Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Many mall-based retailers are struggling amid the shift to online shopping. Build-a-Bear (BBW), founded in 1997, isn't one of them.
Build-A-Bear Workshop, Inc.'s strong fundamentals and strategic expansion in high tourist areas position it for long-term growth, despite economic uncertainties and tariff challenges. The company reported record profits for the fourth consecutive year, with double-digit EPS growth and a solid revenue increase, showcasing robust financial health. Management's commitment to shareholders is evident through a double-digit dividend raise and significant share repurchases, enhancing investor value.
The mean of analysts' price targets for Build-A-Bear (BBW) points to a 39.9% upside in the stock. While this highly sought-after metric has not proven reasonably effective, strong agreement among analysts in raising earnings estimates does indicate an upside in the stock.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Build-A-Bear Workshop, Inc. (NYSE:BBW ) Q4 2024 Results Conference Call March 13, 2025 9:00 AM ET Company Participants Gary Schnierow - Investor Relations Sharon John - Chief Executive Officer Chris Hurt - Chief Operations Officer Voin Todorovic - Chief Financial Officer Conference Call Participants Michael Baker - D.A. Davidson Eric Beder - Small Cap Consumer Research Greg Gibas - Northland Securities Steve Silver - Argus Research Operator Greetings, and welcome to the Build-A-Bear Workshop Fourth Quarter 2024 Earnings Call.
Build-A-Bear (BBW) came out with quarterly earnings of $1.59 per share, beating the Zacks Consensus Estimate of $1.52 per share. This compares to earnings of $1.34 per share a year ago.
Build-A-Bear Workshop has outperformed the S&P 500, growing over 80% in the past year, driven by new partner stores and international expansion. The company is focused on evolving its business, accelerating digital transformation, and returning capital to shareholders through dividends and share repurchases. BBW's unique interactive retail experience, strategic partnerships, and omnichannel approach create a competitive moat and significant growth opportunities.
Build-A-Bear's strong financial performance, debt-free balance sheet, and aggressive share buybacks make it an attractive long-term dividend stock with significant growth potential. The company has outperformed the S&P, up 99% in the past year, driven by expansion and increased sales in both U.S. and UK stores. Despite a higher forward P/E of 11.99x, BBW's continued expansion and shareholder-friendly policies suggest a rerating higher, with a 2026 price target of $60.35.
2025 may be a transformative year for the retail industry. Following a period of growing consumer confidence and increased discretionary spending amid lower inflation post-COVID, retailers have an opportunity to build loyalty among existing customers and expand their bases at the same time.
In 3Q24, BBW generated $119 million in revenues, growing 10.19% y/y and 6.25% q/q. Operating margins and net margins improved to 10.92% and 8.40% from 9.26% and 7.41%. Although the poor consumer outlook will weigh on BBW, investors should not be overly worried. After all, BBW has managed to post impressive results consistently, demonstrating its resilience. Looking ahead, investors should expect continued revenue expansion as BBW continues to accelerate its asset-light shift and pull other levers to tap into other consumers (e.g., new types of products).