BuildABear (BBW) Stock Forecast & Price Target

Build-A-Bear Workshop Inc. has demonstrated a robust financial performance with a 4.9% year-over-year increase in commercial and franchise revenue, indicating positive trends despite temporary challenges from tariffs. The company's EBITDA for the third quarter reached $18.2 million, reflecting a 9.2% year-over-year growth, while the overall performance in the 3Q has positioned the company to meet its annual guidance of mid to high single-digit revenue growth. Additionally, management is optimistic about the commercial segment's potential for 20% revenue expansion in FY25, supported by the company's international growth strategy and increased third-party retail unit openings.

Build-A-Bear Workshop reported a significant year-over-year decline in EBITDA of 14.7% for 3QFY25, indicating weakening operational performance amid rising costs and tariff impacts, which contributed to the decreased EBITDA margins of 11.6%. Despite achieving record results for 3QFY25, the company faced challenging year-over-year comparisons and a top-line miss due to aggressive market expectations, coupled with broader concerns regarding consumer spending during the holiday season. Furthermore, there is a projected incremental cost of $7 to $9 million in cost of goods sold for the first five months of FY26, exacerbating the anticipated decline in gross margins and further reinforcing a negative outlook for the company's financial health.