Build-A-Bear Workshop Inc. reported second-quarter fiscal 2026 revenue of $115.3 million, down 7.2% from a year earlier and below the $121.27 million consensus estimate. The company posted earnings per share of $0.70, beating the $0.67 forecast by $0.03. Pre-tax income fell 24.1% to $11.6 million, while gross margin contracted 340 basis points to 54.2%. Selling, general and administrative expenses totaled $51.4 million, or 44.6% of revenue, an improvement from 45.4% a year earlier.
Cash at quarter-end stood at $14 million, down $25.1 million year-over-year, while inventory remained roughly flat at $81.1 million. The company returned $8.5 million to shareholders during the period and reduced its share count by more than 5% over the past 12 months, leaving $43.2 million remaining under a $100 million buyback authorization.
Shares fell 18.2% to $31.99 in premarket trading following the results, extending a decline from the prior close of $39.10. The stock has traded between $29.35 and $75.85 over the past 52 weeks.
Management lowered its full-year fiscal 2026 revenue guidance to a range of $500 million to $525 million, down from the prior $530 million to $550 million range. Pre-tax income guidance was reduced to $60 million to $68 million from $72 million to $78 million. The company remains on track to open at least 50 net new locations this year, primarily international partner-operated stores, bringing the total to 674 locations across 37 countries.
CEO Chris Hurt cited continued traffic challenges driven by summer collection performance and macroeconomic conditions as key factors behind the quarterly shortfall. Despite the miss, he noted positive guest response to customization-focused products and highlighted the Halloween launch as the company’s highest non-fourth-quarter sales week on record. CFO Voin Todorovic maintained an upbeat outlook for 2026, describing it as one of the stronger years in the company’s history.
The company faces an estimated $10 million to $11 million tariff impact for the remainder of the year, with the current rate at 12.5%. Build-A-Bear plans to celebrate its 30th anniversary in 2027 with vaulted characters and a special Bearemy edition, and will open a new immersive store at Icon Park in Orlando in the third quarter.
