On Thursday, few stock market bears were in sight around Build-A-Bear Workshop's (NYSE: BBW) equity. Shares of the customizable plushy specialist rocketed almost 16% higher on the day due almost exclusively to strong quarterly results. That made the stock an outlier on a day when the S&P 500 index traded sideways.
A double beat brought the bulls to the Bear
Build-A-Bear managed to beat the consensus analyst estimates for both revenue and profitability in its second quarter.
The highly specialized retailer posted a top line of just under $112 million, representing a slightly more than 2% increase year over year. On average, prognosticators tracking the company's stock were expecting a shade under $110 million. The dynamic was similar to generally accepted accounting principles (GAAP) net income; this rose by 5% to nearly $8.8 million, or $0.64 per share. The collective pundit estimate was $0.59.
The top-line increase was due to a nearly 45% increase in commercial and international franchise revenue. However, this isn't (yet) a major income stream for Build-A-Bear. In the second quarter, it brought in $8.3 million, while the company's foundational retail sales were responsible for the remainder of total revenue.
More growth in store, management believes
In its earnings release, Build-A-Bear reiterated its existing guidance for the entirety of 2024. The company forecast that both its non-GAAP (adjusted) revenue and pre-tax income will rise at mid-single-digit percentage rates; it did not get more specific. Management also expects that net new unit growth will total a minimum of 50 "experience" locations. Capital expenditures should come in at $18 million to $20 million.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Build-A-Bear Workshop. The Motley Fool has a disclosure policy.
