Build-A-Bear Workshop (BBW) Q1 2027 earnings summary

Executive summary

• Leadership transition announced, with Chris Hurt succeeding Sharon John as CEO after 13 years of service.

• 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%.

• Commercial segment (wholesale and franchise) grew 34%, partially offsetting retail declines.

• Traffic and web demand were softer than expected, attributed to macroeconomic and geopolitical factors.

• Brand engagement remained strong during key occasions, with higher dollars per transaction and successful product launches.

Financial highlights

• Total Q1 revenue: $125.3 million, down 2.4% year-over-year.

• Gross margin: 63.8%, up 700 basis points, including a 560-basis-point benefit from a $7 million tariff refund.

• Pre-tax income: $23.9 million (19.0% margin); adjusted pre-tax income (excluding tariff refund): $16.9 million.

• EPS: $1.45; adjusted EPS: $1.03.

• Cash balance at quarter end: $26.2 million, down 40.9% year-over-year due to tariff payments and CapEx.

• Inventory: $77.8 million, up 7.7%, reflecting tariffs and preparation for back-half sales.

Outlook and guidance

• Full-year revenue guidance lowered to $530–$550 million (flat to 4% growth), down from prior mid-single digit growth.

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

• Expectation to add at least 50 net new experience locations, mostly internationally.

• Commercial segment revenue expected to grow at least 20% for the year.

• Second quarter profitability expected to be down year-over-year, with easier comparisons and growth planned for Q3 and Q4.

• Capital expenditures projected at $22–$25 million; depreciation and amortization to approximate $16 million.

• Income tax rate expected to be about 24%, excluding discrete items.