Build-A-Bear Workshop Retail wasn’t always the winner.
The toy store, known for its interactive experience of building and accessorizing stuffed animals, has undergone a major transformation since CEO Sharon Price-John took the helm more than a decade ago.
“When I first came in 2013, my reputation for the brand was strong,” she told CNBC. “We don’t have a broken brand. We have a broken business. And when we started doing interviews, you really realized how much this brand meant to people.”
The company found initial success in shopping malls in the early 2000s, but Bill-A-Bear’s stock price plummeted after the 2008 financial crisis, and the company reported a loss of $49 million in fiscal 2012.
Under Price John, the company began investing in e-commerce, moving orders to stores rather than distribution centers, and trying to turn the company around by diversifying its sales beyond malls.
“Our overall goal was to generate sustainable, profitable growth, and profitability came first,” Price John said.
That strategy worked. Virtually all of Build-A-Bear’s stores are now profitable, and the stock experienced an Nvidia-like rally earlier this year, hitting an all-time high of about $76 in September. The stock price has fallen some since then, but it’s still up more than 125% over the past two years.
But tariffs are hurting business. Build-A-Bear imports more than 90% of its products from China and Vietnam, and the company said in its third-quarter earnings report in early December that it expects the hit from tariffs to be about $11 million in fiscal 2025.
Company executives said on a conference call with analysts that the company’s traffic decreased in October during the government shutdown.
Eric Bedder, an analyst at Small Cap Consumer Research, wrote in a note this month that he was lowering his forecast and lowering his price target by $10, citing the company’s weaker-than-expected earnings report and “deep implied tariff impact.”
Still, the company is outperforming most of its retail competitors and is expected to reach $500 million in annual revenue for the first time.
“You can buy stuffed animals and stuffed animals just about anywhere, from Target to FAO Schwarz and everywhere in between,” Vedder told CNBC. “The difference is, with Build-A-Bear, it’s yours. You helped build it.”
Watch the video to learn more about how Build-A-Bear is back.
