WEBVTT - Build-A-Bear CEO on Record Quarter Results

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. So if you're

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<v Speaker 1>looking for an out performer, you've got to check out

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<v Speaker 1>Chairs and Build a Bear Workshop, because the stock, at

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<v Speaker 1>least heading into today's session was up almost this year.

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<v Speaker 1>UH company today reported record revenues, a special cash dividend,

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<v Speaker 1>plus a twenty five million dollar share buy back. And

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<v Speaker 1>I gotta say we had a fair share of the

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<v Speaker 1>company stuffed animals in our home and my daughter was growing. Hey,

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<v Speaker 1>you know what after today's twenty seven after today's twenty

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<v Speaker 1>seven increase in the share price, one of my gainers

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<v Speaker 1>of the day. It's up fo seven percent this year, Carol. Yeah,

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<v Speaker 1>it's been on such a run. So let's get to it.

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<v Speaker 1>Joining us from the New York Stock Exchange is Sharon

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<v Speaker 1>Price John. She is Build a Bear Workshops President and CEO.

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<v Speaker 1>Sharon is so nice to have you here with Tim

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<v Speaker 1>and myself. Um, sounds like things are going really well.

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<v Speaker 1>Give us some color on the quarter that was and

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<v Speaker 1>the outlook that you expected to be. Yeah, thank you

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<v Speaker 1>so much and really appreciate you being a customer of ours.

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<v Speaker 1>Over the years. I always love to hear that. But

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<v Speaker 1>we did announce this morning record revenues and pretext income

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<v Speaker 1>for physical quarter. UM. As you mentioned, we declared a

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<v Speaker 1>special dividend and authorized that dot by that program, but

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<v Speaker 1>also raised the annual guidance. And UM, you know it's

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<v Speaker 1>really we're we're looking at a revenue long number that's

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<v Speaker 1>the best in about a decade, as well as that

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<v Speaker 1>pretext income that I was speaking of. UM, that's the

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<v Speaker 1>best in our corporate history for the first the third quarter,

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<v Speaker 1>in the first three quarters of the year. Yeah. Well,

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<v Speaker 1>you know one thing I just wanted to ask you, Sharon,

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<v Speaker 1>is is why the buyback? Why the special dividend? Is

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<v Speaker 1>that the best way to use some of your cash

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<v Speaker 1>on hand? Well, it's one way to use our cash

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<v Speaker 1>on hand. We have a robust capital plan, UM, and

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<v Speaker 1>a portion of that we felt with these record earnings

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<v Speaker 1>is just a great opportunity for two directly and immediately

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<v Speaker 1>returned some of that value you to our shareholders. Of course,

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<v Speaker 1>the stock buyback has a much different purpose. Uh. It's

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<v Speaker 1>more of a recognition of the board noting and believing

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<v Speaker 1>in the future of the company. UM. But we also

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<v Speaker 1>outlined some strategic objectives and opportunities for the future and

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<v Speaker 1>how we're investing, and that's inclusive of continued and acceleration

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<v Speaker 1>of our digital transformation as well as the evolution of

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<v Speaker 1>our retail footprints and the way we go to market

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<v Speaker 1>and continue to push into uh more robust approach to

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<v Speaker 1>omni channel. I know that people don't always recognize the

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<v Speaker 1>Bill to Bear as an online retailer, but as with

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<v Speaker 1>many through the COVID experience, we really did lean heavily

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<v Speaker 1>into e commerce. We had already been on that road

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<v Speaker 1>from a strategic perspective for a number of years. How

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<v Speaker 1>much of your business is e commerce versus store? Because

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<v Speaker 1>they're going to the store such an experience. I know

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<v Speaker 1>it was something that my daughter are left to do well,

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<v Speaker 1>you know, but Build the Bears now, which is important

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<v Speaker 1>to understand. Build Bears now multi generational. So we're coming

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<v Speaker 1>up on our twenty fifth year. Don't let that make

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<v Speaker 1>you feel old. We've just been around for a while,

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<v Speaker 1>and that's okay because not only do parents of kids

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<v Speaker 1>and want parents now want to take their kids, they

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<v Speaker 1>actually want to experience Build the Bear again. And some

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<v Speaker 1>of that is our collectibles product like Pokemon or Harry

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<v Speaker 1>Potter and they go online. So our business, uh, just

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<v Speaker 1>a few years ago was more in the four or

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<v Speaker 1>five percent range of total sales and now it's up

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<v Speaker 1>to And what's the goal? How high do you want

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<v Speaker 1>to get that? Well, we're really the key is to

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<v Speaker 1>grow total revenue. And because e commerce for us is

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<v Speaker 1>um on par from a profitability perspective to the rest

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<v Speaker 1>of our revenue in stores, we just want to be

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<v Speaker 1>there the way guts want to interact with us. If

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<v Speaker 1>they want to go online and purchase, they can do that.

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<v Speaker 1>If they like to come in store and have that

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<v Speaker 1>very special retail tainment experience that we're famous for, they

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<v Speaker 1>can do that too. And it's really servicing different needs

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<v Speaker 1>for different types of gifts. Clearly, if you're a gift giver,

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<v Speaker 1>you might want to go online because we'll send it

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<v Speaker 1>directly to the ind recipients. Hey, you gotta ask you, um,

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<v Speaker 1>which we ask every leader of an institution or organization

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<v Speaker 1>or company supply chain issues. How rough is it for

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<v Speaker 1>you guys? Yeah? You know, we like so many toy

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<v Speaker 1>industry people, we do source from Southeast Asia and it

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<v Speaker 1>has been a challenge and um, you know, we're we're

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<v Speaker 1>juggling containers and products and re prioritizing on a regular basis.

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<v Speaker 1>We did make a special note though in the call

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<v Speaker 1>this morning, that we believe we have a robust, are

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<v Speaker 1>a really strong inventory position for the remainder of the

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<v Speaker 1>holiday season. UM. We feel like that we have done

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<v Speaker 1>our projections appropriately and really importantly, particularly for that special

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<v Speaker 1>experience in memory that people want to make in our wars.

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<v Speaker 1>We actually have enough bear builders, which would be our

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<v Speaker 1>sales associate UM, to make sure, to the best of

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<v Speaker 1>our ability, that everybody has that that great build a

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<v Speaker 1>bear moment. So not worried about the holiday season? Right?

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<v Speaker 1>Was that it now? Probably you know? There's all we're

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<v Speaker 1>always worried about the holiday seas. It's our biggest season,

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<v Speaker 1>it's the biggest month of our biggest quarter. UM. But

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<v Speaker 1>we feel as good as we can about what we've done.

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<v Speaker 1>The team has been really strong and planning. We were

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<v Speaker 1>way out ahead of this. We ordered a lot of

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<v Speaker 1>products on we forward our Christmas orders, and we're actually

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<v Speaker 1>in an increased inventory position versus last year same time.

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<v Speaker 1>All Right, Sharon very briefly raised wages for these sales associates.

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<v Speaker 1>How much trouble are you having getting labor ten seconds

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<v Speaker 1>actually ten seconds, Well that was my point. Um, we

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<v Speaker 1>actually have been able to hold onto our labor force.

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<v Speaker 1>We don't have as much turn as a lot of

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<v Speaker 1>other people, and it's probably because it's fun to work

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<v Speaker 1>at build. There is there a Build a Bear movie

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<v Speaker 1>coming real quickly. Um, we have all kinds of movies,

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<v Speaker 1>but that's going to take another interview. Apparently you're gonna

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<v Speaker 1>have to come back Build a Bear Entertainment. You guys

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<v Speaker 1>are creating content, so I want to talk a little

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<v Speaker 1>bit more about that. Do come back. Have a good

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<v Speaker 1>and safe holiday season. We've been talking with Sharon Price

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<v Speaker 1>John she's Build a Bear Workshops president CEO. That's stock,

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<v Speaker 1>as we mentioned, up four hundred and seven percent this year.

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<v Speaker 1>You're listening to Bloomberg and yes, you heard it right