Build a Bear Workshop hasn’t always been a retail winner.
The toy store, known for its interactive stuffed animal building and accessory experience, has seen a significant turnaround since CEO Sharon Price John took the helm of the company more than a decade ago.
“When I first came in 2013, that brand valuation was strong,” she told CNBC. “We don’t have a broken brand, we have a broken business, and when you started doing interviews you really understood how much this brand meant to people.”
The company saw initial success in malls in the early 2000s, but Build-A-Bear shares plunged after the 2008 financial crisis, with the company reporting a $49 million loss in fiscal 2012.
Under Price John, the company began investing in e-commerce, shifting orders to stores rather than its distribution center and diversifying sales beyond just malls to turn the company around.
“Our overall goal was to create sustained, profitable growth, but profitability came first,” Price John said.
This strategy worked. Virtually all Build-A-Bear stores are now profitable, and the stock has seen a similar run to Nvidia’s earlier this year, hitting an all-time high of around $76 in September. The stock has declined somewhat since then, but it is still up more than 125% in the last two years.
But the customs tariffs dealt a hard blow to activity. Build-A-Bear imports more than 90% of its products from China and Vietnam, and the company said in its third-quarter earnings report in early December that it expects to take about an $11 million reduction in tariffs for fiscal 2025.
Company executives also said on a call with analysts that the company experienced a slowdown in traffic in October during the government shutdown.
Eric Beder, an analyst at Small Cap Consumer Research, wrote in a note this month that the company was reducing its projections and price target by $10 due to lighter-than-expected revenue and “implied significant pricing impacts.”
Still, the company is outperforming most of its retail competitors, hoping to hit $500 million in annual revenue for the first time.
“You can buy stuffed animals or a cuddly toy just about everywhere, from Target to FAO Schwarz and everywhere in between,” Beder told CNBC. “The difference is, at Build-A-Bear, it’s yours. You helped make it happen.”
Watch the video to learn more about the return of Build-A-Bear.