Build-A-Bear Workshop slumps after pointing to inflation pressures with its earnings report

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Build-A-Bear Workshop (NYSE:BBW) fell in early Thursday trading after the company topped EPS with its Q4 earnings report, but only matched expectations with its revenue tally of $130M.

Revenue soared 61% for Build-A-Bear Workshop (BBW) during the quarter against the soft pandemic comparable from a year ago. Consolidated e-commerce demand increased 3.5% compared to a year ago to rep a penetration rate of 20.7% of net retail sales.

The extra sales leverage helped push the gross profit margin rate up to 53.0% from 38.2% last year. Adjusted net income was $38.3M vs. $0.1M a year ago.

At the end of the quarter, Build-A-Bear Workshop (BBW) had 346 corporately-managed stores. The retailer said it maintains a high level of lease optionality with over 75% of locations having a lease event within the next three years.

Looking ahead, Build-A-Bear pointed to a volatile environment with ongoing inflation pressures, but was confident on its profitability track.

Shares of Build-A-Bear Workshop (BBW) fell 12.58% in premarket action after rising 10.40% on Wednesday right in front of the report. BBW has outperformed the S&P 500 Index and the SPDR S&P Retail ETF by a wide margin over the last six months while sitting with a Seeking Alpha Quant Rating of Strong Buy since last September.