Build-A-Bear Workshop Inc. ( BBW ) on Thursday reported mixed fourth-quarter results, with earnings exceeding expectations and revenue falling slightly short of analyst estimates.

Fourth-quarter GAAP diluted earnings per share were $1.26, surpassing the $1.22 analyst estimate but down from $1.62 a year ago.

Total revenue increased 2.7% year over year to a record $154.5 million, below the $155.7 million analyst estimate. Pre-tax income was $21.5 million, or 13.9% of revenue, compared to $27.5 million, or 18.3%, in the prior year.

The company attributed results to approximately $6 million in tariffs and related costs, as well as over $1.2 million in higher medical and labor expenses due to minimum wage increases.

Retail remained the largest segment, generating $139.5 million in net sales, nearly unchanged from the previous year.

Consolidated e-commerce demand fell 13.6% year over year. Commercial and international franchising revenue rose 37.5% to $15.1 million.

Full Year Results

For fiscal 2025, total revenue increased 6.7% to a record $529.8 million, up from $496.4 million. GAAP diluted EPS rose to $3.99 from $3.80.

Pre-tax income was $67.2 million, nearly unchanged from $67.1 million the previous year. Results included about $11 million in tariffs and related costs and $5 million in higher medical and labor expenses.

Net retail sales grew 5.6% to $486.0 million. Commercial and international franchising revenue increased 21.6% to $43.9 million. Consolidated e-commerce demand declined 5.5%.

Balance Sheet And Capital Returns

At fiscal year-end, cash and cash equivalents were $26.8 million, with no borrowings under the revolving credit facility. Capital expenditures totaled $12.7 million in the fourth quarter and $25.5 million for the year.

Inventory rose to $82.2 million from $69.8 million, reflecting tariff-related costs and inventory to support anticipated sales.

In fiscal 2025, the company returned $39.0 million to shareholders through share repurchases and dividends, and raised its quarterly dividend by 4.5% to 23 cents per share. Payable April 9, 2026, to all stockholders of record as of March 26, 2026.

The company added 64 global experience locations during the year, bringing the total to 662 worldwide across corporately managed, partner-operated, and franchised stores.

“These results reflect approximately $11 million in tariffs and related costs that we partially offset through continued operational excellence, strong store contribution margins, and actions to further diversify our business model. This consistent performance, together with solid cash flow generation, has enabled us to return more than $170 million to shareholders through stock repurchases and dividends over the past five years,” commented Voin Todorovic, Chief Financial Officer of Build-A-Bear Workshop ( BBW ).

2026 Outlook

For fiscal 2026, the company expects revenue to grow at a mid-single-digit rate. Pre-tax income is projected to range from a mid-single-digit percentage decline to low-single-digit growth, including about $16 million in tariff-related costs and $3 million in long-term investments.

Build-A-Bear also anticipates at least 50 new experience locations and commercial revenue growth of at least 20%.

Leadership Transition Announced

Build-A-Bear Workshop ( BBW ) announced a leadership transition as part of its long-term succession plan. President and CEO Sharon Price John plans to retire on June 11, 2026, following the company’s annual shareholders meeting.

The board has appointed Chief Operations and Experience Officer Chris Hurt as the next CEO, and he will join the board upon assuming the role. Price John will remain on the board during the transition to help ensure a smooth leadership handover.

BBW Price Action: Build-A-Bear Workshop ( BBW ) shares were down 4.76% at $41.42 at the time of publication on Thursday, according to Benzinga Pro data.