Build-A-Bear’s Record Q1 2025 Earnings Call

Buildabear Workshop, Inc. ((BBW)) has held its Q1 earnings call. Read on for the main highlights of the call.

Build-A-Bear Workshop’s first-quarter earnings call for 2025 painted a largely positive picture, underscoring the company’s record-breaking revenue growth and successful global expansion. The sentiment was buoyed by strong retail and e-commerce performance, alongside a successful product launch. While there were some concerns about tariffs and operational cost increases, the overall outlook remains optimistic for the company’s future.

Record-Breaking Revenue and Growth

Build-A-Bear reported its best first-quarter results in history, with revenue climbing by 11.9% to over $128 million. The company’s pre-tax income saw a significant increase of 30.6%, reaching nearly $20 million, while earnings per share surged by 42.7% to $1.17. These figures highlight the company’s robust financial health and effective strategic initiatives.

Global Expansion Success

The company successfully expanded its international footprint to 30 countries, opening 15 net new experience locations in the first quarter, including a new corporate store in Dublin, Ireland. Looking ahead, Build-A-Bear plans to open at least 50 net new locations in 2025, further solidifying its global presence.

Strong Retail and E-commerce Performance

Retail sales increased by 10.9% to $119.6 million, with positive results across all metrics, including traffic, conversion, average unit retail, and units per transaction. E-commerce demand also saw a slight increase of 0.5%, demonstrating the company’s effective online strategy.

Successful Product Launches

The Mini Beans collection, launched in February 2024, experienced a 30% year-over-year expansion, with nearly 2 million units sold. This collection has been instrumental in increasing conversion rates and serves as a basket builder, enhancing overall sales performance.

Margin Expansion

Build-A-Bear’s gross margin improved to 56.8%, an increase of 260 basis points from the previous year. This improvement was driven by better merchandise margins and reduced discounts, showcasing the company’s effective cost management strategies.

Tariff Concerns

Despite the positive outlook, the company acknowledged potential impacts from tariffs, with updated pre-tax income guidance reflecting less than $10 million in tariff costs net of mitigation. These costs could affect financial results in the third quarter.

Increased Operational Costs

Operational costs have risen, with SG&A expenses increasing to $53.7 million, representing 41.7% of total revenues. This rise is attributed to higher store-level wage rates, healthcare costs, and general inflationary pressures.

Forward-Looking Guidance

In its forward-looking guidance, Build-A-Bear maintained its 2025 revenue expectations, adjusting its pre-tax income guidance to a range of $61 million to $67 million, considering current tariff impacts. The company remains focused on its strong brand strategy, effective inventory management, and global expansion as key drivers of its continued positive performance.

In summary, Build-A-Bear Workshop’s first-quarter earnings call for 2025 highlighted a period of significant growth and expansion. With record-breaking revenue and strong performance across various sectors, the company remains optimistic about its future, despite challenges such as tariffs and rising operational costs. The strategic initiatives in place, including global expansion and product innovation, are expected to continue driving the company’s success.