No Hugs For Build-A-Bear: Missed Q1 Earnings, Lower Sales Spark Premarket Plunge

Build-A-Bear Workshop, Inc. BBW shares are diving premarket after the company reported worse-than-expected first-quarter 2024 results.

Revenue totaled $114.7 million, marginally missing the analyst consensus of $120.6 million. Sales decreased 4.4% Y/Y. Consolidated e-commerce demand fell 11.3% Y/Y.

Quarterly commercial and international franchise revenues were a combined $6.9 million and declined 13.7% Y/Y.

EPS of $0.82 missed the Wall Street View of $1.03. 

The company added net new units across six global experience locations, comprised of five partner-operated locations and three franchise locations, and closed two corporately managed locations. 

As of quarter-end, Build-A-Bear had 531 global locations through a combination of its corporately managed, partner-operated, and international franchise models. 

Inventory at year-end was $64.0 million, reflecting a decline of $2.5 million, or 3.7%, compared to first quarter-end last year.

As of May 4, cash and cash equivalents totaled $38.2 million.

In the first quarter, the company repurchased shares worth $9.2 million and paid a $2.9 million quarterly cash dividend to shareholders.

Build-A-Bear Outlook

The St. Louis, Missouri-based company reaffirmed FY24 total revenue growth at a low-to-mid-single-digit percentage basis.

For FY24, the company continues to expect net new unit growth of at least 50 experience locations, through a combination of corporately-managed, partner-operated, and franchised business models.

Build-A-Bear reiterated outlook for pre-tax income growth at a mid-single-digit percentage basis in FY24.

Build-A-Bear recently launched a new brand campaign called “The Stuff You Love,” to commemorate more than a quarter-century of “creating and celebrating cherished memories worldwide,” CEO Sharon Price John said, citing a user-generated-content contest for consumers to share their own “special moments.”

Investors can gain exposure to stock via Barron’s 400 BFOR.

Price Action: BBW shares are down 17.19% to $26.50 premarket at the last check Thursday.

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