Build-A-Bear Workshop Q1 Fiscal 2026 Revenue Declines 2.4%

By Chris Stiles • Thursday, May 28 10:32 • Permanent Link

Build-A-Bear Workshop said first-quarter fiscal 2026 revenue slipped to $125.3 million from $128.4 million a year earlier, a decline of 2.4%.

Net retail sales fell 5.1% to $113.5 million, while consolidated e-commerce demand dropped 26.1%. Offsetting some of that weakness, commercial and international franchise revenue rose 34.1% to $11.8 million.

Pre-tax income increased to $23.9 million from $19.6 million, lifting pre-tax margin to 19.0% from 15.3%. The company said the improvement reflected a 700-basis-point gross margin increase, including a 560-basis-point benefit from a $7 million tariff refund. That gain was partly offset by a 310-basis-point increase in SG&A. Excluding the refund, adjusted pre-tax income was $16.9 million, or 13.5% of revenue.

Diluted earnings per share rose to $1.45 from $1.17. EBITDA increased 20.2% to $27.8 million, equal to 22.2% of revenue, while adjusted EBITDA was $20.8 million, or 16.6% of revenue.

The company opened a net seven global experience locations in the quarter, ending with 669 locations worldwide: 376 corporately managed, 181 partner-operated and 112 franchise. That compares with 662 at the end of the prior quarter, based on the net addition disclosed.

Cash and equivalents fell to $26.2 million from $44.3 million a year earlier, down $18.1 million, or 40.9%. Inventory rose to $77.8 million from $72.2 million, up $5.6 million, or 7.7%. Capital spending climbed to $6.9 million from $2.9 million.

During the quarter, the company returned $14.2 million to shareholders, including $11.4 million used to repurchase 248,118 shares and $2.9 million paid as a quarterly dividend. Through May 27, it had spent an additional $3.3 million to buy back 89,966 shares. Over the past 12 months, it said it returned $46 million to shareholders.

For fiscal 2026, Build-A-Bear lowered its revenue outlook to $530 million to $550 million, while pre-tax income guidance was raised to $72 million to $78 million, helped by an expected $13 million tariff refund. Excluding the roughly $7 million refund tied to prior-year costs, adjusted pre-tax income is now expected at $65 million to $71 million. The market has reacted to these announcements by moving the company's shares 1.57% to a price of $38.26. For more information, read the company's full 8-K submission here.

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