Press Release
Build-A-Bear Workshop, Inc. Reports Record Results for Fiscal 2023 First Quarter and Reaffirms Annual Guidance
-
Generates total revenues of
$120.1 million representing a record for this fiscal quarter -
Achieves pre-tax income of
$19.4 million , a record level for the third consecutive fiscal first quarter -
Delivers first quarter diluted earnings per share of
$0.98 , the highest in its history for the period -
Fiscal year-to-date the Company returned
$28.6 million to shareholders through dividends and share repurchases
First Quarter 2023 Results (13 weeks ended
-
Total revenues were
$120.1 million , an increase of$2.4 million , including the negative impact of$1.3 million of currency exchange, as compared to$117.7 million in the fiscal 2022 first quarter;-
Net retail sales were
$112.1 million compared to$112.9 million in the fiscal 2022 first quarter. This decline reflects the$1.3 million negative impact from currency exchange and included growth from sales in corporately-managed retail locations offset by a decline in consolidated e-commerce demand (orders generated online to be fulfilled from either the Company’s warehouse or its stores); -
Commercial and international franchise revenues rose 66.7% to
$8.0 million compared to$4.8 million in the fiscal 2022 first quarter;
-
Net retail sales were
- Gross profit margin was 54.1% compared to 52.5% in the fiscal 2022 first quarter. The 160-basis point expansion in gross profit margin was driven by lower freight costs, as expected, and leverage of distribution costs, as compared to the fiscal 2022 first quarter;
-
Selling, general and administrative (“SG&A”) expenses were
$45.6 million , or 38.0% of total revenues, compared to$43.6 million , or 37.0% of total revenues in the fiscal 2022 first quarter. The$2.0 million increase in SG&A as compared to the fiscal 2022 first quarter was driven by strategic investment in talent and marketing to support future growth and to a lesser extent, inflation in store labor costs; -
Pre-tax income was
$19.4 million , or 16.2% of total revenues compared to pre-tax income of$18.2 million , or 15.5% of total revenues in the fiscal 2022 first quarter; -
Income tax expense was
$4.7 million with an effective tax rate of 24.5% compared to$4.0 million with an effective tax rate of 22.0% in the fiscal 2022 first quarter; -
Net income was
$14.6 million , or$0.98 per diluted share, compared to net income of$14.2 million , or$0.89 per diluted share, in the fiscal 2022 first quarter; and -
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was
$22.4 million , an increase$0.9 million compared to$21.5 million in the fiscal 2022 first quarter.
Store Activity:
As of
Through the Company’s third-party retail business model there were 70 locations at the end of the 2023 first quarter with relationships that include
The Company’s international franchisees operated 63 locations at the end of the fiscal 2023 first quarter reflecting four net closures compared to the beginning of the fiscal year.
Balance Sheet:
As of
During the first quarter of fiscal 2023, the Company utilized
Fiscal year-to-date, the Company returned
In the fiscal 2023 first quarter, capital expenditures totaled
2023 Outlook:
The Company is reaffirming its fiscal 2023 outlook with expectations of delivering growth in total revenues and pre-tax income compared to fiscal 2022. While the Company notes that its fiscal 2023 is a 53-week year compared to a 52-week year in fiscal 2022, it expects to deliver growth in total revenues and pre-tax income versus the prior year exclusive of the projected benefit of the 53rd week. For reference, the additional week in fiscal 2023, which will be reflected in the Company’s fourth quarter, is estimated to be
For fiscal 2023, the Company continues to expect:
- Total revenues to increase in the range of 5% to 7% compared to fiscal 2022 with growth in its three operating segments;
- Pre-tax income growth of 10% to 15% compared to fiscal 2022, surpassing the record high that the Company achieved in fiscal 2022;
- To open 20 to 30 experience locations, through a combination of third-party retail and corporately-managed business models, with the majority planned for the second half of the year;
-
Capital expenditures in the range of
$15 million to$20 million ; -
Depreciation and amortization of approximately
$13 million to$14 million ; and - Tax rate to approximate 25% excluding discrete items.
The Company’s guidance considers a variety of factors ranging from anticipated ongoing inflationary pressures to the expected benefit of reduced freight costs. Additionally, the Company noted that its outlook assumes no further material changes in the operations of its supply chain including the ability to receive and ship product on a timely basis, the macro-economic and geo-political environment, or relevant foreign currency exchange rates.
Note Regarding Non-GAAP Financial Measures:
In this press release, the Company’s financial results are provided both in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic income adjusted to exclude certain costs, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measure later in this document.
Today’s Conference Call Webcast:
A replay of the conference call webcast will be available in the investor relations website for one year. A telephone replay will be available beginning at approximately
About Build-A-Bear:
Build-A-Bear is a multi-generational global brand focused on its mission to “add a little more heart to life” appealing to a wide array of consumer groups who enjoy the personal expression in making their own “furry friends” to celebrate and commemorate life moments. Nearly 500 interactive brick-and-mortar experience locations operated through a variety of formats provide guests of all ages a hands-on entertaining experience, which often fosters a lasting and emotional brand connection. The company also offers engaging e-commerce/digital purchasing experiences on www.buildabear.com including its online “Bear-Builder” as well as the “Bear Builder 3D Workshop”. In addition, extending its brand power beyond retail,
Forward-Looking Statements:
This press release contains certain statements that are, or may be considered to be, “forward-looking statements” for the purpose of federal securities laws, including, but not limited to, statements that reflect our current views with respect to future events and financial performance. We generally identify these statements by words or phrases such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “future,” “potential” or “continue,” the negative or any derivative of these terms and other comparable terminology. All of the information concerning our future liquidity, future revenues, margins and other future financial performance and results, achievement of operating of financial plans or forecasts for future periods, sources and availability of credit and liquidity, future cash flows and cash needs, success and results of strategic initiatives and other future financial performance or financial position, as well as our assumptions underlying such information, constitute forward-looking information.
These statements are based only on our current expectations and projections about future events. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements, including those factors discussed under the caption entitled “Risks Related to Our Business” and “Forward-Looking Statements” in our Annual Report on Form 10-K filed with the
All of our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or other risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the
All other brand names, product names, or trademarks belong to their respective holders.
|
|||||||||||||||
Unaudited Condensed Consolidated Statements of Operations |
|||||||||||||||
(dollars in thousands, except share and per share data) |
|||||||||||||||
13 Weeks |
13 Weeks |
||||||||||||||
Ended |
Ended |
||||||||||||||
|
% of Total |
|
% of Total |
||||||||||||
2023 |
Revenues (1) |
2022 |
Revenues (1) |
||||||||||||
Revenues: | |||||||||||||||
Net retail sales | $ |
112,096 |
|
93.4 |
|
$ |
112,890 |
96.0 |
|||||||
Commercial revenue |
6,688 |
|
5.6 |
|
4,286 |
3.6 |
|||||||||
International franchising |
1,266 |
|
1.0 |
|
486 |
0.4 |
|||||||||
Total revenues |
120,050 |
|
100.0 |
|
117,662 |
100.0 |
|||||||||
Cost of merchandise sold: | |||||||||||||||
Cost of merchandise sold - retail (1) |
50,904 |
|
45.4 |
|
53,600 |
47.5 |
|||||||||
Cost of merchandise sold - commercial (1) |
3,358 |
|
50.2 |
|
1,946 |
45.4 |
|||||||||
Cost of merchandise sold - international franchising (1) |
885 |
|
69.9 |
|
288 |
59.3 |
|||||||||
Total cost of merchandise sold |
55,147 |
|
45.9 |
|
55,834 |
47.5 |
|||||||||
Consolidated gross profit |
64,903 |
|
54.1 |
|
61,828 |
52.5 |
|||||||||
Selling, general and administrative expense |
45,626 |
|
38.0 |
|
43,620 |
37.1 |
|||||||||
Interest (income) expense, net |
(76 |
) |
(0.1 |
) |
18 |
0.0 |
|||||||||
Income before income taxes |
19,353 |
|
16.1 |
|
18,190 |
15.5 |
|||||||||
Income tax expense |
4,745 |
|
4.0 |
|
3,999 |
3.4 |
|||||||||
Net income | $ |
14,608 |
|
12.2 |
|
$ |
14,191 |
12.1 |
|||||||
Income per common share: | |||||||||||||||
Basic | $ |
1.01 |
|
$ |
0.92 |
||||||||||
Diluted | $ |
0.98 |
|
$ |
0.89 |
||||||||||
Shares used in computing common per share amounts: | |||||||||||||||
Basic |
14,457,858 |
|
15,475,731 |
||||||||||||
Diluted |
14,974,930 |
|
15,964,433 |
(1) |
Selected statement of operations data expressed as a percentage of total revenues, except cost of merchandise sold - retail, cost of merchandise sold - commercial and cost of merchandise sold - international franchising that are expressed as a percentage of net retail sales, commercial revenue and international franchising, respectively. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales, commercial revenue or international franchising and immaterial rounding. |
|||||||||||||||
Unaudited Condensed Consolidated Balance Sheets |
|||||||||||||||
(dollars in thousands, except per share data) |
|||||||||||||||
|
|
|
|||||||||||||
2023 |
2023 |
2022 |
|||||||||||||
ASSETS |
|||||||||||||||
Current assets: | |||||||||||||||
Cash, cash equivalents and restricted cash |
$ |
32,819 |
|
$ |
42,198 |
|
$ |
26,093 |
|
||||||
Inventories, net |
|
66,489 |
|
|
70,485 |
|
|
77,366 |
|
||||||
Receivables, net |
|
13,307 |
|
|
15,374 |
|
|
11,838 |
|
||||||
Prepaid expenses and other current assets |
|
13,503 |
|
|
19,374 |
|
|
12,436 |
|
||||||
Total current assets |
|
126,118 |
|
|
147,431 |
|
|
127,733 |
|
||||||
Operating lease right-of-use asset |
|
73,780 |
|
|
71,791 |
|
|
72,126 |
|
||||||
Property and equipment, net |
|
50,385 |
|
|
50,759 |
|
|
46,691 |
|
||||||
Deferred tax assets |
|
6,642 |
|
|
6,592 |
|
|
7,609 |
|
||||||
Other assets, net |
|
4,785 |
|
|
4,221 |
|
|
2,266 |
|
||||||
Total Assets |
$ |
261,710 |
|
$ |
280,794 |
|
$ |
256,425 |
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable |
$ |
13,686 |
|
$ |
10,286 |
|
$ |
19,930 |
|
||||||
Accrued expenses |
|
27,272 |
|
|
37,358 |
|
|
23,444 |
|
||||||
Operating lease liability short term |
|
27,843 |
|
|
27,436 |
|
|
23,470 |
|
||||||
Gift cards and customer deposits |
|
18,637 |
|
|
19,425 |
|
|
18,770 |
|
||||||
Deferred revenue and other |
|
5,010 |
|
|
6,646 |
|
|
3,881 |
|
||||||
Total current liabilities |
|
92,448 |
|
|
101,151 |
|
|
89,495 |
|
||||||
Operating lease liability long term |
|
59,030 |
|
|
59,080 |
|
|
66,617 |
|
||||||
Other long-term liabilities |
|
1,260 |
|
|
1,446 |
|
|
1,774 |
|
||||||
Stockholders' equity: | |||||||||||||||
Common stock, par value |
|
149 |
|
|
148 |
|
|
157 |
|
||||||
Additional paid-in capital |
|
70,324 |
|
|
69,868 |
|
|
71,962 |
|
||||||
Accumulated other comprehensive loss |
|
(12,177 |
) |
|
(12,274 |
) |
|
(12,452 |
) |
||||||
Retained earnings |
|
50,676 |
|
|
61,375 |
|
|
38,872 |
|
||||||
Total stockholders' equity |
|
108,972 |
|
|
119,117 |
|
|
98,539 |
|
||||||
Total Liabilities and Stockholders' Equity |
$ |
261,710 |
|
$ |
280,794 |
|
$ |
256,425 |
|
||||||
Unaudited Selected Financial and Store Data |
||||||||||
(dollars in thousands) |
||||||||||
13 Weeks |
13 Weeks |
|||||||||
Ended |
Ended |
|||||||||
|
|
|||||||||
2023 |
2022 |
|||||||||
Other financial data: | ||||||||||
Retail gross margin ($) (1) | $ |
61,192 |
|
$ |
59,290 |
|
||||
Retail gross margin (%) (1) |
54.6 |
% |
52.5 |
% |
||||||
Capital expenditures (2) | $ |
3,065 |
|
$ |
1,070 |
|
||||
Depreciation and amortization | $ |
3,080 |
|
$ |
3,250 |
|
||||
Store data (3): | ||||||||||
Number of corporately-managed retail locations at end of period | ||||||||||
312 |
|
306 |
|
|||||||
37 |
|
39 |
|
|||||||
Total corporately-managed retail locations |
349 |
|
345 |
|
||||||
Number of franchised stores at end of period |
63 |
|
64 |
|
||||||
Number of third-party retail locations at end of period |
70 |
|
62 |
|
||||||
Corporately-managed store square footage at end of period (4) | ||||||||||
726,209 |
|
721,966 |
|
|||||||
52,763 |
|
58,216 |
|
|||||||
Total square footage |
778,972 |
|
780,182 |
|
(1) |
Retail gross margin represents net retail sales less cost of merchandise sold - retail. Retail gross margin percentage represents retail gross margin divided by net retail sales. Store impairment is excluded from retail gross margin. |
|||||||
(2) |
Capital expenditures represents cash paid for property, equipment, and other assets. |
|||||||
(3) |
Excludes e-commerce. North American stores are located in |
|||||||
(4) |
Square footage for stores located in |
|||||||
* Non-GAAP Financial Measures | ||||||||
|
||||||||
Reconciliation of GAAP to Non-GAAP figures |
||||||||
(dollars in thousands) |
||||||||
13 Weeks |
13 Weeks |
|||||||
Ended |
Ended |
|||||||
|
|
|||||||
2023 |
2022 |
|||||||
Income before income taxes (pre-tax) |
$ |
19,353 |
|
$ |
18,190 |
|||
Interest (income) expense, net |
|
(76 |
) |
|
18 |
|||
Depreciation and amortization expense |
|
3,080 |
|
|
3,250 |
|||
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
$ |
22,357 |
|
$ |
21,458 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230525005288/en/
Investors:
VP Investor Relations & Corporate Finance
(314) 593-3233
Media:
PR@buildabear.com
Source: