BuildABear Workshop Inc. Reports Operating Results (10-K)
Buildabear Workshop Inc. has a market cap of $123.1 million; its shares were traded at around $6.3 with a P/E ratio of 126 and P/S ratio of 0.3.
Highlight of Business Operations:There is no non-voting common equity. The aggregate market value of the common stock held by nonaffiliates (based upon the closing price of $6.42 for the shares on the New York Stock Exchange on July 2, 2010) was $108,236,250 as of July 3, 2010.
On February 20, 2007, we announced that our board of directors had authorized a $25 million share repurchase program of our outstanding common stock. On March 10, 2008, we announced that the Board of Directors had authorized an increase in our share repurchase program to up to $50 million. On March 2, 2011, we announced that our share repurchase program had been extended to March 31, 2012. As of March 15, 2011, we had $21.2 million of availability under the program.
Since February 2004, we have utilized fully integrated marketing programs that include direct marketing, online advertising, and other components as well as national television advertising in the United States. In the fourth quarter of 2010, we expanded our television advertising to the United Kingdom for the first time. Our advertising expenditures were $18.5 million (4.2% of net retail sales) in fiscal 2010, $24.4 million (6.3% of net retail sales) in fiscal 2009 and $33.4 million (7.2% of net retail sales) in fiscal 2008, reflecting the continuation and further refinement of our marketing initiatives.
Our Stuff Fur Stuff club loyalty program was introduced in the United States in 2007 as an update to our previous Buy Stuff Club program and rolled out to Canada in 2008. The program is designed to reward repeat guest visits. The program currently provides one point for each $1 spent, with a $10 discount certificate awarded for every 100 points. The data collected gives us insight into the overall purchasing history of members including visit frequency, items purchased and amounts spent on each visit and cumulatively over time. We continue to leverage this information and improve our direct mail effectiveness and response rates through additional targeting and personalization of communications and offers. We launched a version of the Stuff Fur Stuff program in the United Kingdom in fall of 2008 that does not provide discount certificates but keeps guests informed of new products and offers members special coupons and other seasonal offers.
While Build-A-Bear Workshop offers consumers an interactive and personalized experience, our tangible products are stuffed animals, including our flagship product, the teddy bear, a widely adored icon for over 100 years. According to data published by the Toy Industry Association and The NPD Group, sales of the traditional toy market were $21.9 billion in the United States (excluding video games) in 2010 with plush and doll sales having a combined 20.5% share of the traditional toy market. According to further data provided by The NPD Group, worldwide toy sales topped $83.9 billion dollars in 2009.
According to the estimates by the United States Census Bureau, in 2009 there were over 62 million children age 14 and under in the United States. The size of this population group is projected to remain relatively stable over the next decade. Industry sources estimate direct spending by children in the United States at over $50 billion annually and that parents and family members spend an additional $170 billion annually on children. In addition, children influence billions of dollars in other family spending.
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