Q2 2026 Build-A-Bear Workshop, Inc. Earnings Call Transcript
Key Points
- Record-breaking Halloween launch delivered the highest non-Q4 sales week in company history and the third-highest US e-commerce sales week ever.
- Early Q3 results show improved traffic and sales performance, indicating positive momentum despite challenging comparisons.
- Strong performance of core customizable products like dressable Chummy Shark and Promise Pets, which drove higher dollars per transaction.
- Continued global expansion with 12 net new locations in H1, on track to open at least 50 net new locations in 2026.
- New strategic initiatives, including the Icon Park location with premium gifting and personalization offerings, and the McDonald's Happy Meal collaboration, are expected to drive brand awareness and growth.
- Q2 revenue declined 7.2% year-over-year, falling short of projections due to underperforming summer trend products and macroeconomic pressures.
- Persistent traffic challenges, with domestic store traffic lagging broader US trends and e-commerce demand down 15.6%.
- Gross margin decreased 340 basis points due to occupancy cost deleverage and increased promotional activity.
- Full-year guidance reduced, with revenue and pre-tax income expectations lowered due to weaker-than-expected performance and the inability to repeat the Walmart program.
- Wholesale business development has been slower than anticipated, with the multi-million dollar Walmart program not repeating and other opportunities progressing slowly.
Greetings and welcome to the Build-A-Bear Workshop second quarter 2026 earnings conference call. (Operator Instructions)
As a reminder, this conference is being recorded. It is now my pleasure to introduce Gary Schnierow, Vice President, Investor Relations. Please go ahead.
Thank you. Good morning, everyone, and welcome to Build-A-Bear's second quarter 2026 earnings conference call. With us today are Chris Hurt, Build-A-Bear's chief executive officer, and Voyne Todorovitch, our chief financial officer and chief administrative 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 factor section. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A
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