Build-A-Bear Workshop, Inc. (NYSE:BBW) Q3 2023 Results Conference Call November 30, 2023 9:00 AM ET

Company Participants

Gary Schnierow - IR

Sharon Price John - CEO

Voin Todorovic - CFO

Conference Call Participants

Michael Baker - D.A. Davidson

Greg Gibas - Northland Securities

Steve Silver - Argus Research

Nancy Frohna - 1492 Capital Management

Zach Miller - Yost Capital

Michael Baker - D.A. Davidson

Operator

Greetings, and welcome to the Build-A-Bear Workshop Third Quarter 2023 Earnings Call [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Schnierow, Investor Relations. Thank you. Please go ahead.

Gary Schnierow

Good morning. Thank you for joining us. With me today are Sharon Price John, CEO; and Voin Todorovic, CFO. For today's call, Sharon will begin with a discussion of our third quarter performance and update the progress we've made on our key priorities. After, Voin will review the financials in more detail and provide our guidance. We will then open the call to take your questions. Members of the media who may be on our call today should contact us after this conference call with your questions. Please note the call is being recorded and broadcast live via the Internet. The earnings release is available on the Investor Relations portion of our corporate Web site. A replay of both our call and webcast will be available later today on the IR site. I will remind everyone that forward-looking statements are inherently subject to risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including those set forth in the Risk Factors section of the company's annual report on Form 10-K. We undertake no obligation to revise any forward-looking statements unless required by law. Also during this call, we may discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items, which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP financial measures should not be considered in isolation or a substitute for results prepared in accordance with GAAP. If non-GAAP measures are presented, you will find information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in the company's earnings release.

And now I would like to turn the call over to Sharon.

Sharon Price John

Thank you, Gary. Good morning. And thank you for joining us for Build-A-Bear's third quarter 2023 earnings call. We are pleased to again report strong results as we continue to execute against our strategic initiatives to evolve our business model by leveraging the power of the Build-A-Bear brand. As noted in this morning's press release, while we have revised our guidance to reflect some unexpected softness in the business starting in the latter part of October and continuing into November, we intend to stay focused on delivering our fourth quarter plans during the remainder of the most critical holiday shopping period as we continue to expect to deliver our third consecutive record breaking year. Our results represent the best ever third quarter and first nine months revenue and pretax income in Build-A-Bear’s history. Specifically, for the third quarter, revenues increased nearly 3% to over $107 million and pretax income increased almost 5% to $10 million. For the first fiscal nine months of 2023, revenues increased 4% to almost $337 million and pretax income increased 12% to $40 million. We attribute our meaningful expansion and profitable growth over the past few years to the successful execution of our strategy and business model evolution. Note that the $337 million in revenue we generated over the first nine months of fiscal 2023 approximate the $339 million in revenue recorded for the entire fiscal 2019, the last pre-pandemic year. Additionally, this revenue is at a significantly improved level of profitability, generating $40 million in pretax income over the 2023 fiscal nine month period as compared to less than $2 million in the 2019 fiscal year.