Why Build-A-Bear Workshop Stock Roared 14% Higher on Thursday

Key Points

• This bear looked awfully mighty following its latest earnings release.

• It had a beat-and-raise second quarter, after all.

• 10 stocks we like better than Build-A-Bear Workshop ›

Investors sure were bullish on Build-A-Bear Workshop (NYSE: BBW) on Thursday, as they bid the custom plushie retailer's stock up in excess of 14% that trading session. In retrospect, that wasn't a stunning development, as the company posted convincing beats in its second quarter and raised certain guidance items in the process. That performance crushed the 0.3% rise of the S&P 500 index.

An ever-growing bear

Build-A-Bear Workshop, which, as its name implies, allows customers to design and create their own stuffed toys, published that period's figures Thursday morning. They revealed the company's revenue notched a new all-time record for the second quarter at over $124 million. That number was 11% higher year over year.

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Generally accepted accounting principles (GAAP) net income enjoyed a far more sprightly double-digit bounce, increasing nearly 41% to almost $12.4 million, or $0.94 per share.

Both headline figures easily beat the consensus analyst estimates of $116 million for revenue and $0.74 per share for net profit.

Build-A-Bear Workshop had success on several fronts, which contributed to the surprisingly high revenue and profitability growth. The company said its consolidated e-commerce demand (online orders fulfilled by either its stores or warehouses) surged 15% higher, as did its revenue from franchising.

Puffed-up guidance

With those kinds of improvements, Build-A-Bear Workshop clearly felt confident enough to raise certain full-year guidance items. For the entirety of 2025, it now anticipates that revenue will rise in the mid- to high-single-digit percentage rates, with pre-tax income landing at $62 million to $70 million. The company also expects to add 50 to 60 new "experience locations; these total over 600 at present. Build-A-Bear Workshop did not proffer net income guidance.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Build-A-Bear Workshop. The Motley Fool has a disclosure policy.