Build-A-Bear Workshop, Inc. Shares Outlook for Fourth Quarter and Fiscal Year 2020 Financial Results

Build-A-Bear Workshop, Inc. (NYSE: BBW) today shared its financial expectations for the fourth quarter and fiscal year 2020, in advance of its planned presentation at the 23^rd Annual ICR Conference. The Company noted that its projected results reflect ongoing progress from the disciplined execution on its strategy including the acceleration of its digital transformation initiatives. In addition, the Company noted its retail store operations continued to be negatively impacted from local restrictions in response to the COVID-19 pandemic with the disruptions escalating as the fourth quarter progressed. Despite this impact, the Company expects to deliver a significant increase in e-commerce sales, strong gross profit and an increase in cash and equivalents on its balance sheet at quarter-end compared to the prior year’s results.

For the fiscal 2020 fourth quarter (13 weeks ending January 30, 2021 compared to the 13 weeks ended February 1, 2020), the Company expects:

• Total revenues in the range of $88.0 million to $92.0 million compared to $104.6 million in the fiscal 2019 fourth quarter. The Company had a significant reduction in store traffic during the nine-week holiday period ending January 2, 2021 driven by local COVID-19 restrictions which led to an 18% reduction in store operating days (including a decline of 10% in North America and 66% in the United Kingdom). In addition, retail store sales were negatively impacted by a reduction in operating hours as well as limitations on store capacity due to government mandates during the key days leading up to the holiday;
• E-commerce demand to increase in the range of 90 - 100% compared to the fiscal 2019 fourth quarter;
• Earnings before interest and taxes (“EBIT”) to be in the range of $4.0 million to $6.0 million, compared to $7.6 million in the fiscal 2019 fourth quarter; and
• Cash and cash equivalents at quarter end to be between $32 and $37 million, an increase of approximately $5 to $10 million from the prior year’s quarter end and it expects to have no borrowings under its revolving credit facility at the end of the period.

Sharon Price John, Build-A-Bear Workshop President and Chief Executive Officer, commented, “We continue to focus on accelerating our strategy including initiatives to drive our digital transformation, evolve our retail channels and capabilities and maintain solid financial health and liquidity. Our team has continued to adapt to the constant changes in our operating environment driven by ongoing disruption from COVID-19 while leveraging the power and consumer affinity for our brand. We expect to deliver a profitable fiscal 2020 fourth quarter with strong e-commerce growth even as our retail store operations were negatively impacted by crowd size restrictions and governmentally mandated temporary closures, which have been particularly difficult in our UK market.