Build-A-Bear Workshop, Inc. (BBW) | Investment Case

1. Company Snapshot

1.a. Company Description

Build-A-Bear Workshop, Inc.operates as a multi-channel retailer of plush animals and related products.The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising.

Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes, accessories, and other toy and novelty items.The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites.As of January 29, 2022, it operated 346 stores, including 305 stores in the United States and Canada; and 41 stores in the United Kingdom and Ireland, as well as 72 franchised stores internationally.

The company was founded in 1997 and is headquartered in St. Louis, Missouri.

Show Full description

1.b. Last Insights on BBW

Here is a 90-word analysis of the positive drivers behind Build-A-Bear Workshop's recent performance: Build-A-Bear Workshop's strong Q3 2024 results, with revenue growth of 10.19% year-over-year and 6.25% quarter-over-quarter, drove operating margins and net margins higher to 10.92% and 8.40%, respectively. The company's asset-light shift, new partner stores, and international expansion are key growth drivers. Its debt-free balance sheet and aggressive share buybacks also support its attractiveness as a long-term dividend stock. With a focus on evolving its business, accelerating digital transformation, and returning capital to shareholders, Build-A-Bear Workshop is well-positioned for continued revenue expansion and growth.

1.c. Company Highlights

Last Price	59.96
Change Percentage	0.47%
Open	60.2
Previous Close	59.68
Market Cap ( Millions)	787
Volume	288206
Year High	75.85
Year Low	32.55
M A 50	57.99
M A 200	54.01

FCF Yield	5.94%
Dividend Yield	1.47%
ROE	38.73%
Debt / Equity	78.49%
Net Debt / EBIDTA	103.19%
Price To Book	5.18
Price Earnings Ratio	13.57
Price To FCF	16.84
Price To sales	1.5
EV / EBITDA	10.01

2. Build-A-Bear Workshop's Q3 2025 Earnings: A Record-Breaking Performance

Build-A-Bear Workshop, Inc.'s third quarter 2025 revenue grew nearly 3% to $122.7 million, with pretax income declining $2 million to $10.7 million, due to a $4 million negative tariff impact. For the first nine months, revenue grew over 8% to $375 million and pretax income increased 15% to $46 million. The company returned $26.1 million to shareholders through dividends and buybacks, contributing to over 24% EPS growth. The actual EPS came out at $0.62, beating estimates of $0.55.

Publication Date: Dec -07

                                    📋 Highlights
                                    Q3 Revenue Growth:
                                                Revenue rose 3% to $122.7 million, despite a $4 million tariff impact reducing pretax income to $10.7 million.
Global Expansion Momentum:
                                                Added 24 net new stores (70% international), expanding to 651 locations across 33 countries.
Full-Year Guidance:
                                                Aiming for $500+ million revenue and 20%+ commercial revenue growth, with pretax income targeting $20 million.
Product Diversification Success:
                                                Mini beans sold 3 million units, driving 60% Q4 growth, while Glisten ($100) and licensed partnerships boost high-end appeal.
Tariff Mitigation:
                                                Projected $11 million annual tariff impact, offset by cost cuts, price increases, and a Chinese tariff rate reduction (30% to 20%).

                                

Store Expansion and Global Presence

The company has 651 locations in 33 countries and added 24 net new experience locations in the quarter, 70% of which were outside the United States. This expansion is expected to drive future growth, with the company opening second locations in large malls like American Dream and Mall of America, which can provide leverage in lease terms and create opportunities for growth.

Diversification Strategy and Product Mix

The company discussed its diversification strategy, including the introduction of high-end products like Glisten, a limited-edition item priced at $100, and lower-end products like mini beans at $9-$10. Mini beans have been successful, with sales approaching 3 million units and a 60% increase in Q4. The company is expanding mini beans into new retailers and introducing licensed products, such as a partnership with Sanrio.

Tariff Impact and Mitigation

Tariffs are expected to impact the company by less than $6 million in the fourth quarter, and the company has guided to less than $11 million in tariffs impact for the year. A Chinese rate reduction from 30% to 20% will provide some relief. The company is working to mitigate the challenges through cost reduction, selective price increases, and promotions.

Valuation and Growth Prospects

With a P/E Ratio of 11.27 and an ROE of 38.73%, the company's valuation appears reasonable. Analysts estimate next year's revenue growth at 8.8%. The company's ability to manage expenses and drive experience and ticket value rather than relying on promotions is expected to drive future growth. The expansion into new retail environments offers thousands of doors for growth, and mini beans benefits from the company's brand equity, standing out as a quality product.

3. NewsRoom

Thrivent Financial for Lutherans Has $59.83 Million Holdings in Build-A-Bear Workshop, Inc. $BBW

Feb -02

Source: defenseworld.net

ONE OF BUILD-A-BEAR'S FASTEST SELL-OUTS RETURNS FOR NATIONAL HUG DAY

Jan -20

Source: prnewswire.com

2 Cheap Mid-Cap Growth Stocks That Can Benefit From Lower Interest Rates

Jan -15

Source: 247wallst.com

BIG HEART, BIGGER IMPACT - BUILD-A-BEAR WORKSHOP EARNS ONE OF AMERICA'S TOP WORKPLACE HONORS

Jan -15

Source: prnewswire.com

Brokerages Set Build-A-Bear Workshop, Inc. (NYSE:BBW) PT at $64.75

Jan -14

Source: defenseworld.net

Build-A-Bear Workshop: An Unlikely Growth Story Trading At A Great Price

Jan -14

Source: seekingalpha.com

Build-A-Bear Workshop (NYSE:BBW) Share Price Crosses Above 200-Day Moving Average – Here’s Why

Jan -09

Source: defenseworld.net

2 Long-Term Winners I'm Looking To Buy In 2026

Jan -01

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.89%)

6. Segments

Direct-to-Consumer

Expected Growth: 5%

Build-A-Bear Workshop's Direct-to-Consumer segment growth is driven by e-commerce expansion, personalized and interactive online experiences, strategic partnerships, and targeted marketing efforts. Additionally, the company's focus on digital transformation, improved user experience, and omnichannel integration have contributed to the 5% growth.

Commercial

Expected Growth: 3%

Build-A-Bear Workshop's 3% growth is driven by increasing brand awareness, strategic partnerships, and omnichannel expansion. The company's focus on experiential retail, loyalty programs, and personalized products also contributes to growth. Additionally, the company's efforts to optimize store operations, improve supply chain efficiency, and invest in digital marketing have helped to drive sales and revenue.

International Franchising

Expected Growth: 4%

Build-A-Bear Workshop's international franchising growth is driven by increasing demand for personalized retail experiences, expansion into underserved markets, strategic partnerships, and a strong brand reputation. Additionally, the company's flexible business model, which allows for easy adaptation to local markets, contributes to its success.

7. Detailed Products

Build-Your-Own Stuffed Animals

Customizable stuffed animals that can be personalized with various outfits, accessories, and sounds

Licensed Characters

Stuffed animals and accessories featuring popular licensed characters from franchises like Disney, Pixar, and more

Fashion and Accessories

Outfits, shoes, hats, and other accessories for stuffed animals

Sound Chips and Record Your Voice

Sound chips that can be inserted into stuffed animals, allowing children to record and play back their own voices

Gift Cards and Packages

Gift cards and packages that include a stuffed animal, outfit, and accessories

Parties and Events

In-store parties and events where children can build and customize their own stuffed animals

8. Build-A-Bear Workshop, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Build-A-Bear Workshop, Inc. because the company offers a unique and personalized experience that is difficult to replicate. While there are other toy retailers, the ability to build and customize a stuffed animal is a distinctive feature that sets Build-A-Bear apart.

Bargaining Power Of Customers

The bargaining power of customers is medium for Build-A-Bear Workshop, Inc. because while customers have some flexibility to negotiate prices, the company's unique products and experiences limit the ability to switch to competitors.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Build-A-Bear Workshop, Inc. because the company has a diverse supplier base and is not heavily reliant on a single supplier. This reduces the negotiating power of suppliers.

Threat Of New Entrants

The threat of new entrants is medium for Build-A-Bear Workshop, Inc. because while there are barriers to entry, such as the need for significant capital investment, the company's business model is not highly complex and could be replicated by a new entrant.

Intensity Of Rivalry

The intensity of rivalry is high for Build-A-Bear Workshop, Inc. because the company operates in a competitive retail environment with many established players. The company must continually innovate and differentiate itself to maintain market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	39.19%
Debt Cost	3.95%
Equity Weight	60.81%
Equity Cost	12.35%
WACC	9.05%
Leverage	64.45%

11. Quality Control: Build-A-Bear Workshop, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Build-A-Bear Workshop

A-Score: 6.0/10

Value: 5.5

Growth: 6.7

Quality: 7.2

Yield: 5.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

Winmark

A-Score: 5.8/10

Value: 2.8

Growth: 5.0

Quality: 8.4

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

Tandy Leather Factory

A-Score: 5.4/10

Value: 9.1

Growth: 3.9

Quality: 6.9

Yield: 5.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

1stdibs

A-Score: 5.1/10

Value: 7.7

Growth: 4.7

Quality: 5.3

Yield: 0.0

Momentum: 9.0

Volatility: 3.7

1-Year Total Return ->

Liquidity Services

A-Score: 4.4/10

Value: 3.1

Growth: 6.9

Quality: 7.0

Yield: 0.0

Momentum: 4.5

Volatility: 5.0

1-Year Total Return ->

A.K.A. Brands

A-Score: 2.5/10

Value: 7.6

Growth: 3.4

Quality: 2.0

Yield: 0.0

Momentum: 1.5

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.57%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.05%

Build-A-Bear Workshop, Inc. - US1200761047

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BBW

1.c. Company Highlights

Better Quality

Higher Growth

Strong Momentum

Earnings Beats

Earnings Miss

Higher Yield

Revenues Miss

Average Yield

Revenues Beats

Average Growth

2. Build-A-Bear Workshop's Q3 2025 Earnings: A Record-Breaking Performance

Store Expansion and Global Presence

Diversification Strategy and Product Mix

Tariff Impact and Mitigation

Valuation and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.89%)

6. Segments

Direct-to-Consumer

Expected Growth: 5%

Commercial

Expected Growth: 3%

International Franchising

Expected Growth: 4%

7. Detailed Products

Build-Your-Own Stuffed Animals

Licensed Characters

Fashion and Accessories

Sound Chips and Record Your Voice

Gift Cards and Packages

Parties and Events

8. Build-A-Bear Workshop, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Build-A-Bear Workshop, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

59.96$

Current Price

59.96$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA