BBW - Earnings call transcript Q1 2022 | Build-A-Bear Workshop, Inc.

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Operator

Greetings, and welcome to the Build-A-Bear Workshop’s First Quarter 2022 Earnings Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. ICR. of Malkin Allison you. Thank ahead. go Please

Allison Malkin

Good morning. are CFO. With today joining you Price John, for Sharon Todorovic, us. CEO; me Thank and Voin

For the performance begin first today's our key we will discussion Voin on guidance call, our will in After, of detail. review have with made quarter and update and the XXXX priorities. the financials progress fiscal Sharon more

website. now, those a obligation like no would undertake Sharon. Risk and Factors differ replay forward-looking number to annual currently statements note, the will This you question call Feel then take on you media, due your our live available available both to X should call will may be follow-up. results this in that A of I forth Form on the Actual open to with The after and the of revise ask call one including to those of to the of on our portion today webcast site. the subject being Please this to further We risks everyone And we Internet. XX-K. is have to call section who limit statements. will free get inherently and that questions report recorded and call We later contact factors, the via earnings is are broadcast I remind We your during us if can the materially forward-looking the set from call uncertainties. could everyone’s today release conference way Relations IR one corporate to anticipated questions. in our on questions. over the to any Members questions, questions. Investor requeue call. hour turn company's be your

Sharon John

to I and will for today's Allison, of believe execution diversified first We foundation and that which pillars. quarter, disciplined that has and the financial thanks the this of our our on us by growth our we accomplishments our and and expect and further plan provide advanced us business the start year updates highlighting models beyond. fiscal will formats, call you, strategic has morning. joining build a then everyone allowed fuel hello, to in to for I some our Thank capabilities

an outstanding Following fiscal XXXX, of pleased positive the XXXX trend. quarter were performance continued our in report to we first that

the company's and in Our and Total results over for revenues of business, direct-to-consumer, million, both and of growth financial both franchising business revenues the $XXX in a segments, retail as sales total as well history, America prior with an North net and digital period. commercial our including in include quarter increase were reported highest Europe, year's demand. XX% first all

The and the Europe. time. growth of As our North during restrictions e-commerce Europe had the for given in particularly in due stores both in we America for and that in dominant closed impressive noted, in mandated government period majority to of first that XXXX, quarter the channel the were that e-commerce is was sales fact increases the

for over million representing the fiscal years. demand last $XX entire increase last the breaking over transformation the digital we pre-tax our trend importantly, record quarter greater consolidated quarter the XX% high. is e-commerce first five our XXXX our dimension, all-time And year's of with sales of digital over year, have previous added we for XXXX continued profitability our consecutive in For than income an made fifth progress demonstrating of

volatile compared revenues successfully positive to growth that environment. pleased executing with our press we see As our multi-faceted, noted growth a multi-year second and in a are of that release, total year's and projected We we is continued quarter in current the guidance results. this are largely been providing strategic momentum morning's highly plan result profit believe prior sustained annual have to profitable while the navigating for

include the focus entity disciplined in that the dynamic key played includes have into a challenges, evolution ranging and role omni-channel profitable advancing comprehensive been and of experiential focused remain digital who stated and digitally to intended growth to retail highly a optimizing to during transformation position have consumers, that pillars, our additional and prolonged results, a pandemic-related experience a drive agility consistent while diversified capabilities retail strategy and concept in as we drive expanded delivering increasingly capabilities, key more particularly across our driven broad Our our on our growth. friendly has relevant continuing remains expanding that to our and company, have across evolve family further strong the vertical initiatives lifted. to invest engaging, restrictions inefficient omnichannel place today's seeking, company in financial With activities solid a footprint shopping leveraging our been which

repeat net the both leveraging designed with we leveraging digital This across confidence initiatives we drive First, our and by believe put ongoing performance. we in up as it transformation compared XX% have a media that and retail program digital a the impacting purchases that to we year channels. financial adding paid our to brick-and-mortar sales and over variety in efficient is from range propelling of content Impressions awareness, is prior are positively platforms our higher across media this to digital to contributing relates engagement, capabilities results that believe the dynamic we are place. our of includes trial, and organization, have and marketing

footfall the advancing marketing digital trends in believe which to commerce fueled outpaced sales to digital net our levels. quarter, compared also national significant activities efficient also setting while We to year's traffic record primary stores We and are driving our retail and and prior increase website. our to a our store saw

Twitter marketing Instagram, and segments. Facebook, diverse With a of expanded platforms, across Our have delivering digital allowed followers to and consumer reach to millions TikTok. tens millions develop content of multi-dimensional of capabilities us audiences and dynamic reaching campaigns of number views including designed

online the goal website with are year, a process of We the updating reimagined e-commerce additional experience driving of our in with business. guest later this

We across affinity the interfaces all order modernize checkout. and conversion SEO optimize and improve including to organic the XD of expect gifting, through the practices. leading Workshop, Builder Bear improve to areas to improve as site, efficiency traffic well as In site,

have process. elevate contacts. and one drive personalized to million We to our And Deloitte Digital guide and with our and agencies messages to technology experience data Deloitte party our campaigns opted-in analytical this digital growth to the is innovation. and and engaged further enhance strategy, first targeted capabilities (ph) XX leading refine of we expect Digital specializing merging to digital

as step in we implementation to next before our track these year. efforts, on loyalty sales the force launch multi-faceted part of As remain module of plan the the end new the

Moving experiences further our to expanded omni-channel purchase footprint retail our adding engaging second capabilities while pillar, occasions. and and our we leveraged evolving

As believe strategically the previously two contribution XXXX. years. XX% XX margin of to there we average locations we over to profitable is previously our North American We shared grow an to stated, three had store in that open over planned next opportunity that XX base to

have model. timeline managed in we expect retail and elected that a corporately to of third-party add and sites However, now accelerate to combination our Through fiscal approximately XXXX. XX

to optionality select locations do. has Our exit allowed we continue to strategically high to plan which of us level lease

re-launched retail sales However, as more had our program, our the year retail our as popular to represented accelerated net total approximately fiscal to with which compared party plans opening historical locations us finish of we X% previously Separately, XXXX. in-store position in recently announced, stores.

seen We comparable since relaunch, XXXX. average the have transaction of XX% held and from the over last steady up party, have demand period with XXXX over party the

are sales percentage below a the drive remains to party at back plans further have we of that business parties as awareness demand. While historic to norm, Build-A-Bear our raise

continue This or as Build-A-Bear expand We Teddy Machine. to brand vending our innovate also includes machines, also known Automatic experiences to ATMs, reach.

in machines America. Hudson with approximately travel more XX have of half by to relationship than end them a year our in retail expect throughout North Group, with airports the We of through this leader

In also ATMs, than plans expand to to future. to model premade Hudson's with offer that in Build-A-Bear in XX expectations stores a continue products more addition travel the wholesale the through other to

profitability. growth while generating our sustained to Third, remain solid position financial intent on invest we leveraging in

As facing of sales. designed spur we the consumer to to with our drive with and XXth interest the plan anniversary, the balance activities we celebration of to a guest of look forward year, continue variety

of the theme with Dragon,” movie select conjunction our part past special products. a of that's including plush inspired have developed entertainment collection historically partners, been franchise Furry delivered Your popular by been XXth are in first the have licensed to Friends best-selling celebration popular that which has one Train Other characters. We from a collectible options Toothless “How

We of by the inspired the also Star launched addition Darth a Saga. Vader evergreen Bear War recently silver

aspects events, memories for of addition, the through marketing our themed millions brand of Build-A-Bear we of have engagement. to leveraging XXth Disney have iconic the In by nostalgic content a campaign user special guests engagement the celebration. generated encouraged part World anniversary In a consumer commemorative an as also that on introduced build recently this collectible leans new we year encourage of Walt and gift bundle, special

to that We the are beloved trip for to and an collectable experience this to reveal gift collectible during planning bundle a travel part upcoming offering families, -- anniversary. theme

to We also and through are teaming drive licensing create partners our affinity popular sales collectible Furry growing buzz for in segment. up Friends with other

collections. from Love and and Harry supporting We sensation offering to Hello favorites, update World expect release perennial like Pokemon YouTube product Ryan's to our and Kitty, Diana Potter

website products Bear like We from programs items Friends. offerings Cave, will popular (ph) and The to including updated of also be adding Dark select selection our Build-A-Bear After and the pulp Office

tie that and in Jurassic anticipated to Boots the we number have merchandise of and addition, a will in Rings with including Puss later upcoming the In World, Lord in plan films year, Elvis highly of X.

Love the and the Doctor offer also and as Thor: products light will We as Strange Pixar's Disney well year Madness Thunder. anticipated of highly Multiverse Studios in and inspired movies Marvel by

for a that suppliers a to offer in in for like been list lastly, offers to from We drive want are to company personalized nearly and continue a by thank Statista. once America's this commitment work business quarter. on achieve with our strategic our has would I that published to again at Newsweek a the this and retail relevant recently best toy. with Build-A-Bear sustained as special other demand results. XX-year-old And I for to was our recognized anniversary founded partners retailers and that proud In a wanted year classic support as share experience us closing, And that deliver have of to record-breaking company XXXX also we their successful one to everyone expansion. appreciation kicked-off

shared and and into distinct continued the diversified including to increasing offerings our achieve expanded leveraging evolved entity of our anticipated of have guidance this iconic by to this with a omnichannel we With company shareholder combination, is in longer-term achieve the growth objectives the our broader positioned value. well morning, annual our We driven believe product diversified consumer brand. segment digital power the

like to I over turn for financial more detail year. including metrics, Now to the our to would providing fiscal call on discuss outlook Voin the

Voin Todorovic

good Sharon, morning, everyone. Thanks, and

strong We believe record Combined, demonstrates today and first ongoing are to another leverage record EBITDA. of revenue, for pleased strategy. the quarter in drove We share quarter first speak successful you income execution to by breaking highlighted results solid SG&A. gross with of margin, and another pretax quarter growth this our our

organization Some unique feel highlights a worldwide channels, experience advantages revenue include capitalized differentiated across rising include We the revenues and quarter growth and broad-based transactions, that operate. and geographies a on the after geographies online we chain physical our across a with headwinds. significant loyalty of stores of of and the and with sells our that that in customers, offering reflecting robust enabled minimal mitigate then leverages discounts, program and navigate agile our sought efficient marketing drive to us portion to inflationary an the supply disruption product traffic that consistently

for results, the consistent year. outlook our sheet strong Given and balance positive

that $XX authorized continue program market shareholders are November We our under share to Board, by repurchase the shares yesterday, approximately our million $XX.X stock we common closed value in as our to utilizing XXX,XXX XX, XXXX. pleased to to of return of million

ahead uncertain. in well and As to with guidance, environment we and revenue, in remain that positioned EBITDA pre-tax discuss the the we That to trends believe further recognize I and XXXX experience line we macro sales in XXXX, begin fiscal income deliver quarter, set shortly. said, continuing of the second we which detail records we positive remains will are today's

profit XXXX. basis, retail total to results. Moving compared that X.X% are about Total to when margin million, strategic price open a factoring points quarter, digital driven geographies reflecting we was in compared significant for was reduction and being by now one-third first margin increase year. record-setting cost European through our by leverage increases saw and our first XXXX price growth of price merchandise segments, was basis contracted XX.X% fiscal XX.X% decline Overall over and last this noteworthy occupancy fiscal broad-based and The demand promotional distribution have a fiscal XXX majority the mostly The driven increase $XX.X basis Revenue merchandise full activity. result in the year freight inflation gross pressures quarter of quarter. inflationary XXX%. lower up points both was offset margin and the million of compared by margin XX.X% increase in related XXXX channels, fiscal for a digital, increases, margin, across shown to year's by of quarter locations higher was mitigated first first costs, $XXX.X of XXX Web and growth points sales. Demand Gross quarter were partially approximately of of to On closed first from business and quarter in two-year profit cost a XXXX. last in product first was basis XX% revenues to gross the to we significant review compared XX quarter versus revenue experienced. in in

in a store an by of our of revenues. increased the in one given full XXXX, reopening total $X.X as was our all improvement expected second the which expenses, first quarter half as $XX.X cost of this year guidance incremental the SG&A reflected substantially of transportation basis half We fiscal fiscal was of see some percentage in salary to XXX up the European points year, of expect of million, from million base. is SG&A relief driven About

of a The quarter quarter million. in order exceeding last $XX.X first level million Build-A-Bear's income sales. from pretax $XX.X of the first pretax income in XXXX $XX.X In record first in was of addition, impacted in increase pretax by delivered $XX.X of million, EBITDA XX-year quarter. million or favorably government the SG&A was XX.X% setting fiscal history, year's approximately And the for handily quarter XXXX an $X highest XX.X% first We subsidies. income million

drive prior cash year. of ended to quarter end of end at the stock, the $XX.X and cash cash of quarter quarter the at to $XX.X We first The sheet. balance share with position to reflects reduced million common Turning the million, Inventory support first forward of million special an $XX.X compared the repurchases compared the of year equivalents first the dividend last initiatives inclusive quarter. intended a further the $XX.X payment was working growth, to in strategic higher increase end of in quarter investment pull the million to of receipts. end at capital year's inventory versus of last

and noted, of I business chain collection for our support we momentum the mitigate accelerated quantities products resulting core as to in placements, evergreen part timing As supply increased our order to challenges. merchandise just proactively strategically ongoing of and efforts our and

level product higher unit reflects and the remain balance to the transportation costs. higher expected composition addition our comfortable with inventory. In levels, inventory and both of We

million year, receipt the operator this latter changes in result compared $XX to As would over our return of closing, as level. below the more in to million, quarter exchange strong and to range million in back a anticipated in part $XX for inventory ongoing fiscal start hard inflationary able mind XX%. million assumes normalized range macro-economic to will no on rate expect our we takes XX% $XXX well more a or of the XXXX. had of flow relevant prior borrowings continuing no environment plans range Please further introducing compared stabilized XXXX. in account million, $XX to the deliver timely reporting EBITDA concludes ending I'm Also forward in XXXX performance million a Operator? of we million. which and $XX accomplishments outlook, momentum This Income on of XXXX. which depreciation range fiscal At ship positive investments as we material chain on work supply our environment on approximately we $XX we into million and of turn credit the fiscal amortization expenditures XXXX be $XXX further prepared to mitigate year on Pre-tax foreign the in total income currency the in to trends to facility. keep rates. we $XX end, our to proud compared year's our success in our anticipate guidance and are our XXXX. and of the outlook as and in on that and to Based $XX fiscal our In first to impact strategic guidance, to in in profitability includes the to million, to and pressures, a revenues the fiscal growth the the Capital to range as the chain hills call product team look of $XX off the of as now $XX.X record-setting in million to (ph) million our The tax million, operations $XXX.X quarter of supply margins. receive ability is including successful Fiscal notable, of to for in strong initiatives. and another remarks our questions. a basis. quarter

Operator

is [Operator Please questions. coming is Instructions] Eric go question open Thank for Research. now The first Beder from The ahead. you. of floor SCC

Eric Beder

Good morning. Congratulations a the solid start to on year.

Voin Todorovic

Thanks, Eric.

Eric Beder

the so have driven of -- seeing as year, the products XXth you ago. these and who look people time the long anniversary you rediscovered by of want Are demand rollout you part Build-A-Bear that being had of now this When parties. kind

people plan you of on the further comes that. For driving how kind see run? on of what's and to the initial going parties kind even those do them capturing now and And doing after in

Sharon John

Yeah.

still all lot that's an on is in and that's actually that's of concepts, based a us. our long anniversary been in middle later just anniversary actually separate XXth year. this the momentum XXth on year if of we're creating preparation, some a and the our We product not behind launches So of fact of those that doing experience front marketing

celebration our year. anniversary XXth this So is

is Now, the indeed to your in to again, question engaging about want Build-A-Bear gone that come, case. that now people that past yes and is may have the

fun in advertising sentiment that go you're you to you when to back that to encouraging about fact, that program a people and child. to it teenager, again most get very celebrate as talk at celebrate fact is experiences your about come fun think kid Build-A-Bear an remember and expecting capture either as to -- trying when entire designed with In were marketing also a and is that of to Build-A-Bear because how itself is or wouldn’t you it in as you a haven't because child you to

awful course building, historical of that brand of this, over those because Each an and the XXX of sold is memory to a XX Bear's lot So engagement re-engage. we nostalgia last over an and of one years. million hundreds opportunity

The get we does that the that the and up to over start habit people those to entire and take vast about since majority closed recognition -- noted, see for they had parties. we period. while back second been around the announced business into Build-A-Bear we're ramp party back call, at after start of parties, the the last right and marketing are of had pandemic down X,XXX of shortly had I we've the parties It as that question to starting a had already we the time. just parties expected And that

it's for multiple the to but that us often to times an person to DPT parties have expected of But high because our know parties celebrate those a research, trial that birthday we some multiple sales value the they not bears our to Eric, noting with we are kids are the ramp-up sales for get kids. of been high not only through lot and usually the come to party Build-A-Bear. the example, because themselves historical generate and you're X% mechanism back as sale, important So that on see

own So a back and Bear. for to a lot special times come of them create desire that their to creates want

so the all the repeat and anniversary always from for been we and are reengage older great a have Build-A-Bear us bringing years been two those getting are nearly before, for types of people back parties want in trial those drive part mechanism are to us. sales not guests, been have to was things good mix of repeat that with now. future of So Yes, different for have XXth guests, a our

So we're hoping helps. certainly that

Eric Beder

you And the pricing the you not raising last or Bear so seen, Great. the What back on that? from know or discounting feedback seen dollar always have offer -- one have here, range, push continue I in customer some been you from to XX so Inflation, as much. has and

Sharon John

have, always or Well, $XX you a we as offered $XX, not what Bear we it's have a know, a just $XX Bear.

called where age, product a child, for turning spare the as they birthday of month have they're birth that a the treat any our can on We pay year. that

And one-year-old price from very is accessible to so and point. that's that XX-years-old, a

Friend, we opportunity not special on to is not engagement. engagement for life. what comparatively as so for one just personalized creates a do and this that but have really of point. that the broader you that fan strata Build-A-Bear But reach And because for what part socio-economic just special is level This very we Furry experience that a the one this the experience experience entry assure reason know experience remained affordable entire is that we price get Build-A-Bear to

your we not. sharing have in of from have measure, specific sales -- back or and our sweeping and not of we not pricing that's of up, be is push It's strategy. the So think guests an a our information which and important way, may an builders, the big Bear then might driving our in hear important or to through the is that a part future lot our degree that and filling at so up, the social terms, important of strategy, about are traffic loyalty, emails us. good -- we that some our you we of part very to pipeline we But to our question, could just times part they're

Eric Beder

Great. of luck the Thank Well congrats and good you. rest year. the for

Operator

Wealth from The you. Thank Management. next go Kanen question ahead. Please Kanen David of is coming

David Kanen

morning. Good Sharon to and Congratulations, you team.

Sharon John

you, Good morning. David. Thank

David Kanen

it's I'm questions, be If it's okay, -- traveling okay going If several good I later. to morning. have

could rules, I stretch if So to little a the bit.

regards to you spend So year. the open then Can the XX CapEx you expect to early through that results, you this expect sites you take per believe in could if first new us And in give I format. question just what me some is to site? economics, you opened a

St. think read it's could in that, you I an it. augmented early the just Louis if us area give open experience, an if Appreciate on with yet?

Sharon John

Thanks, to very the stores, third-party corporately that I they are and clear that be and retail particularly about of the think side. a from few that getting right model we've them assure the forward comfortable four-wall to our -- on we had good to we've more relates that seen retail have that over But past also been that economics, expansion stores XX% to expansion feel are over the needed to we that never feel to last that store -- benefit David. in a which know. overstored. getting the the managed pipeline not share pulling as these we earlier years to believed have We we which economic sure owned profitability month lot very process, evolved continued you opening and we're wanted three want yes, stores, of just now, different that we openings it make just I We we've are profit that months

more just those we with, third-party some see Wolf and wanted buy cap that example, some Great are we're do clarify and stores some their consider or where them the of fixtures the the give locations buy that that, this -- product. like we more capital some third-party a opening the I that’s theme they So parks what and they labor the going the stores that to form business of light to and that in traditional you're Lodge for

more with like are those business and a treated economics. different again So wholesale very

think. way not, not that's spend So to you the impact our that's going might capital in

So color add Voin little there. more a

Voin Todorovic

Yeah.

David, third-party the space. called going So second like be to of light, timing lot year, half of the the asset a also to these more unique out stores locations and very and some in that tourist XX as again, probably we more of stores of we but Sharon the locations and said open are of the in retail these mix these those looking stores

have with we good expenditures job cost really a our managing really capital associated teams So and done The a stores. the job. done these good have managing

have operated. different those some our of capital And pressures for I of mix shifting don't market. of formats composition labor years these and and within challenges I cost going debts no be those in structures that reflected as average We an But with and expect of are mentioned, variety some retail capital investment. there definitely in versus probably range depending on a the and couple of and the plan, of owned costs some location, the between is $XXX,XXX $XXX,XXX third-party the per inflationary the store to

David Kanen

Okay.

talking level opened, year So you one you were two on the stores XX% about that essentially? can to hit ROIs store if mark, that you

Voin Todorovic

typical North that correct. your is Yes, is Hitting in math our Yeah. stores XX% do. America

Operator

you. Thank

William, Our next And and question coming go question from please as Capital. Divisadero time. Zolezzi reminder yourself is one of interest in limit ahead. William one to follow-up of just the to a please

William Zolezzi

businesses, compared the worse, kind we're It speak a materially can Divisadero Sure. three-year on and ‘XX macro like, an having it things noise. are get to basis. lot Street. at It's accelerated environment -- pretty our of just strongest to on of based Anyway, from some a like the being in you guys in seems their throughout given linearity the the the really resoundingly April business quarter quarter where looks checks, looking of people a with the little quickly month

when maybe an have So what you then acceleration there little on? that to accelerating, drove business that indeed that speak picked you on a was that can quarter happen outlier up your the or what others parties if we was maybe, whether are is decelerating so, that? and it's might an ‘XX just drove throughout got acceleration, if you can speak to So color versus

Voin Todorovic

some see in the Even still the So little well year. that and also we of nature that anniversary did things pending in half results demand for they I'll last skeptical as that in the profit quarter. and the QX. we as were We holding and we definitely, surprisingly But, from start year William, of bit last the growth were of impact starting expect and second for see revenue our the were had they held we and keep to a stimulus we some to of well improvements guiding the call were the the May. and when results of

with to full we we timing are the in of shifts about we have so on of that's Some in of definitely break we have and were could comfortable of seen reason the that the May. results quarter, of that the giving second kids results what seen out changes, year March, the also that pleased some be we part part more the of guidance the as with Easter are school feeling seeing And far. spring timeframe definitely, are that stuff April timing, related but

William Zolezzi

-- the of was the this year EBITDA. versus, repurchase And of business full-year helpful. and EBITDA year in accelerating share there But seems That's macro. of percentage full did some QX, EBITDA about QX it you the you stepping if I appreciate on like year throughout a Okay. XX% last pieces moving are lot guess the your of I back, take kind with just is the

earnings to in guys and with of stock XXX dislocation but you sub-$XX I'm XX. quarter, this I'm but you pieces, pronounced based of getting better, if you run moving over on to not lot that but are side there more aggressive seem be do $XX would shouldn't a So guys reported in things you the I the buyback obviously, that flip math and is you to the so the here what bought be the maybe of than today, happy million stock guide getting getting is year, guys because forward that encourage this is I'm new the worse, and and today more

is I are you, the very advice, there so guys hard work So again, strong unsolicited and appreciate but doing Bye. results some you thank the are

Sharon John

you, Thank William.

Voin Todorovic

you. Thank

Operator

from you. coming of next go is Capstone question Equities. Please Thank The ahead. Adelipour Justin

Justin Adelipour

Good morning. Hi.

that job the your -- great about is guys just do I new of at to regard? mean to the think I multiples And stores your to good ask, how the trading second a was a let's it get it's old wanted just quarter. wanted pretty all, growth at? prospects, multiples thoughts of like just stores. buyback and First mentioned the just you accelerating, on can kind your multiple what sense stock in for to, that relative just about you seems say,

Voin Todorovic

year within the in control Thanks for last excellent executed the Justin. Definitely, started I question, and well. what been think are on focused are operations year that our and as we teams things as and we the have this

can you inflationary supply believe feel pressures. we the things I we that controlling, reflect market the doing, are business the and are overall in do the as multiples, we unexplained mitigate the What's the shift, trying chain some and results based deliver. personally properly there So results are what market and significant fluctuations, our good challenges about market business, with the and things ongoing of to continue but and in on value to happening some are economics the to that that we see we of will

Justin Adelipour

little say. just sorry, need not I oh Sometimes interrupt, to to wanted a just help,

Sharon John

No, that's fine. agree. We

Justin Adelipour

not you worst It's the can cash. And it can you you out of guys and take could -- have yeah, right. thing, and you help advantage, plenty

mean just know take can guys this advantage I I'm of also a I opportunity So as well. this saying, hear and lot, you you

Sorry, mean interrupt. not to did

Sharon John

our process. the level. the going strategy with that in November. right lot more opportunistically. periods. that underlying we we volatility the of of do the that basis regular of a This yes, reiterate have that that No, Recognizing And the fact, recent buyback just does it on -- has is get in of Board that, allows the a that approved us halfway first stock about through our in months now, purchase could than lot the to what that’s six is And program. lot particularly was is conversations market was And right as right Justin. we I into volatility a volatility. fine, now, a of And we're trading in believe to

as it and types strategic in our to years our would and much of and been help would that forward all Board belief, pulling, of overall more and I those but we of from of this us we've to things but and the So, are our of tweens and pulling cancel we I and Yes, always people to teens, the but the on choices who our is increases the types expand that also multiple our levers to the so the also not come is, that as to impact uncertain and and strategic through are certainly base conscientious tightly ongoing on made reiterate us of there with we expenses why, it's to those Build-A-Bear it's inventory to do get products. of company children, managing believe will gifting consumer these company, sales want shift but there lot that building that just how blocks and done and expanding affect affinity opportunity some decisions. collectibles being note I shift organization -- like of times, price point. that touch to to adults has everyone's

to be been resilient strategic to times. lot So company of have through able those a volatile for these underlying a us that makes us more important and external shifts manage

Operator

ahead. Management. Instructions] Thank The follow-up you. question is next coming David [Operator move Kanen Please Kanen go onto of question. We'll the from Wealth next a

David Kanen

Hi.

and up. it discuss said posers doesn't the regards go Board going Board any to to skin and buyback of that previous the piggyback augmenting equity of really speak game I to the in the yourself, the to back appreciate have potentially that amount Just to two Outside but alignment, now. Sharon, you in to question have you're you

owners, the more back So stock. us need meaning shareholders you the buy the to is from message

that in in sitting easily for $XX EPS that excess at that million here for could which even, that today, we million real estate foot, means million or that's ROI a of $XXX on look million, we're Florida share. large of to $XX a an significantly shareholders really fact, worth worth, form return doesn't a when the $XX We're $XX be $XXX sure buyback share be foot. In can in worth generate asset particular, per per an could would -- where that EBITDA in going very $XX we your increase distribution seeing center. They're our

very message owners no in Board, cash. that us to has little, my listen the game to is little the So skin who and return to

store the Okay. And that it's then posed, in if update is, it St. early for I in yet? on that believe question asked new the what and I open I last format. just was read Louis an

Sharon John

types make really Yes, Yeah. your bringing Yes, a kids, did Thank in inclusive cupcakes a things. and groups in It adventures notes groups and a of address back that we of concept Build-A-Bear sort as called a an and designed Build-A-Bear it's here it of opportunities I own say also it's there, appreciate well adults, larger and on. for arcade is different it of Louis, kinds of my in of square of party can place parties with that bigger up. I had not rooms written mean, to an for has go Adventure you you. all and it off-mall experience you them but that, St. is and has footage. the

kind do health certain that's health allowed of stores often food for was the reasons, hear not when -- our guests challenges is checkbox in surveys our looking the party party. moms about for are reason of business to we have our we and one were and really and stores reopen from like that a in that safety that we last that lot we do -- the our So perfect

to, partnered So a it. of a in for growing that for we a which big experience of we open to make been we or now environment we see We've it. fair to lot test with them, could activity parties and learning lot wanted people are lot is of malls people is Build-A-Bear about of but full-service to in and the wanted had we're concept try base and this pretty the traffic. that a lot excited We've nine There we parties. love weeks how

So we we're would on be to where quarters that's doing some coming the -- expect that where to provide information going. and in what with able

if capabilities buy that really a store, having oversized solution done larger to you've is the like versus know accelerate business piece kind that of that's just we of other this where products. mini more solution could don't but kind and that warehouses a The important our stores, see contradictory part from ship David own types and of personalized us is, interesting of, of bathroom as is to our gives omnichannel network has our online our to it space continues larger us e-commerce an robust for it do I larger, for be

opportunities So of it's a multifaceted lot solution different for a for us.

Operator

you. Thank

Schnierow ahead. coming Gary Funds. is from question Please next of RiverPark go Our

Gary Schnierow

how not typical? couple you Sharon color given the of year, expect have been morning, us Voin. and on this execution. Can years a to little Good last give the you quarterly Nice revenue go sequence

Voin Todorovic

Thanks God morning, for Gary. the question.

the our full-year basis about definitely the some see of out did in full-quarter being to a we in an impact QX stores of UK -- out revenue, one-third sorry, called quarter, As as in our we I first I and out reopened called that we of and think related basis that. growth in was called the

in think year As the the the from to of about some we of of reflected rest the our that’s low guidance high-end definitely, range.

rest it's perspective particularly UK, dollar of that know, of hurting challenges, us to environment ongoing from trying impact the are encompass rates the as as exchange you in against We some year. for well of strengthening the the macro the pound as

some impact. has that So

think year, to could last manifest absolute is be that going at dollars year some looking going we about there you when We versus this are that's how itself. to choppiness even between growth, be QX to there believe, As definitely, quarter. QX some the

are on wait are that confident, available are now but a year that the overall growth and more year the we'll quarters just see information seeing manage extrapolating color have of as be and last seeing timing, we would basis trends, that. maybe and to one we is some just full becomes what for but strong to three provide way us that on particular using for last a you bit We

Gary Schnierow

first greater sales third quarter, year, quarter third pre-COVID. year it quarter and second last right, below second go first guiding this But Right. how you're was second -- if than presumably is previous we were being to -- quarter and and which quarter in was it

just I'm to trying So inputs on that? the understand

Voin Todorovic

Great.

again the because QX majority for second was the Last largest the was the quarter of being speaking, us. year So stores impact quarter. of QX smaller historically year, UK closed of for of

to impact and the Now UK some QX, was QX, demand, so late the in of definitely we believe second did last have year, some our that of year, using there pent-up particular some we seen, help the some that biggest that was of typically so sales quarter but after QX. start stores prior region, COVID that open if timing of QX the QX seasonality we with speaking,

Gary Schnierow

benefit some XQ to the you XQ which is But that should parties didn’t offset Okay. extent XQ, that should -- when what versus potentially fair? returning and is

Voin Todorovic

as ramp Correct. know up QX. in mentioned, Sharon late to We we started you parties started,

are we levels. historical our definitely, below So

things those We improve. to are expecting and working on

of headwinds for the that rest one could be of year. definitely the those So

Gary Schnierow

Right.

modeling Great. the year-over-year purposes? given for relative is your cash to should inventory free fair net And that it year for guidance, be flat greater flow than Okay. income, being

Voin Todorovic

but (ph). I to of There assume. is probably bit think for – CapEx, purposes a modeling that's elevated fair X%

Gary Schnierow

right. You're

or be Your your more… depreciation, little a CapEx take, equal to is, could bit give

Voin Todorovic

Correct.

Gary Schnierow

so Thanks Great. okay. Right, much.

Voin Todorovic

Gary. Thanks,

Operator

you. Thank John turn back At comments. over this Ms. to like to for I'd time, closing floor the

Sharon John

our for We our we on results and call. appreciate next all you forward second to today. updating Thank quarter it you at joining really us look

Operator

your you thank Build-A-Bear participation for gentlemen, and interest in and Workshop. Ladies

of or this rest time You enjoy your at and the off day. walk disconnect the your lines webcast may

Build-A-Bear Workshop (BBW) 26 May 222022 Q1 Earnings call transcript