Build-A-Bear (BBW) Q2 2026 Earnings Call Transcript

Vice President, Investor Relations - Gary Schnierow

Chief Executive Officer - J. Christopher Hurt

Chief Financial Officer and Chief Administrative Officer - Voin Todorovic

Operator: Greetings, and welcome to the Build-A-Bear Workshop Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Gary Schnierow, Vice President, Investor Relations.

Gary Schnierow: Thank you. Good morning, everyone, and welcome to Build-A-Bear's second quarter 2026 earnings conference call. With us today are Chris Hurt, Build-A-Bear's Chief Executive Officer, and Voin Todorovic, our Chief Financial Officer and Chief Administrative 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 Factors 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 Chris.

J. Christopher Hurt: Thank you, Gary, and good morning, everyone. I appreciate you joining us today for Build-A-Bear's second quarter fiscal 2026 earnings call. As we communicated earlier this year, we expected fiscal 2026 to be a tale of 2 halves, with more difficult comparisons impacting the first half, followed by less challenging comparisons and anticipated improved performance in the back half of the year. Although we continue to expect a stronger second half than the first, second quarter results fell short of our projections, driven mainly by continued traffic challenges due to the performance of our summer trend collection and in addition to macroeconomic conditions.

As a result, we have moderated our direct-to-consumer expectations for the balance of the year, and together with our updated outlook for our commercial segment, we reduced our full-year guidance. Voin will discuss the updated guidance in more detail in his remarks. Second quarter was up against a particularly strong performance last year, when DTC revenue increased 11% and web demand increased 15%.