Earnings Results under Review: Build-A-Bear Workshop, Inc. (NYSE: BBW)

On Tuesday, Build-A-Bear Workshop, Inc. (NYSE: BBW) oscillated between $8.10 and $8.35 before concluding trading period higher +1.85% at $8.25 . The stock recorded total trading quantity of 93,574 shares as compared to its average volume of 120,123 shares. The share price fluctuated between $7.25 to $10.45 during the 52-week trading period. The firm has a total market worth of $120.12k and $120.679M shares remain outstanding.

Build-A-Bear Workshop, Inc. (NYSE: BBW) stated results for the first quarter ended May 5, 2018. Given the Company’s before reported fiscal year-end change, all references to previous year results are based on the recast 13 weeks ended April 29, 2017.

First Quarter 2018 highlights (13 weeks ended May 5, 2018, contrast to the 13 weeks ended April 29, 2017):

Total revenues were $83.2M contrast to $91.2M in the fiscal 2017 first quarter;

Consolidated net retail sales were $81.4M contrast to $88.7M in the fiscal 2017 first quarter;

Retail gross margin declined 340 basis points to 44.3% and included a 30 basis point increase in merchandise margin offset by occupancy deleverage driven by lower sales;

Selling, general and administrative expenses (“SG&A”) were $36.3M, or 43.7% of total revenues, contrast to $39.2M, or 43.0% of total revenues, in the fiscal 2017 first quarter;

GAAP pre-tax income reduced to $0.6M, including an estimated $0.6M negative pre-tax impact from adoption of the new revenue recognition standard, contrast to $4.4M in the fiscal 2017 first quarter;

Income tax expense was $0.3M with an effective tax rate of 45.2%, contrast to $1.8M with an effective tax rate of 40.6% in the fiscal 2017 first quarter. Further, the first fiscal quarters of 2018 and 2017 included the recognition of $0.1M and $0.2M, respectively, of net additional tax expense associated with vested share-based payments; and

Net income was $0.4M, or $0.02 per diluted share, contrast to $2.6M, or $0.16 per diluted share, in the fiscal 2017 first quarter.

Store Activity:

In the first quarter of fiscal 2018, the Company opened 2 locations, closed 4 locations and remodeled or reformatted 7 stores into a Discovery format, ending the quarter with 32% of its store base in an updated Discovery design. As of May 5, 2018, the Company operated 352 corporately-managed locations, including 294 in North America and 58 outside of North America. The Company’s international franchisees ended the quarter with 96 stores in 12 countries.

Balance Sheet:

As of May 5, 2018, cash and cash equivalents totaled $18.9M. The Company ended the quarter with no borrowings under its revolving credit facility. Total inventory at quarter-end was $49.4M contrast to $55.2M at the end of the first quarter of 2017, a decrease of 10.5%. In the first quarter of fiscal 2018, capital expenditures totaled $3.0M and depreciation and amortization were $4.1M.

Fiscal Year Change:

As before revealed, the Company’s Board of Directors accepted a change in the Company’s fiscal year-end, which before ended on the Saturday closest to December 31, to the Saturday closest to January 31. This change was effective following the end of the Company’s 2017 fiscal year. As a result of this change, the Company is including a one fiscal month transition period, December 31, 2017 through February 3, 2018, as part of this first quarter press release.

Share Repurchase:

Since December 30, 2017, the Company repurchased 616,141 shares of its ordinary stock for $5.3M, including 528,228 shares during the transition period and 87,913 shares during the first quarter of fiscal 2018. As of May 5, 2018, the Company had $10.0M remaining on the share repurchase authorization that was adopted in August 2017.

Build-A-Bear Workshop, Inc.’s (BBW) stock price showed strong performance of 1.85% in last seven days, switched up 7.14% in last thirty days and it fell -12.23% in last one year.

It has 14.74 million of outstanding shares and its shares float measured at 14.02.

 

Andrew Carr

Andrew Carr covers the Business news across the all us market sectors for Streetobserver.com. He has over 5 years experience writing financial and business news. He is a graduate of the University of Florida graduating with an MBA. He focuses on adding value to investors' portfolios via thoroughly checked proprietary information and data sources. He has a very strong interest in stock trading, and other various investments. He currently lives in Fort Myers, FL with his wife Heidi.

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