We are reiterating our Buy rating and $65 price target for Build-A-Bear Workshop after the company posted a mixed 1QFY26 (April), with revenue, driven by weak retail sales, below expectations, but EBITDA and EPS solidly beating Street consensus, as gross margins rose 140 bp. Reflecting these shifts, Build-A-Bear management lowered FY26 revenue guidance and raised the high-end of their pre-tax projection. As such, we are raising our FY26 and FY27 EPS to $4.00 (from $3.78) and $4.26 (from $4.23) while lowering our revenue projections; we continue to forecast the turn for 2HFY26. We remain positive on the longer-term growth potential for Build-A-Bear and reiterate our price target of $65 (or 10.1X our FY27 EV/EBITDA projection) and Buy rating for BBW.
