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

Executive summary

• Second quarter results fell short of projections, with revenues down 7.2% year-over-year to $115.3 million and net income of $8.8 million, due to weak summer product performance 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.

• Direct-to-consumer sales, while down year-over-year, marked the second-highest Q2 DTC sales in company history.

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

• 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), down 24.1%.

• First half pre-tax income was $35.5 million (14.8% margin); adjusted pre-tax income $28.5 million (11.9% margin), excluding a $7 million tariff refund.

• Q2 EBITDA was $15.2 million (13.2% margin), compared to $18.8 million (15.1% margin) last year.

• Gross margin for Q2 was 54.2%, down 340 basis points year-over-year due to occupancy deleverage and increased promotions.

• SG&A expenses were $51.4 million (44.6% of revenue), down 80 basis points from last year.

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 for fiscal 2026 expected at $53–$61 million, excluding a $7 million 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.