ST. LOUIS, August 28, 2026, 08:55 EDT
- Shares closed 27.3% lower at $28.44, their steepest one-day decline on record.
- Fiscal 2026 revenue guidance fell to $500 million–$525 million.
- Quarterly revenue declined 7.2%; e-commerce demand dropped 15.6%.
- The $10.66 share loss erased about $134 million of implied equity value.
Build-A-Bear Workshop, Inc. (NYSE: BBW) shares suffered a record 27.3% fall after the retailer cut its annual outlook. The stock closed Thursday at $28.44, its lowest level in about two years.
The decline removed roughly $134 million from the company’s implied market value. That calculation uses the $10.66 price loss and 12.54 million shares outstanding. Premarket trading was flat at $28.44 at 08:43 EDT on Friday MarketWatch quote.
The sharper signal came from the new revenue range. Management now expects $500 million to $525 million for fiscal 2026. The midpoint is 5.1% below the previous $530 million–$550 million range.
Pre-tax income guidance fell to $60 million–$68 million from $72 million–$78 million. Its midpoint dropped 14.7%. The profit reset therefore exceeded the sales reset.
| Quarter metric | Q2 fiscal 2026 | Q2 fiscal 2025 | Change |
|---|---|---|---|
| Total revenue | $115.3 million | $124.2 million | -7.2% |
| Pre-tax income | $11.6 million | $15.3 million | -24.1% |
| Pre-tax margin | 10.1% | 12.3% | -220 bps |
| Diluted EPS | $0.70 | $0.94 | -25.5% |
| EBITDA margin | 13.2% | 15.1% | -190 bps |
Revenue missed the $121.27 million consensus cited by StreetInsider. Adjusted earnings of $0.70 exceeded the $0.67 estimate. Investors focused instead on weaker traffic and margins earnings comparison.
Net retail sales declined 7.1%. E-commerce demand fell 15.6%. Commercial and international franchise revenue dropped 9.0% August 27 filing and earnings release.
Gross margin contracted 340 basis points. Occupancy-cost deleverage and heavier promotions drove that decline. Lower incentive compensation partly softened the pressure on operating expenses.
The wholesale push also lost a key support. Build-A-Bear could not renew a multimillion-dollar Walmart program. Other wholesale opportunities are moving slower than management expected Reuters.
Chief Executive Chris Hurt said second-quarter results fell short of expectations. The company plans to accelerate experience-location openings later this year. It ended the quarter with 674 locations worldwide.
Liquidity offers less room than last year. Cash totaled $14.0 million, down from $39.1 million. Inventory stood at $81.1 million, while the revolving credit facility remained undrawn.
Build-A-Bear returned $22.7 million through dividends and buybacks during the first half. That capital return now sits beside a lower cash balance and softer adjusted earnings. The trade-off merits closer scrutiny.
Four analysts still carried a “Strong Buy” consensus and a $51.75 average target on Friday StockAnalysis. Those figures may predate the outlook cut. D.A. Davidson retained a buy rating but said the update fell below consensus.
Risks: Strong Halloween demand or faster store openings could improve the second half. Further traffic weakness, promotions or tariff costs could pressure margins again. The outlook already includes $10 million–$11 million of ongoing tariff-related costs.
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