Q3 2025 Build-A-Bear Workshop Inc Earnings Call Transcript
Key Points
- Build-A-Bear Workshop Inc (BBW) achieved record revenue and pretax income for the first nine months of fiscal 2025, indicating strong financial performance.
- The company is on track to deliver fiscal 2025 revenue of over $0.5 billion for the first time in its history.
- BBW's asset-light commercial segment is expected to achieve its fourth consecutive year of growth exceeding 20%.
- The company expanded its retail footprint significantly, adding 24 net new experience locations, with 70% of those openings outside the United States.
- BBW's Mini Beans collection has been a success, approaching 3 million units sold, with over 60% growth in the third quarter alone.
- Pretax income for the third quarter declined by $2 million to nearly $11 million, impacted by approximately $4 million in negative tariff effects.
- E-commerce demand declined by 10.8% in the third quarter, primarily due to challenging comparisons from a strong license product launch last year.
- Gross margin declined by 40 basis points compared to last year, primarily reflecting the impact of tariffs.
- SG&A expenses increased to $55.3 million, or 45.1% of total revenues, due to higher store-level compensation, marketing expenses, and inflationary pressures.
- The company faces ongoing challenges from tariffs, with an expected impact of less than $11 million for the year, and anticipates further impacts in the first five months of 2026.
Greetings. Welcome to Build-A-Bear Workshop Third Quarter 2025 Earnings Call. (Operator Instructions)
Please note, this conference is being recorded. I would now like to turn the conference over to Gary Schnierow with Investor Relations. Thank you. You may begin.
Thank you. Good morning, everyone, and welcome to Build-A-Bear's Third Quarter 2025 Earnings Conference Call. With us today are Sharon John, Build-A-Bear's Chief Executive Officer; Chris Hurt, Chief Operating Officer; and Voin Todorovic, Chief Financial Officer.
During this call, we'll refer to forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially. Please refer to our forms 10-K and 10-Q, including the Risk Factors section. We undertake no obligation to update any forward-looking statements.
During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press
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