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The
mall staple was able to get ahead of tariff impacts during the
first half of the year through preemptive actions, Chief
Financial Officer Voin Todorovic said in a statement Thursday,
but the levies caught up to the company in its most recent
quarter and will continue to weigh on its performance into 2026.
“We expect this elevated level of impact to continue through the
fourth quarter and into the next fiscal year," Todorovic said.
"Nevertheless, we remain confident in our guidance, which
accounts for tariff impacts and our focus on disciplined expense
management.”
Build-A-Bear shares tumbled 13% Thursday.
Trump acknowledged in April that his tariffs could result in
fewer and costlier products in the United States, saying at the
time that American kids might “have two dolls instead of 30
dolls.”
Many U.S. companies have been able to avoid price hikes through
various maneuvers like aggressively buying supplies before
tariffs kicked in. Many have absorbed some of the costs and
pulled back on hiring instead of raising prices.
Both importers and economists, however, said that those tactics
have an expiration date.
For the period ended Nov. 1, Build-A-Bear earned $8.1 million,
or 62 cents per share. A year earlier the St. Louis company
earned $9.9 million, or 73 cents per share.
The performance topped the 59 cents per share that analysts
polled by FactSet were looking for.
Revenue rose nearly 3% to $122.7 million, but came in below the
$124 million that Wall Street expected.
Build-A-Bear still anticipates fiscal 2025 revenue to grow on a
mid-to-high-single-digit percentage basis.
Part of the reason for the retailer's rebound is growing
popularity on social media, particularly among what are referred
to as “kidults,” those who may have had a Build-A-Bear growing
who are buying them again. Those buyers tend to spend more on
the products.
Todorovic said that it's been the most profitable first nine
months in the company's history. And investors have been reaping
sizeable gains. Shares closed at $57.40 on Wednesday, which is
dramatic growth from five years ago, when the retailer’s stock
sat under $3.
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