Build-A-Bear Workshop, Inc.

Greetings, and welcome to the Build-A-Bear Workshop second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Schneiro, Build-A-Bear Investor Relations. Thank you, sir. You may begin.

Thank you. Good morning, everyone, and welcome to Build-A-Bear's second quarter 2025 earnings conference call. With us today are Sharon John, Build-A-Bear's Chief Executive Officer, Chris Hurt, Chief Operating Officer, and Voyne Todorovich, Chief Financial Officer. During this call, we'll refer to forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially. Please refer to our forms 10-K and 10-Q, including the risk factor section. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our investor relations website. And now, I'll turn the call over to Sharon.

Thank you, Gary. Good morning, and thanks for joining us for Build-A-Bear's second quarter fiscal 2025 earnings call. Today, we are pleased to report the best second quarter and first half results in Build-A-Bear's history, achieving record revenue while simultaneously expanding pre-tax margin and earnings per share. This unprecedented start to the year is largely a result of a long-term focus on monetizing Build-A-Bear's unique position in the marketplace, multi-generational appeal, and exceptional brand recognition to scale the business with innovative initiatives across three strategic pillars. For example, the use of our unique Capital Light partner-operated retail model to accelerate our global expansion strategy, the focused effort on developing social media initiatives to drive omnichannel sales with a broadened consumer base as a part of our digital transformation strategy, and the introduction of new concepts like our mini beans collection as a representation of our strategy to invest in leveraging our powerful brand equity to evolve beyond our traditional retail and product space. Simply put, we are building on the iconic status of the brand to introduce it to more people in more places with more types of product for more purposes, all with a strategic vision to drive profitable growth. Before I provide more information regarding these ongoing initiatives, let's review some financial highlights from the second quarter and first half of 2025, all of which set new records for the company. Specifically, in the second quarter, revenues grew 11% to over $124 million. Pre-tax income increased by 33% to over $15 million. and EPS rose by 47% to 94 cents. For the first half, revenues grew more than 11% to over $252 million. Pre-tax income increased over 31% to almost $35 million, and EPS rose approximately 45% to $2.11 cents. Additionally, during the first half of the fiscal year, we returned more than $13 million in capital to shareholders. After posting multiple quarters of record results over the past four and a half years, Build-A-Bear's most recent performance clearly supports the benefits of our very purposefully evolved and diversified business model and executional discipline. As an example of our progress from a profitability perspective, our first half EBITDA margin rate of nearly 17% more than tripled versus the first half of 2019, the last pre-COVID year, driven by annual store contribution margins of over 25% combined with the growth of our higher margin commercial segment. When considering these results were achieved amid a wide variety of economic challenges and geopolitical shifts, They serve as a valuable source of confidence in our team, our brand, our plans, and the company's future. With that in mind, while we understand a meaningful portion of the year remains and acknowledge the potential for some economic uncertainty ahead, we also believe it is appropriate to increase our 2025 guidance at this juncture. Specifically, we shared in today's press release our increased revenue and pre-tax income guidance, based on the current tariff rates, as well as higher expectations for net new unit growth. Therefore, when considering our business momentum, historical ability to respond to shifting marketing conditions, solid balance sheet, strong cash flow, and a focus on controlling the controllable, we remain confident in our continued efforts to drive our three strategic pillars of, one, the expansion and evolution of our experiential retail footprint, two, the advancement of our comprehensive digital transformation, and three, the continued investment to leverage the powerful equity of the Build-A-Bear brand while simultaneously returning capital to shareholders. Now, Chris Hurt, Build-A-Bear's Chief Operations Officer, will provide some additional information about our first strategic pillar, the expansion of our retail footprint. Chris?