Build-A-Bear 2026 Q3 Earnings Net Income Declines 17.7% Despite Revenue Growth

Build-A-Bear Workshop (BBW) reported fiscal 2026 Q3 earnings on Dec 11, 2025, with revenue growth outpacing expectations but net income declining year-over-year. The company’s stock has shown strong post-earnings momentum, with a 10.38% weekly gain, while analysts remain cautiously optimistic about long-term prospects.

Revenue

Build-A-Bear’s total revenue rose 2.7% year-over-year to $122.68 million in 2026 Q3, driven by robust performance across its core segments. Net retail sales, the largest contributor at $112.27 million, reflected sustained demand for its interactive retail experience. The Commercial segment added $8.94 million in revenue, while International franchising contributed $1.47 million, underscoring the company’s diversified revenue streams.

Earnings/Net Income

Despite revenue growth, Build-A-Bear’s earnings declined. EPS fell 16.2% to $0.62 in 2026 Q3 from $0.74 in 2025 Q3, while net income dropped 17.7% to $8.12 million. The decline was attributed to higher SG&A expenses and operational costs, though the company highlighted a record-breaking fiscal Q3 net income over the past two decades. The earnings contraction signals margin pressures despite top-line expansion.

Price Action

BBW shares surged 10.38% in the most recent trading week and 9.76% month-to-date, reflecting investor optimism. The stock’s strong performance post-earnings has drawn attention from analysts, who note its volatility and long-term growth potential.

Post-Earnings Price Action Review

The strategy of purchasing BBW following revenue beats and holding for 30 days yielded a 172.38% return, vastly outperforming the 57.35% benchmark. This approach demonstrated a 27.30% CAGR and 115.03% excess return, though its 49.95% volatility and 0.55 Sharpe ratio highlight the trade-off between growth and risk.

CEO Commentary

## CEO Commentary Summary

Build-A-Bear’s CEO emphasized resilience amid margin challenges, attributing revenue growth to strategic store expansions and digital innovation. “Our focus on non-traditional retail locations and enhanced customer experiences has driven consistent net retail sales,” the CEO stated. The company reiterated its commitment to cost optimization and leveraging intellectual property for new product lines, including licensed offerings and digital content.

## Guidance Section

The CEO outlined forward-looking priorities, including continued global expansion in non-traditional markets and accelerating digital transformation. “We expect to open additional retail locations in 2026 and maintain disciplined SG&A management to improve profitability,” the CEO noted, signaling confidence in long-term operational improvements.

## Additional News

## Recent Developments

1. Analyst Coverage: CJS Securities initiated coverage on BBW with a “Market Outperform” rating and a $70.00 price target, citing the company’s brand strength and expansion potential.

2. SEC 10-Q Report: The Q3 10-Q highlighted a 30-basis-point decline in gross margin despite revenue growth, attributed to higher store-level compensation and corporate expenses.

3. Strategic Expansion: Build-A-Bear opened 52 new retail locations in the first 39 weeks of 2026, with a focus on tourist and non-traditional destinations to diversify its footprint.