Build-A-Bear Workshop, Inc. (BBW) is experiencing a decline in its stock price today following the release of its third-quarter earnings report on December 5th. Despite reporting the best-ever third quarter in its history, the company's updated FY2024 outlook suggests disappointing growth for the fourth quarter. This outlook reflects weaker e-commerce demand and slower wholesale shipments, which have raised concerns among investors. The company's reliance on online sales, which have shown signs of softness, is particularly concerning given that these sales are primarily driven by adults and teens, a demographic that has significantly contributed to Build-A-Bear's profit growth in recent years.
Additionally, Build-A-Bear is facing potential legal and operational challenges. The company is embroiled in a lawsuit with Squishmallows over its new line of plush toys, "Skoosherz," which could impact its market position and financial performance. Furthermore, the reelection of Donald Trump has reignited fears of tariffs on products manufactured in China, where Build-A-Bear sources most of its inventory. These factors have contributed to investor unease, leading to a sell-off in the stock.
Build-A-Bear's stock is currently trading at $41.72, down 10.26% from its previous close of $46.49, and has dropped 10.43% from its opening price of $46.58.