Build-A-Bear Workshop Inc. shares fell 5% in early trading after the retailer posted second-quarter results that beat profit estimates but missed revenue forecasts, while slashing its full-year guidance.
The St. Louis-based company reported adjusted earnings per share of $0.70, exceeding the $0.67 consensus among analysts. Total revenues declined 7.2% year-over-year to $115.3 million, below the $121.27 million estimate. Net retail sales dropped 7.1% to $106.5 million, with consolidated e-commerce demand falling 15.6%.
Pre-tax income for the quarter totaled $11.6 million, or 10.1% of revenues, down from $15.3 million, or 12.3% of revenues, in the prior-year period. The company incurred approximately $1 million in tariffs and related costs during the quarter.
Management cited underperformance in the second quarter and delays in wholesale opportunities as reasons for the cautious outlook. Fiscal 2026 revenue guidance was lowered to a range of $500 million to $525 million, with a midpoint of $512.5 million, below the analyst consensus of $538.8 million. Pre-tax income guidance was reduced to $60 million to $68 million, including an estimated $13 million tariff refund.
The company returned $22.7 million to shareholders in the first half of fiscal 2026 through share repurchases and quarterly dividends. As of August 1, Build-A-Bear held $14.0 million in cash and had no borrowings under its revolving credit facility.
CEO Chris Hurt noted that while fiscal 2026 was expected to be back-half weighted, second-quarter results fell short of expectations and certain wholesale opportunities may take longer to materialize than previously anticipated.
