BBW - Earnings call transcript Q1 2025 | Build-A-Bear Workshop, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Build-a-Bear Workshop First Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.I would now like to turn the conference over to your host, Mr. Gary Schnierow, Build-A-Bear, Investor Relations. Thank you.

You may begin.

Gary Schnierow

you. Thank and First everyone, Conference XXXX to Call. welcome morning, Quarter Build-a-Bear's Earnings Good are Price statements CEO Voin us Build-a-Bear's With today Sharon to and call, refer subject Todorovic.During we'll John; to are forward-looking that risks uncertainties. this CFO, and materially. could results Actual differ to and XX-Q, our section. Risk including XX-K Forms refer the Factors Please any We update forward-looking undertake no obligation statement. to

distributed is turn financial and website.And release, of non-GAAP reconciliation this we present will A public press the call, to now, over earnings both GAAP available measures. Sharon. included measures through During which Relations today's is GAAP the and non-GAAP Investor to in to our call I'll

Sharon John

our Thank you, on the which of Build-A-Bear call.For for XXXX the is our Gary. us evolution earnings profitably to brand. business of morning, reaffirm Good the power past for you've leverage strategy, joining quarter Build-A-Bear years, the fiscal thanks focused first few model and us heard

challenging given model execution integration we people, strategic strategy.We working places reach expansion points few year. results numerous past we've of created mantra more products. over first anticipated, balance of we business Build-A-Bear's that are slightly We a through successful systematic the and with the to have than of the believe broadened years shown more guidance, our more and refer has the towards reiterating of been for expectation the consumer, diversified as Although the were geographic category growth have brand we proof and plans to quarter digital our our like more

licenses and the plush with continuous our furry new the animals or and product leverage consumer brand's friends, such appeal profitability, new returning to example business Capybara successful TikTok has Pokemon make-your-own of in of of as trend shareholders. company an a As like of and as in of resulted such popularity form-factors expansion, including key we ability launches initiatives strategic execution Beans these capital higher Mini to level continuing the systematic future while to the maintain recent our collectibles.The of invest introduction diverse our

profits enjoyed unprecedented compared a years, combination the quarter of remain X-plus time distributing returning the through quarter In higher fact, a we an in has the payouts.Even quarterly of first a margin. million deliver higher profitability in of quarter. environment, past when profitability, which profitability Build-A-Bear repurchases evolution pretax as history is level model last sales IPO and in million first We remain the dividend.Now $XX and to for driven to first our the pre-tax record-breaking shareholder recently $XX this results in almost own and and a $XXX have first quarter quarter we to committed same XX.X% company's century challenging of capital, over business much compared shareholders record to income over versus any of to decrease recap revenue, period any With pre-COVID this share XXXX. at than its more delivered X.X% year, since other period in level million of to announced

our X-pronged to we call, a recognized first the impacts overall demand strategy page were update the expected, the from growth. economic marketing contributor like quarter, and volatility somewhat greater transition than I our profitable we as uncertainty that a being web business on long-term with the quarter ongoing to significant would turn deliver affect web of had fourth and to shared could potential Although decline.Now, to the brief some our revenue on

the is we brand, grounded in strategy our following is valuable the As what recall, believe you asset, is and most Build-A-Bear power on of the may the based initiatives.

operated, our locations, continued partner X of operated store as variety which models; franchised. our footprints, types expansion global strategic evolution the unique as is corporately and a of experience and of well the includes retail First business

with another As partner-operated partner, an expansion first quarter. expanded our a franchise Global model, a X locations X and shop-in-shop locations our Giochi relationship with opened [ the opened we Preziosi, the Scouts with footprint Boeing in and in of stores were part Italian first the beyond American of we shop-in-shops Rome U.S., Girl South our Chile, our Colombia. in Vercelli.In our opened business new with X relationship we Bogota, in partner-operated ] with in

in X. integration comprehensive to are France open second Department with on experience whom Galeries store and company, England Champs-Elysees. XX ranging second recently opened creation. opened to conjunction Plaza Vercelli, existing This with relationships, locations digital systems the and plus towards quarter, York Rockefeller new in location corporately-operated Africa, net Preziosi In iconic Milan opened our Giochi transformation new to upgrades with Paris remain we in year.The this one at content China partner operated locations delighted is the acceleration in that initiative X Separately, successful X models early franchise were new of in we in and Store Lafayette to stores very franchise another at to the FAO long-time City. the destination least the popular opened of share operate We in on tourist opened first from for New we expanded We Castle. Schwarz, in through website this which the track end partner-operated Bergamo, with partner, in of these Windsor in and total X brings opened year, Rome conjunction we Italy near shop-in-shop location the a South past number last location Saturday, stores the the Napoli.Including plus of

best-in-class made our of in-store and Deloitte what enterprise the economy to unlock unlock more With have investments unites provide rapid that a the side.The undeniable integration to currently our the from entire we to communications the ago. infrastructure, of side ecosystem leverages retail efforts. and began personalization a and and the is create merging an partners to from for with goal our consumers long-range the economy. omnichannel is to across to to to physical upgrades with our digital journey the Microsoft true by about we With digital reality experience we entity focused business Build-A-Bear's seamlessly transaction Digital, decade step-by-step the Salesforce in power presence online elevation integrated processes of of the systems our that to advancement needed and the on Given improved value as direct are entirety mind, consumer-facing the across driving of phygital synergy, referred new unique

combined yet demand, e-mail, and in-store named social film's not our briefly campaign of initiatives, that of shareholders unlock is endeavor appeal execute is continuation the through message traditional like last a the through we in last of the fronts. And to quarters.In the exclusive out new represents I'd anticipating new strategic collective to like in as this the which more to to designed example to a while expect pop of Star, the example expand media, we these It's it be to turn quarter release unified over including the our incremental then, generations are adding initiatives toward I we the of like continuing of the power product, a and the for would digital You on integrated Build-A-Bear leverage million continue cash power in partnership, thank to Blue, called ceremony make-your-own brand beloved of profitable multigenerational initiatives marketing uncommon to new simultaneously was closing, is across our multifaceted challenging, from and totaling e-commerce, The new to While Voin. comprehensive content, in this, more all are number IF, curated loyalty impacts the theatrical reiterating first Notably, a Since decisions positive release mind, rolled as heart the we right the Director recent transition journey of investment our company, exciting we to guests was Hollywood brand while version conversation. culture for efforts, of for Love. associates, the to executing Build-A-Bear, the web introducing partners brand continue Writer, momentum capital recent by XX a company's of the friend the little of return most XX were while we Build-A-Bear connecting just a brand, call the I the Creator, The shareholders.A designed have initiative of we expect movie, the talent lead steps to a to multimillion-dollar a and heart all Stuff I multiple disruptive, life.And that continue along with call, capital imaginary to This vision.Third specially the growth. to make with the awareness reviewed, to continuing than friend. our creative, powerful Build-A-Bear's furry further universal a one another of effort nature now, year brand has progresses Build-A-Bear with the of of of drive outlook meaningful the John May work although place to touching $XXX as and transformation to flow strategic allowed return middle to that infrastructure, a their across mission a mentioned over us improvement XXXX. to to we see launch on collaboration just leverage Krasinski. brand.Separately, included the the created longer-term with to launch, on as

Vojin Todorovic

solid to our the financials its years results.Before I spent we XXXX in a XXX,XXX paid level it quarter past everyone. the profitability. at work initiatives reflects the over the our as first a This business sustainably of strong quarter in history shares. and cash several speak share the Thank $X.X you, committed generation, quarter, today quarter, morning, We first want you continue on one past highlights. the most are and good from Sharon, consistent with of of was dividend, and operating the recap few Even I to again capital returning It's and from first million to the touch over repurchase to higher of softness, now during flow good quarterly be result company. profitable with Also, more to to our strategic we performance that the shareholders.

we review $X than more in have first shift of to that end additional quarter first spent the the a quarter, more million reflects since to starting XX,XXX with repurchased and shares.Now weeks results, year. compared the moving a prior Additionally, detailed

for $X the about lead to down was Specifically, largest replaced of be impact decline at million. a This us negative the include in web the strong Net revenues Valentine's $XXX.X affected were by estimated some total expenses.For for the continues And first shift XXXX, week week ended contributor of An was compared second week to when It the XX.X% XX demand not the the holiday. decreased first year-over-year. retail an does the sales typical quarter quarter, of a demand a quarter to quarter Day, to XXXX also significant timing end of million, up quarter-to-date. in February weeks third, our X.X%. down decrease. web more X.X%

basis Additionally, on transaction of challenge.Commercial negative timing per of to was a the partner for were dollars due revenue, as last XX.X%, sales. particularly shift expect full-year wholesale the basis.Gross revenue year, international operators, margin in the first primarily repeat a to commercial prior We franchise to and a to to that on and product calendar XX.X% fourth an sales the more margin small quarter down still noted comparison. quarter points difficult versus represents acquisition, expected growth was commercial increase shipments. while had the call growth strong new due the segment Note particularly timing We revenue also compared XX was that declines due customer year solid, of impacted expected, improvement. customer which both online traffic

total the Although saw to of merchandise the rollout in expenses retail was depreciation of system. was by of related primarily gross first than were higher last margin, basis more of in and point-of-sale new revenues XX% inflationary SG&A fixed higher margins leverage year's expense expansion SG&A wages, occupancy offset or driven that and quarter.The XX.X% million, XXXX costs point pressures. general increase compared in the by $XX.X expense revenues timing total to XXX

million, in revenue below level. year, respect down tax SG&A at we cash share SG&A expense, compared of was be pre-tax our a million the last offset and year. was level to income. with nearly For pre-tax Earnings higher end, total declining Even per with $X.XX, $XX shareholders $XX.X rate, after to quarter the the comfortable million, decline balance million composition the year. the past balance our was or the sheet, by with along was first XX.X% partially reflecting $X.X increase. to $X.X percent of million, or Inventory over in million, at quarter reduction the as $XX full representing the XX.X%, delivered $XX we outlook. returning We a share inventory.Turning period end at to or same X.X% income, remain lower count.With expect of XXXX's the a to This

impact our The are details in guidance but fiscal highlight guidance. full We XXrd of the included press a compared of week. XXXX, are few will release, metrics reiterating I excluding the key the to

ongoing weighted a partner-operated continue income expansion, half net more quarter is addition by would and XX-week on and basis. the grow our partially new by in And brand.This the concludes of fourth back questions. like evolve the well growth grow to the our driven to as associates, thank and I reflects at as majority locations, to company basis. internationally freight the team Operator? of wage leveraging the add favorable expect to to their This a operator We on comparison warehouse for increased costs.In outlook experience dedication power members the with inflationary be depreciation revenue execution over domestically. full-year total both XX corporate on mid-single-digit for basis. as ongoing least the through Build-A-Bear our of and Revenue pressures, a the partners and expense back closing, also growth coming remarks. to more we turn locations prepared now and we store mid-single-digit all range Pre-tax will call expect The strategy experience a will to of

Operator

the question Beder first from of with Our line Research. Eric Instructions] [Operator SCC comes

Eric Beder

Congrats the stores XX that look the for your own at here is outside you here. positives know own are beyond? on you're what franchisee, of a total. store expansion, XXXX doing those your I look kind focus and what on lot at of But in terms in of When stores? the in and you focus of when the your commercial

Sharon John

you When you're partner-operated? our clarification, for talking corporately-operated stores, own Eric, versus say about just

Eric Beder

Yes.

Sharon John

have the in our we call our model. asset-light Yes. that's said But on corporately-operated. as some for expansion We an we're as more of partner-operated on noted and previous plans many because focused do calls, we've expansion

those then that that of great level, their from and Build-A-Bear, a looks really you sell location. we wholesale Build-A-Bear train Great fixtures to know, benefit bear-builders As partners feels and consumer marketing, to our but just perspective, et seamless they operation a the then have purchase Wolf our and and example be employees we product Lodge from a an is It's a a one where product to cetera. our the on like them, --

is expansion the take that, the a That's the of potential so of come fan is get think some sales we we financial financials.I of and how store brand very the good to good go long the for obvious in us very in down, a And are those for own as memory cases, us, that stuff for that, indelible it's and time, ceremony, our the critical So, life, piece choose that keep experience part that expand it model then that that your referring consumers. power this ecosystem. does a for you such we'll of important is besides Build-A-Bear capital and for to, through less for the to footprint. heart and brand a you're build

Eric Beder

that. expand a little let's on Actually, Yes. bit

get those franchisees start terms are like new and at really stores where the how add there's to initial international an roll they I'm sure inventory. right areas and the Colombia and do non-corporate Historically, looking the in product know as In you're international quickly the to ramp out the you Italy, start of I locations, and that grow there other territories now? expansion,

Sharon John

Yes.

a is many opportunity. fuzzy well at is kids in company question believe do We Build-A-Bear are years seem as extended and for these understood looking your language to This interesting, are that partners. We've understand the inside in mantra territories. there had But interestingly. other adults we that international though, hug every as is a

hand. unilateral have aren't to decisions. work hand So, we in Those

other Some with our Preziosi. actually -- Giochi with relationships conjunction of these That relationship Hamleys. are shop-in-shops relationship with in with is

many some of inside there's are when roll So, example.So The Hamleys' South an of as example that's a stores shop-in-shops infrastructure, America. with stores other inside of those in we is relationship can lot Colombia faster. toy in pre-existing a actually countries a

a beyond ground But have entire is franchise. in and continent, that was stake first that, in We just the this Chile just store. an a the

Colombia just relationship. not that's a So,

requirements it the -- what is is partnership So lot specifically, perspective capital. answer, for look we as when depends But their sadly in are. of and are it -- contracts a it's a of the with those from relationship it there hands but and expectations at their

Operator

Our next with question Gibas comes of Greg line from Northland the Securities.

Gregory Gibas

to web those. of whether And think a you if that at you the cover total just and the level saw versus I transaction Wondering demand also with you that that size, could you that on if expect persist? Voin, to could again? follow-up transactions kind trends high you mentioned challenges average speak

Vojin Todorovic

Sure.

been our traffic the challenging definitely, So during has web quarter.

web to transaction. saw continue the in within trends those challenges basis. per those we quarter, again, some in product, strong persist growth saw February, of conversion Day we related quarter-to-date But our Valentine's some very of on traffic so we that even saw perspective, a from in the to especially dollar far And and

challenges continue traffic the the we to rest choppiness some have conversion dollar per and had year offset our on a from piece website. challenging particularly again, perspective.We the lower not to point. continue on we the of visits initiatives transaction enough focus at For improve more though our as some our different challenging drive opportunities this smaller throughout quarter, business to improved on we was level, still of to of the But traffic the Even to we our work may this and traffic.

of think last the we dollar across board, some slightly As per traffic was lower our than seeing the transaction year. the we about are and that DPT

again, Some of strong continue and lower but overall more that could see on as DPT focused shifting may price related what trade-offs may seeing about our in past, we to the where we was in also be with situation. be to there some speaking we are be things There are engagement locations, the rest we the to the people feel that points the very economic environment. some in entry the have guests the compared product some economic But the priced our done overall for of good from the and line overall year.

Sharon John

couple A understand is little from Yes. going kick -- color softness, just best that, research we're of what's course, gear things into see that a we we of to we on traffic on can the perspective. a when

we're it piece, not traffic as across in process, hiccups minute kind that it's there traction engine past is integration some an from that's rate the rollout from of try to conquested to try organic a I doing on can be mentioned that being to interesting an We've to search in gone brand's organic what's search -- to that entire the into external data higher of is separately, only also remarks, the down years at brand attention comprehensive the understand related that.But to takes you particularly relates to that on on is much is consumers, success some perspective. campaign. we're of perspective. With X over raise It that with level, years, as going that. been a of a an water assumption are from the web. But that we X a the to new uncommon, a we've your piece our have lot -- my search this you to a when Because brought the get ecosystem

we have searching our of brand our new do assuring going actually sort and economy. of we how we're people manage, to are the that an through brand, work so what pops And when up just to indicator

Gregory Gibas

to trend you color to drove elevated expense maybe the appreciate expenses I that as quarters? could helpful. there. guess timing very kind we that's Would in I the what just a we Yes, expect on of follow-up, coming expect to And touch and normalcy? should in return unfavorable or QX if Right. how

Vojin Todorovic

Yes.

Love'. more related called So of timing in the we related signage out, to incremental 'The we the QX, start a as and expenses had elevated of new marketing You expenses, SG&A as bit some to campaign, it's supplies little Stuff

We be also SG&A the to payroll certain I basis expenses a And expect QX. at had or timing rate. on as below full-year in call, year mentioned of last to we QX some

So, we a on good feel about overall basis. the SG&A full-year

created I and is Just noise quarters. things that creating these couple a with shift of timing a that's calendar there between highlighted

Operator

Steve Our Argus Silver with next question line comes from Research. the of

Steven Silver

is, markets. that geographic in increase Congratulations international largely on guess broadly? markets the year, course question are expansion that I the we of international really or building fewer on new the to a markets expect will in level the focus my should more on the over the goal is density being penetrated

Vojin Todorovic

Well, the increase market. answer is really year. penetration our first our as opened both. And last late just in to Italy existing a September reminder, in store And of the goal is short

of year. expanding be the are definitely to on, and about the and but Italy. the again, on globe, also markets but going in market. It's those expanding an discussions and just the with testament excited being new in new worked to So be that partners the we we to we May and markets, around adding work continue least with not accomplishment as in -- X deals existing in But just in different brand locations cities X XX different to are the engaged for the locations new and come late to at now net are are in more opportunity rest we

Steven Silver

And Great. I more one can. That's helpful. if

mentioned in collaboration with them. showing Mission know you recent IF, of movies the new the some press terms theater strategic around initiatives I release chains the announcing the in the guys movie, tying year, over the Merry So last holidays

to going tie-ins drive to this whether where movie possible? work are launch on just store theater the around to anything together curious to those from Just just the traffic there's as

Sharon John

Yes. Good question, Steve.

the often We well last past and of little many some the there traditional circumstances a more type for theaters And are a the the talk past, as on to kids have the collaborations with as a a you integrated for Cinemark with Build-A-Bear, film business trip malls in see staple that's theaters with of a get often we've of even of launch partnered after. different We world. a and to many, of in swing yourself about been down in year holidays. before with as Build-A-Bear of weekend maybe years. film of collaboration, that opening our co-location in be by doing our used part own which you or it's Workshop Mission the had that the Merry IF -- that pre-COVID than This real we've the there

of usually have to stores. character buying lead and Build-A-Bear is concept Blue, of of to the of all that opportunity the this goes theater, the clear -- we releases.The going of leveraging the that behind lead in character in marketing dollars at hundreds much theatrical collaboration the the connect IF really Just the of millions

your type to certain opportunity locations, an place There's of we're store I where this, John we've also one helped been an personally next friends for have for where we is a own different the what making release out a course, about I for experience. -- been that New partners us you York, major in heart And the has conjunction utilizing marketing. is in level of they've this. get of where way, Paramount. mean, you're think, taken theatrical marketing excited to doing us. in Of ceremony great real entirely And if has tricked it to feeling as imaginary been part America. a But John a that Mall a they're marketing in with we've it create. the extremely, this And

you're not idea of leads memories, theatrical that we only I going between entertainment. where but connections, this also net So which this we content, companies, own key again, with the creation why our think goes of why the is together, all create entertainment partner question, to emotional of

Operator

[Operator comes Instructions] D.A. next question Our of Cox Keegan the Davidson. from with line

Keegan Tierney Cox

transaction. wanted the kind guys ask you said, just on you and a But to spending the half? or Is lower gives the of what end like or like your some your to to confidence on little picking environment guidance down bit. seeing struggle maintain per just seems back full-year It are you initiatives? a the in it executing dollar demand I trade for issues up, like

Vojin Todorovic

the call, last year grow for a on the back we as this shared And question. weighted. to we Thanks basis half expected on was it full-year and

to the about as between from expansion second the both We also the are it's year. be half talked well net the locations, adding count perspective as partner-operated going XX the as of in store we some of domestic locations. Again,

that drive growth. of going help some to feel that's we So, that

in some we year. last softness addition, In had QX

believe and the brand environment, we also that in are But year, of easier those. softness later things believe cognizant from the we comparison.Now to as are we the economic definitely in of that think we choppiness about So, achieve. have some overall some we able and the we

from seeing deliver We to continue continue again, we are transaction the some dollar both strength. performance. basis, to drive And per strong

years Now, elevated and results we also couple had some last of of record numbers.

the after losses we the the going feel earlier of the in that a good was our of when So, coming to the things as the in we expectations been like numbers far so and that web we about some introduced or recover And of us traffic are timing inventory anniversarying especially some are has that some to full-year creates how improve projecting for this on of be year. a challenge But basis. with product launches on demand are we able the COVID, the we and some were timing. think, year, comparison some some and

Operator

Thank you. concludes floor session. that for final comments. John Ladies question-and-answer our the and gentlemen, I'll turn to any Ms. back

Sharon John

you for to All quarter. we and joining you look forward with much us today, right. next so speaking Thank

Operator

you. conference Thank call. This concludes today's

your for you Thank participation. time. this at lines your disconnect may You

Build-A-Bear Workshop (BBW) 30 May 242025 Q1 Earnings call transcript