We are reiterating our Buy rating, $41 price target and projections for Build-A-Bear after visiting stores in Connecticut and Long Island. As expected, the decision to start the key Halloween period early was a material success, with multiple rollouts and newness and inventory flows ensuring key sales and the ability to satisfy shoppers for the season later. Further, driving key newness in Sanrio, and favorites such as Nightmare Before Xmas, and the launch of Bluey and Bingo assured a strong season. The first Halloween for the Mini Beans was also a key success with seasonal favorites actually selling out before our visit. As such, with the company starting to turn to the Xmas season (fully on November 1st), we believe momentum has remained strong, and Build-A-Bear is well positioned to register strong 2H top and bottom line results. As such, we reiterate our Buy rating and $41 price target for BBW.
