Key Highlights

  • Second-quarter Revenue fell to $115.3 million from $124.2 million, with online Demand down 15.6%.
  • Fiscal 2026 revenue guidance was lowered to $500 million to $525 million.
  • BBW closed at $25.53 on October 9, versus a 52-week range of $24.15–$72.19.
  • The company repurchased $5.6 million of stock and declared a $0.23 quarterly dividend.

Build-A-Bear Workshop, Inc. (NYSE:BBW) has lowered its full-year targets under a newly installed chief executive, even as the plush-toy retailer remains profitable, returns cash to shareholders and prepares its most ambitious store yet.

What the second quarter showed

In its fiscal second-quarter report on August 27, 2026, covering the 13 weeks ended August 1, the company reported total revenues of $115.3 million, down from $124.2 million a year earlier. Net retail sales were $106.5 million, while commercial and international Franchise revenues together came to $8.8 million. Direct-to-consumer demand, which covers online sales, fell 15.6%, according to the release.

Profit followed revenue lower. Pre-tax income was $11.6 million against $15.3 million, Net Income was $8.8 million against $12.4 million, and Diluted Earnings per Share were $0.70 against $0.94. For the first half, reported pre-tax income of $35.5 million included a roughly $7 million Tariff refund; excluding it, the company put the figure at $28.5 million.

Chris Hurt, who became chief executive on June 11, 2026, as part of a planned succession, said second-quarter results fell short of the company's expectations and that it had moderated its outlook for the rest of the year.

A lower outlook

The revised fiscal 2026 guidance is for total revenues of $500 million to $525 million, down from a previous range of $530 million to $550 million. Pre-tax income is now expected at $60 million to $68 million, or $53 million to $61 million excluding the prior-year tariff refund. Management still plans at least 50 net new experience locations, unchanged from earlier guidance, and expects Capital Expenditure of about $25 million.

Market data showed the shares closing at $25.53 on October 9, 2026, within a 52-week range of $24.15 to $72.19.

Cash returns and expansion

Despite the downgrade, the company continues to distribute cash. In the second quarter it spent $5.6 million repurchasing 155,118 shares and paid $2.9 million in dividends, leaving $43.2 million available under its $100 million buyback authorization. On September 9, 2026, it declared a quarterly Dividend of $0.23 per share, payable on October 8 to holders of record on September 24. That equates to an indicated annual rate of $0.92 per share.

Cash and equivalents stood at $14.0 million at quarter end, compared with $39.1 million a year earlier. The company had 674 locations worldwide at August 1: 379 corporate-owned, 177 partner-operated and 118 franchised.

On the product side, Build-A-Bear introduced its Mellow Moodies collection, aimed at teenagers and young adults, on October 8, 2026. On October 5 it said a three-story Workshop at ICON Park in Orlando, its largest and most immersive yet, is scheduled to open in November. It will include an appointment-only Design Studio and a Bakeshop.

Risks, Q3 Results and the Orlando Opening

The main risk is that the weakness proves more than seasonal. Online demand has fallen in both the quarter and the first half, and the lower guidance points to cautious consumer spending and a tougher comparison with a strong prior year. Tariffs add uncertainty, and the first-half result benefited from a one-off refund that will not necessarily recur.

Markers to watch include third-quarter results, whether the revised revenue range holds, the date and reception of the Orlando opening, progress toward 50 net new locations, and the cash balance alongside further Buybacks and dividends.