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Build-A-Bear will pay a cash dividend of 23 cents per share on October 8 to anyone who owns the stock as of September 24. This regular payment is part of the company's plan to return cash to owners, supported by a business that continues to generate profit even as it works through a period of slower sales growth.
Source: Business Wire
Northland Securities lowered its target for the stock from $60 to $40 after the company cut its full-year sales and profit goals. D.A. Davidson also reduced its target to $37 while keeping a buy rating. These moves reflect a more cautious view on how quickly the company can grow its wholesale business, though the new targets are still well above the current price of about $26.
Source: Northland Securities
Build-A-Bear reported second-quarter revenue of about 115 million dollars, which was lower than the 124 million dollars it brought in during the same period last year. While earnings of 70 cents per share came in slightly ahead of what analysts expected, the company is struggling with a slowdown in its e-commerce business and softening demand from shoppers.
Management lowered its expectations for the full year, now forecasting revenue between 500 million and 525 million dollars. The company noted that some of its wholesale deals, where it sells products through other retailers like Walmart, are taking longer to ramp up than planned. Despite the slower growth, the business remains profitable and returned nearly 23 million dollars to owners through dividends and buying back its own stock in the first half of the year.
Management consistently sets a low bar they can clear with eight straight beats, but shrinking sales suggest they are managing expectations for a business that is currently cooling off.
| Expectation | |
|---|---|
| EPS | $0.59 |
| Revenue | $119M |