Build-A-Bear Workshop Reports Q3 2025 Revenue Growth but Declining Net Income

Build-A-Bear Workshop, Inc. reported its financial results for the third quarter of fiscal 2025, revealing a total revenue of $122.7 million, a 2.7% increase from $119.4 million in the same period last year. The growth was primarily driven by a $2.8 million rise in net retail sales, which reached $112.3 million, and a $0.4 million increase in commercial revenue, totaling $8.9 million. However, net income for the quarter decreased to $8.1 million, or $0.62 per diluted share, compared to $9.9 million, or $0.73 per diluted share, in the prior year, reflecting a decline in profitability despite higher revenues.

For the first thirty-nine weeks of fiscal 2025, Build-A-Bear's total revenues increased by 8.5% to $375.3 million, up from $346.0 million in the same period last year. This growth was attributed to a $25.7 million increase in net retail sales and a $3.3 million rise in commercial revenue. The company reported a net income of $35.8 million, or $2.73 per diluted share, compared to $30.1 million, or $2.20 per diluted share, in the previous year, indicating improved profitability over the longer term.

Operationally, Build-A-Bear expanded its retail footprint, opening a net of 52 new locations during the first thirty-nine weeks of fiscal 2025, including both corporately-managed and partner-operated stores. As of November 1, 2025, the company operated 375 corporately-managed stores, 168 partner-operated locations, and 108 international franchised stores. The company also reported a significant increase in inventory, which rose to $83.3 million, reflecting a strategic decision to mitigate tariff impacts and ensure product availability.

The company’s selling, general, and administrative expenses increased to $55.3 million for the third quarter, representing 45.1% of total revenue, compared to 43.3% in the prior year. This rise was attributed to higher store-level compensation and inflationary pressures. Despite these challenges, Build-A-Bear remains optimistic about its future, focusing on expanding its unique retail experiences and enhancing its digital transformation efforts to drive growth and profitability.

Looking ahead, Build-A-Bear plans to continue its expansion strategy, targeting at least 60 new locations in fiscal 2025, while also investing in digital initiatives to enhance customer engagement. The company is committed to returning capital to shareholders through dividends and share repurchases, having utilized $17.4 million for share repurchases in the first thirty-nine weeks of fiscal 2025. The outlook remains cautiously optimistic, with management acknowledging potential risks from inflation and changing consumer preferences but confident in the brand's ability to adapt and thrive.