Build-A-Bear Workshop Reports Revenue Decline but Increased Net Income in Latest Quarter

Build-A-Bear Workshop, Inc. reported its financial results for the thirteen weeks ended May 2, 2026, revealing a total revenue of $125.3 million, a decrease of 2.4% from $128.4 million in the same period last year. The decline was primarily attributed to a 5.1% drop in net retail sales, which totaled $113.5 million compared to $119.6 million in the prior year. However, the company saw a significant increase in commercial revenue, which rose 44% to $10.9 million, driven by higher sales to wholesale customers. The net income for the quarter was $18.3 million, up from $15.3 million a year earlier, resulting in a basic and diluted earnings per share of $1.45, compared to $1.17 in the previous year.

In terms of operational metrics, Build-A-Bear's gross profit increased to $79.9 million, reflecting a gross margin of 63.8%, up from 56.8% in the prior year. This improvement was bolstered by a $7 million benefit from a tariff refund related to prior fiscal year costs, which positively impacted the retail gross margin. Selling, general, and administrative expenses rose to $56.1 million, representing 44.8% of total revenue, compared to 41.7% in the previous year, largely due to increased compensation costs and inflationary pressures.

The company continued to expand its footprint, ending the quarter with 669 global locations, including 376 corporately-managed stores and 112 international franchise locations. The first quarter of fiscal 2026 saw the addition of seven new experience locations, comprising one corporately-managed store, three partner-operated locations, and three international franchise locations. The partner-operated model, which allows for a capital-light expansion strategy, now includes 181 locations, reflecting a growing trend in non-traditional retail spaces.

Looking ahead, Build-A-Bear remains cautious about the impact of ongoing inflationary pressures and evolving trade policies, particularly regarding tariffs. The company has taken steps to mitigate these challenges through cost reduction initiatives and selective pricing strategies. Management anticipates that these factors may continue to affect product costs and consumer spending patterns in the near term. Despite these challenges, Build-A-Bear is focused on leveraging its brand strength and expanding its market presence through its four-pillar strategic framework, which emphasizes organic growth, location expansion, wholesale and licensing opportunities, and enhancing gifting and personalization offerings.