Build-A-Bear focused on diversification
Build a Bear overcame a negative same store sales performance to produce better than expected profits in the fourth quarter.
The company reported that for the fourth quarter ended Jan. 3, same storesales (stores and e-commerce) decreased 5.6% following a 9.8% increase in fiscal 2014. Net income was $20.6 million, or $1.25 per diluted share compared to net income of $11.8 million, or 67 cents per diluted share in the 2014 fourth quarter. For the year, however,same store sales increase 1% in fiscal 2015 while netincome increased to $17.9 million, an 11.7% improvement from fiscal 2014.
“In 2015, we delivered our third consecutive year of improved profitability and increased consolidated comparable sales. Our initiatives including remodeling stores in our new Discovery format, which generated double-digit growth compared to our heritage stores, focusing on key consumer segments and investing in infrastructure continued to gain traction," saidSharon Price John, Build-A-Bear Workshop’s CEO. "We made steady progress toward our stated long-term sales productivity goals as we achieved the highest average transaction value in our history and highest units per transaction since 2008. We remain committed to the ongoing disciplined execution of our strategy while we continue to leverage our powerful brand in order to deliver both sales and profit improvement.”
For the fourth quarter, revenues were $117.7 million andnet retail sales were $116.5 million.The company blamed the decline in net retail sales on a calendar shift in 2014, store closures and the negative impact of foreign exchange.
During fiscal 2015, the company closed 20 stores and opened 25 locations, including 11 in its new Discovery format, to end the year with 329 company-owned stores with 269 in North America and 60 in Europe. The company’s international franchisees ended the year with 77 stores in 11 countries.
For fiscal 2016, the company continues to expect:
Total revenue to increase in the low to mid-single digit range
Same store sales to increase in the low single digit range
To end the year with 340 to 345 stores, 45 to 55 of which will be in its new Discovery format
Build-A-Bear also outlined some key strategic initiatives for 2016:
The company expects to expand its owned and operated locations in 2016 by adding approximately 10 stores, net of closures. The company also expects to continue to diversify its real estate portfolio with the addition of outlet format stores, shop-in-shops and seasonal pop-up locations.
The company expects to offer a branded experience on board Carnival Cruise Lines ships through a wholesale agreement, beginning in the second half of 2016.
The company plans to continue to develop and expand its offering of intellectual property concepts such as Honey Girls, Promise Pets and the holiday-specific Merry Mission collection that are supported by digital content including music, videos and games.