Build-A-Bear 2026 Q3 Earnings New Record Net Income Despite EPS Decline

Build-A-Bear (BBW) reported fiscal 2026 Q3 earnings on Dec 11, 2025, with revenue growth outpacing expectations and a revised Q4 guidance. The company’s shares surged 10.38% in the past week, reflecting investor optimism despite a 16.2% EPS decline.

Revenue

Net retail sales formed the backbone of Build-A-Bear’s performance, generating $112.27 million, while commercial revenue supplemented with $8.94 million and international franchising added $1.47 million. Total revenue reached $122.68 million, a 2.7% increase from the prior year, driven by existing and new store contributions.

Earnings/Net Income

Build-A-Bear’s EPS fell 16.2% to $0.62, and net income dropped 17.7% to $8.12 million. However, the company achieved a historic milestone: its highest Q3 net income in over two decades, underscoring long-term strategic gains.

Post-Earnings Price Action Review

A strategy of purchasing BBW after earnings beats and holding for 30 days yielded a 172.38% return, vastly outperforming the 57.35% benchmark. This approach delivered a 27.30% CAGR with zero maximum drawdown but high volatility (49.95%) and a Sharpe ratio of 0.55, highlighting its risk-reward balance.

CEO Commentary

CEO David Dyer emphasized “modest but consistent progress,” spotlighting digital engagement and new product lines as growth drivers. He acknowledged supply chain challenges but outlined plans for AI-driven analytics and sustainability investments, prioritizing long-term value.

Guidance

The company projected 8–10% year-over-year revenue growth and adjusted EPS of $0.65–$0.68 for Q4 2026, with $5 million allocated to digital infrastructure. Dyer reiterated disciplined cost management as a pillar for 2027 targets.

Additional News

CJS Securities initiated coverage on BBW with a “Market Outperform” rating and a $70 price target, aligning with recent analyst upgrades. Meanwhile, the company’s 10-Q filing detailed a 30-basis-point gross margin decline and SG&A-driven income before taxes of $10.7 million. Analysts at Small Cap Consumer Research and DA Davidson also raised or maintained “Buy” ratings, reflecting confidence in BBW’s expansion and digital transformation.