BuildABear (BBW) Stock Forecast & Price Target

Build-A-Bear Workshop Inc. demonstrated strong growth potential, highlighted by a 4.9% year-over-year increase in commercial and franchise revenue, despite initial challenges from tariffs that are now easing. The company's focus on international expansion, particularly in the commercial segment, reflects a promising forecast with anticipated revenue growth of 20% for the fiscal year, alongside a record EBITDA of $18.2 million in the third quarter. Additionally, the strong performance during the Halloween season and record Black Friday sales position the company well for capturing holiday sales and align with its guidance of mid to high single-digit revenue growth for the year.

Build-A-Bear Workshop's financial outlook is challenged by a potential decline in pre-tax income for 4QFY25, which could range from an 18.9% decrease to a 10.2% increase, primarily due to increasing Selling, General & Administrative (S,G&A) expenses. Despite reporting record results in 3QFY25, the company fell short of aggressive expectations largely influenced by tough comparisons and concerns regarding consumer spending during the holiday season. Additionally, the anticipated impact of tariffs is expected to further pressure gross margins and overall EBITDA, which declined 14.7% year-over-year, leading to a reduction in EBITDA margins for FY26 by 210 basis points.