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BuildABear Workshop Inc. Reports Operating Results (10-Q)

May 13, 2010 | About:
10qk

10qk

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BuildABear Workshop Inc. (BBW) filed Quarterly Report for the period ended 2010-04-03.

Buildabear Workshop Inc. has a market cap of $185.7 million; its shares were traded at around $9.18 with and P/S ratio of 0.5. BBW is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Total revenues. Net retail sales increased to $99.8 million for the thirteen weeks ended April 3, 2010 from $96.3 million for the thirteen weeks ended April 4, 2009, an increase of $3.5 million, or 3.6%. This increase was primarily attributable to a $1.9 million increase in comparable store sales, a $1.7 million positive impact of foreign currency translation and $0.6 million increase in sales from non-store locations. These increases were partially offset by decreases of $0.8 million which included changes in deferred revenue adjustment and sales from non-comparable store locations.

Revenue from franchise fees increased to $0.7 million for the thirteen weeks ended April 3, 2010 from $0.6 million for the thirteen weeks ended April 4, 2009. This increase was primarily due to having three more locations in the 2010 first quarter as compared to the same period in 2009. Revenue from licensing increased to $1.0 million for the thirteen weeks ended April 3, 2010 from $0.8 million for the thirteen weeks ended April 4, 2009, an increase of $0.2 million. This increase was primarily related to the launch of new Wii and Nintendo DS games in the 2010 first quarter.

Gross margin. Total gross margin increased to $42.3 million for the thirteen weeks ended April 3, 2010 from $36.3 million for the thirteen weeks ended April 4, 2009, an increase of $6.0 million, or 16.6%. Retail gross margin increased to $41.0 million for the thirteen weeks ended April 3, 2010 from $35.3 million for the thirteen weeks ended April 4, 2009, an increase of $5.7 million, or 16.1%. As a percentage of net retail sales, retail gross margin increased to 41.1% for the thirteen weeks ended April 3, 2010 from 36.6% for the thirteen weeks ended April 4, 2009, an increase of 450 basis points as a percentage of net retail sales (bps). Our gross margin expansion was primarily driven by a 200 bps increase in merchandise margin and leverage in buying and occupancy of 210 bps.

Selling, general and administrative. Selling, general and administrative expenses were $39.5 million for the thirteen weeks ended April 3, 2010 as compared to $36.9 million for the thirteen weeks ended April 4, 2009, an increase of $2.6 million, or 7.1%. As a percentage of total revenues, selling, general and administrative expenses increased to 39.0% for the thirteen weeks ended April 3, 2010 as compared to 37.8% for the thirteen weeks ended April 4, 2009, an increase of 120 bps. The dollar increase and the increase as a percent of revenue were primarily due to increases in supplies to support store themes and increases in salaries and incentive compensation.

Interest expense (income), net. Interest income, net of interest expense, was $32,000 and $24,000 for the thirteen weeks ended April 3, 2010 and April 4, 2009, respectively.

Provision for income taxes. The provision for income taxes was $1.1 million for the thirteen weeks ended April 3, 2010 as compared to the income tax benefit of $0.3 million for the thirteen weeks ended April 4, 2009. The effective tax rate was 40.4% for the thirteen weeks ended April 3, 2010 compared to 25.4% for the thirteen weeks ended April 4, 2009. The increase in the effective tax rate was primarily attributable to the impact of recording a valuation allowance in one foreign tax jurisdiction in a profitable quarter in 2010 as compared to losses in the same period in 2009.

Read the The complete Report

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10qk
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