Build-A-Bear Workshop (BBW) investor relations material

Executive summary

• First-quarter revenue was $125.3 million, down 2.4% year-over-year, with net retail sales declining 5.1% and e-commerce demand down 26.1%, partially offset by commercial segment growth of up to 44%.

• Net income rose to $18.3 million, with EPS increasing to $1.45 from $1.17, and EBITDA up 20% to $27.7 million, aided by a $7–$10.4 million IEEPA tariff refund.

• CEO transition announced, with Chris Hurt succeeding Sharon John, who will remain on the board.

• Seven net new experience locations opened in Q1, expanding the global footprint to 669 locations.

• Strategic focus remains on organic growth, location expansion, wholesale/licensing, and gifting/personalization.

Financial highlights

• Gross margin rose to 63.8–64.4%, up 700–750 basis points year-over-year, including a 560 basis point benefit from the tariff refund.

• SG&A expenses increased to $56.1 million (44.8% of revenue), up from 41.7%, due to higher wages, inflation, and investments.

• Pre-tax income was $23.9 million; adjusted pre-tax income (excluding tariff refund) was $16.9 million.

• Cash and cash equivalents at quarter-end were $26.2 million, down $18.1 million year-over-year, mainly due to tariff payments and CapEx.

• Capital expenditures for the quarter were $6.9 million, up from $2.9 million, focused on IT and new store openings.

Outlook and guidance

• Full-year revenue guidance lowered to $530–$550 million, reflecting Q1 and Q2 softness, but remains above last year’s record.

• Pre-tax income guidance raised to $72–$78 million, including $13 million in tariff refunds; adjusted pre-tax income expected at $65–$71 million.

• At least 50 net new experience locations expected in 2026, mostly internationally, and commercial segment revenue projected to grow at least 20%.

• Capital expenditures projected at $22–$25 million for fiscal 2026.

• Second quarter profitability expected to be down year-over-year, with stronger performance anticipated in the back half.