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Bear of the Day: Build-A-Bear Workshop (BBW)

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Founded in 1997 and headquartered in St. Louis, MO, Build-A-Bear Workshop (BBW - Free Report) is a retailer of plush animals that provides an interactive make-your-own stuffed animal entertainment experience.

The company was founded in 1997 and currently operates more than 400 stores worldwide, including company-owned stores in the US, Canada, China the UK, Ireland and Denmark and franchisees operated stores worldwide.

Disappointing Quarterly Results

The company reported results for its fiscal first quarter ended May 5 on May 31. Total revenues were $83.2 million, down from $91.2 million in the same quarter a year ago.

Net income was $0.4 million, or $0.02 per share, down from $2.6 million, or $0.16 per share, and significantly short of the Zacks Consensus Estimate of $0.25.

The company said they had expected to see a sales and profit decline due to adoption of the new revenue recognition standard and the recent closure of their largest store.

“Separately, with a less robust movie lineup for the year, we anticipated softness in licensed product performance. And, while we expected continued traffic declines, this headwind was further exacerbated by the unexpected Toys“R”Us liquidation, which according to our analysis eroded sales in nearby locations,” said the CEO.

Estimates Slashed

Analysts have slashed their estimates significantly after poor results. Zacks Consensus Estimates for the current and next year are down to $0.50 per share and $0.56 per share respectively, down from $0.55 and $0.79, before the results.

The stock plunged after the earnings report and is now down more than 15% this year.

Build-A-Bear Workshop, Inc. Price, Consensus and EPS Surprise

Build-A-Bear Workshop, Inc. Price, Consensus and EPS Surprise | Build-A-Bear Workshop, Inc. Quote

The Bottom Line

In addition to disappointing consumer spending and mall traffic, the retail space is witnessing a shift toward online shopping. This trend definitely hurts this toy maker, which focuses on building toys in store.

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