Exhibit 99.1
Build-A-Bear Workshop, Inc. Revises Second Quarter and Fiscal Year Outlook
ST. LOUIS--(BUSINESS WIRE)--June 14, 2007--Build-A-Bear Workshop,
Inc. (NYSE: BBW), an interactive, entertainment retailer of customized
stuffed animals, today said that based on its net sales results for
the ten week period ended June 9, 2007, it now expects earnings per
diluted share for the second quarter (the 13 weeks ending June 30,
2007) to be in the range of $0.07 to $0.10. The company had previously
said that it had expected to report second quarter earnings per
diluted share of $0.15 to $0.19. Build-A-Bear Workshop reported
earnings per diluted share of $0.15 for the second quarter 2006.
The company said that the revised earnings guidance is primarily a
result of North American comparable store sales in the negative 7% to
9% range. The prior guidance was based upon achieving comparable store
sales in the flat to negative low-single digit range.
"We were encouraged by our sales in April, the start of our second
quarter, however recent sales trends have been below our
expectations," said Maxine Clark, Build-A-Bear Workshop chairman and
chief executive bear. "Our licensed product introductions, which based
on our research were expected to have a balanced appeal to both girls
and boys, actually appealed most strongly to boys who are a
significant part of our customer base but not our core customer. While
we supported these products with an aggressive integrated marketing
campaign, inventory and strong in-store presentation, they ultimately
did not perform as planned. We believe we can manage our inventory
positions and continue to expect our strong store economic model to
deliver top line and net income growth this year."
The revised second quarter earnings outlook continues to take into
account higher costs compared to the 2006 second quarter reflecting
increased advertising expenses as a percentage of sales,
performance-based bonus compensation expense, and language translation
costs associated with store openings in Montreal and Puerto Rico in
the second half of the year. Second quarter earnings outlook also
continues to anticipate an operating loss from the United Kingdom
operations; while the anticipated impact of expensing stock-based
compensation is approximately $0.9 million pretax ($0.5 million net of
tax or $0.03 per diluted share). The second quarter guidance includes
a reduction in deferred revenue of approximately $0.3 million pretax
($0.2 million net of tax or $0.01 per diluted share) related to the
company's frequent shopper program.
Based upon the revised second quarter guidance, the company now
expects its full year earnings per diluted share to be in the range of
$1.55 to $1.65. This guidance includes a number of assumptions
including North American comparable store sales in the negative
mid-single digit range and the anticipated impact of expensing
stock-base compensation of approximately $3.1 million pretax ($2.0
million net of tax or $0.10 per diluted share). The company had
previously provided guidance in a range of $1.65 to $1.75. In fiscal
year 2006, the company reported fully diluted earnings per share of
$1.44.
Build-A-Bear Workshop plans to release financial results for the
second quarter on Thursday, July 26, 2007, before the opening of
trading on the New York Stock Exchange.
About Build-A-Bear Workshop, Inc.
Build-A-Bear Workshop, Inc. is the only global company that offers
an interactive make-your-own stuffed animal retail-entertainment
experience. Founded in St. Louis in 1997, the company currently
operates more than 275 stores in the United States, Canada, the United
Kingdom and Ireland. The addition of franchise stores in Europe, Asia
and Australia make Build-A-Bear Workshop the leader in interactive
retail. In November 2004, the company expanded the make-your-own
concept from stuffed animals to dolls with the opening of its first
friends 2B made(R) stores, where Guests can make their own doll
friends. Build-A-Bear Workshop (NYSE: BBW) posted total revenue of
$437 million in fiscal 2006. For more information, call 888.560.BEAR
(2327) or visit the company's award-winning Web sites at
www.buildabear.com and www.friends2bmade.com.
Forward-Looking Statements
This press release contains "forward-looking statements" (within
the meaning of the federal securities laws) which represent the
Build-A-Bear Workshop's expectations or beliefs with respect to future
events. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially
from those anticipated. Those factors include, without limitation: we
may be unable to generate interest in and demand for our interactive
retail experience, or to identify and respond to consumer preferences
in a timely fashion; our marketing initiatives may not be effective in
generating sufficient levels of brand awareness and guest traffic; we
may be unable to generate comparable store sales growth; we may be
unable to open new stores or may be unable to effectively manage our
growth; we may be unable to effectively manage our international
franchises or laws relating to those franchises may change; we may be
unable to realize some of the expected benefits of the acquisition of
Amsbra and Bear Factory including making these operations profitable;
customer traffic may decrease in the shopping malls where we are
located, on which we depend to attract guests to our stores; general
economic conditions may deteriorate, which could lead to
disproportionately reduced consumer demand for our products, which
represent relatively discretionary spending; our market share could be
adversely affected by a significant, or increased, number of
competitors; we may lose key personnel, be unable to hire qualified
additional personnel, or experience turnover of our management team;
the ability of our principal vendors to deliver merchandise may be
disrupted; the availability and costs of our products could be
adversely affected by risks associated with international
manufacturing and trade; high petroleum products prices could increase
our inventory transportation costs and adversely affect our
profitability; we may be unable to realize the anticipated benefits
from our company-owned distribution center; fluctuations in our
quarterly results of operations could cause the price of our common
stock to substantially decline; we may fail to renew, register or
otherwise protect our trademarks or other intellectual property; we
may have disputes with, or be sued by, third parties for infringement
or misappropriation of their proprietary rights; we may be unable to
renew or replace our store leases, or enter into leases for new stores
on favorable terms or in favorable locations, or may violate the terms
of our current leases; we may suffer negative publicity or be sued due
to violations of labor laws or unethical practices by manufacturers of
our merchandise; and we may improperly obtain or be unable to protect
information from our guests in violation of privacy or security laws
or expectations. These and other applicable risks, cautionary
statements and factors that could cause actual results to differ from
the Company's forward-looking statements are included in the Company's
filings with the SEC, including as described in the Company's annual
report on Form 10-K for the fiscal year ended December 30, 2006. The
Company undertakes no obligation to update or revise any forward-
looking statements to reflect subsequent events or circumstances even
if experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
CONTACT: Build-A-Bear Workshop, Inc.
Investors:
Molly Salky, 314-423-8000 ext. 5353
or
Media:
Jill Saunders, 314-423-8000 ext. 5293