We are reiterating our Buy rating, $58 price target and projections for Build-A-Bear Workshop with the company announcing 1QFY25 (April) results before the open on Thursday. We believe, driven by strong Easter and Spring offerings, further expansion of the Mini Beans, and continued growth in the franchising and commercial space, revenue for 1Q will be solid. That said, the near term question remains the impact of tariffs on overall margins, as Build-A-Bear purchased 58% of merchandise from China and 38% from Vietnam in FY24, with China projected by management to account for less than half of merchandise in FY25. That said, longer term we remain highly upbeat on the potential for further domestic and international expansion, the ability to continue to innovate and offer compelling products and to offset any tariffs and further diversify the supply chain; as such, we reiterate our Buy rating and $58 price target for BBW.
