Buildabear Workshop, Inc. ((BBW)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Build-A-Bear Workshop, Inc. recently held its earnings call, revealing a strong performance with record-breaking revenue and earnings growth. The company showcased successful global expansion and effective digital transformation initiatives, although challenges from tariffs and potential economic uncertainties present notable headwinds.
Record Revenue and Earnings Growth
Build-A-Bear reported its best second quarter and first half results in its history. Q2 revenues grew by 11% to over $124 million, with pretax income increasing by 33% to over $15 million. Earnings per share (EPS) rose by 47% to 94¢. For the first half, revenues grew more than 11% to over $252 million, pretax income increased over 31%, and EPS rose approximately 45%.
Successful Global Expansion
The company expanded its global presence by opening 14 net new experience locations in Q2, with 86% of them being international. This expansion has extended Build-A-Bear’s reach to 32 countries. The company has increased its net new unit growth guidance for the year to at least 60 locations from the previous 50.
Strong E-commerce and Digital Transformation
E-commerce demand increased by 15.1%, driven by strong consumer response to key product launches. Digital transformation efforts, including social media initiatives, have successfully driven omnichannel sales and broadened the consumer base.
Innovative Product Launches
The introduction of the mini beans collection led to an 80% year-on-year revenue increase for the category. The company successfully launched new product types and marketing campaigns, such as the fruit stand assortment, contributing to its growth.
Increased Shareholder Returns
Build-A-Bear returned more than $13 million in capital to shareholders during the first half of the fiscal year through dividends and share repurchases, demonstrating its commitment to rewarding investors.
Tariff and Cost Challenges
The company faces significant headwinds, including almost $16 million in additional costs from tariffs and medical and labor expenses. The impact from tariffs is expected to be less than $11 million for fiscal 2025.
Potential Economic Uncertainty
Despite strong first half results, Build-A-Bear acknowledges the potential for economic uncertainty affecting future performance. This cautious outlook reflects the broader economic challenges that could impact the company’s growth.
Forward-Looking Guidance
In its guidance, Build-A-Bear projected mid-single to high-single-digit revenue growth and pretax income in the range of $62 to $70 million for fiscal 2025. Despite facing nearly $16 million in headwinds from tariffs and increased costs, the company remains optimistic about its growth prospects.
In summary, Build-A-Bear Workshop, Inc.’s earnings call highlighted a robust performance with record-breaking growth and strategic expansions. While the company faces challenges from tariffs and potential economic uncertainties, its forward-looking guidance remains optimistic, projecting continued growth in the coming fiscal year.