Build-A-Bear Workshop, Inc. Q4 FY2025 earnings call

Sharon Price John discussed retirement and Chris Hurt's appointment as CEO. Focus on three strategic initiatives: experiential retail expansion (added 11 net new locations in Q4, 8 new countries in 2025), digital transformation (work on inventory system and SEO/ads shifts), brand investment (Mini Beans success, Kabu series launch). Chris Hurt talked about experiential store expansion, including new Hello Kitty stores and plans for ICON Park location. Sharon also mentioned first quarter mixed results with strong Valentine's Day and actions to address traffic trends.

In fiscal 2025, total revenues were $529,800,000, up 6.7% year over year. Pretax income was $67,200,000, impacted by tariffs and other costs. Retail segment: fourth quarter net retail sales $139,500,000, essentially flat; full-year retail revenue up. Commercial segment: fourth quarter revenue up 42.2%, full-year up 23.4%. Inventory increased due to tariffs and growth investments.

Expect total revenues to grow mid-single-digit, first-quarter revenue roughly flat. Commercial segment revenue growth at least 20% back-half weighted. Pretax income range mid-single-digit decline to low-single-digit growth, impacted by tariffs and long-term investments like ICON Park and wholesale growth.

Tariff and supply chain disruptions, digital environment changes affecting SEO and traffic, uncertainty in tariff rate changes and refunds, geopolitical impacts on international expansion and wholesale orders.

Q: Talk about FAO Schwarz expansion and personalization.

A: Sharon and Chris discussed FAO Schwarz expansion and personalization efforts in stores.

Q: Inventory and tariff impact on inventory flows.

A: Voin discussed inventory elevation due to tariffs and managing inventory for growth.

Q: Long-term investments in digital and operations.

A: Voin talked about investments in ICON Park, wholesale, and international expansion.

Q: Commercial and partner-operated stores.

A: Christopher Hurt discussed new countries entered and store maturation.

Q: Pretax margin guide and variables.

A: Voin explained tariff timing and long-term investments affecting pretax margin.

Q: Tariff impact on product sourcing.

A: Voin and Sharon discussed sourcing mix adjustments due to tariff fluctuations.

Q: New locations mix.

A: Christopher Hurt talked about new countries and partners for location expansion.

Q: SEO challenges and traffic offset.

A: Sharon discussed SEO shifts and direct marketing to offset traffic headwinds.

Q: Mini Bean trend and new unit growth cadence.

A: Sharon talked about Mini Bean trends and back-half weighted new unit growth.