Build-A-Bear Workshop (BBW) Q2 2025 earnings summary

Executive summary

• Second quarter revenues rose 2.4% to $111.8 million, with pre-tax income up 10.2% and diluted EPS up 12.3% year-over-year.

• EBITDA for Q2 2024 rose 10.7% to $15.0 million, but first half EBITDA declined 7.4% to $33.3 million due to higher SG&A expenses and lower retail gross margin.

• The company continued global expansion, opening 17 net new locations in Q2 and 23 in the first half, on track for at least 50 net new units in 2024 across over 20 countries.

• Diversified business model with expanded consumer base, now 40% teen and adult retail sales, and broadened product offerings including Mini Beans collectibles.

• Returned $23.9 million to shareholders in the first half through share repurchases and dividends.

Financial highlights

• Q2 net retail sales were $103.5 million, flat year-over-year; commercial and international franchise revenues grew 44.8% to $8.3 million.

• Q2 consolidated e-commerce demand fell 28.2% year-over-year, but rebounded to strong double-digit growth in Q3 to date.

• Q2 gross margin was 54.2%, up 50 basis points year-over-year; SG&A expenses were $49.2 million, or 44% of revenues, a 20 basis point improvement.

• Q2 pre-tax income was $11.5 million (10.3% of revenues), up 70 bps, and diluted EPS was $0.64, up 12.3% year-over-year.

• Cash balance at quarter end was $25.2 million after returning $33 million to shareholders over the past year; inventory was $67 million, up 1% year-over-year.

Outlook and guidance

• Fiscal 2024 guidance reaffirmed: total revenue and pre-tax income growth expected on a low- to mid-single-digit percentage basis, with at least 50 net new locations anticipated.

• Capital expenditures projected at $18–$20 million; depreciation and amortization at $15–$16 million; tax rate to approximate 26%.

• Guidance reflects ongoing inflationary pressures, increased depreciation, and freight costs, assuming no major macroeconomic or geopolitical changes.

• Anticipates revenue acceleration in Q3 and Q4, with strong product launches and favorable comparisons.