Build-A-Bear Says Consumers Seek Emotional Connection With Brands

Offering engaging customer experiences is proving to be a profitable business model for Build-A-Bear Workshop.

The company achieved record third-quarter earnings results, with revenues up 9.9% year over year during the quarter ended Oct. 29, and raised its annual guidance, according to a Wednesday (Nov. 30) press release.

“This is really involved engagement at a different type of level,” Build-A-Bear Workshop President and CEO Sharon Price John said Wednesday during the company’s quarterly earnings call. “We’re an iconic brand, and you can see it showing up in our business — the kinds of impressions that we get on media drops, the engagement that we have, the lines that form outside of our stores.”

Wednesday morning, shortly after the call, Build-A-Bear shares were up about 13.5% from the previous day and 25% over the past month.

Build-A-Bear Workshop allows consumers to make their own teddy bears and other products at about 500 brick-and-mortar stores and online. It also creates content and offers wholesale products, according to the release.

During the quarter, the company’s retail store traffic increased by double digits and it said virtually all its physical locations were profitable. At the same time, eCommerce demand dropped 29.4% year over year as customers returned to in-person shopping.

“We are generally agnostic to any single channel, with a focus on driving more visits and lifetime value to consistently deliver profitable total growth,” John said during the call.

John also attributed the company’s growth to a diversification strategy that leverages the Build-A-Bear brand on new offerings that include gifts, collectibles, pajamas, live action films, radio shows and non-fungible tokens (NFTs). The company is also working on a documentary film and a video game.

“Today’s consumers want to engage with brands that provide experiences and emotional connection when they want, where they want and for whatever they want,” John said.

Looking ahead, Build-A-Bear Workshop raised its guidance and said in the press release that it expects total revenues of $455 million to $465 million in fiscal 2022, up from $411.5 million in 2021.

“With the strong positive trends continuing in our fourth quarter, we are raising our guidance and believe we are on track to deliver the most profitable year in our 25-year history, building on the 2021 results which set our previous record high,” John said in the release.

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