Build-A-Bear Workshop (BBW) Q2 2027 earnings summary

Executive summary

• Second quarter fiscal 2026 revenues declined 7.2% year-over-year to $115.3 million, with net income of $8.8 million and EBITDA of $15.2 million, both down from the prior year, mainly due to weak summer product performance, lower store and e-commerce sales, and macroeconomic headwinds.

• First half fiscal 2026 revenues were $240.6 million, with net income of $27.1 million and diluted EPS of $2.16.

• Early Q3 results show improved traffic and sales, especially with the Halloween launch, though still slightly below prior expectations.

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

• Shareholder returns totaled $22.7 million in the first half through share repurchases and dividends.

Financial highlights

• Q2 revenue was $115.3 million, down 7.2% year-over-year; pre-tax income was $11.6 million (10.1% margin), net income was $8.8 million, and EBITDA was $15.2 million (13.2% margin).

• First half revenue was $240.6 million; pre-tax income $35.5 million (14.8% margin); adjusted pre-tax income $28.5 million, excluding a $7 million tariff refund.

• Gross margin for Q2 was 54.2%, down from 57.6% year-over-year due to occupancy deleverage and increased promotions.

• SG&A expenses were $51.4 million (44.6% of revenue), down from $56.4 million (45.4%) last year, aided by lower incentive compensation.

• Cash balance at Q2 end was $14 million, down $25.1 million year-over-year, mainly due to higher stock repurchases and front-loaded capex.

Outlook and guidance

• Full-year revenue guidance lowered to $500–$525 million (from $530–$550 million); pre-tax income guidance reduced to $60–$68 million (from $72–$78 million); adjusted pre-tax income expected at $53–$61 million, excluding tariff refund.

• At least 50 net new locations expected in 2026, mostly international partner-operated.

• Commercial revenue expected to be flat versus 2025; capital expenditures projected at $25 million.

• Fourth quarter expected to be strongest, despite anticipated commercial segment revenue decline.

• Fiscal 2026 outlook reflects ongoing tariff impacts with an estimated effective tariff rate of 12.5%.