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Sell-off deepens after Build-A-Bear earnings report

Build-A-Bear shares fell 18% in early trading on Thursday, August 27. The U.S. specialty retailer’s second-quarter results came in below market expectations, while management lowered its full-year forecasts for the second time this year. The move pointed to a sharp reversal in the stock after its standout run in recent years.

Second-quarter numbers fell short of forecasts

Revenue declined 7% year on year to $115.3 million, below analysts’ estimate of $120.8 million. Net income fell to $8.8 million from $12.4 million a year earlier, while earnings per share dropped to 70 cents from 94 cents.

  • Full-year sales guidance was cut to $500 million-$525 million from $530 million-$550 million.
  • Pre-tax profit guidance was also reduced to $60 million-$68 million from $72 million-$78 million.

CEO Chris Hurt said the second-quarter results were weaker than expected and that some wholesale opportunities may close later than anticipated. The remarks heightened concerns that the weak demand outlook may not be limited to a single quarter.

Sharp stock drop has erased long-term gains

BBW shares are down 46% so far in 2026. As of June 2025, the company had delivered a 4,658% return over five years, even outperforming Nvidia. Its five-year total return has now narrowed to 122%.

The market comparison has shifted

Over the same period, Nvidia moved in the opposite direction after posting strong financial results. Revenue rose to $96.2 billion, and the company projected 70% revenue growth for fiscal 2028; the stock gained about 6% that day. Nvidia’s five-year return has climbed above 800%, making Build-A-Bear’s selling pressure even more apparent.

Management changes and costs add pressure

Leadership turnover has continued after Sharon Price John stepped down in June. The company said Chief Growth Officer David Henderson was dismissed without cause and will receive more than $3.2 million in connection with his departure. The management shake-up comes as store traffic slows amid economic uncertainty.

  • The company expects $10 million-$11 million in tariff costs this year.
  • Part of that impact is expected to be offset by a tax refund of about $13 million.

Larger rivals in retail have looked more resilient during the same period. Dollar General reported a 3.5% increase in same-store sales, while Target shares are up 66% over the past year. Build-A-Bear’s experience-driven toy business, which depends on discretionary spending, is leaving the company more vulnerable as consumer confidence hovers at 49.5.

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