Build-A-Bear Workshop Q4 e-commerce surges 104%; earnings top Street
Build-A-Bear Workshop reported adjusted fourth-quarter earnings and sales that beat expectations even as its operations continue to be negatively impacted by the pandemic.
The company's earnings totaled $8.84 million, or $0.57 per share for the quarter ended Jan. 30, compared to $6.16 million, or $0.42 per share, in the year-ago period. Adjusted earnings came in at $7.32 million or $0.47 per share for the period, easily beating analysts’ estimates of $0.16 per share.
Net retail sales fell 8.7% to $91.9 million, better than expected, with an 18% reduction in store operating days driven by temporary store closures, fewer operating hours and capacity limitations amid the pandemic. Total revenue fell 10.4% to $93.66 million.
The retailer said its corporately-managed stores experienced a significant decline in traffic during the quarter, with an 18% reduction in store operating days. All of Build-A-Bear’s locations in Europe were closed for two-thirds of the quarter and its stores in North America experienced an approximate 25% reduction in operating hours compared to the year-ago period.
Consolidated fourth-quarter e-commerce demand (orders generated online to be fulfilled from either the company’s warehouse or its stores) rose 104%.
“During a year with great global disruption, I am proud of our organization’s ability to rapidly respond and make the changes needed to deliver $9.2 million in pre-tax profit in the fourth quarter, an increase of over 20% compared to the prior year and exceeding previously issued guidance, as well as a stronger year-end cash position,” said Sharon Price, CEO. “Although there were challenges, we were able to accelerate important long-term strategic initiatives including moving forward with our digital transformation and rapidly evolving our retail model and capabilities while simultaneously managing our financial stability and liquidity.”
For the full year, Build-a-Bear’s total revenues were $255.3 million compared to $338.5 million in the previous year. Net retail sales fell 23% to $249.2 million, with a 33.4% decline in store operating days. E-commerce demand rose 133%.
Build-A-Bear announced plans to launch a product collection based on the popular Nintendo Switch game — Animal Crossing: New Horizons — later this quarter. Separately, in an agreement with Sony Picture Worldwide Acquisitions, it expects a fall release of “Honey Girls,” a live-action film inspired by one of Build-A-Bear’s product lines.
“As we begin fiscal 2021, our operations continue to be negatively impacted by the pandemic … while e-commerce demand continues to be very strong across geographies fueled by Valentine’s product performance and the initial response to our Easter assortment,” Price said. “We remain focused on the advancement of our key strategies with the goal to deliver profitable growth as the macro-environment stabilizes.”