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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Build A Bear Workshop Inc | NYSE:BBW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.90 | -3.06% | 28.47 | 29.60 | 28.415 | 29.55 | 82,284 | 01:00:00 |
Build-A-Bear Workshop, Inc. (NYSE: BBW) today announced results for the fourth quarter and fiscal year 2023 ended February 3, 2024, both of which benefited from an additional week of sales as compared to fiscal 2022.
“Build-A-Bear achieved another milestone in 2023, as we reported our third consecutive year of revenue and profit growth. We believe our record results reflect our strategy to continue the evolution of our business model, inclusive of our ongoing digital transformation, the broadening appeal of the Build-A-Bear brand, and last year’s net new unit growth of 37 experience locations across our corporate, partner-operated, and franchise store models,” commented Sharon Price John, President and Chief Executive Officer of Build-A-Bear Workshop. “Looking ahead, we remain focused on our strategic initiatives to leverage the power of the Build-A-Bear brand, including a recent reorganization designed to further elevate our digital and marketing efforts, plus the expected acceleration of net new unit growth to at least 50 locations globally,” concluded Ms. John.
Voin Todorovic, Chief Financial Officer of Build-A-Bear Workshop added, “In conjunction with Build-A-Bear’s third consecutive year of sustained profitable growth and our 2024 outlook, we are pleased to initiate a quarterly dividend, which reflects our confidence in the company's continued financial performance and underscores our commitment to return capital to shareholders."
Fourth Quarter Fiscal 2023 Results
(14 weeks ended February 3, 2024, compared to the 13 weeks ended January 28, 2023)
The company notes that the additional week in fiscal fourth quarter 2023 generated approximately $7 million in total revenues with an estimated 35% flow-through to EBITDA.
Fiscal year 2023 Results
(53 weeks ended February 3, 2024, compared to the 52 weeks ended January 28, 2023)
The company notes that the additional week in fiscal 2023 generated approximately $7 million in total revenues with an estimated 35% flow-through to EBITDA.
Store Activity
The Company added three corporately-managed locations, seven partner-operated locations, and four franchised locations in the quarter. As of the fiscal year-end, Build-A-Bear had 525 global locations through a combination of its corporately-managed, partner-operated, and international-franchise models. This reflects 359 corporately-managed stores, 92 partner-operated stores, and 74 international franchise stores. For the fiscal year, the company had net new unit growth of 37 experience locations, comprised of nine corporately-managed locations, 22 partner-operated locations, and six international franchise locations.
Balance Sheet
As of February 3, 2024, cash and cash equivalents totaled $44.3 million compared to $42.2 million as of January 28, 2023. The Company finished the quarter with no borrowings under its revolving credit facility.
For the fourth quarter and fiscal 2023, capital expenditures totaled $7.2 million and $18.3 million, respectively.
Inventory at year end was $63.5 million, reflecting a decline of $7.0 million, or 9.9% from January 28, 2023. The Company remains comfortable with the level and composition of its inventory.
Return of Capital to Shareholders
For the fourth quarter, the Company utilized $5.2 million in cash to repurchase 223,869 shares of its common stock. For fiscal 2023, the Company returned $42.4 million to shareholders in the form of a $22.0 million special dividend and share repurchases of $20.4 million.
Since fiscal year-end through March 11, the Company utilized $2.6 million in cash to repurchase 111,135 shares of its common stock. As of March 11, $23.5 million remained available under the Board authorized $50.0 million stock repurchase program adopted on August 31, 2022.
As announced on March 13, 2024, the Company’s Board of Directors declared an initial quarterly cash dividend of $0.20 per share that will be paid on April 11, 2024, to all stockholders of record as of March 28, 2024. The Company intends to pay dividends quarterly in the future, subject to market conditions and approval by the Board of Directors.
2024 Outlook
The Company issues the following fiscal 2024 outlook with expectations of delivering growth in total revenues and pre-tax income compared to our 53-week fiscal 2023:
For comparative purposes, the company notes that the additional week in fiscal 2023 was approximately $7 million in total revenues with an estimated 35% flow-through to EBITDA.
For fiscal 2024, as compared to the 2023 non-GAAP 52-week year, the Company expects:
In addition, for fiscal 2024, the Company currently expects:
The Company’s guidance considers a variety of factors including anticipated ongoing inflationary pressures and increased freight costs. Additionally, the Company’s outlook assumes no further material changes in the macroeconomic or geopolitical environment, or relevant foreign currency exchange rates.
Note Regarding Non-GAAP Financial Measures
In this press release, the Company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic income adjusted to exclude certain costs, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measure later in this document.
Webcast and Conference Call Information
At 9:00 AM ET today, Build-A-Bear Workshop will host a conference call with investors and financial analysts to discuss its financial results. The conference call will be webcast on Build-Bear’s Investor Relations website, https://ir.buildabear.com.
The dial-in number for the live conference call is (877) 407-3982 or (201) 493-6780 for international callers. The access code is Build-A-Bear. The call is expected to conclude by 10 AM ET.
A replay of the conference call webcast will be available in the investor relations website for one year. A telephone replay will be available beginning at approximately 1:00 PM ET today until 11:59 PM ET on March 21, 2024. The telephone replay is available by calling (412) 317-6671 (toll/international) or (844) 512-2921 (toll free). The access code is 13743348.
About Build-A-Bear
Build-A-Bear is a multi-generational global brand focused on its mission to “add a little more heart to life” appealing to a wide array of consumer groups who enjoy the personal expression in making their own “furry friends” to celebrate and commemorate life moments. More than 500 interactive brick-and-mortar experience locations operated through a variety of formats provide guests of all ages a hands-on entertaining experience, which often fosters a lasting and emotional brand connection. The Company also offers engaging e-commerce/digital purchasing experiences on www.buildabear.com including its online “Bear-Builder” as well as “HeartBox” and its age-gated adult-focused “Bear Cave.” In addition, extending its brand power beyond retail, Build-A-Bear Entertainment, a subsidiary of Build-A-Bear Workshop, Inc., is dedicated to creating engaging content for kids and adults that fulfills the Company’s mission, while the Company also offers products at wholesale and in non-plush consumer categories via licensing agreements with leading manufacturers. Build-A-Bear Workshop, Inc. (NYSE: BBW) posted total revenues of $486.1 million for fiscal 2023. For more information, visit the Investor Relations section of buildabear.com.
Forward-Looking Statements
This press release contains certain statements that are, or may be considered to be, “forward-looking statements” for the purpose of federal securities laws, including, but not limited to, statements that reflect our current views with respect to future events and financial performance. We generally identify these statements by words or phrases such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “future,” “potential” or “continue,” the negative or any derivative of these terms and other comparable terminology. All the information concerning our future liquidity, future revenues, margins and other future financial performance and results, achievement of operating of financial plans or forecasts for future periods, sources and availability of credit and liquidity, future cash flows and cash needs, success and results of strategic initiatives and other future financial performance or financial position, as well as our assumptions underlying such information, constitute forward-looking information.
These statements are based only on our current expectations and projections about future events. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements, including those factors discussed under the caption entitled “Risks Related to Our Business” and “Forward-Looking Statements” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 13, 2023 and other periodic reports filed with the SEC which are incorporated herein.
All our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or other risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our continuing operations and our future financial results, cash flows, available credit, prospects, and liquidity. Except as required by law, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
All other brand names, product names, or trademarks belong to their respective holders.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
14 Weeks
13 Weeks
Ended
Ended
February 3,
% of Total
January 28,% of Total
2024
Revenues (1)
2023
Revenues (1)
Revenues:
Net retail sales $
140,191
93.9
$138,180
95.2
Commercial revenue7,729
5.2
6,059
4.2
International franchising1,358
0.9
871
0.6
Total revenues149,278
100.0
145,110
100.0
Cost of merchandise sold:
Cost of merchandise sold - retail (1)
60,652
43.3
62,148
45.0
Cost of merchandise sold - commercial (1)3,634
47.0
2,767
45.7
Cost of merchandise sold - international franchising (1)775
57.1
393
45.1
Total cost of merchandise sold65,061
43.6
65,308
45.0
Consolidated gross profit84,217
56.4
79,802
55.0
Selling, general and administrative expense
58,473
39.2
53,608
36.9
Interest (income) expense, net(405
)
(0.3)
(8
)
(0.0)
Income before income taxes26,149
17.5
26,202
18.1
Income tax expense3,876
2.6
5,692
3.9
Net income $22,273
14.9
$20,510
14.1
Income per common share:
Basic $
1.57
$
1.42
Diluted $
1.57
$
1.39
Shares used in computing common per share amounts:
Basic
14,146,883
14,469,633
Diluted
14,224,767
14,767,725
(1)
Selected statement of operations data expressed as a percentage of total revenues, except cost of merchandise sold - retail, cost of merchandise sold - commercial and cost of merchandise sold - international franchising that are expressed as a percentage of net retail sales, commercial revenue and international franchising, respectively. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales, commercial revenue or international franchising and immaterial rounding.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
53 Weeks
52 Weeks
Ended
Ended
February 3,
% of Total
January 28,% of Total
2024
Revenues (1)
2023
Revenues (1)
Revenues:
Net retail sales $
456,163
93.9
$446,181
95.4
Commercial revenue25,413
5.2
18,523
4.0
International franchising4,538
0.9
3,233
0.7
Total revenues486,114
100.0
467,937
100.1
Cost of merchandise sold:
Cost of merchandise sold - retail (1)
206,815
45.3
211,489
47.4
Cost of merchandise sold - commercial (1)12,092
47.6
8,591
46.4
Cost of merchandise sold - international franchising (1)2,816
62.0
1,985
61.4
Total cost of merchandise sold221,723
45.6
222,065
47.5
Consolidated gross profit264,391
54.4
245,872
52.5
Selling, general and administrative expense
198,991
40.9
183,929
39.3
Interest (income) expense, net(929
)
(0.2)
19
0.0
Income before income taxes66,329
13.6
61,924
13.2
Income tax expense13,524
2.8
13,939
3.0
Net income $52,805
10.9
$47,985
10.3
Income per common share:
Basic $
3.68
$
3.21
Diluted $
3.65
$
3.15
Shares used in computing common per share amounts:
Basic
14,342,931
14,940,770
Diluted
14,471,875
15,249,819
(1)
Selected statement of operations data expressed as a percentage of total revenues, except cost of merchandise sold - retail, cost of merchandise sold - commercial and cost of merchandise sold - international franchising that are expressed as a percentage of net retail sales, commercial revenue and international franchising, respectively. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales, commercial revenue or international franchising and immaterial rounding.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) February 3, January 28,2024
2023
ASSETS Current assets: Cash, cash equivalents and restricted cash$
44,327
$
42,198
Inventories, net
63,499
70,485
Receivables, net
8,569
15,374
Prepaid expenses and other current assets
11,377
19,374
Total current assets
127,772
147,431
Operating lease right-of-use asset
73,443
71,791
Property and equipment, net
55,262
50,759
Deferred tax assets
8,682
6,592
Other assets, net
7,165
4,221
Total Assets
$
272,324
$
280,794
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$
16,170
$
10,286
Accrued expenses
19,954
37,358
Operating lease liability short term
25,961
27,436
Gift cards and customer deposits
18,134
19,425
Deferred revenue and other
3,514
6,646
Total current liabilities
83,733
101,151
Operating lease liability long term
57,609
59,080
Other long-term liabilities
1,320
1,446
Stockholders' equity: Common stock, par value $0.01 per share
143
148
Additional paid-in capital
66,329
69,868
Accumulated other comprehensive loss
(12,082
)
(12,274
)
Retained earnings
75,272
61,375
Total stockholders' equity
129,662
119,117
Total Liabilities and Stockholders' Equity
$
272,324
$
280,794
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Unaudited Selected Financial and Store Data (dollars in thousands) 14 Weeks 13 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended February 3, January 28, February 3, January 28,
2024
2023
2024
2023
Other financial data: Retail gross margin ($) (1) $79,539
$
76,032
$
249,348
$
234,692
Retail gross margin (%) (1)
56.7
%
55.0
%
54.7
%
52.6
%
Capital expenditures (2) $7,171
$
6,882
$
18,295
$
13,634
Depreciation and amortization $
4,117
$
3,187
$
13,657
$
12,480
Store data (3): Number of corporately-managed retail locations at end of period North America
320
312
Europe
39
38
Total corporately-managed retail locations
359
350
Number of franchised stores at end of period
74
68
Number of third-party retail locations at end of period
92
70
Corporately-managed store square footage at end of period (4) North America
732,966
726,209
Europe
54,787
54,725
Total square footage
787,753
780,934
(1)
Retail gross margin represents net retail sales less cost of merchandise sold - retail. Retail gross margin percentage represents retail gross margin divided by net retail sales. Store impairment is excluded from retail gross margin.
(2)
Capital expenditures represents cash paid for property, equipment, and other assets.(3)
Excludes e-commerce. North American stores are located in the United States and Canada. In Europe, stores are located in the United Kingdom and Ireland. Seasonal locations are not included in store count.(4)
Square footage for stores located in North America is leased square footage. Square footage for stores located in Europe is estimated selling square footage. Seasonal locations not included in the store count. * Non-GAAP Financial Measures
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP figures (dollars in thousands) Adjusted net income and adjusted income per diluted share 14 Weeks 13 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended February 3, January 28, February 3, January 28,
2023
2022
2023
2022
Net income$
22,273
$
20,510
$
52,805
$
47,985
Valuation allowance (1)
(4,361
)
-
(4,361
)
-
International restructuring (2)
1,102
-
1,102
-
Adjusted net income$
19,014
$
20,510
$
49,546
$
47,985
Net income per diluted share (EPS)
1.57
1.39
3.65
3.15
Adjusted net income per diluted share (adjusted EPS)
1.34
1.39
3.42
3.15
(1)
Represents the valuation allowance recorded on its net deferred tax assets in the United Kingdom in prior periods.
(2)
Tax impact of restructuring in international jurisdictions. Earnings before interest, taxes, depreciation and amortization (EBITDA) 14 Weeks 13 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended February 3, January 28, February 3, January 28,2023
2022
2023
2022
Income before income taxes (pre-tax)$
26,149
$
26,202
$
66,329
$
61,924
Interest expense, net
(405
)
(8
)
(929
)
19
Depreciation and amortization expense
4,117
3,187
13,657
12,480
Earnings before interest, taxes, depreciation and amortization (EBITDA)$
29,861
$
29,381
$
79,057
$
74,423
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314549003/en/
Investor Relations Contact Gary Schnierow, Vice President, Investor Relations & Corporate Finance garys@buildabear.com
Media Relations Contact pr@buildabear.com
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