Build-A-Bear To Emerge As A Key Winner This Holiday Season, Says Analyst

  • Small Cap Consumer Research analyst Eric M Beder has reiterated a Buy rating on the shares of Build-A-Bear Workshop Inc BBW with a price target of $33.
  • The analyst said inventory flows have been strong, allowing Build-A-Bear to offer a compelling and nearly complete set of Holiday driven costumes, accessories and furry friends.
  • After a material expansion from last year, the Advent calendar remains a Holiday favorite, added the analyst.
  • The return of Sonic has been a highly pleasant surprise, with strong demand and one of the few characters with shortages of key accessories, said Beder.
  • The demand for Holiday Stitch has remained extremely strong, while new Pokémon offerings move closer to sellouts and the release of new movies has driven sales of Black Panther and Puss in Boots related items, said the analyst.
  • The analyst noted that store managers have been aggressive in upselling and adding additional accessories to drive higher average tickets.
  • With parents and grandparents looking for Holiday experiences, Build-A-Bear is increasingly in the sweet spot for Xmas driven spending.
  • With school closed for the Holidays, demand for in-store parties has continued to reach pre-COV-19 levels and beyond, added the analyst.
  • Beder noted that most gift card spending is the three weeks after Xmas, when families are together and are focused on experiential outings.
  • Given the familial and experiential nature of the Build-A-Bear shopping experience, the analyst believes the impact of inflation has been limited.
  • The analyst believes momentum at the stores has remained strong, driven by consumers desire for family driven experiences and a strong series of Holiday driven offerings.
  • Further, with in-store parties in full swing and gift cards sales even stronger than prior years, the analyst believes Build-ABear is primed to register further growth post-Xmas.
  • As such, Beder views BuildA-Bear as one of the key winners for the Holiday season.
  • RelatedBuild-A-Bear Workshop Pops On Q3 Revenue Beat, Raised Annual Guidance
  • Price Action: BBW shares are trading lower by 0.17% at $23.18 on the last check Tuesday.
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