Build-A-Bear Workshop Q1: Bottomline Miss, 2% Topline Growth & More

  • Build-A-Bear Workshop, Inc. BBW shares are sliding after reporting first-quarter FY23 results, where earnings missed estimates.
  • The multi-channel retailer of plush animals and related products registered an adjusted EPS of $0.98, missing the Street view of $1.01.
  • The company registered a revenue growth of 2% year-on-year to $120.05 million, beating the consensus of $118.53 million.
  • Forex woes negatively hit the company by $1.3 million, partly weighing on Q1's performance. However, strength in Commercial and international franchise revenues bolstered revenue growth Y/Y. 
  • Segment: Net retail sales inched lower by 0.7% Y/Y. Commercial and international franchise revenues grew 66.7% Y/Y.
  • Gross profit margin was 54.1% compared to 52.5% a year ago. Lower freight costs and leverage of distribution costs drove the 160-basis point expansion in gross profit margin.
  • As of quarter-end, the company held $32.8 million in cash and equivalents.
  • As of April 29, 2023, the company had 482 global locations through a combination of its corporately-managed, third-party retail and international franchise models.
  • Outlook: Build-A-Bear reiterated its FY23 outlook. The company sees revenues to increase 5% - 7%, representing $491.33 million-$500.69 million versus the consensus of $472.07 million.
  • The company expects FY23 capital expenditure of $15 million - $20 million.
  • Build-A-Bear expects to open 20 to 30 experience locations in FY23. 
  • Price Action: BBW shares are trading lower by 1.91% at $20.44 on the last check Thursday.
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