51ºÚÁÏ

ST. LOUIS — Build-A-Bear Workshop reported a record first half of the year, boasting new international stores and new plush toys on the horizon.

Company leaders told investors Thursday that total net revenue for the first half of the fiscal year was up more than 11% to $252.6 million. Similarly, revenue grew 11% to $124.2 million for the brand’s most recent quarter, from May to August.

While the number of items bought per transaction was down, sales were up thanks to higher traffic and price increases on merchandise.

“Simply put, we are building on the iconic status of the brand to introduce this to more people in more places, with more types of product for more purposes, all with a strategic vision to drive profitable growth,� company CEO Sharon Price John said on an earnings call.

In the most recent quarter, Build-A-Bear opened 14 new locations, including stores in Georgia, Uzbekistan, Colombia, Fiji, Denmark, Qatar and the United Arab Emirates. Christopher Hurt, Build-A-Bear’s chief operations and experience officer, said the company plans to open 60 new locations this year, up from its previously predicted 50.

Further buoying sales was the brands’ social media strategy, which aims to broaden its customer base. John said the company is using Instagram, TikTok, Facebook and YouTube to showcase products. Build-A-Bear continues to invest in artificial intelligence, influencers and algorithm and trend-watching to further inform its product stories, he added.

A recent summer marketing campaign for its fruit-themed toys drove triple-digit growth in media impressions and was “a significant contributor to our second quarter success,� John said. By engaging online, Build-A-Bear is able to reach the growing “kidults� (kid-adults) market, which is more likely to make bigger and more frequent purchases. 

Heather Smith, president of Rhode Island-based The Good Toy Group, said that all plush companies are seeing success right now. Smith attributes this to consumers “flight to comfort� during stressful times and a growing trend in personalization. However, she said, Build-A-Bear's performance with “kidults� likely is driving the company double-digit growth. 

“Older kids still want to play with toys they love,� Smith said. “Eighteen to 24 is a growing toy segment.�

Leaders also updated investors on the anticipated impacts tariffs will have on Build-A-Bear.

Before 2020, the 51ºÚÁÏ-based toy manufacturer bought 90% of its products from China. As part of its efforts to diversify its supply chain, less than 50% of Build-A-Bear’s inventory will come from China this year, leaders previously said.

In anticipation of potential rising tariff costs, the company has been buying more product than usual, stockpiling inventory at pre-tariff rates. Tariffs on Vietnam doubled from 10% to 20% this summer, which will negatively impact Build-A-Bear in the second half of the year, company leaders said. 

Voin Todorovic, chief financial officer of Build-A-Bear, said the company expects tariffs and associated costs will cost less than $11 million this year.

“There are a lot of things that are outside of our control. One of those things are tariffs,� Todorovic said Thursday. “Tariffs are a real cost that we are facing.�

He said the tariffs should not directly affect the cost of products sold outside of North America, but merchandise in that region will be impacted.

John called price increases on products “very selective and very strategic� and said the largest price changes likely will be on collectibles and licensed products.

“There are some pricing changes on some of our core animals, but not to the degree that you might expect, given what we would believe some of the tariff impact is going to be over time,� she told investors.

New products, including Mini Bean plush toys, are helping drive more shoppers to stores. Typically, Build-A-Bear's stuffed toys can range from $30 to more than $100, so the lower price point of $10 per Mini Bean is helping bring in new customers. 

John said the company has seen an 80% increase of sales and expects to see continued growth. Halloween-themed toys, an upcoming toy launch tied to blockbuster “Wicked: For Good� and the 10-year anniversary edition of the brand's holiday snowdeer toy will help carry sales this fall and winter, John said. 

Build-A-Bear shares closed Thursday at $67.01, up $8.25 or about 14%.

Build-A-Bear is headquartered in 51ºÚÁÏ. It was founded in 1997 by Maxine Clark and opened its first store in Richmond Heights’ 51ºÚÁÏ Galleria Mall.