
Build-A-Bear Workshop Reports Record-Breaking Q3 Fiscal 2024 Results
Build-A-Bear Workshop, Inc. (NYSE: BBW) announced its financial results for the third quarter of fiscal 2024, which ended on November 2, 2024. With the mantra “add a little more heart to life,” the company achieved its best-ever third-quarter performance, continuing its streak of growth and profitability.
Highlights of Q3 Fiscal 2024
- Revenues: Total revenues rose to $119.4 million, an increase of 11.0% year over year.
- Pre-Tax Income: Pre-tax income reached $13.1 million, up 26.4%.
- Earnings Per Share (EPS): Diluted EPS grew by 37.7% to $0.73.
- Unit Growth: The company updated its fiscal 2024 guidance to reflect at least 65 new experience locations globally, up from its previous target of 50.
- Shareholder Returns: Through the first nine months of fiscal 2024, Build-A-Bear returned $31.3 million to shareholders via share repurchases and quarterly dividends.
Sharon Price John, President and CEO, remarked, “Our best-ever third-quarter performance brings us closer to achieving a fourth consecutive year of record revenues. This success underscores the power of the Build-A-Bear brand and our evolving business model. Expanding our global retail presence remains a priority, and in this quarter alone, we entered six new international markets, broadening our footprint to over 20 countries.”
Chief Financial Officer Voin Todorovic added, “Our strong retail and third-party sales drove the most profitable third quarter in company history, although e-commerce demand remains below expectations. With consistent cash flow generation and confidence in our strategy, we repurchased more than 6% of our outstanding shares over the past year.”
Third Quarter Fiscal 2024 Results
For the 13 weeks ending November 2, 2024, compared to the same period in 2023:
- Total Revenues: Increased 11.0% to $119.4 million.
- Net Retail Sales: Rose by 9.1% to $109.5 million.
- E-Commerce Demand: Saw a slight increase of 1.3%.
- Commercial and Franchise Revenues: Grew by 38.8% to $9.9 million.
- Gross Margin: Improved by 140 basis points, driven by stronger retail and commercial performance.
- EBITDA: Increased 25.3% to $16.7 million, representing 14.0% of total revenues.
Nine-Month Fiscal 2024 Results
For the 39 weeks ending November 2, 2024, compared to the same period in 2023:
- Total Revenues: Grew by 2.7% to $346.0 million.
- Net Retail Sales: Increased by 1.5% to $320.8 million.
- E-Commerce Demand: Declined by 11.8%.
- Commercial and Franchise Revenues: Expanded by 20.5% to $25.2 million.
- Pre-Tax Income: Decreased slightly by 1.3% to $39.7 million, impacted by higher SG&A expenses.
- Diluted EPS: Rose by 4.8% to $2.20.
- EBITDA: Increased by 1.5% to $49.9 million, representing 14.4% of total revenues.
Global Expansion and Store Activity
Build-A-Bear added 17 new experience locations during the quarter, including one corporately-managed store and 16 partner-operated locations. As of the end of Q3, the company had 565 global locations, comprised of:
- 362 corporately-managed stores
- 123 partner-operated stores
- 80 franchise stores
Financial Position
- Cash and Cash Equivalents: Increased by 16.8% to $29.0 million.
- Inventory: Grew by 9.8% to $70.8 million, reflecting strategic early purchases for 2025 core products.
- Capital Expenditures: Reached $3.9 million for Q3 and $9.6 million for the first nine months of fiscal 2024.
- No Borrowings: The company ended the quarter with no debt under its revolving credit facility.
Shareholder Returns
During Q3, Build-A-Bear used $4.8 million to repurchase 147,917 shares of its common stock and paid $2.7 million in quarterly dividends. For the first nine months, the company allocated $23.0 million to repurchase 832,944 shares and paid $8.3 million in dividends. As of December 4, 2024, $97.0 million remains under the company’s $100.0 million stock repurchase program authorized in September 2024.
Fiscal 2024 Outlook
Build-A-Bear updated its fiscal 2024 guidance:
- Total Revenue: Expected to range from $489 million to $495 million, representing low single-digit growth.
- Pre-Tax Income: Projected between $65 million and $67 million, aligning with prior-year levels at the midpoint.
- New Locations: At least 65 new experience locations globally.
- Capital Expenditures: Estimated at $18 million to $20 million.
- Tax Rate: Approximately 24.5%, excluding discrete items.
This guidance factors in inflationary pressures, increased freight costs, and stable macroeconomic conditions.
Non-GAAP Measures
The company reported certain non-GAAP financial metrics to provide a clearer picture of its underlying performance. These metrics, while complementary to GAAP results, should be viewed as supplemental and not superior to standard GAAP reporting.
Webcast and Conference Call Information
Build-A-Bear Workshop hosted a webcast and conference call at 9:00 AM ET on December 9, 2024, to discuss its financial results. The event was accessible through the company’s Investor Relations website at Build-A-Bear Investor Relations.
The company’s results reflect continued momentum, strategic execution, and a steadfast commitment to delivering shareholder value.