Build-A-Bear Workshop Inc. (NYSE:BBW) shares climbed 6.22% in premarket trading on Thursday after the company delivered stronger-than-expected quarterly earnings and increased its profit outlook, despite reporting revenue below analyst forecasts.
The specialty retailer posted adjusted earnings per share of $1.03 for the first quarter, surpassing Wall Street expectations of $0.76 by $0.27.
Revenue totaled $125.3 million, missing analyst estimates of $130.55 million and declining 2.4% from $128.4 million in the same quarter last year.
Reported EPS came in at $1.45, which included a $7 million tariff refund tied to expenses incurred during the prior fiscal year.
Net retail sales fell 5.1% year-over-year to $113.5 million, while consolidated e-commerce demand dropped 26.1%.
At the same time, commercial and international franchise revenue increased 34.1% to $11.8 million. Build-A-Bear also expanded its global footprint during the quarter by adding seven new experience locations, bringing the company’s worldwide total to 669 locations.
“Although there were positive highlights for the period, given a more uncertain economic environment, with consumer traffic posing a challenge, our results were lower-than-expected for the quarter,” said Sharon Price John, President and Chief Executive Officer.
For fiscal 2026, the company reduced its revenue guidance to a range of $530 million to $550 million, below the analyst consensus estimate of $554.1 million. The midpoint of the forecast, $540 million, trails expectations by approximately $14.1 million.
Despite the softer sales outlook, Build-A-Bear increased its pre-tax income guidance to between $72 million and $78 million, including the impact of an estimated $13 million tariff refund.
Excluding the $7 million benefit tied to prior-year tariffs, the company projected adjusted pre-tax income between $65 million and $71 million.
During the quarter, Build-A-Bear returned $14.2 million to shareholders through dividends and stock repurchases.