Build-A-Bear Workshop, Inc.

Greetings, and welcome to the Build-A-Bear Workshop fourth 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 Shinero, Investor Relations. Thank you, sir. You may begin.

Thank you. Good morning, everyone, and welcome to Build-A-Bear's fourth 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 statements. 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 fourth quarter fiscal 2025 earnings call. In addition to our earnings release, you may have read this morning's announcement concerning my decision to retire as President and Chief Executive Officer of Build-A-Bear Workshop and that longtime Chief Operations Officer Chris Hurt has been appointed by the Board of Directors to assume the CEO role on June 11, 2026 in accordance with a multi-year planned succession process. Given his instrumental impact on both the company's turnaround and current success, Chris has proven to be an invaluable partner over the last 10 years, and I am confident that his outstanding leadership skills, strategic insights, business acumen, and intimate knowledge of the brand and culture of this iconic company underscores his ability to take the organization to new heights. With this news as a backdrop, after we provide the 2025 highlights, financial summary, and the 2026 outlook, we plan to share more about Chris and the transition, as well as an outline for the go-forward strategic framework before opening up the call for questions. Fiscal 2025 was a dynamic year marked by our continued focus on strategic store and global brand expansion, while we also worked to manage and mitigate unexpected tariff and global supply chain disruptions. With gratitude to the team, I am pleased to share that we ultimately delivered a solid year with both pre-tax income and revenue within our guidance range. In fact, we hit an important milestone for the company by delivering more than a half a billion dollars in annual revenue for the first time in Build-A-Bear's history. However, we didn't just barely cross the mark on the top line. Specifically, revenue hit close to $530 million, which represents nearly 7% growth, while after accounting for $11 million in tariff and related costs, pre-tax income increased marginally to $67.2 million. We believe this performance not only reflects the company's proven tenacity and resilience, but even in disruption, our ability to continue to focus on the ongoing execution of Build-A-Bear's long-term strategic initiatives that we have shared over the past several years. One, expanding and evolving our experiential retail footprint. Two, advancing our comprehensive digital transformation. And three, investing to leverage the powerful equity of the Build-A-Bear brand while continuing to return capital to shareholders. With that, I'll turn our first initiative, expanding our experiential retail locations, over to Chris. Over the past decade, Chris has been central to evolving and improving performance across our corporate store base, while also building the capabilities and models that allow us to efficiently grow the Build-A-Bear experience around the world.