Build-A-Bear’s (BBW) Proves Business Isn’t Full of Fluff, Shares Soar ~25% on Q2 Earnings

PRISM Consumer Products Index company Build-A-Bear Workshop (BBW) has posted a YTD return ~40% with a nice steady rise in share price since January. Today on its Q2 earnings announcement, shares rose close to its 20 year high, as shares climbed ~25%. The company posted Q2 EPS $0.64 vs FactSet $0.58 and revenues of $111.8M vs FactSet $109.4M. Looking forward at FY guidance the teddy maker reaffirmed revenue growth +low-to-mid-single-digit% y/y vs FactSet +1.3% and pre-tax income growth on a low-single-digit percentage basis. Additionally, they reaffirmed net new unit growth of at least 50 experience locations, through a combination of corporately-managed, partner-operated, and franchised business models.

Despite their transitory web demand challenges, the company grew total revenues, resulting in the most profitable Q2 in the company’s history. Due to Build-A-Bear’s strong cash flow generation, and management’s confidence in the company’s continued financial performance, YTD they have repurchased more than 5% of the shares outstanding at the start of FY24.

President and CEO Sharon Price John stated, “As the year progresses, we intend to stay focused on leveraging the power of the Build-A-Bear brand while driving profitable growth, and believe our omni-channel integration initiatives, combined with new global experience locations across our corporately-operated, partner-operated, and franchise store models, will continue to provide key opportunities to deliver on our stated objectives.”

Prior to this morning’s earnings announcement the company announced the celebration of Hello Kitty’s 50th Anniversary with limited-edition plush and grand opening plans for its first-ever Build-A-Bear x Hello Kitty® and Friends Workshop.