Key Highlights

  • Build-A-Bear's $0.23 quarterly Dividend trades ex-date September 24, 2026, payable October 8, yielding approximately 3.45%, unchanged from the prior quarter.
  • Second-quarter Revenue was $115.3 million, down 7.2% year over year, with pre-tax income of $11.6 million, down 24.1%, and diluted EPS of $0.70, compared with $0.94 a year earlier.
  • Gross Margin declined approximately 340 basis points to 54.2%, driven by occupancy cost deleverage and increased promotional activity.
  • The company lowered its fiscal 2026 revenue guidance to $500 million to $525 million and pre-tax income guidance to $60 million to $68 million.

Overview

Build-A-Bear Workshop's (NYSE:BBW) $0.23 quarterly dividend yields approximately 3.45% and continued unchanged through a second quarter in which diluted EPS declined to $0.70 from $0.94 a year earlier, reflecting lower store traffic and a 340-basis-point gross margin contraction. Six-month diluted EPS reached $2.16, a period that included a $7 million Tariff refund recognized in the first quarter, a figure management has said should not be extrapolated into a normalized annual payout ratio.

Dividend Program and Shareholder Returns

Build-A-Bear's board declared a quarterly Cash Dividend of $0.23 per share on September 9, 2026, payable October 8 to shareholders of record September 24. The rate is unchanged from the prior quarter and equals $0.92 annualized. The company returned $22.7 million to shareholders through share repurchases and dividends in the first half of fiscal 2026, part of $49 million returned over the trailing 12 months.

About the Company

Build-A-Bear Workshop is a specialty retailer offering an interactive "retailtainment" experience in which customers create and customize stuffed animals and related products, selling through company-owned and franchised stores, e-commerce, wholesale channels and licensing arrangements across 674 locations in 37 countries.

Financial Performance Behind the Payout

Build-A-Bear reported second-quarter total revenues of $115.3 million, down 7.2% year over year, driven by lower traffic and underperformance of summer products. Pre-tax income was $11.6 million, down 24.1% from $15.3 million. Net retail sales were $106.5 million, down 7.1%, while commercial and international Franchise revenue was $8.8 million, down 9.0%, reflecting the non-recurrence of a prior-year opportunistic wholesale order. Gross margin was 54.2%, down approximately 340 basis points, driven by occupancy cost deleverage and increased promotional activity. SG&A expense was $51.4 million, or 44.6% of revenue, an 80-basis-point improvement from lower incentive compensation. EBITDA was $15.2 million, or 13.2% of revenues, down from $18.8 million, or 15.1%. First-half revenue was $240.6 million, down 4.8%, with first-half diluted EPS of $2.16, aided by a $7 million IEEPA tariff refund recognized in the first quarter.

A Lowered Outlook Alongside a Continued Dividend

The 340-basis-point gross margin contraction, driven by occupancy cost deleverage and increased promotional activity, occurred alongside management's decision to lower fiscal 2026 revenue guidance to $500 million to $525 million from a prior $530 million to $550 million range, and pre-tax income guidance to $60 million to $68 million, a range that itself reflects an approximately $13 million IEEPA tariff refund benefit for the full year. The $7 million tariff refund recognized in the first quarter is a specifically identified item distinct from the underlying quarterly operating trends the guidance reduction addresses. Location expansion continued during the quarter, with the company targeting at least 50 net new locations for the full year, the majority through international partner-operated sites, a growth avenue distinct from the traffic and margin pressures affecting existing stores.

Outlook

Build-A-Bear's board lowered fiscal 2026 revenue guidance to $500 million to $525 million and pre-tax income guidance to $60 million to $68 million. Comparable sales trends into the holiday period, store traffic recovery, international location expansion progress toward the 50 net new location target, and gross margin trends excluding the full-year tariff refund benefit are the relevant considerations.