BuildABear Workshop Reports Record Q2 Fiscal Year 2024 Earnings
Intellectia.AI Updated: 2024-08-29
Build-A-Bear Workshop Reports Record Q2 Fiscal Year 2024 Earnings
Build-A-Bear Workshop, Inc. (NYSE: BBW) today announced its financial results for the second quarter of fiscal year 2024, which ended on August 3, 2024.
Key Financial Metrics
| Metric | Q2 FY 2024 | Q2 FY 2023 | YoY Change | Consensus Estimates |
|---|---|---|---|---|
| Total Revenue | $111.8M | $109.2M | +2.4% | $108.49M |
| Diluted EPS | $0.64 | $0.57 | +12.3% | $0.57 |
| Pre-tax Income | $11.5M | $10.4M | +10.6% | - |
Interpretation: Build-A-Bear Workshop’s total revenue of $111.8 million exceeded the consensus estimate of $108.49 million, marking a 2.4% year-over-year increase. The diluted EPS of $0.64 also surpassed expectations, showing a 12.3% growth from the previous year. These results reflect strong financial performance despite challenges in certain areas of the business.
Segment Performance
| Segment | Q2 FY 2024 Revenue | YoY Change |
|---|---|---|
| Net Retail Sales | $103.5M | In-line |
| Consolidated E-commerce Demand | - | -28.2% |
| Commercial & Int'l Franchise | $8.3M | +44.8% |
Interpretation: While net retail sales remained steady, the company saw a significant decline in consolidated e-commerce demand, dropping by 28.2%. On the other hand, commercial and international franchise revenues surged by 44.8%, showcasing robust growth in these segments.
Key Developments and Operational Highlights
- Net New Unit Growth: 17 global experience locations added (4 corporately-managed, 10 partner-operated, 3 franchise).
- Shareholder Returns: $23.9 million returned to shareholders via share repurchases and quarterly dividends in H1 FY 2024.
- Operational Efficiency: No borrowings under its revolving credit facility, maintaining a strong cash position of $25.2 million.
Comments from Company Officers
Sharon Price John, President and CEO, highlighted the increasing momentum in experience locations and the strong improvement in web demand going into the third quarter. She emphasized confidence in meeting annual guidance and the strategic focus on leveraging the Build-A-Bear brand for profitable growth.
Voin Todorovic, CFO, noted that Q2 was the most profitable second quarter in the company’s history. Despite transitory web demand challenges, the company’s transformed business model showed sustainability, supported by strong cash flow generation and continued share repurchases.
Dividends and Share Repurchase Program
- Dividends: Quarterly cash dividends of $2.7 million in Q2 FY 2024 and $5.6 million in H1 FY 2024.
- Share Repurchases: $9.1 million spent to repurchase 341,621 shares in Q2 and $18.2 million to repurchase 685,027 shares in H1 FY 2024. An additional $1.7 million spent post-Q2 through August 28, 2024.
Forward Guidance
Build-A-Bear Workshop reaffirmed its fiscal 2024 outlook: - Revenue Growth: Low-to-mid single-digit percentage. - Pre-tax Income Growth: Low-single-digit percentage. - Net New Unit Growth: At least 50 experience locations. - Capital Expenditures: $18-$20 million. - Depreciation and Amortization: $15-$16 million. - Tax Rate: Approximately 26% (excluding discrete items).
Stock Price Movement
Following the earnings release, Build-A-Bear Workshop's stock saw a significant after-event change of 5.76%.
Overall, Build-A-Bear Workshop demonstrated strong financial resilience and operational efficiency in Q2 FY 2024, bolstered by strategic initiatives and a diversified revenue mix. The company’s reaffirmed guidance underscores confidence in continued growth and profitability.
