officer of Build-A-Bear Workshop, added, "The Company's most profitable first nine months in our history underscore the durability of our evolved and diversified business model as well as the ability to execute our strategic plan. While the Company preemptively mitigated significant tariff impacts during the first half of the year, the third quarter marked the first meaningful expenses from tariffs and related costs. We expect this elevated level of impact to continue through the fourth quarter and into the next fiscal year. Nevertheless, we remain confident in our guidance, which accounts for tariff impacts and our focus on disciplined expense management."

Third Quarter Fiscal 2025 Results

(13 weeks ended November 1, 2025, compared to the 13 weeks ended November 2, 2024)

●

Total revenues were $122.7 million and increased 2.7%.

o

Net retail sales were $112.3 million and increased 2.5%.

o

Consolidated e-commerce demand (online orders fulfilled from either the Company's warehouses or its stores) decreased 10.8%.

o

Commercial and International franchising segment revenues were a combined $10.4 million and increased 4.9%.

●

Pre-tax income was $10.7 million, or 8.7% of total revenues, compared to $13.1 million, or 11.0% of total revenues, in the prior-year quarter. The $2.4 million decline reflects approximately $4 million in tariffs and related costs. The 230-basis-point reduction in pre-tax margin reflects a 40-basis-point decrease in gross margin, driven by a decline in Retail and Commercial gross margins, primarily due to the impact of tariffs, and a 180-basis-point increase in selling, general and administration ("SG&A") expense, from higher store-level compensation, timing of marketing expenses, and general inflationary pressures.

●

Diluted earnings per share ("EPS") of $0.62, decreased by 15.1%, reflecting lower pre-tax income, partially offset by a lower income tax rate, and a reduction in share count.

●

Earnings before interest, taxes, depreciation and amortization ("EBITDA") of $14.2 million, decreased by 14.6%, and represented 11.6% of total revenues.

Nine-Month Fiscal 2025 Results

(39 weeks ended November 1, 2025, compared to the 39 weeks ended November 2, 2024)

●

Total revenues were $375.3 million and increased 8.5%.

o

Net retail sales were $346.5 million and increased 8.0%.

o

Consolidated e-commerce demand (online orders fulfilled from either the Company's warehouses or its stores) decreased 0.7%.

o

Commercial and International franchising segment revenues were a combined $28.8 million and increased 14.7%.

●

Pre-tax income was $45.7 million, or 12.2% of total revenues, compared to $39.7 million, or 11.5% of total revenues, in the prior year. The $6.0 million profit expansion includes approximately $5 million in tariffs and related costs. The 70-basis-point improvement in pre-tax margin reflects a 180-basis-point improvement in total gross margin driven by expansion in Retail gross margin from reduced promotional activity, leverage of fixed costs, and selective price increases, partially offset by the impact of tariffs, and a 110-basis-point increase in SG&A expense, due to higher store-level compensation, corporate costs, and general inflationary pressures.

●

Diluted EPS of $2.73, increased by 24.1%, reflecting higher pre-tax income, a lower income tax rate, and a reduction in share count.

●

EBITDA of $56.1 million, increased by 12.5%, and represented 15.0% of total revenues.

Store Activity

For the quarter, the Company had net new unit growth of 24 global experience locations, comprised of seven corporately-managed, 11 partner-operated, and six franchise locations. At the end of the third quarter, Build-A-Bear had 651 locations across its corporately-managed, partner-operated, and franchise business models. Globally, this reflects 375 corporately-managed, 168 partner-operated, and 108 franchise locations.

Balance Sheet

At third-quarter end, cash and cash equivalents totaled $27.7 million, a decrease of $1.2 million, or 4.2%, compared to third-quarter end last year. The Company finished the quarter with no borrowings under its revolving credit facility.

For the third quarter and first nine months of fiscal 2025, capital expenditures totaled $6.5 million and $12.9 million, respectively.

Inventory at quarter-end totaled $83.3 million, an increase of $12.5 million, or 17.7%, compared to third-quarter end last year, primarily driven by the added cost of tariffs and the pull-forward of products aligned with our tariff-mitigation plans. The Company remains comfortable with the level and composition of its inventory.

Return of Capital to Shareholders

For the third quarter, the Company utilized $10.1 million in cash to repurchase 168,456 shares of its common stock and paid a quarterly cash dividend of $2.9 million to shareholders. For the first nine months of fiscal 2025, the Company utilized $17.4 million in cash to repurchase 336,041 shares of its common stock and paid $8.7 million in quarterly cash dividends to shareholders.

Since the end of the third quarter through December 3, the Company has utilized $2.1 million in cash to repurchase an additional 41,551 shares of its common stock. The Company has $69.7 million remaining under the board-authorized $100.0 million stock repurchase program adopted on September 11, 2024.

2025 Outlook

The Company reaffirms its 2025 revenue, pre-tax income, and net-new-unit guidance.

Specifically, the Company continues to expect:

●

Total revenues to grow on a mid-to-high-single-digit percentage basis

●

Pre-tax income in the range of $62 million to $70 million, reflecting approximately $11 million of tariffs and related costs during the seven months from July through the end of the fiscal year

●

Net-new-unit growth of at least 60 experience locations through a combination of corporately-managed, partner-operated, and franchise business models

In addition, for fiscal 2025, the Company continues to expect:

●

Capital expenditures in the range of $20 million to $25 million

●

Depreciation and amortization to approximate $16 million

●

The income tax rate to be in the range of 22% to 24%, excluding discrete items

The Company's guidance considers various factors, including tariffs, medical and labor costs, changes in freight expense, and ongoing inflationary challenges. Additionally, the Company's outlook does not contemplate any further material changes in tariffs, the macroeconomic or geopolitical environment, or relevant foreign currency exchange rates.

Note Regarding Non-GAAP Financial Measures

In this press release, the Company's financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic income adjusted to exclude certain costs, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company's business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company's core operating results. These measures should not be considered a substitute for or superior to GAAP results. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measure later in this document.

Webcast and Conference Call Information

Today, at 9:00 AM ET, Build-A-Bear Workshop will host a conference call with investors and financial analysts to discuss its financial results. The call will be webcast on Build-A-Bear's Investor Relations website, https://ir.buildabear.com.

The dial-in number for the live conference call is (877) 407-3982 or (201) 493-6780 for international callers. The access code is Build-A-Bear. The call is expected to conclude by 10 AM ET.

A replay of the conference call webcast will be available on the investor relations website for one year. A telephone replay will be available from approximately 1:00 p.m. ET on Thursday, December 4, 2025, until 11:59 p.m. ET on Thursday, December 11, 2025. The telephone replay is available by calling (412) 317-6671 (toll/international) or (844) 512-2921 (toll-free). The access code is 13756755.

About Build-A-Bear

Since its beginning in 1997, Build-A-Bear has evolved to become a beloved multi-generational brand focused on its mission to "add a little more heart to life," where guests of all ages make their own "furry friends" in celebration and commemoration of life moments. Guests create their own stuffed animals by participating in the stuffing, dressing, accessorizing, and naming of their own teddy bears and other plush toys based on the Company's own intellectual property and in conjunction with a variety of best-in-class licenses. The hands-on and interactive nature of our more than 600 company-owned, partner-operated and franchise experience locations around the world, combined with Build-A-Bear's pop-culture appeal, often fosters a lasting and emotional brand connection with consumers and has enabled the Company to expand beyond its retail stores to include e-commerce sales on www.buildabear.com and non-plush branded consumer categories via out-bound licensing agreements with leading manufacturers, as well as the creation of engaging content via Build-A-Bear Entertainment (a subsidiary of Build-A-Bear Workshop, Inc.). The brand's newest communications campaign, "The Stuff You Love," commemorates more than a quarter-century of creating cherished memories worldwide. Build-A-Bear Workshop, Inc. (NYSE: BBW) posted consolidated total revenues of $496.4 million for fiscal 2024. For more information, visit the Investor Relations section of buildabear.com.

Build-A-Bear Workshop Inc. published this content on December 04, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on December 04, 2025 at 22:24 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]