Executive Summary

Record Q4: Revenue $150.4M (+0.8% GAAP; +5.7% ex 53rd week) and pre-tax income $27.5M (+5.1% GAAP; +15.8% ex 53rd week), with diluted EPS $1.62 (+3.2%); gross margin expanded 20 bps to 56.6% and SG&A leveraged 80 bps to 38.4% .
FY24 marked the 4th consecutive year of record results; dividend raised 10% to $0.22 and $42M returned via buybacks/dividends; year-end cash $27.8M, no revolver borrowings .
FY25 outlook: mid-single-digit revenue growth; pre-tax income from low-single-digit decline to low-single-digit growth given >$10M cost headwinds, about half from tariffs; at least 50 net new locations, capex $20–$25M, D&A ~$16M, tax rate ~24% .
Strategic catalysts: accelerating partner-operated international expansion, product innovation (Mini Beans >1.25M units sold), omni-channel upgrades (same-day delivery with Uber), and an Orlando ICON Park multi-level flagship planned for 1H26 .

What Went Well and What Went Wrong

What Went Well
- Margin execution: Q4 gross margin +20 bps to 56.6% and SG&A -80 bps to 38.4%, lifting pre-tax margin to 18.3% (+80 bps) .
- Mix/adjacencies: Commercial + franchise revenues +20.5% in Q4; retail gross margin 56.9% (vs 56.7% LY) .
- Strategic momentum: “fourth consecutive year of record results… exceeded our most recent guidance,” with plans for “fifth straight year of record-breaking revenue in fiscal 2025,” albeit cautious on pre-tax due to tariffs (CEO) .
What Went Wrong
- E-commerce softness: Q4 consolidated e-commerce demand declined 11.6% (after +1.3% in Q3), with management acknowledging “a lot of opportunity” in web and focusing on holistic omni-channel integration .
- Macro/cost headwinds: FY25 pre-tax outlook held back by >$10M added costs (~half tariffs; also medical, labor), with supply-chain/tariff uncertainty cited as a key risk (CFO) .
- Higher tax rate offset: EPS growth tempered by a higher tax rate despite higher pre-tax income and lower share count .

Financial Results

Core P&L and Margins (oldest → newest)

Metric	Q4 FY2023 (14 wks)	Q2 FY2024	Q3 FY2024	Q4 FY2024 (13 wks)
Total Revenue ($M)	149.3	111.8	119.4	150.4
Diluted EPS ($)	1.57	0.64	0.73	1.62
Adjusted EPS ($)	1.34	—	—	1.59
Gross Margin (%)	56.4%	54.2%	54.1%	56.6%
SG&A (% of Rev)	39.2%	44.0%	43.3%	38.4%
Pre-tax Income ($M)	26.1	11.5	13.1	27.5
Pre-tax Margin (%)	17.5%	10.3%	11.0%	18.3%

Notes: Q4 FY2024 revenue +0.8% GAAP and +5.7% excluding prior-year extra week; pre-tax +5.1% GAAP and +15.8% ex-53rd week .

Revenue Mix (oldest → newest)

Revenue Component ($M)	Q4 FY2023 (14 wks)	Q2 FY2024	Q3 FY2024	Q4 FY2024 (13 wks)
Net Retail Sales	140.2	103.5	109.5	139.5
Commercial Revenue	7.7	7.3	8.6	9.5
International Franchising	1.4	1.0	1.3	1.4

Q4 commentary: commercial + franchise combined +20.5% YoY; retail gross margin 56.9% .

KPIs and Operating Metrics

KPI	Q4 FY2023 (14 wks)	Q2 FY2024	Q3 FY2024	Q4 FY2024 (13 wks)
Retail Gross Margin (%)	56.7%	54.0%	54.2%	56.9%
Corp-Managed Stores (Total)	359	361	362	368
Franchise Stores	74	80	80	83
Third-Party Retail Locations	92	107	123	138
Capex ($M)	—	3.27 (Q2)	3.87 (Q3)	9.75 (Q4)
E-commerce Demand YoY	—	-28.2%	+1.3%	-11.6%
Inventory ($M, YE)	—	—	—	69.8
Cash & Equivalents ($M, YE)	—	—	—	27.8
Share Repurchases (Qtr)	—	—	$4.8M (Q3)	$8.0M (Q4)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue Growth	FY2025	N/A (initial)	Mid-single-digit % growth	New
Pre-tax Income	FY2025	N/A (initial)	Low-single-digit decline to low-single-digit growth; >$10M added costs (~½ tariffs)	New
Net New Unit Growth	FY2025	N/A (initial)	At least 50 locations (majority partner-operated)	New
Commercial Revenue Growth	FY2025	N/A (initial)	At least +20%, back-half weighted	New
Capex	FY2025	N/A (initial)	$20M–$25M	New
Depreciation & Amortization	FY2025	N/A (initial)	~ $16M	New
Tax Rate	FY2025	N/A (initial)	~24% excl. discrete items	New
Quarterly Dividend/Share	Ongoing	$0.20	$0.22 (+10%) effective Apr 10, 2025 payment	Raised

Assumptions include current tariffs, medical and labor costs, freight and inflation; no further material macro/FX/tariff changes contemplated .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY2024)	Previous Mentions (Q3 FY2024)	Current Period (Q4 FY2024)	Trend
E-commerce/Omni-channel	Web demand -28.2% YoY; focus on omni integration; reaffirmed FY24 guidance	Web demand +1.3% YoY; best-ever Q3; continued integration	Web demand -11.6% YoY; inventory visibility upgrades; Uber same-day delivery scaled; focus on holistic omni	Improving capabilities; mixed demand
International/Partner Expansion	+17 net new units; 548 total locations	+17 net new units; 565 total locations	+24 net new in Q4; 589 total; plan ≥50 net new in FY25	Accelerating expansion
Tariffs/Supply Chain	Ongoing inflation/freight headwinds in outlook	Noted cost environment; updated FY24 guide	FY25 pre-tax impacted by >$10M costs; <50% of 2025 North America receipts from China; diversified sourcing	Elevated cost risk; diversification progress
Product/Consumer	Strategy leveraging brand; categories/channels	Retail and 3rd-party strength; web below expectations	Mini Beans >1.25M units; “kidulting” ~40% sales; strong licenses (Bluey/Pokémon/Sanrio)	Broader audience, collectible momentum
New Flagship/Experiences	—	—	Orlando ICON Park multi-level “retail-tainment” planned 1H26	New experiential catalyst

Management Commentary

CEO Sharon Price John: “Record results… exceeded our most recent guidance… fourth consecutive year of record results… expect to harness that momentum to deliver a fifth straight year of record-breaking revenue in fiscal 2025, although we are cautiously optimistic on pretax income… largely due to tariff concerns” .
COO Chris Hurt: Described 24 net new locations in Q4, global partner/franchise expansion across >25 countries, and plans for ≥50 net new locations in FY25; highlighted Orlando ICON Park concept opening 1H26 .
CEO on omni-channel: “More inventory visibility… extend cutoff windows… same-day shipping initiative with Uber… increasing same-day shipped orders tenfold versus the entirety of 2024” .
CFO Voin Todorovic: “Less than 50% of our inventory shipped to North America in 2025 will be sourced from China”; FY25 impact includes upwards of $10M in added costs (~½ tariffs) .
CEO on product stretch: Mini Beans “sold over 1.25 million units,” with plans to expand into wholesale in 2025; “kidulting” represents ~40% of sales .

Q&A Highlights

Consumer and traffic: Store traffic +3% YoY in Q4 vs U.S. national traffic down ~1%; dollars per transaction positive; slight softness in conversion .
E-commerce pathway: Management “wholly acknowledge[s]… a lot of opportunity,” focusing on omni integration (Salesforce, POS, journeys, CRO role) rather than “goosing” web in isolation .
Tariffs and pricing: Diversification reduced China dependence (<50% of 2025 NA receipts); mitigation via vendor efficiency; pricing as last resort, with “scalpeled and consumer conscious” actions and premium offerings when warranted .
Same-day delivery: Uber partnership extends holiday/birthday windows and taps convenience; supports personalization use-cases (e.g., Record Your Voice) .
Expansion cadence: ≥50 net new FY25 locations expected, majority international partner-operated; commercial growth at least +20% and back-half weighted (recognized at shipment) .
Inventory stance: Elevated to mitigate tariffs and support expansion; comfortable with levels; total inventory $69.8M at YE (+9.9% YoY) .

Estimates Context

S&P Global Wall Street consensus for Q4 FY2024 revenue and EPS was unavailable at time of analysis due to access limits; as a result, we cannot present an “Actual vs Consensus” comparison for this quarter. Values would normally be sourced from S&P Global.

Metric	Actual	Consensus	Surprise
Revenue ($M)	150.4	N/A – S&P Global consensus unavailable	N/A
Diluted EPS ($)	1.62	N/A – S&P Global consensus unavailable	N/A

Key Takeaways for Investors

Quality Q4 print with margin expansion and strong pre-tax margin (18.3%), underpinned by cost discipline and mix (commercial/franchise), while retail gross margin remained robust; supports durability into FY25 .
FY25 revenue growth guide (mid-single-digit) is underwritten by ≥50 net new locations and at least +20% commercial growth (back-half weighted), offering volume/mix levers despite macro cost headwinds .
Tariffs are the key watch item: management expects >$10M incremental costs (~½ tariffs). Supply-chain diversification (<50% China in 2025) and pricing architecture provide buffers, but pre-tax likely lags revenue growth near term .
Omni progress is a medium-term unlock (inventory visibility, same-day via Uber, checkout personalization, CRO-led integration), with web demand currently volatile; execution here is a catalyst for estimate revisions once traction is evident .
Capital returns remain shareholder-friendly (10% dividend raise; $85.3M remaining under $100M buyback as of Mar 12) with a clean balance sheet (no revolver borrowings) .
New Orlando flagship (1H26) and continued partner-led international expansion should enhance brand reach and commercial revenue, adding optionality to the thesis .
Non-GAAP adjustments were modest in Q4 (adjusted EPS $1.59 vs $1.62 GAAP); monitor for consistency and clarity amid cost/tariff dynamics .

Appendix: Additional Data Points

Q4 specifics: EBITDA $31.1M; 20.7% of revenue; adjusted pre-tax and revenue exclude prior-year 53rd week for comparability .
Capital allocation: Q4 buybacks $8.0M (188,060 shares); FY24 buybacks $31.0M (1,021,004 shares) plus $11.0M dividends .
Year-end metrics: Cash $27.8M; inventory $69.8M; no revolver borrowings; capex $19.3M in FY24 .

All data above are sourced from the company’s 8-K and press releases for Q4 FY2024 and prior quarters, and the Q4 FY2024 earnings call transcript: .

BUILD-A-BEAR WORKSHOP INC (BBW)·Q4 2025 Earnings Summary