On May 1, specialty retailer Build-A-Bear
- Total revenue grew 18.4%, but same-store sales struggled, falling 6.9%.
- Margins fell across the board and shares outstanding increased slightly, leading to a 4.9% fall in diluted earnings. The company also recorded a $0.14 charge related to a U.K. acquisition.
- Management reduced guidance for the coming quarter and is calling for full-year earnings of $1.65 to $1.75, with flat to slightly negative comps in the core North American store base.
- The tone is bearish on Build-A-Bear, as it carries a lowly one-star rating in Motley Fool's CAPS community. Toy rivals Mattel
(NYSE:MAT) and Hasbro(NYSE:HAS) have slightly better two-star ratings. Kids may be increasingly embracing video games -- retailer GameStop(NYSE:GME) has a more favorable four-star rating.
(Figures in thousands, except per-share data)
Income Statement Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Revenue |
$116,814 |
$98,631 |
18.4% |
Net Profit |
$8,065 |
$8,346 |
(3.4%) |
EPS |
$0.39 |
$0.41 |
(4.9%) |
Diluted Shares |
20,525 |
20,401 |
0.6% |
Get back to basics with a look at the income statement.
Margin Checkup
Q1 2007 |
Q1 2006 |
Change* |
|
---|---|---|---|
Gross Margin** |
46.4% |
49.0% |
(2.6) |
Operating Margin |
10.7% |
12.9% |
(2.2) |
Net Margin |
6.9% |
8.5% |
(1.6) |
**Does not include franchise or license fees.
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$42,375 |
$43,398 |
(2.4%) |
Accounts Rec. |
$6,028 |
$7,297 |
(17.4%) |
Inventory |
$48,013 |
$43,591 |
10.1% |
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Accounts Payable |
$44,167 |
$32,265 |
36.9% |
The balance sheet reflects the company's health.
Cash Flow Highlights
Fools will have to wait until Build-A-Bear files its 10-Q with the Securities and Exchange Commission for juicy cash flow details. Find out why free cash flow is a Fool's best friend.
Related Foolishness:
- Warren Buffett's Priceless Investment Advice
- Can Mumbles Save Build-A-Bear?
- 70 Times Better Than the Next Microsoft
Hasbro and GameStop are Stock Advisor recommendations, and Microsoft is an Inside Value pick. The Fool has a newsletter for almost every type of investor.
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.