Build-A-Bear Workshop swings to Q4 profit; declines to give guidance, citing Covid-19
Build-A-Bear Workshop’s efforts to diversify its brand were reflected in its fourth quarter, which included an 80% increase in commercial revenue.
In reporting its results on Wednesday, the retailer said that it has experienced an increase in total revenues on a year-to-date basis in fiscal 2020. But it refrained from providing specific guidance “given the rapidly changing environment with COVID-19.”
“As such, we are evaluating potential business scenarios while remaining focused on our long-term goal to build on the foundation and infrastructure that we have been developing for several years,” said Sharon Price John, Build-A-Bear Workshop president and CEO.
Build-A-Bear’s net income totaled $6.2 million, or $0.42 per share, for the period ended Feb. 2, compared to a net loss of $10.4 million, or $0.72 loss per diluted share, in the year-ago period. On an adjusted basis, earnings per share were $0.45
Total revenues rose 3% to $104.6 million. The total included the company’s ninth consecutive quarter of double-digit grown in e-commerce sales and an 80% increase in commercial revenue.
By geography, total revenues increased 3.6% in North America and declined 2.1% in Europe.
For the full year, total revenues inched up 0.6% to $338.5 million, including a 0.9% decrease in net retail sales and an 81.3% increase in commercial revenue.
“During the fourth quarter, we saw a positive shift in retail traffic and sales leading into Christmas, which then carried over into the post-holiday period with our data indicating that Build-A-Bear outpaced national traffic trends over that time,” said John. “We attribute the improvement to several factors including a meaningful shift to digital marketing that benefited both our online and in-store business and helped drive an increase in sales of gift products that appealed to a broad consumer base. We also had higher sales and redemptions of gift cards, indicative of the ongoing trend-right appeal of our hands-on retail experience.”
Price added that the results “demonstrate the success of our strategy to diversify our business model by leveraging the strength of our brand.” In recent years, the company has diversified its retail portfolio and evolved its business model, opening shops on cruise ships and in family resorts as well as in-store shops in some Walmart locations. It also has expanded partnerships with such companies as Disney and Sony, critical for licensing products. It is gearing up for the addition of a Baby Yoda https://chainstoreage.com/build-bear-workshop-lifts-forecast-strong-holiday-sales-adding-baby-yoda-lineupto its line of stuffed animals.
Build-A-Bear noted it maintains a high level of “lease optionality,” with more than 70% of corporately-managed stores having a lease event within the next three years
As of February 1, 2020, the company operated 372 corporately-managed locations, including 316 in North America inclusive of 22 shop-in-shops within select Walmart locations, and 56 outside of North America. Through its third-party retail model, there were 60 stores in operation with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry’s and Beaches Family Resorts. The company’s international franchisees ended the year with 92 stores in 12 countries.