BUILD-A-BEAR WORKSHOP INCBBW财报
NYSE · 可选消费 · 爱好、玩具及游戏商店
Build-A-Bear Workshop, Inc. is an American retailer headquartered in St. Louis, Missouri that sells teddy bears, stuffed animals, and characters. During store visits, customers go through an interactive process where the stuffed animal of their choice is assembled and tailored to their own preferences including varying scents, sounds, looks, and outfits. Build-A-Bear Workshop is the largest chain that operates in this style. The company's slogan was "Where Best Friends Are Made" from 1997–201...
What changed in BUILD-A-BEAR WORKSHOP INC's 10-K — 2025 vs 2026
Top changes in BUILD-A-BEAR WORKSHOP INC's 2026 10-K
209 paragraphs added · 152 removed · 134 edited across 5 sections
- Item 7. Management's Discussion & Analysis+78 / −50 · 48 edited
- Item 1A. Risk Factors+62 / −54 · 49 edited
- Item 1. Business+51 / −35 · 26 edited
- Item 5. Market for Registrant's Common Equity+12 / −7 · 6 edited
- Item 2. Properties+6 / −6 · 5 edited
Item 1. Business
Business — how the company describes what it does
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Item 1. Business
Business — how the company describes what it does
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2025 filing
2026 filing
Specificall y, we have key strategic relationships with select companies in which we feature their brands on products sold in our stores, including Disney®, NBCUniversal, Lucasfilm, Warner Bros., Pokémon, ViacomCBS, Nintendo, and major professional sports leagues along with other culturally relevant brands.
Specificall y, we have key strategic relationships with select companies in which we feature their brands on products sold in our stores, including Disney®, NBCUniversal, Lucasfilm, Warner Bros., Pokémon, ViacomCBS, Nintendo, Sanrio, and major professional sports leagues along with other culturally relevant brands.
In Europe, we contract with a third-party distribution center in Selby, England under an agreement guaranteed through January 2025, and continuing on if neither party terminates the agreement, to fulfill our store and e-commerce fulfillment needs. This agreement contains clauses that allow for termination if certain performance criteria are not met.
In Europe, we contract with a third-party distribution center in Selby, England under an agreement guaranteed through January 2026 , and continuing on if neither party terminates the agreement, to fulfill our store and e-commerce fulfillment needs. This agreement contains clauses that allow for termination if certain performance criteria are not met.
In Asia, we contract for office space and a third-party distribution center in Shanghai, China, with the office space contract ending in August 2024 and the distribution center contract ending in April 2024, with both contracts expected to be renewed before their respective expiration dates. Transportation from the warehouses to stores is managed by several third-party logistics providers.
In Asia, we contract for office space and a third-party distribution center in Shanghai, China, with the office space contract ending in August 2025 and the distribution center contract ending in April 2025, with both contracts expected to be renewed before their respective expiration dates. Transportation from the warehouses to stores is managed by several third-party logistics providers.
Operating Strategies We believe that the initiatives and investments that were put in place prior to the pandemic, and in many cases, we accelerated during the pandemic, are driving improved results, as we delivered growth in total revenues and profit in fiscal 2023.
Operating Strategies We believe that the initiatives and investments that were put in place prior to the pandemic, and in many cases, we accelerated during the pandemic, are driving improved results, as we delivered growth in total revenues and profit in fiscal 2022, 2023 and 2024.
To continue to drive revenue and profit growth, we remain focused on our strategic priorities, which are centered primarily on three key areas: • The global expansion of our unique experience locations. D uring fiscal 2023, we opened a net 37 Build-A-Bear Workshop retail experience locations, through a combination of corporately-managed, third-party operated, and franchise business models.
To continue to drive revenue and profit growth, we remain focused on our strategic priorities, which are centered primarily on three key areas: • The global expansion of our unique experience locations. D uring fiscal 2024, we opened a net 64 Build-A-Bear Workshop retail experience locations, through a combination of corporately-managed, third-party operated, and franchise business models.
In fiscal 2024, we expect net new unit growth of at least 50 locations in North America and internationally through our three store business models.
In fiscal 2025, we expect net new unit growth of at least 50 locations in North America and internationally through our three store business models.
The average time from product conception to the arrival in stores is approximately 12 months, including approximately 90 to 150 days from the beginning of production to in-store delivery. Through an ongoing analysis of selling trends, we regularly update our product assortment by increasing quantities of productive styles and eliminating less productive styles.
Historically, the average time from product conception to the arrival in stores has been approximately 12 months, including approximately 90 to 150 days from the beginning of production to in-store delivery. Through an ongoing analysis of selling trends, we regularly update our product assortment by increasing quantities of productive styles and eliminating less productive styles.
We have made a concerted effort to shift to non-traditional locations, including family-centric tourist and hospitality sites, as well as partner-operated and franchise locations, and now have more than 35% of total stores in non-traditional settings.
We have made a concerted effort to shift to non-traditional locations, including family-centric tourist and hospitality sites, as well as asset-light partner-operated and franchise locations, and now have more than a third of total stores in non-traditional settings.
In early 2024, we created a new position of Chief Customer & Digital Officer to further align our operating structure with our digital strategy. • Drive profitable growth through investment initiatives while maintaining a commitment to return capital to shareholders .
In September 2024, we created a new position of Chief Revenue Officer to further align our operating structure with our digital strategy. • Drive profitable growth through investment initiatives while maintaining a commitment to return capital to shareholders .
Build-A-Bear's pop-culture and multi-generational appeal have played a key role in growing our total addressable market beyond children by adding teens and adults with entertainment and sports licensing, collectible and gifting offerings, as well as by introducing new products and adding categories beyond plush.
Build-A-Bear's pop-culture appeal has played a key role in expanding our total addressable market beyond children by adding teens and adults with entertainment and sports licensing, collectible and gifting offerings, as well as by introducing new products and adding categories beyond plush.
For the 2023 fiscal year, the Company had a net new unit growth of 37 experience locations, comprised of nine corporately managed locations, 22 partner-operated locations, and six international franchise locations. Segments and Geographic Areas Our business is conducted through three reportable segments consisting of direct-to-consumer (“DTC”), commercial, and international franchising.
For the 2024 fiscal year, the Company had a net new unit growth of 64 experience locations, comprised of nine corporately managed locations, 46 partner-operated locations, and nine international franchise locations. Segments and Geographic Areas Our business is conducted through three reportable segments consisting of direct-to-consumer (“DTC”), commercial, and international franchising.
While tourist sites have been and will remain a critical part of our location expansion strategy, recent research data supports our opportunity to reengage in profitable expansion in traditional locations on a more localized level, particularly given the numerous and flexible corporate store models we have developed in the past few years.
While tourist sites have been and will remain a critical part of our location expansion strategy, recent research data supports our opportunity to reengage in profitable expansion in traditional locations on a more localized level, particularly given the numerous and flexible corporate store models we have developed in the past few years. • Accelerate our multi-year comprehensive digital transformation across the entire company.
Our retail stores also act as “mini distribution centers” that provide efficient omnichannel support for our digital demand. The primary consumer target for our retail stores is families with children while our e-commerce sites focus on collectors and gift givers that are primarily tweens, teens and adults.
Our retail stores also act as mini distribution centers that provide efficient omnichannel support for our growing digital demand. The primary consumer target for our brick-and-mortar locations is families with children, while our e-commerce sites focus on collectors and gift givers that are primarily tweens, teens, and adults.
This reflects 359 corporately-managed locations, including 320 stores in the United States (“U.S.”) and Canada and 39 stores in the United Kingdom (“U.K.”) and Ireland, 92 partner-operated locations operated through our "third-party retail" model in which we sell our products on a wholesale basis to other companies that then, in turn, execute our retail experience, and 74 franchised stores operating internationally, all under the Build-A-Bear Workshop brand.
This reflects 368 corporately-managed locations, including 328 stores in the United States (“U.S.”) and Canada and 40 stores in the United Kingdom (“U.K.”) and the Republic of Ireland, 138 partner-operated locations operated through our "third-party retail" model in which we sell our products on a wholesale basis to other companies that then, in turn, execute our retail experience, and 83 franchised stores operating internationally, all under the Build-A-Bear Workshop brand.
These ongoing programs allow our brick and mortar locations to operate essentially as mini distribution centers allowing us to leverage the geographic proximity of stores, available inventory and labor to fulfill digital demand. Employees As of February 3, 2024 , we had approximately 1,000 full-time and 3,550 regular part-time employees in the U.S., Canada, the U.K., and Ireland.
These ongoing programs allow our brick-and-mortar locations to operate essentially as mini distribution centers allowing us to leverage the geographic proximity of stores, available inventory and labor to fulfill digital demand. Human Capital Management Employees As of February 1, 2025, we had approximately 1,000 full-time and 4,100 part-time employees in the U.S., Canada, the UK, and the Republic of Ireland.
As of February 3, 2024, the Company had 525 global locations through a combination of its corporately-managed, partner-operated, and international-franchise models.
As of February 1, 2025, the Company had 589 global locations through a combination of its corporately-managed, partner-operated, and international-franchise models.
Since our signature products, teddy bears and other stuffed animals, are included in the toy category, we compete indirectly with a number of companies that sell plush products or premium children’s toys, including, but not limited to, Ty, Mattel, Hasbro, Lego, Ganz, and Steiff.
Since our signature products, teddy bears and other stuffed animals, are included in the toy category, we compete indirectly with a number of companies that sell plush products or premium children’s toys, including, but not limited to, Ty, Mattel, Hasbro, and Lego. We also compete with toy retailers including online and mass merchandisers such as Amazon, Walmart, and Target.
For our retail stores, we view the Build-A-Bear Workshop store experience as a distinctive combination of entertainment and retail with limited direct competition.
Competition As our company has diversified and evolved, we view our competition through a number of categories. For our retail stores, we view the Build-A-Bear Workshop store experience as a distinctive combination of entertainment and retail with limited direct competition.
The number of part-time employees at all locations fluctuates depending on our seasonal needs. None of our employees are represented by a labor union, and we believe our relationship with our employees is good. Competition As our company has diversified and evolved, we view our competition through a number of categories.
The number of part-time employees at all locations fluctuates depending on our seasonal needs. None of our employees are represented by a labor union, and we believe our relationship with our employees is good.
Over the last 26 years, with more than 240 million furry friends sold to guests around the world, Build-A-Bear has become a brand with high consumer awareness, positive affinity, and strong retail influence. We are leveraging this brand strength to grow our brick-and-mortar retail footprint beyond traditional malls through a range of store sizes, formats and locations including tourist destinations.
Over the last 27 years, Build-A-Bear has become a brand with high consumer awareness, positive affinity, and strong retail influence by leveraging our brand strength to expand our brick-and-mortar retail footprint through a range of store sizes, formats, and locations, including tourist destinations.
The Company announced a new dividend program on March 13, 2024, declaring an initial quarterly cash dividend of $0.20 per share. 6 Table of Contents Merchandise Sourcing and Inventory Management Our stores and e-commerce sites offer an extensive and coordinated selection of merchandise, including a wide range of different styles of plush products to be stuffed, pre-stuffed plush products, sounds and scents that can be added to the stuffed animals and a broad variety of clothing, shoes and accessories, as well as other brand appropriate toy and novelty items including family sleepwear, sourced from multiple vendors primarily in Vietnam and China.
This higher-level of cash flows has been used to increase support for key initiatives to deliver long-term profitable growth, while also returning capital to shareholders through dividends and share repurchases. 6 Table of Contents Merchandise Sourcing and Inventory Management Our stores and e-commerce sites offer an extensive and coordinated selection of merchandise, including a wide range of different styles of plush products to be stuffed, pre-stuffed plush products, sounds and scents that can be added to the stuffed animals and a broad variety of clothing, shoes and accessories, as well as other brand appropriate toy and novelty items including family sleepwear, sourced from multiple vendors primarily in Vietnam and China.
Our relationships with our vendors generally are on a purchase order basis without contractual obligation to provide adequate supply or acceptable pricing on a long-term basis . As of February 3, 2024, our inventory balance was $63.5 million, a decrease of $7.0 million compared to January 28, 2023. We are comfortable with the composition and level of our inventory.
Our relationships with our vendors generally are on a purchase order basis without contractual obligation to provide adequate supply or acceptable pricing on a long-term basis . As of February 1, 2025, our inventory balance was $69.8 million, an increase of $6.3 million compared to February 3, 2024.
Our ongoing digital transformation, which touches our e-commerce business, consumer loyalty program and digital marketing and content, has led to omni-channel growth over the past several years.
In addition to growing our corporately-managed store footprint, we are also growing through third-party-operated and franchised stores, particularly for our international expansion. Our ongoing digital transformation, which touches our e-commerce business, consumer loyalty program, and digital marketing and content, has led to omnichannel growth over the past several years.
We operate a vertical retail channel with experience locations that feature a unique combination of interactivity and product in which guests can “make their own stuffed animals” by participating in the stuffing, fluffing, dressing, accessorizing and naming of their own teddy bears and other stuffed animals.
We operate a vertical retail channel with experience locations that feature a unique combination of interactivity and product in which guests can “make their own stuffed animals” by participating in the stuffing, dressing, accessorizing and naming of their own teddy bears and other stuffed animals along with the now-famous "Heart Ceremony" that helps to make the experience memorable by bringing the furry friend to "life." We also operate e-commerce sites that focus on gift-giving, collectible merchandise and licensed products that appeal to consumers that have an affinity for characters from a range of entertainment, sports, art, and gaming properties.
ITEM 1. BUSINESS Overview Build-A-Bear Workshop, Inc., a Delaware corporation, was formed in 1997 as a mall-based, experiential specialty retailer where children and their families could create their own stuffed animals by participating in the stuffing, fluffing, dressing, accessorizing, and naming of their own teddy bears and other plush toys.
Guests create their own stuffed animals by participating in the stuffing, dressing, accessorizing, and naming of their own teddy bears and other plush toys based on the Company’s own intellectual property and in conjunction with a variety of best-in-class licenses.
In addition to growing our e-commerce channel, this includes our marketing and loyalty programs, including our Count Your Candles offer, and content and entertainment initiatives, such as our first-ever animated theatrical film in 2023 “Glisten and the Merry Mission.” Our digital transformation is designed to elevate our business efficiency, integrate our customer communications to acquire new customers and increase purchase occasions, and expand our total addressable market by reaching beyond our core kid base and to continue to acquire new tween, teen and adult consumers by new offerings including gifting and personalization programs.
Our digital transformation is also designed to elevate our business efficiency, integrate our consumer communications to acquire new guests and increase purchase occasions while expanding our total addressable market beyond our core kid base and to acquire tween, teen and adults with new offerings including gifting, personalization and licensed options.
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We believe the hands-on and interactive nature of our experience locations, our personal service model and engaging digital shopping experiences result in guests forming an emotional connection with our brand.
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ITEM 1. BUSINESS Overview Build-A-Bear Workshop, Inc., a Delaware corporation, was formed in 1997 as a mall-based, experiential specialty retailer for children. Build-A-Bear has evolved to become a beloved multi-generational brand focused on its mission to “add a little more heart to life” where guests of all ages make their own “furry friends” in celebration and commemoration of life moments.
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We are also growing through our websites, which focus on gift-giving, collectible merchandise, and licensed products. In addition to growing our corporately-managed store and e-commerce footprint, we are also growing through third-party operated and franchised stores, particularly for our international expansion.
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The hands-on and interactive nature of our nearly 600 company-owned, partner-operated and franchise experience locations around the world, combined with Build-A-Bear’s pop-culture appeal, often fosters a lasting and emotional brand connection with consumers, and has enabled the Company to expand beyond its retail stores to include e-commerce sales on www.buildabear.com, third-party-operated stores, and non-plush branded consumer categories via out-bound licensing agreements with leading manufacturers, as well as the creation of engaging content via Build-A-Bear Entertainment (a subsidiary of Build-A-Bear Workshop, Inc.).
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We also operate e-commerce sites that focus on gift-giving, collectible merchandise and licensed products that appeal to consumers that have an affinity for characters from a range of entertainment, sports, art, and gaming properties. Our engaging digital purchasing experiences include our online “Bear-Builder”, an age-gated adult-focused “Bear Cave” and the “HeartBox” gift site.
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We primarily operate through a vertical retail channel with corporately-managed, partner-operated, and franchise locations that feature a unique combination of experience and product in which guests can “make their own stuffed animals.” We also operate buildabear.com that serves as an information and communications tool to plan a store visit as well as an e-commerce. that focuses on gift-giving, collectible merchandise, and licensed products that appeal to consumers that have an affinity for characters from a range of entertainment, sports, art, and gaming properties.
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We also continue to develop innovative experiences to expand our brand reach, including Build-A-Bear vending machines, also known as ATMs or automatic teddy machines. • Accelerate our comprehensive digital transformation.
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Additionally, we offer products in non-plush consumer categories via outbound licensing agreements with leading manufacturers. Our strategy includes leveraging our brand strength to continue to evolve our brick-and-mortar retail footprint with a versatile range of formats and locations, including tourist destinations, expand into international markets primarily via our partner-operated and franchise store models, and grow our e-commerce business.
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Our 2023 e-commerce sales, inclusive of softness during the year, have tripled since 2018, which was prior to the implementation of key digital initiatives.
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By leveraging our brand strength and owned intellectual properties through the creation of engaging short-form and long-form content for kids and adults, we endeavor to develop a circle of continuous engagement to increase purchase occasions and to continue to broaden the consumer base beyond children by adding tweens, teens and adults with entertainment and sports licensing, plus collectible and gifting offerings.
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This higher-level of cash flows has been used to increase support for key initiatives to deliver long-term profitable growth, while also returning capital to shareholders through dividends and share repurchases.
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Our engaging digital purchasing experiences include our online “Bear-Builder”, an age-gated adult-focused “Bear Cave” microsite. Our retail stores also act as “mini distribution centers” that provide efficient omnichannel support for our digital demand.
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The Company returned capital to shareholders through two special dividends paid December 27, 2021, and April 6, 2023, totaling $42 million, through share repurchases from a $25 million stock repurchase program that was adopted in November 2021, and through a $50 million stock repurchase program announced in August 2022.
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The primary consumer target for our retail stores is families with children while our e-commerce sites focus on collectors and gift givers that are primarily tweens, teens and adults.
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We also compete with toy retailers including online and mass merchandisers such as Amazon, Walmart or Target as well as specialty stores such as The Entertainer Toy Shop, Smyths Toys Superstores and Hamleys. As our gift-giving and affinity business has grown, our competitors include diverse retail and online companies such as Vermont Teddy Bear, Funko, or 1-800 Flowers .
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In addition to systems upgrades and e-commerce evolution, we have been enhancing o ur marketing and loyalty programs as well as creating digital content and entertainment initiatives to increase consumer engagement.
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Since we sell a product that integrates merchandise and experience, we also view our competition as any company that competes for family time and entertainment dollars, such as movie theaters, amusement parks and arcades, other mall-based entertainment venues, party venues and online entertainment.
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The Company accelerated inventory purchases in the second half of fiscal 2024 in anticipation of the uncertainty in cost due to potential tariffs. We are comfortable with the composition and level of our inventory.
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Our Culture Our mission statement is to "add a little more heart to life." This tenet guides both the experience that we provide our guests and the way we treat our fellow associates, vendors and partners. Every day, we work to create a unique and fun environment that values and promotes teamwork and individual contributions.
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Our goals include looking for possibilities, not obstacles, to help us strive for breakthrough results. Employee Engagement We encourage our teams to acknowledge success, recognize individual and team contributions, and to have fun along the way.
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It is important for our associates to feel that they are a part of a bigger mission to spread joy around the world because, as our founder Maxine Clark said, "a teddy bear hug is understood in every language." We pride ourselves on cultivating engaging connections with associates such as regular Global Bearquarters Meetings, Experience First Fun (monthly in-person events), philanthropic team-building events via our Foundation and periodically scheduled events that facilitate direct access to our leadership team. .
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Human Capital Management Oversight Our recruitment is all about finding the perfect fit for each position. We seek out individuals who will thrive and contribute to our special Bear family. Our Build-A-Bear HR teams scout for the best talent to fill a wide variety of roles and functions.
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They rely on various avenues to support their efforts, including internal job placements and promotions, career websites, social media, internships, and temporary hiring services, as well as guests who have a desire to join our team. We have set a minimum age of 18 to work in our stores, Bearhouse, and Bearquarters.
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We ensure the right fit by providing each of our managers access to digital surveys completed by candidates, as well as interview guides to ensure rigorous interviews are completed. Refence checks and psychological tests are also utilized to help ensure that candidates values align with our mission and vision.
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Once hired, our field talent development strategy focuses on the entire employee lifecycle. We provide comprehensive training programs that are tailored to different roles and responsibilities, both when employees join the Company and on an ongoing basis. We strive to nurture organizational capabilities through associate development, programs, and processes that help Build-A-Bear achieve its vision.
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Learning never stops at our Company as we are committed to the development of our people and take a promote-from-within approach. We help our associates develop their skills and build their confidence to be the best versions of themselves.
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Compensation Philosophy, Benefits, and Wellness Our approach to compensation focuses on consistency and fairness across our offices, distribution centers, and stores world-wide. We have conducted compensation risk assessments to evaluate our pay practices and policies to help identify if there are high-risk compensation plans and assist us in better understanding which plans may pose moderate risks.
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Results of the assessments are shared with the Compensation and Human Capital Committee of our Board of Directors to inform its review of the Company's base salary and bonus initiatives, incentive bonus framework, as well as executive and director compensations assessments.
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We continuously strive to make Build-A-Bear a fun place and make it a point to care about the health, well-being, and long-term financial security of our associates and their families. We achieve this with our comprehensive health coverage and other important employee benefits including paid time off, savings and retirement benefits, and life and disability insurance.
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We also provide an online corporate perquisites program, a scholarship program, as well as employee assistance programs, most notably the Beverly Fund, created to honor one of our associates who lost their battle with cancer.
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Giving Back: Philanthropy and Social Impact The act of giving – providing support and caring for one another – is one of our core values and has been a pillar of our brand throughout our history. Our giving program comes to life through the work of the Build-A-Bear Foundation and the generous acts of our associates and guests.
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Founded in 2004, the Build-A-Bear Foundation is the charitable arm of our Company. Its mission is to add a little more to life by sharing hugs, inspiring creativity, and supporting those in need.
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Our giving strategy is driven by three impactful programs: The Build-A-Bear Foundation Literacy Programs, the Hearts’ ‘n’ ‘Hugs Fund and charitable partnerships that cultivate community strength and impact by funding remarkable organizations that empower people to overcome serious challenges and meet the diverse needs in our communities.
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Additionally, because approximately one-third of our business is associated with birthdays and/or parties and as our gift-giving and affinity business has grown, our competition has also expanded to include gift-giving and collectibles businesses as well as companies that compete for family leisure time and entertainment dollars such as movie theaters, amusement parks, arcades, and party venues.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
49 edited+13 added−5 removed131 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
49 edited+13 added−5 removed131 unchanged
2025 filing
2026 filing
Such a weakened economic and business climate, as well as consumer uncertainty created by such a climate, could harm our revenues and profitability. 9 Table of Contents Our success and profitability not only depend on consumer demand for our products, but also on our ability to produce and sell those products at costs which allow us to make a profit.
Such a weakened economic and business climate, as well as consumer uncertainty created by such a climate, could harm our revenues and profitability. 9 Table of Contents Our success and profitability depend not only on consumer demand for our products, but also on our ability to produce and sell those products at costs which allow us to make a profit.
In addition, negative commentary regarding our company or the products we sell may be posted on social media sites and other platforms at any time and may negatively impact our reputation or business. Our future success depends, in part, on the popularity and consumer demand for brands of licensors such as Disney, NBCUniversal, Lucasfilm, Warner Bros., and Nintendo.
In addition, negative commentary regarding our company or the products we sell may be posted on social media sites and other platforms at any time and may negatively impact our reputation or business. Our future success depends, in part, on the popularity and consumer demand for brands of licensors such as Sanrio, Disney, NBCUniversal, Lucasfilm, Warner Bros., and Nintendo.
A number of our leases include a termination provision which applies if we do not meet certain sales levels during a specified period, typically in the third to fourth year and the sixth to seventh year of the lease, which may be at either the landlord’s option or ours.
A number of our leases include a termination provision that applies if we do not meet certain sales levels during a specified period, typically in the third to fourth year and the sixth to seventh year of the lease, which may be at either the landlord’s option or ours.
Further landlord consolidation may negatively impact our results of operations. Our leases in the U.K. and Ireland also typically contain provisions requiring rent reviews every five years in which the base rent that we pay is adjusted to current market rates.
Further landlord consolidation may negatively impact our results of operations. Our leases in the U.K. and the Republic of Ireland also typically contain provisions requiring rent reviews every five years in which the base rent that we pay is adjusted to current market rates.
The retail industry continues to rapidly evolve and consumers continue to increasingly embrace digital shopping. As a result, the portion of total consumer expenditures with retailers occurring through digital platforms is increasing and the pace of this increase could continue to accelerate.
The retail industry continues to evolve rapidly and consumers continue to embrace digital shopping. As a result, the portion of total consumer expenditures with retailers occurring through digital platforms is increasing, and the pace of this increase could continue to accelerate.
In addition, if we miscalculate the market for our merchandise or the purchasing preferences of our guests, we may be required to sell a significant amount of our inventory at discounted prices or even below costs, thereby adversely affecting our financial condition and profitability.
In addition, if we miscalculate the market for our merchandise or the purchasing preferences of our guests, we may be required to sell a significant amount of our inventory at discounted prices or even below cost, thereby adversely affecting our financial condition and profitability.
Whether due to inflation or other factors, rising petroleum and material prices, increased transportation and shipping costs, and increased labor costs in the markets in which our products are manufactured and sold all may further increase the costs we incur to produce and transport our products, which in turn may reduce our margins, reduce our profitability, and harm our business, in particular if we are unable to further adjust prices beyond what we were able to do in fiscal 2023, as discussed above.
Whether due to inflation or other factors, tariffs, rising petroleum and material prices, increased transportation and shipping costs, and increased labor costs in the markets in which our products are manufactured and sold all may further increase the costs we incur to produce and transport our products, which in turn may reduce our margins, reduce our profitability, and harm our business, in particular if we are unable to further adjust prices beyond what we were able to do in fiscal 2024, as discussed above.
Our operating results for one period may not be indicative of results for other periods, and may fluctuate significantly due to a variety of factors, including: • the profitability of our stores; • increases or decreases in total revenues; • changes in general economic conditions and consumer spending patterns; • the timing and frequency of our marketing initiatives; • changes in foreign currency exchange rates; • seasonal shopping patterns; • the timing of store closures, relocations and openings and related expenses; • the effectiveness of our inventory management; • changes in consumer preferences; • the continued introduction and expansion of merchandise offerings including those associated with major motion pictures; • actions of competitors or mall anchors and co-tenants; • weather conditions and natural disasters; • public health issues such as pandemics, and associated impacts on store openings and store operations • the timing and frequency of national media appearances and other public relations events; and • the impact of a 53rd week in our fiscal year, which occurs approximately every six years, (e.g., occurred in fiscal 2023).
Our operating results for one period may not be indicative of results for other periods, and may fluctuate significantly due to a variety of factors, including: • changes in tariffs and other foreign policy matters that may impact pricing; • changes in foreign exchange rates; • the profitability of our stores; • increases or decreases in total revenues; • changes in general economic conditions and consumer spending patterns; • the timing and frequency of our marketing initiatives; • seasonal shopping patterns; • the timing of store closures, relocations and openings and related expenses; • the effectiveness of our inventory management; • changes in consumer preferences; • the continued introduction and expansion of merchandise offerings including those associated with major motion pictures; • actions of competitors or mall anchors and co-tenants; • weather conditions and natural disasters; • public health issues such as pandemics, and associated impacts on store openings and store operations • the timing and frequency of national media appearances and other public relations events; and • the impact of a 53rd week in our fiscal year, which occurs approximately every six years, (e.g., occurred in fiscal 2023).
We are subject to trade restrictions in the form of tariffs or quotas, or both, applicable to the products we sell as well as to raw material imported to manufacture those products. Such tariffs or quotas are subject to change. Our compliance with the regulations is subject to interpretation and review by applicable authorities.
We are subject to trade restrictions in the form of tariffs or quotas, or both, applicable to the products we sell and to raw material imported to manufacture those products. Such tariffs or quotas are subject to change. Our compliance with the regulations is subject to interpretation and review by applicable authorities.
Our strategy, which includes investments in e-commerce platforms, digital technology, and other consumer initiatives, may not adequately or effectively allow us to continue to grow our e-commerce business, increase sales, or grow our position in the specialty retail and gifting and collectibles markets such as adult to adult gifting (e.g., Heartbox), adult driven affinity (e.g., The Bear Cave), and occasion gifting (e.g., graduation, Valentine's Day).
Our strategy, which includes investments in e-commerce platforms, digital technology, and other consumer initiatives, may not adequately or effectively allow us to continue to grow our e-commerce business, increase sales, or grow our position in the specialty retail and gifting and collectibles markets such as adult to adult gifting (e.g., gift boxes), adult driven affinity (e.g., The Bear Cave), and occasion gifting (e.g., graduation, Valentine's Day).
Any such harm to our reputation or any failure or perceived failure by us to adequately address ESG-related activities, including setting of metrics or enhancing disclosures, could adversely affect our business, financial performance, and growth. 18 Table of Contents Risks Related to Owning Our Common Stock Fluctuations in our quarterly results of operations could cause the price of our common stock to substantially decline.
Any such harm to our reputation or any failure or perceived failure by us to adequately address ESG-related activities in light of evolving circumstances including setting of metrics or enhancing disclosures, could adversely affect our business, financial performance, and growth. 18 Table of Contents Risks Related to Owning Our Common Stock Fluctuations in our quarterly results of operations could cause the price of our common stock to substantially decline.
For example, our real estate development initiatives includes a focus on tourist locations due to changing consumer preferences and declining traditional mall traffic and we cannot be certain that this strategy will be successful.
For example, our real estate development initiatives include a focus on tourist locations due to changing consumer preferences and declining traditional mall traffic, and we cannot be certain that this strategy will be successful.
The flow of merchandise from our vendors could also be adversely affected by financial or political instability in any of the countries in which the materials or goods we purchase are manufactured, if the instability affects the production or export of merchandise from those countries.
The flow of merchandise from our vendors could also be adversely affected by financial or political instability in any of the countries where the materials or goods we purchase are manufactured, if the instability affects the production or export of merchandise from those countries.
If we are unable to do so, our results of operations and financial condition could be harmed, and we may be required to record significant additional impairment charges. 12 Table of Contents Fail ure to successfully execute our omnichannel and brand expansion strategy and the cost of our investments in e-commerce and digital transformation may materially adversely affect our financial condition and profitability.
If we cannot do so, our results of operations and financial condition could be harmed, and we may be required to record significant additional impairment charges. 12 Table of Contents Fail ure to successfully execute our omnichannel and brand expansion strategy and the cost of our investments in e-commerce and digital transformation may materially adversely affect our financial condition and profitability.
For example, as noted above, in Europe, we contract with a third-party distribution center in Selby, England under an agreement that ends in January 2025.
For example, as noted above, in Europe, we contract with a third-party distribution center in Selby, England under an agreement that ends in January 2026.
If we are not able to meet our contractual commitments or are unable to maintain licensing agreements with key brands, our business would be adversely affected.
If we are not able to meet our contractual commitments or are unable to maintain licensing agreements with key brands, our business may be adversely affected.
While we have had significant growth in our e-commerce sales compared to pre-pandemic levels and continue with initiatives intended to develop and strengthen our online business, the majority of our sales are generated from our physical store locations.
While we have had significant growth in our e-commerce sales compared to pre-pandemic levels and continue with initiatives intended to develop and strengthen our online business, most of our sales are generated from our physical store locations.
The majority of our store leases contain provisions for base rent plus percentage rent based on sales in excess of an agreed upon minimum annual sales level. Some store leases only include a provision for a percentage of a store's total sales, instead of a fixed base rent amount.
Most of our store leases contain provisions for base rent plus percentage rent based on sales in excess of an agreed-upon minimum annual sales level. Some store leases only include a provision for a percentage of a store's total sales, instead of a fixed base rent amount.
We do not own or operate any factories that produce our plush products, clothing, shoes or accessories. In fiscal 2023 we purchased 73% of our merchandise from five vendors, compared to 77% in fiscal 2022 . These vendors in turn contract for the production of merchandise with multiple manufacturing facilities.
We do not own or operate any factories that produce our plush products, clothing, shoes or accessories. In fiscal 2024 we purchased 69% of our merchandise from five vendors, compared to 73% in fiscal 2023 . These vendors in turn contract for the production of merchandise with multiple manufacturing facilities.
Our ability to manage our portfolio of stores in future years, in desirable locations, as well as to operate stores profitably, particularly in multi-store markets, are key factors in our ability to achieve sustained profitable growth.
Our ability to manage our portfolio of stores in future years, in desirable locations, and to operate stores profitably, particularly in multi-store markets, are key factors in our ability to achieve sustained profitable growth.
If we are unable to renew, renegotiate or replace our store leases or enter into leases for new stores on favorable terms, or if we violate any of the terms of our current leases, our revenue and profitability could be harmed. We lease all of our corporately-managed store locations.
If we cannot renew, renegotiate or replace our store leases or enter into leases for new stores on favorable terms, or if we violate any of the terms of our current leases, our revenue and profitability could be harmed. We lease all of our corporately-managed store locations.
In addition to our U.S. locations, we currently operate stores in the U.K., Canada, and Ireland.
In addition to our U.S. locations, we currently operate stores in the U.K., Canada, and the Republic of Ireland.
If we publish an ESG report or otherwise expand our ESG disclosures, the metrics we disclose whether they be based on the standards we set for ourselves or those set by others, may influence our reputation and the value of our brand.
If we expand our ESG disclosures, the metrics we disclose whether they be based on the standards we set for ourselves or those set by others, may influence our reputation and the value of our brand.
We may receive increased pressure to publish an ESG report or otherwise expand our disclosures in these areas, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks.
We may receive increased pressure to expand our disclosures in these areas, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risks.
Prior to 2020, over 90% of merchandise received annually was produced in China. However, our efforts to diversify our supply chain reduced China sourcing to 63% of merchandise received as production shifted primarily to Vietnam, which provided 29% of our merchandise in 2023.
Prior to 2020, over 90% of merchandise received annually was produced in China. However, our efforts to diversify our supply chain reduced China sourcing to 58% of merchandise received as production shifted primarily to Vietnam, which provided 38% of our merchandise in 2024.
From time to time, we have repurchased shares under plans authorized by our Board of Directors, including a $50 million program adopted in August 2022. Such programs generally do not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice.
From time to time, we have repurchased shares under plans authorized by our Board of Directors, most recently a $100 million program adopted in September 2024. Such programs generally do not require us to repurchase any specific number of shares, and may be modified, suspended, or terminated at any time without prior notice.
Our business may be adversely impacted by ongoing uncertainty, fluctuations in currency exchange rates, changes in trade policies, or changes in labor, immigration, tax, data privacy or other laws. Any of these effects, among others, could materially and adversely affect our business, results of operations, and financial condition.
Our business may be adversely impacted by ongoing uncertainty, fluctuations in currency exchange rates, changes in trade policies, or changes in labor, immigration, tax, data privacy or other laws. Any of these effects, among others, could materially and adversely affect our business, results of operations, and financial condition. We may not be able to operate our international corporately-managed locations profitably.
Our credit agreement restricts our ability to repurchase shares and issue dividends when certain liquidity conditions exist. 19 Table of Contents Our relatively low market capitalization can cause the market price of our common stock to become volatile. During fiscal 2023, the trading price of our common stock fluctuated between $17.85 and $30.49 per share.
Our credit agreement restricts our ability to repurchase shares and issue dividends when certain liquidity conditions exist. 19 Table of Contents Our relatively low market capitalization can cause the market price of our common stock to become volatile. During fiscal 2024, the trading price of our common stock fluctuated between $21.60 and $48.23 per share.
A key growth initiative for our business is the global expansion of our unique experience locations through international, third-party operated locations. At the end of fiscal 2023, we had one location open in Milan, Italy and additional locations expected to be opened in 2024 and beyond.
A key growth initiative for our business is the global expansion of our unique experience locations through international, third-party-operated locations. At the end of fiscal 2024, we had more than 30 international locations, and additional locations are expected to be opened in 2025 and beyond.
Continued or further volatility in retail consumer traffic could adversely affect our financial performance and profitability. While we invest in integrated marketing efforts and believe we are more of a destination location than many other retailers, we rely to a great extent on consumer traffic in the malls and tourist locations in which we are located.
While we invest in integrated marketing efforts and believe we are more of a destination location than many other retailers, we rely to a great extent on consumer traffic in the malls and tourist locations in which we are located.
The loss of certain key employees, change in management for strategic purposes, our inability to attract and retain other qualified key employees or a labor shortage that reduces the pool of qualified candidates could have a material adverse effect on our business, financial condition and results of operations.
The loss of certain key employees, change in management for strategic purposes, our inability to attract and retain other qualified key employees or a labor shortage that reduces the pool of qualified candidates could have a material adverse effect on our business, financial condition and results of operations. 20 Table of Contents We may be unsuccessful in acquiring businesses or engaging in other strategic transactions, which may negatively affect our financial condition and profitability.
As a result, we could experience damage to our reputation and the value of our brands if we fail to act responsibly in the areas in which we report.
As a result, we could experience damage to our reputation and the value of our brands if we fail to act responsibly in the areas in which we report or if such reporting exposes us to risks due to "anti-ESG" sentiments.
Additionally, our international partners may experience financing, merchandising and distribution expenses and challenges that are different from those we encounter in our corporately-managed markets. The operations and results of our international partners could be negatively impacted by the economic, public health (such as a pandemic), or political factors in the countries in which they operate or foreign currency fluctuations.
The operations and results of our international partners could be negatively impacted by the economic, public health (such as a pandemic), or political factors in the countries in which they operate or foreign currency fluctuations.
Although we took actions to mitigate these pressures, such as strategic price increases on highly sought-after products, there can be no assurance that we will be able continue these actions or that they will be successful in the future. We expect the inflationary pressures experienced in fiscal 2023 to decrease but continue into fiscal 2024.
Inflation had an adverse effect on our business operations in fiscal 2024, predominately through rising store labor costs. Although we took actions to mitigate these pressures, such as strategic price increases on highly sought-after products, there can be no assurance that we will be able continue these actions or that they will be successful in the future.
Our business may be adversely impacted at any time by a variety of significant competitive threats. We operate in a highly competitive environment characterized by low barriers to entry. We compete against a diverse group of competitors.
A decrease in consumer traffic could have an adverse effect on our financial condition and profitability. 10 Table of Contents Our business may be adversely impacted at any time by various significant competitive threats. We operate in a highly competitive environment characterized by low barriers to entry. We compete against a diverse group of competitors.
We continue to monitor the impact of inflation on our business operations on an ongoing basis and may need to adjust our prices further to mitigate the impacts of changes to the rate of inflation during 2024 or in future years. These select price increases could have a negative impact on demand for our products.
We expect the inflationary pressures experienced in fiscal 2024 to continue in the fiscal year 2025. We continue to monitor the impact of inflation and tariffs on our business operations on an ongoing basis and may need to adjust our prices further to mitigate the impacts of changes to the inflation rate during 2025 or in future years.
Additionally, in the event of a significant price increase from these suppliers, we may not be able to find alternative sources of supply in a timely manner or raise prices to offset the increases, which could have an adverse effect on our business, financial condition and results of operations. 14 Table of Contents We may not be able to operate our international corporately-managed locations profitably.
Additionally, in the event of a significant price increase from these suppliers, we may not be able to find alternative sources of supply in a timely manner or raise prices to offset the increases, which could have an adverse effect on our business, financial condition and results of operations. 14 Table of Contents Our merchandise is manufactured by foreign manufacturers, we transact business in various foreign countries, and the availability and costs of our products, as well as our product pricing, may be negatively affected by risks associated with international manufacturing and trade and foreign currency fluctuations.
To the extent a pandemic adversely affects our business, operations, financial condition and operating results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to retail consumer traffic, general global economic conditions, and demand for our interactive retail experience. 11 Table of Contents OPERATIONAL RISKS If we are unable to generate interest in and demand for our interactive retail experience and products, including being able to identify and respond to consumer preferences in a timely manner, our sales, financial condition and profitability could be adversely affected.
To the extent a pandemic adversely affects our business, operations, financial condition and operating results, it may also heighten many of the other risks described in this “Risk Factors” section, such as those relating to retail consumer traffic, general global economic conditions, and demand for our interactive retail experience.
Our operations are subject to numerous technology related risks, including risks related to the failure of the computer systems that operate our point of sale and inventory systems, websites and mobile sites and their related support systems.
Our operations are subject to numerous technology-related risks, including risks related to the failure of the computer systems that operate our point of sale and inventory systems, websites, mobile sites and their related support systems. We engage key third-party business partners to support various functions of our business, including, but not limited to, information technology, web hosting and cloud-based services.
Additionally, in fiscal 2023 we operated 26 stores located within other retailers’ stores and 92 stores through our "third-party wholesale" model and as such are subject to the operational risks of these companies, including but not limited to, ineffective store operations, labor disputes and negative publicity, all of which could have a negative impact on our sales and operating performance.
These stores have less corporate influence and as such are subject to the operational risks of these companies, including, but not limited to, ineffective store operations, labor disputes, and negative publicity, all of which could negatively impact our sales and operating performance.
Weakened economic conditions, lowered employment levels or recessions in any of our major markets may also significantly reduce consumer purchases of our products.
These select price increases could have a negative impact on demand for our products. Weakened economic conditions, lowered employment levels or recessions in any of our major markets may also significantly impair consumer spending and reduce purchases of our products.
Our planned marketing expenditures may not result in increased total sales or generate sufficient levels of product and brand awareness, which could also have a material adverse effect on our financial condition and profitability.
Our planned marketing expenditures may not increase total sales or generate sufficient product and brand awareness, which could also have a material adverse effect on our financial condition and profitability. Additionally, we have shifted a number of our marketing programs to digital outlets, which may not continue to be as effective as our more traditional, historical programs.
We cannot ensure that our international partners will be successful in identifying and securing desirable locations or in operating their stores. International markets frequently have different demographic characteristics, competitive conditions, consumer tastes and discretionary spending patterns than our corporately-managed markets, which may impact the performance of these stores.
International markets frequently have different demographic characteristics, competitive conditions, consumer tastes and discretionary spending patterns than our corporately-managed markets, which may impact the performance of these stores. Additionally, our international partners may experience financing, merchandising and distribution expenses and challenges that are different from those we encounter in our corporately-managed markets.
We are unable to predict what the price of crude oil and the resulting petroleum products will be in the future. We may be unable to pass along to our guests the increased costs that would result from higher petroleum prices. Therefore, any such increase could have an adverse impact on our business and profitability.
We cannot predict the price of crude oil or resulting petroleum products in the future. We may be unable to pass along to our guests the increased costs resulting from higher petroleum prices.
Also, we may require additional capital in the future to sustain or grow our technological infrastructure and digital commerce capabilities.
We, and those third-party businesses that support us, are also subject to risks related to computer viruses, telecommunications failures, and other disruptions. Also, we may require additional capital in the future to sustain or grow our technological infrastructure and digital commerce capabilities.
If we are unable to effectively manage our international partner-operated locations, attract new partners or if the laws relating to our international partners change, our growth and profitability could be adversely affected, and we could be exposed to additional liability. As of February 3, 2024, there were 74 Build-A-Bear Workshop international franchised stores and international, third party operated locations.
In addition, we could experience restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences. If we cannot effectively manage our international partner-operated locations, attract new partners or if the laws relating to our international partners change, our growth and profitability could be adversely affected, and we could be exposed to additional liability.
We purchase the majority of our merchandise directly from manufacturers in foreign countries, primarily in China and Vietnam. Any event causing a disruption of imports, including the imposition of import restrictions, taxes or fees, or labor strikes or lockouts and pandemics, could adversely affect our business.
In addition to the risks associated with tariffs discussed in " Impact of the significant tariffs on countries from which we import are expected to have an impact on our business, mainly our cost of goods and profit margin " above, any event causing a disruption of imports, including the imposition of, increase in amount of or uncertainty regarding import restrictions, taxes or fees, labor strikes or lockouts or pandemics, could adversely affect our business.
A decrease in consumer traffic could have an adverse effect on our financial condition and profitability. 10 Table of Contents Our profitability could be adversely affected by fluctuations in petroleum products prices.
Our profitability could be adversely affected by fluctuations in petroleum product prices.
Additionally, we have shifted a number of our marketing programs to digital outlets which may not continue to be as effective as our more traditional, historical programs. We depend upon the shopping malls and tourist locations in which our stores are located to attract guests.
We depend upon the shopping malls and tourist locations in which our stores are located to attract guests. Continued or further volatility in retail consumer traffic could adversely affect our financial performance and profitability.
Removed
Inflation impacted our business operations in fiscal 2023 and had an adverse impact on our business throughout the year, specifically seen through rising store labor costs.
Added
The impact of the significant tariffs on countries from which we import is expected to have an impact on our business, mainly our cost of goods and profit margin.
Removed
We engage key third-party business partners to support various functions of our business, including, but not limited to, information technology, web hosting and cloud-based services. We, and those third-party businesses that support us, are also subject to risks related to computer viruses, telecommunications failures, and other disruptions.
Added
The recent enactment of tariffs by the U.S. government, including a tariff on all imported goods and targeting specific countries, along with the unpredictability of the rates, poses a significant risk to our business operations.
Removed
In addition, we could experience restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences.
Added
As a company that sources a substantial portion of our inventory from Vietnam and China, these tariffs are expected to increase the cost of goods sold, which could adversely affect our profit margins. The tariffs may lead to higher prices for our products, potentially reducing consumer demand and impacting our sales volume.
Removed
Our merchandise is manufactured by foreign manufacturers and we transact business in various foreign countries, and the availability and costs of our products, as well as our product pricing, may be negatively affected by risks associated with international manufacturing and trade and foreign currency fluctuations.
Added
Additionally, the increased costs could force us to seek alternative suppliers, which may result in supply chain disruptions and further cost increases. We are actively monitoring the situation and exploring strategies to mitigate these risks, including negotiating with suppliers, adjusting our pricing strategies, and seeking tariff exemptions where possible.
Removed
Impacts resulting from turnover of key management personal or a named executive officer, such as the termination of our Chief Digital and Merchandising Officer as of February 3, 2024, could materially harm our business or operating strategies. 20 Table of Contents We may be unsuccessful in acquiring businesses or engaging in other strategic transactions, which may negatively affect our financial condition and profitability.
Added
However, there can be no assurance that these measures will fully offset the negative impact of the tariffs on our business.
Added
Given the uncertainty regarding the scope and duration of the current and potential tariffs, as well as the potential for additional trade actions by the U.S. or other countries, the specific impact on our business, results of operations, and financial condition is uncertain but could be significant.
Added
Therefore, any such increase could have an adverse impact on our business and profitability. 11 Table of Contents OPERATIONAL RISKS If we are unable to generate interest in and demand for our interactive retail experience and products, including being able to identify and respond to consumer preferences in a timely manner, our sales, financial condition and profitability could be adversely affected.
Added
Additionally, in the fiscal year 2024, we operated 25 stores located within other retailers’ stores and 138 stores through our "third-party wholesale" model and franchisees operated 83 stores.
Added
We purchase the most of our merchandise directly from manufacturers in foreign countries, primarily in China and Vietnam.
Added
As of February 1, 2025, there were 83 Build-A-Bear Workshop international franchised stores and 138 international, third-party-operated locations. We cannot ensure that our international partners will be successful in identifying and securing desirable locations or in operating their stores.
Added
The rise of ESG criteria and reporting has sparked a debate over its potential to either unite or divide stakeholders by prioritizing and disclosing ethical considerations over traditional financial metrics.
Added
For example, “anti-ESG” sentiment has gained momentum across the U.S., with a growing number of states, federal agencies, the executive branch and Congress having enacted, proposed or indicated an intent to pursue “anti-ESG” policies, legislation or issued related legal opinions and engaged in related investigations and litigation.
Added
We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or customers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, results of operations and financial condition.
Item 2. Properties
Properties — owned and leased real estate
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Item 2. Properties
Properties — owned and leased real estate
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2025 filing
2026 filing
ITEM 2. PROPERTIES Stores We lease all of our store locations. As of February 3, 2024, we operated 359 retail stores located primarily in major malls throughout the U.S., Canada, the U.K., and Ireland in our DTC segment.
ITEM 2. PROPERTIES Stores We lease all our store locations. As of February 1, 2025, we operated 368 retail stores located primarily in major malls throughout the U.S., Canada, the U.K., and Ireland in our DTC segment. Non-Store Properties We own a warehouse and distribution center in Groveport, Ohio, which is utilized primarily by our DTC segment.
This agreement contains clauses that allow for termination if certain performance criteria are not met. In Asia, we contract for office space and a third-party distribution center in Shanghai, China, with the office space contract ending in August 2024 and the distribution center contract ending in April 2024.
In Europe, we contract with a third-party distribution center in Selby, England under an agreement that ends in January 2026. This agreement contains clauses that allow for termination if certain performance criteria are not met.
We lease 51,600 square feet in a building that we use as our corporate headquarters in downtown St. Louis, Missouri with a lease of eleven years commencing in June 2020. This lease was modified in March 2024 to increase the square footage of our corporate headquarters to approximately 58,000 square feet without changing the term length.
The facility is approximately 350,000 square feet and includes our North American e-commerce fulfillment center. We lease 51,600 square feet in a building that we use as our corporate headquarters in downtown St. Louis, Missouri with a lease of eleven years commencing in June 2020.
We also contra ct with a third-party warehouse in southern California to service our West Coast stores. The contract has a one-year term and is renewable. In Europe, we contract with a third-party distribution center in Selby, England under an agreement that ends in January 2025.
In the U.K., w e lease approximately 6,500 square feet for our regional headquarters in Slough, England under a lease that commenced in March 2016 with a term of 10 years. We also contra ct with a third-party warehouse in southern California to service our West Coast stores. The contract has a one-year term and is renewable.
We also lease an approximately 1,870 square foot storage space in St. Louis, Missouri with the lease commencing in July 2023 and continuing through July 2028. In the U.K., w e lease approximately 6,500 square feet for our regional headquarters in Slough, England under a lease that commenced in March 2016 with a term of 10 years.
This lease was modified in March 2024 to increase the square footage of our corporate headquarters to approximately 58,000 square feet without changing the term length. We also lease an approximately 1,870 square foot storage space in St. Louis, Missouri with the lease commencing in July 2023 and continuing through July 2028.
Removed
Non-Store Properties In addition to leasing all of our store locations, we own a warehouse and distribution center in Groveport, Ohio, which is utilized primarily by our DTC segment. The facility is approximately 350,000 square feet and includes our North American e-commerce fulfillment center.
Added
In Asia, we contract for office space and a third-party distribution center in Shanghai, China, with the office space contract ending in August 2025 and the distribution center contract ending in April 2025.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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2025 filing
2026 filing
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “BBW.” Our common stock commenced trading on the NYSE on October 28, 2004. 23 Table of Contents Holders As of April 15, 2024, the number of holders of record of the Company’s common stock totaled approximately 1,864.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “BBW.” Our common stock commenced trading on the NYSE on October 28, 2004. 23 Table of Contents Holders As of April 14, 2025, the number of holders of record of the Company’s common stock totaled approximately 1,783.
This program authorizes the Company to repurchase shares through August 31, 2025 and does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior noticed. Shares repurchased under the program will be subsequently retired.
This program authorizes the Company to repurchase shares through September 30, 2028, and does not require the Company to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice. Shares repurchased under the program will be subsequently retired.
On March 13, 2024, our Board of Directors approved a new quarterly dividend program to evolve its strategic use of capital and declared an initial quarterly dividend of $0.20 per share paid on April 11, 2024 to all stockholders of record as of March 28, 2024.
In fiscal 2024, our Board of Directors approved a new quarterly dividend program to evolve its strategic use of capital and declared an initial quarterly dividend of $0.20 per share which was paid on April 11, 2024.
(3) On August 31, 2022, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $50 million of our common stock.
(3) On August 31, 2022, the Board of Directors adopted the August 2022 Stock Repurchase program that authorized the repurchase of up to $50 million of our common stock. On September 11, 2024, we announced that our Board of Directors terminated an existing stock repurchase program and authorized a new share repurchase program of up to $100 million.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid Per Share (or Unit) (2) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (3) Oct 29, 2023 - Nov 25, 2023 71,178 $ 24.45 71,178 $ 29,579,380 Nov 26, 2023 - Dec 30, 2023 52,493 23.58 52,493 28,341,639 Dec 31, 2023 - Feb 3, 2024 100,198 22.32 100,198 26,105,492 Total 223,869 $ 23.29 223,869 $ 26,105,492 (1) Includes shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of restricted shares which vested during the quarter.
Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid Per Share (or Unit) (2) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (3) Nov 3, 2024 - Nov 30, 2024 5,288 $ 37.82 5,288 $ 96,998,597 Dec 1, 2024 - Jan 4, 2025 61,304 44.88 61,304 94,247,390 Jan 5, 2025 - Feb 1, 2025 121,468 41.59 121,468 89,195,065 Total 188,060 $ 42.56 188,060 $ 89,195,065 (1) Includes shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of restricted shares which vested during the quarter, if any.
The Company intends to pay dividends quarterly in the future, subject to market conditions and approval by the Board of Directors. Securities Authorized for Issuance Under Equity Compensation Plans Refer to Part III, Item 12, for information related to our equity compensation plan.
Securities Authorized for Issuance Under Equity Compensation Plans Refer to Part III, Item 12, for information related to our equity compensation plan.
Removed
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the past three years.
Added
The Company also paid quarterly dividends of $0.20 per share to recorded shareholders on July 11, 2024, October 10, 2024, and January 9, 2025.
Added
Additionally, on March 12, 2025, the Board of Directors declared a quarterly dividend of $0.22 per share on the issued and outstanding common stock of the Company, which was paid on April 10, 2025, to all stockholders of record as of March 27, 2025.
Added
Performance Graph In order to show a Comparative Stock Performance, Build-A-Bear has shown a five-year comparative investment of $100 into Build-A-Bear, the Russell 2000 Index, and the Russell 2000 Consumer Discretionary Index. The Company has determined that based on their current size, the Russell 2000 information would be more comparable than the S&P 500.
Added
It should be noted that as Build-A-Bear has a floating fiscal year end occurring on the last Saturday in January or first Saturday in February, the information utilized as the year end information will be on the close the day prior the listed date.
Added
Any dividends that are paid by the Company will be assumed to be reinvested at the next day opening price.
Added
Cumulative Total Return February 1, January 30, January 29, January 28, February 3, February 1, 2020 2021 2022 2023 2024 2025 Build - A - Bear $ 100.00 $ 132.62 $ 433.72 $ 604.66 $ 604.66 $ 1,187.23 Russell 2000 $ 100.00 $ 128.47 $ 121.96 $ 118.43 $ 121.60 $ 141.74 Russell 2000 Consumer Discretionary $ 100.00 $ 145.39 $ 142.62 $ 129.28 $ 135.65 $ 154.26 Recent Sales of Unregistered Securities There were no sales of unregistered securities during the past three years.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
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Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
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2025 filing
2026 filing
We believe that we have a concept that has broad demographic appeal which, for North American stores open for the entire year averaged net retail sales per store of $1.2 million in fiscal 2023 and 2022.
We believe that we have a concept that has broad demographic appeal which, for North American stores open for the entire year averaged net retail sales per store of $1.2 million in fiscal 2024, 2023 and 2022.
See Note 4 - "Leases" and Note 6 - "Property and Equipment, net" to our consolidated financial statements for further discussion. 33 Table of Contents During fiscal 2023 and 2022, we recorded immaterial impairment charges on long-lived assets.
See Note 4 - "Leases" and Note 6 - "Property and Equipment, net" to our consolidated financial statements for further discussion. 33 Table of Contents During fiscal 2024, 2023 and 2022, we recorded immaterial impairment charges on long-lived assets.
Selected financial data attributable to each segment for fiscal 2023 and 2022 are presented in Note 15 — Segment Information to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Selected financial data attributable to each segment for fiscal 2024, 2023 and 2022 are presented in Note 15 — Segment Information to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The increase in overall expense was driven by higher store-level wages due to inflation and the addition of talent and other investments to support growth, including an advertising expense incre ase of $ 4.7 million or 23.9% compared to fiscal 2022. Interest expense (income) , net.
The increase in overall expense was driven by higher store-level wages due to inflation and the addition of talent and other investments to support growth, including an advertising expense increase of $4.7 million or 23.9% compared to fiscal 2022. Interest expense (income), net.
The following table details net retail sales per square foot for stores open throughout the fiscal year for the periods presented: : Fiscal year ended February 3, January 28, Net retail sales per square foot 2024 2023 North America (1) $ 495 $ 479 United Kingdom (2) £ 629 £ 679 (1) Net retail sales per square foot in North America represents net retail sales from stores open throughout the entire period in North America, excluding e-commerce sales, divided by the total leased square footage of such stores.
The following table details net retail sales per square foot for stores open throughout the fiscal year for the periods presented: : Fiscal year ended February 1, February 3, January 28, Net retail sales per square foot 2025 2024 2023 North America (1) $ 492 $ 495 $ 479 United Kingdom (2) £ 729 £ 629 £ 679 (1) Net retail sales per square foot in North America represents net retail sales from stores open throughout the entire period in North America, excluding e-commerce sales, divided by the total leased square footage of such stores.
The number of international, franchised stores opened and closed for the periods presented below is summarized as follows: Fiscal year ended February 3, 2024 January 28, 2023 Beginning of period 68 72 Opened 12 12 Closed (6 ) (16 ) End of period 74 68 As of February 3, 2024, the distribution of franchised locations among these countries was as follows: South Africa 21 Australia (1) 20 China (2) 8 Gulf States (3) 14 Chile 11 Total 74 (1) Australia master franchise agreement includes New Zealand where one store is currently open.
The number of international, franchised stores opened and closed for the periods presented below is summarized as follows: Fiscal year ended February 1, 2025 February 3, 2024 January 28, 2023 Beginning of period 74 68 72 Opened 11 12 12 Closed (2 ) (6 ) (16 ) End of period 83 74 68 As of February 1, 2025, the distribution of franchised locations among these countries was as follows: South Africa 22 Australia (1) 21 China (2) 8 Gulf States (3) 20 Chile 12 Total 83 (1) Australia master franchise agreement includes New Zealand where one store is currently open.
Results of Operations Fiscal 2023 Overview Our performance continues to reflect the success of our strategy which has allowed us to put the building bl ocks in place to develop a powerful platform to support our initiatives to deliver consistent profitable growth.
Results of Operations Fiscal 2024 Overview Our performance continues to reflect the success of our strategy which has allowed us to put the building bl ocks in place to develop a powerful platform to support our initiatives to deliver consistent profitable growth.
Third-Party Retail L ocations : The number of third-party retail locations opened and closed for the periods presented below is summarized as follows: Fiscal year ended February 3, 2024 January 28, 2023 Beginning of period 70 61 Opened 22 13 Closed - (4) End of period 92 70 27 Table of Contents Through our third-party retail model, there were 92 stores in operation at the end of fiscal year 2023 with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry's and Girl Scouts of the USA.
Third-Party Retail L ocations : The number of third-party retail locations opened and closed for the periods presented below is summarized as follows: Fiscal year ended February 1, 2025 February 3, 2024 January 28, 2023 Beginning of period 92 70 61 Opened 47 22 13 Closed (1 ) - (4 ) End of period 138 92 70 27 Table of Contents Through our third-party retail model, there were 138 stores in operation at the end of fiscal year 2024 with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry's, and Girl Scouts of the USA.
Our leases in North America tend to be shorter term leases to provide flexibility in aligning stores with market trends. During fiscal 2023, lease extensions began to have longer terms as we have secured longer deals with more favorable terms.
Our leases in North America tend to be shorter term leases to provide flexibility in aligning stores with market trends. During fiscal 2024, lease extensions began to have longer terms as we have secured longer deals with more favorable terms.
The compon ents of this increase are as follows: Fiscal year ended February 3, 2024 (dollars in millions) Impact from: Existing stores (0.1 ) E-commerce (3.2 ) New stores 7.3 Store closures (4.0 ) Gift card breakage 1.2 Foreign currency translation 0.7 53rd Week 6.9 Other 1.2 10.0 29 Table of Contents The retail revenue increase was primarily the result of the 53rd week in the fiscal year, new store openings, and an increase in gift card breakage recorded, partially offset by a decrease in digital sales.
The compon ents of this increase are as follows: Fiscal year ended February 3, 2024 (dollars in millions) Impact from: New stores 7.3 53rd week 6.9 Store closures (4.0 ) E-commerce (3.2 ) Gift card discounts 1.9 Gift card breakage 1.2 Foreign currency translation 0.7 Existing stores (0.1 ) Other (0.7 ) 10.0 The retail revenue increase was primarily the result of the 53rd week in the fiscal year, new store openings, and an increase in gift card breakage recorded, partially offset by a decrease in digital sales.
We continue to monitor the impact of inflation on our business operations on an ongoing basis and may need to adjust our prices further to mitigate the impacts of changes to the rate of inflation during 2023 or in future years.
We continue to monitor the impact of inflation on our business operations on an ongoing basis and may need to adjust our prices further to mitigate the impacts of changes to the rate of inflation during 2024 or in future years.
Over the last 26 years, with more than 240 million furry friends sold to guests around the world, Build-A-Bear has become a brand with high consumer awareness, positive affinity, and strong retail influence. We are leveraging this brand strength to grow our brick-and-mortar retail footprint beyond traditional malls through a range of store sizes, formats and locations including tourist destinations.
Over the last 27 years, with more than 250 million furry friends sold to guests around the world, Build-A-Bear has become a brand with high consumer awareness, positive affinity, and strong retail influence. We are leveraging this brand strength to grow our brick-and-mortar retail footprint beyond traditional malls through a range of store sizes, formats and locations including tourist destinations.
Percentages may not total due to immaterial rounding: Fiscal year ended February 3, January 28, 2024 2023 Revenues: Net retail sales 93.9 % 95.3 % Commercial revenue 5.2 4.0 International franchising 0.9 0.7 Total revenues 100.0 100.0 Costs and expenses: Cost of merchandise sold - retail (1) 45.3 47.4 Cost of merchandise sold - commercial (1) 47.6 46.4 Cost of merchandise sold - international franchising (1) 62.1 61.4 Total cost of merchandise sold 45.6 47.5 Consolidated gross profit 54.4 52.5 Selling, general and administrative 40.9 39.3 Interest expense (income), net (0.2 ) 0.0 Income before income taxes 13.6 13.2 Income tax expense 2.8 3.0 Net income 10.9 10.3 Retail gross margin (2) 54.7 % 52.6 % (1) Cost of merchandise sold – retail is expressed as a percentage of net retail sales.
Percentages may not total due to immaterial rounding: Fiscal year ended February 1, February 3, January 28, 2025 2024 2023 Revenues: Net retail sales 92.8 % 93.9 % 95.3 % Commercial revenue 6.3 5.2 4.0 International franchising 0.9 0.9 0.7 Total revenues 100.0 100.0 100.0 Costs and expenses: Cost of merchandise sold - retail (1) 45.0 45.3 47.4 Cost of merchandise sold - commercial (1) 42.8 47.6 46.4 Cost of merchandise sold - international franchising (1) 69.2 62.1 61.4 Total cost of merchandise sold 45.1 45.6 47.5 Consolidated gross profit 54.9 54.4 52.5 Selling, general and administrative 41.5 40.9 39.3 Interest expense (income), net (0.2 ) (0.2 ) 0.0 Income before income taxes 13.5 13.6 13.2 Income tax expense 3.1 2.8 3.0 Net income 10.4 10.9 10.3 Retail gross margin (2) 55.0 % 54.7 % 52.6 % (1) Cost of merchandise sold – retail is expressed as a percentage of net retail sales.
As a measure of sensitivity for fiscal 2023, a hypothetical 10% decrease in the undiscounted future cash flows for the stores would have resulted in immaterial impairment s for the year .
As a measure of sensitivity for fiscal 2024, a hypothetical 10% decrease in the undiscounted future cash flows for the stores would have resulted in immaterial impairment s for the year .
Financing activities used cash of $43.9 million in fiscal 2023 compared to $25.1 million in fiscal 2022. Cash used in financing activities in fiscal 2023 increased as compared to fiscal 2022, driven primarily by the repurchases of our common stock for $20.5 million throughout fiscal 2023 and dividends paid of $22.1 million. Capital Resources .
Cash used in financing activities in fiscal 2023 increased as compared to fiscal 2022, driven primarily by the repurchases of our common stock for $20.5 million throughout fiscal 2023 and dividends paid of $22.1 million. Capital Resources .
Capital spending in fiscal 2023 totaled $18.3 million and was primarily used to support our ongoing digital initiatives and new store openings. We have various contractual or other obligations, including operating lease commitments and obligations under deferred compensation plans. Additional information is provided in the notes to our consolidated financial statements.
Capital spending in fiscal 2024 totaled $19.3 million and was primarily used to support our ongoing digital initiatives and new store openings. We have various contractual or other obligations, including operating lease commitments and obligations under deferred compensation plans. Additional information is provided in the notes to our consolidated financial statements.
S tores Co rporately-Managed L ocations : The number of Build-A-Bear Workshop stores in the U.S. and Canada (collectively, North America) and the U.K. and Ireland (collectively, Europe) for the last two fiscal years is summarized as follows: Fiscal year ended February 3, 2024 January 28, 2023 North North America Europe Total America Europe Total Beginning of period 312 38 350 305 41 346 Opened 9 2 11 9 3 12 Converted (1 ) - (1 ) - - - Closed - (1 ) (1 ) (2 ) (6 ) (8 ) End of period 320 39 359 312 38 350 During fiscal 2023, our retail business model continued to evolve to address changing shopping patterns by diversifying our locations, formats and geographies.
S tores Co rporately-Managed L ocations : The number of Build-A-Bear Workshop stores in the U.S. and Canada (collectively, North America) and the U.K. and Ireland (collectively, Europe) for the last three fiscal years is summarized as follows: Fiscal year ended February 1, 2025 February 3, 2024 January 28, 2023 North North North America Europe Total America Europe Total America Europe Total Beginning of period 320 39 359 312 38 350 305 41 346 Opened 14 3 17 9 2 11 9 3 12 Converted - - - (1 ) - (1 ) - - - Closed (6 ) (2 ) (8 ) - (1 ) (1 ) (2 ) (6 ) (8 ) End of period 328 40 368 320 39 359 312 38 350 During fiscal 2024, our retail business model continued to evolve to address changing shopping patterns by diversifying our locations, formats and geographies.
We have no off-balance sheet arrangements as of February 3, 2024. 32 Table of Contents Inflation The impact of higher inflation on the Company's business operations was seen throughout fiscal 2022 and continued to adversely affect our business in fiscal 2023, mainly through rising store labor costs.
We have no off-balance sheet arrangements as of February 1, 2025. 32 Table of Contents Inflation The impact of inflation on the Company's business operations was seen throughout fiscal 2022 and 2023. Inflation continued to adversely affect our business in fiscal 2024, mainly through rising store labor costs.
All franchised stores generally have similar signage, store layout and merchandise assortments as our corporately-managed stores. As of February 3, 2024, we had five master franchise agreements, which typically grant franchise rights for a particular country or group of countries, covering an aggregate of eight countries.
All franchised stores generally have similar signage, store layout and merchandise assortments as our corporately-managed stores. As of February 1, 2025, we had five master franchise agreements, which typically grant franchise rights for a particular country or group of countries, covering an aggregate of eight countries.
We believe our elevated omnichannel business model, which includes a highly profitable e-commerce and experiential retail store base, complimented by diversified revenue streams and disciplined expense and balance sheet management, puts us in a solid position for continued future success. W e delivered a full year pre-tax profit of $66.3 million, which was the highest in our company’s 26-year history.
We believe our elevated omnichannel business model, which includes a highly profitable e-commerce and experiential retail store base, complimented by diversified revenue streams and disciplined expense and balance sheet management, puts us in a solid position for continued future success. W e delivered a full year pre-tax profit of $67.1 million, which was the highest in our company’s 27-year history.
As of February 3, 2024, borrowings under the agreement would bear interest at (a) a base rate determined under the agreement, or (b) the borrower's option, at a rate based on SOFR, plus in either case a margin based on average undrawn availability as determined in accordance with the agreement.
As of February 1, 2025, borrowings under the agreement would bear interest at (a) a base rate determined under the agreement, or (b) the borrower's option, at a rate based on SOFR, plus in either case a margin based on average undrawn availability as determined in accordance with the agreement.
As a matter of sensitivity, a hypothetical 1% change in our gift card breakage rate in f iscal 2023 would have resulted in a change in breakage revenue of $ 1.0 million.
As a matter of sensitivity, a hypothetical 1% change in our gift card breakage rate in f iscal 2024 would have resulted in a change in breakage revenue of $1.1 million.
As of February 3, 2024, we had a cash balance of $44.3 million, of which 81% was domiciled within the U.S, after investing $18.3 million in capital projects throughout the year. 31 Table of Contents We have a revolving credit and security agreement with PNC Bank, as agent, that provides for a secured revolving loan in aggregate principal of up to $25.0 million, subject to a borrowing base formula.
As of February 1, 2025, we had a cash balance of $27.8 million, of which 79% was domiciled within the U.S, after investing $19.3 million in capital projects throughout the year. 31 Table of Contents We have a revolving credit and security agreement with PNC Bank, as agent, that provides for a secured revolving loan in aggregate principal of up to $25.0 million, subject to a borrowing base formula.
Fiscal year ended February 3, January 28, 2024 2023 Net cash provided by operating activities $ 64,310 $ 47,276 Net cash used in investing activities (18,295 ) (13,634 ) Net cash used in financing activities (43,901 ) (25,056 ) Effect of exchange rates on cash 15 767 Increase (decrease) in cash, cash equivalents and restricted cash $ 2,129 $ 9,353 Operating Activities.
Fiscal year ended February 1, February 3, January 28, 2025 2024 2023 Net cash provided by operating activities $ 47,087 $ 64,310 $ 47,276 Net cash used in investing activities (19,317 ) (18,295 ) (13,634 ) Net cash used in financing activities (44,159 ) (43,901 ) (25,056 ) Effect of exchange rates on cash (180 ) 15 767 Increase (decrease) in cash, cash equivalents and restricted cash $ (16,569 ) $ 2,129 $ 9,353 Operating Activities.
Temporary locations generally have lease terms of two to eighteen months. These specific sites are designed to capitalize on short-term opportunities. In the future, we expect to close certain stores in accordance with natural lease events as an ongoing part of our real estate management and day-to-day operational plans.
These specific sites are designed to capitalize on short-term opportunities. In the future, we expect to close certain stores in accordance with natural lease events as an ongoing part of our real estate management and day-to-day operational plans.
As of February 3, 2024, we had purchase obligations totaling approxim ately $ 84.7 million, of which $ 26.0 million a re due in the next 12 months. We believe our operating cash flows are sufficient to meet our material cash requirements for at least the next 12 months.
As of February 1, 2025, we had purchase obligations totaling approxim ately $98.3 million, of which $27.0 million a re due in the next 12 months. We believe our operating cash flows are sufficient to meet our material cash requirements for at least the next 12 months.
Management regularly assesses the tax risk of the company’s return filing positions and believes its accruals for uncertain tax benefits are adequate as of February 3, 2024 and January 28, 2023. Recent Accounting Pronouncements See Note 2 – "Summary of Significant Accounting Policies" for additional information. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
Management regularly assesses the tax risk of the company’s return filing positions and believes its accruals for uncertain tax benefits are adequate as of February 1, 2025, February 3, 2024, and January 28, 2023. Recent Accounting Pronouncements See Note 2 – "Summary of Significant Accounting Policies" for additional information. ITEM 7A.
The following table sets forth, for the periods indicated, the components of EBITDA (dollars in millions): Fiscal year ended February 3, 2024 January 28, 2023 Income before income taxes (pre-tax) 66,329 61,924 Interest expense (income), net (929 ) 19 Depreciation and amortization expense 13,657 12,482 Earnings before interest, taxes, depreciation, and amortization $ 79,057 $ 74,425 EBITDA for fiscal 2023 was $79.1 million, compared to $74.4 million for fiscal 2022, an increase of $4.7 million compared to the prior year period.
The following table sets forth, for the periods indicated, the components of EBITDA (dollars in millions): Fiscal year ended February 1, 2025 February 3, 2024 January 28, 2023 Income before income taxes (pre-tax) 67,141 66,329 61,924 Interest expense (income), net (861 ) (929 ) 19 Depreciation and amortization expense 14,772 13,657 12,482 Earnings before interest, taxes, depreciation, and amortization $ 81,052 $ 79,057 $ 74,425 EBITDA for fiscal 2024 was $81.1 million, compared to $79.1 million for fiscal 2023 and $74.4 million in fiscal 2022.
We ended the year with cash and cash equivalents of $44.3 million with no outstanding borrowings on our credit facility.
We ended the year with cash and cash equivalents of $27.8 million with no outstanding borrowings on our credit facility.
As of February 3, 2024, we had 359 corporate-managed stores globally, 92 locations operating through our "third-party retail" model in which we sell our products on a wholesale basis to other companies that then in turn execute our retail experience, and 74 franchised stores operating internationally under the Build-A-Bear Workshop brand.
As of February 1, 2025, we had 368 corporate-managed stores globally, 138 locations operating through our "third-party retail" model in which we sell our products on a wholesale basis to other companies that then in turn execute our retail experience, and 83 franchised stores operating internationally under the Build-A-Bear Workshop brand.
Cash flows provided by operating activities were $64.3 million and $47.3 million in fiscal years 2023 and 2022, respectively. Cash flows from operating activities increased in fiscal 2023 as compared to fiscal 2022 primarily driven by a decrease in cash spent on inventory purchases and increased sales volume, resulting in higher net income. Investing Activities .
Cash flows from operating activities increased in fiscal 2023 as compared to fiscal 2022 primarily driven by a decrease in cash spent on inventory purchases and increased sales volume, resulting in higher net income. Investing Activities . Cash flows used in investing activities were $19.3 million, $18.3 million and $13.6 million in fiscal years 2024, 2023 and 2022, respectively.
We believe that the majority of our positive performance was driven by the disciplined execution of our strategic initiatives, including leveraging our financial management to invest in growth initiatives, to contribute to a 3.9% increase in total revenue to $486.1 million in fiscal 2023.
We believe that the majority of our positive performance was driven by the disciplined execution of our strategic initiatives, including leveraging our financial management to invest in growth initiatives, to contribute to an increase in total revenue of $10.3 million in fiscal 2024.
The positive evidence considered in our assessment of the realizability of the deferred tax assets included the generation of significant positive cumulative income in the U.K. for the three-year period ending with fiscal 2023, the implementation of tax planning strategies, and projections of future taxable income. The Company maintains a valuation allowance in certain other foreign jurisdictions.
The positive evidence considered in our assessment of the realizability of the deferred tax assets included the generation of significant positive cumulative income in the U.K. for the three-year period ending with fiscal 2023, the implementation of tax planning strategies, and projections of future taxable income.
During fiscal 2023, the Company returned over $42 million to shareholders through $20.5 million in share repurchases and $22.0 million special dividend. 28 Table of Contents The following table sets forth, for the periods indicated, selected statement of operations data expressed as a percentage of total revenues, except where otherwise indicated.
During fiscal 2024, the Company returned $42.0 million to shareholders through $31.0 million in share repurchases and $11.0 million in dividends. 28 Table of Contents The following table sets forth, for the periods indicated, selected statement of operations data expressed as a percentage of total revenues, except where otherwise indicated.
As of February 3, 2024 , we had restricted cash of $0.4 million compared to $0.5 million as of January 28, 2023, resulting in an immaterial difference in activity. Most of our retail stores are located within shopping malls and all are operated under leases classified as operating leases.
As of February 1, 2025 , we had restricted cash of $0.4 million c ompared to $0.4 million as of February 3, 2024 and $0.5 million as of January 28, 2023. Most of our retail stores are located within shopping malls and all are operated under leases classified as operating leases.
Our year-over-year results discussed below are impacted by an additional week in fiscal 2023 as it was a 53-week period compared to the 52-week period for fiscal 2022. Our consolidated net income was $52.8 million in fiscal 2023 compared to net income of $48.0 million in fiscal 2022.
Our year-over-year results discussed below are impacted by fiscal 2024 and fiscal 2022 being 52-week periods compared to fiscal 2023 which had an additional week because it was a 53-week period. Our consolidated net income was $51.8 million in fiscal 2024 compared to net income of $52.8 million in fiscal 2023 and $48.0 million in fiscal 2022.
Our leases in the U.K. and Ireland typically have terms of ten years and generally contain a provision whereby every fifth year the rental rate can be adjusted to reflect the current market rates. The leases typically provide the lessee with the first right for renewal at the end of the lease.
Our leases in the U.K. and Ireland typically have terms of five or ten years and generally contain a provision whereby every third or fifth year we have the opportunity to exit the lease (the ‘break clause’). The leases typically provide the lessee with the first right for renewal at the end of the lease.
Cash flows used in investing activities were $18.3 million and $13.6 million in fiscal years 2023 and 2022, respectively. Cash used in investing activities in fiscal 2023 increased as compared to fiscal 2022 primarily driven by an increase in spending on capital expenditures related to information technology projects and new store openings. Financing Activities .
The increases in cash used in investing activities when comparing fiscal 2024 to fiscal 2023 and fiscal 2023 to fiscal 2022 were primarily driven by an increased spending on capital expenditures related to information technology projects and new store openings. Financing Activities .
However, we continue to take mitigating actions, such as select strategic price increases on highly sought-after products, and leveraging distribution costs.
However, we continue to take mitigating actions, such as select strategic price increases on highly sought-after products and leveraging distribution costs. We expect the inflationary pressures experienced in fiscal 2024 to continue into fiscal 2025, specifically through wage increases and tariffs on inventory purchases.
We are updating our store portfolio with our Discovery format, which represented 47% of our store base as of February 3, 2024. During fiscal 2023, we executed 9 planned new store openings in North America, with six being opened under the Discovery format, one of which was in a tourist site.
We are updating our store portfolio with our Discovery format, which represented 52% of our store base as of February 1, 2025. During fiscal 2024, we executed eight planned net new store openings in North America, with seven being opened under the Discovery format. Temporary locations generally have lease terms of two to eighteen months.
We ended fiscal 2023 with no borrowings under our credit agreement and with $44.3 million in cash, cash equivalents and restricted cash after investing $18.3 million in capital projects throughout the year.
We ended fiscal 2024 with no borrowings under our credit agreement and with $27.8 million in cash, cash equivalents and restricted cash after investing $19.3 million in capital projects throughout the year. In fiscal 2024 the company utilized $31.0 million in cash to repurchase 1,021,004 shares. During the year, the Company repurchased shares under two separate stock repurchase programs.
From the end of fiscal 2023 through April 15, 2024, the Company utilized $5.1 million to repurchase $201,198 shares under the stock buyback program, leaving $21.0 million authorized outstanding.
Since the end of fiscal 2024 through April 14, 2025, the Company utilized $4.2 million to repurchase 108,503 shares under the stock buyback program, leaving $85.0 million available under the September 2024 Stock Repurchase Program.
During the first quarter of fiscal 2024, our Board of Directors declared an initial quarterly dividend of $0.20 per share paid on April 11, 2024 to all shareholders of record as of March 28, 2024.
During fiscal 2024, the company declared and paid quarterly dividends totaling $11.0 million. Additionally, the Board of Directors declared a quarterly cash dividend of $0.22 per share on the issued and outstanding common stock of the company, which was paid on April 10, 2025, to all stockholders of record as of March 27, 2025.
Changes in the valuation allowance in fiscal 2023 primarily related to the U.K. valuation reversal, balance sheet adjustments and functional currency fluctuations. Significant judgment is required in evaluating our uncertain tax positions. We establish accruals for uncertain tax positions when we believe that the full amount of the associated tax benefit may not be realized.
We establish accruals for uncertain tax positions when we believe that the full amount of the associated tax benefit may not be realized.
Over the past several years, we have met these requirements through cash generated from operations.
Liquidity and Capital Resources Our cash requirements are primarily for the opening, remodeling or reformatting of stores, installation and upgrades of information systems and working capital. Over the past several years, we have met these requirements through cash generated from operations.
On August 31, 2022, we announced that our Board of Directors authorized a share repurchase program of up to $50.0 million, and during fiscal 2023, we had utilized $20.5 million in cash to repurchase 896,603 shares under the stock buyback program, leaving $26.1 million authorized outstanding.
As of February 3, 2024, we had a borrowing base of $25.0 million. A s of February 1, 2025, we had no outstanding borrowings. During fiscal 2024, we utilized $31.0 million in cash to repurchase 1,021,004 shares under the both the August 2022 Stock Repurchase Program and September 2024 Stock Repurchase Program.
On March 13, 2024, we announced that our Board of Directors approved a new quarterly dividend program to evolve its strategic use of capital and declared an initial quarterly dividend of $0.20 per share paid on April 11, 2024 to all shareholders of record as of March 28, 2024.
From the end of fiscal 2024 through April 14, 2025, the Company utilized $4.2 million to repurchase 108,503 shares under the stock buyback program, leaving $85.0 million available under the September 2024 Stock Repurchase Program. On March 13, 2024, we announced that our Board of Directors approved a new quarterly dividend program to evolve its strategic use of capital.
The overall increase in EBITDA was driven by lower freight expense, leverage of warehouse costs, and the impact of the 53rd week in fiscal 2023. Liquidity and Capital Resources Our cash requirements are primarily for the opening, remodeling or reformatting of stores, installation and upgrades of information systems and working capital.
The increase of $2.0 million in fiscal 2024 was driven by retail and commercial margins partially offset by higher SG&A expenses. The increase in fiscal 2023 was driven by lower freight expense, leverage of warehouse costs, and the impact of the 53rd week in fiscal 2023.
Removed
As of February 3, 2024, we had a borrowing base of $25.0 million. As a result of a $250,000 letter of credit against the line of credit at the end of fiscal 2023, approximately $24.7 million was available for borrowing. A s of February 3, 2024, we had no outstanding borrowings.
Added
The company repurchased 758,301 shares utilizing $20.2 million in cash under the Company's $50.0 million stock repurchase program that was authorized by its Board of Directors on August 31, 2022 (the "August 2022 Stock Repurchase Program").
Removed
During fiscal 2023, we utilized $20.5 million in cash to repurchase 896,603 shares under the $50.0 million program authorized by our Board of Directors in August 31, 2022 . As of April 15, 2024, we have repurchased a total of $26.9 million to purchase 1,149,018 shares, leaving $19.6 million available.
Added
On September 11, 2024, the Company announced that its Board of Directors terminated the August 2022 Stock Repurchase Program and authorized a new share repurchase program of up to $100 million (the “September 2024 Stock Repurchase Program”). The company repurchased 262,703 shares utilizing $10.8 million in cash under the September 2024 Stock Repurchase Program.
Added
Recent Events and Trends Regarding Tariffs and International Trade Since we import the vast majority of our products from vendors outside the U.S., we face uncertainty and risks related to tariffs and other trade policies that could negatively impact our Company.
Added
Tariffs and other non-tariff trade practices can adversely affect our business in multiple ways including increased costs of our products. While we have taken steps since 2020 to diversify our supply chain and reduce China sourcing by shifting primarily to Vietnam, we remain subject to substantial potential exposure to tariffs.
Added
Specifically, the latest tariffs implemented by the U.S. would have significant impact on our cost structure and product margins. Additionally, the uncertainty about trade policy, tariff rates, and other changes in practices affecting international trade, including whether such tariffs or other measures will be withdrawn, or modified in the future, makes it difficult for us to operate optimally.
Added
Depending on the level and longevity of the tariff disruption, we will continue to adjust our pricing while monitoring the impact of inflation and consumer confidence, on both a micro and macro basis.
Added
Fiscal Year Ended February 1, 2025 Compared to Fiscal Year Ended February 3, 2024 Fiscal 2024 had 52 weeks compared to fiscal 2023 which was impacted by an additional week as it was a 53-week period. Total revenues.
Added
Net retail sales were $460.3 million for fiscal 2024, compared to $456.2 million for fiscal 2023 , an increase of $4.2 million or 0.9% , compared to the prior year.
Added
The compon ents of this increase are as follows: Fiscal year ended February 1, 2025 (dollars in millions) Impact from: Existing stores 12.2 53rd week (9.2 ) New stores 8.5 E-commerce (8.1 ) Store closures (2.3 ) Gift card discounts 1.4 Foreign currency translation 0.8 Gift card breakage 0.2 Other 0.7 4.2 29 Table of Contents The retail revenue increase was primarily the result of an increase in sales from corporately-operated retail locations through growth in the number of transactions, as our traffic outpaced national retail traffic data, and the opening of a net nine new corporately-managed locations in the fiscal year.
Added
The increased sales were partially offset by impact of the 53rd week in 2023 and a decrease in web demand for the year. Commercial revenue was $31.4 million for fiscal 2024 compared to $25.4 million for fiscal 2023, an increase of $6.0 million or 23.5%, primarily due to increased sales volume from our commercial accounts through our third-party retail model.
Added
Revenue from international franchising was $4.7 million for fiscal 2024 compared to $4.5 million for fiscal 2023. This $0.2 million or 3.4% increase was primarily due to having more stores in operation in 2024 compared to the same period in 2023. Retail gross margin .
Added
Retail gross margin was $253.1 million in fiscal 2024 compared to $249.3 million in fiscal 2023, an increase of $3.8 million or 1.5%. As a percentage of net retail sales, retail gross margin increased to 55.0% for fiscal 2024 from 54.7% for fiscal 2023, or 30 basis points as a percentage of net retail sales.
Added
The increase in gross margin was the result of lower merchandise and freight costs partially offset by higher occupancy expenses. Selling, general and administrative . Selling, general and administrative expenses were $206.2 million or 41.5% of consolidated revenue for fiscal 2024 as compared to $199.0 million or 40.9% of consolidated revenue for fiscal 2023.
Added
The increase in overall expense was driven by higher store-level wages due to minimum wage increases and higher outside services. These higher expenses were partially offset by decreased advertising expense. Interest expense (income) , net. For fiscal 2024, we had $0.9 million of interest income compared to $0.9 million of interest income in fiscal 2023. Provision for income taxes.
Added
The provision for income taxes was $15.4 million in fiscal 2024 compared to $13.5 million in fiscal 2023. The 2024 effective rate of 22.9% differed from the statutory rate of 21% primarily due to state income tax expense partially offset by the benefit of the foreign-derived intangible income (FDII) deduction.
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The 2023 effective rate of 20.4% differed from the statutory rate of 21% primarily due to the reversal of the valuation allowance in the U.K. partially offset by state income tax expense.
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Cash flows provided by operating activities were $47.1 million, $64.3 million and $47.3 million in fiscal years 2024, 2023 and 2022, respectively.
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Cash flows from operating activities decreased in fiscal 2024 as compared to fiscal 2023 primarily driven by increased cash spent on inventory purchases in the second half of fiscal 2024 in anticipation of the uncertainty in cost due to potential tariffs, higher accounts receivable resulting from higher commercial revenue and decreased payables and accrued expenses.
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Financing activities used cash of $44.2 million in fiscal 2024, $43.9 million in fiscal 2023 and $25.1 million in fiscal 2022. Cash used in financing activities in fiscal 2024 increased slightly when compared to fiscal 2023 due to increased stock repurchases offset by lower dividends.
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On March 13, 2024, the Company announced the initiation of a quarterly dividend program and during the first, second, third and fourth quarters of fiscal 2024, the Company declared cash dividends of $0.20 per share, totaling $2.9 million, $2.7 million, $2.7 million and $2.7 million, respectively.
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Additionally, the Board of Directors declared a quarterly cash dividend of $0.22 per share on the issued and outstanding common stock of the Company, which was paid on April 10, 2025, to all stockholders of record as of March 27, 2025.
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The Company maintains a valuation allowance in fiscal year 2023 and 2024 in certain other foreign jurisdictions. Changes in the valuation allowance in fiscal 2024 are primarily related to functional currency fluctuations. Significant judgment is required in evaluating our uncertain tax positions.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We conduct business globally in many different jurisdictions with currencies other than U.S. dollars. Our results could be negatively impacted by changes or fluctuations in currency exchange rates since we report our consolidated financial results in U.S. dollars.
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We purchase all inventory in U.S. dollars, and our foreign subsidiaries buy their inventory from us in their functional currency, which exposes us to currency risk when their functional currencies fluctuate relative to the U.S. dollar.
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Decreases in the value of the U.S. dollar against foreign currencies, particularly the Chinese renminbi and Vietnamese dong, could increase the cost of products we purchase from our vendors.
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Moreover, as our international sales are primarily denominated in the Canadian dollar, Euro, and British pound, the pricing of our products in our stores may also be affected by changes in foreign currency rates. This could require us to make adjustments that would impact our revenue and profit in various markets.
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Assets and liabilities of our foreign operations with functional currencies other than the U.S. dollar are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the year. Translation adjustments are reported in accumulated other comprehensive income, a separate component of stockholders’ equity.
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Gains and losses resulting from foreign exchange transactions, including the impact of the re-measurement of the Company’s balance sheet, are recorded as a component of selling, general and administrative expenses. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not had a formal hedging program with respect to foreign currency.
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A hypothetical 10% decrease in current foreign currency exchange rates would not have a material effect on our financial position or results of operations or cash flows. For a detailed discussion of material risk factors that have the potential to cause our actual results to differ materially from our expectations, refer to “ ITEM 1A.
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RISK FACTORS ,” included in this Annual Report on Form 10-K.