TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.
If you grew up in the late 1980’s or early 1990’s, you are familiar with Build A Bear Workshop (NYSE: BBW). They are a retail store in many malls that allow customers to build a teddy bear from scratch. You customize the bear to your exact liking, get a certificate and a box to take him or her home in.
In the beginning, building your own teddy bear and customizing to you or your kids exact tastes was all the rage. But over the years, the novelty has slowly worn off.
Build A Bear Workshop stock went through some tough times and was looking to turn the corner. But then it hit a speed bump.
The question for investors is, is this speed bump temporary or a sign of things to come? In this post, we will walk through Build A Bear Workshop to see if it is a stock worth the underlying risk.
Build A Bear Workshop Background
Build A Bear Workshop began in 1997 and in the first 13 years in business, sold over 50 million customized teddy bears to customers. But as the new wave of technology overtook the world, the interest in building stuffed animals began to wane.
The stock and earnings for Build A Bear Workshop plummeted.
The company was faced with a stark reality. Make changes or go out of business. Executives decided to double down and began to implement an aggressive turnaround plan that included closing some stores, rebranding existing stores, and expanding the offerings at these stores.
As earnings trickled in quarter after quarter, it appeared that the plan was working. Earnings and revenues were both growing. And they continued to grow for close to 4 years. Then the holiday season of 2016 hit.
When the results for the 2016 holiday shopping season came out, revenues were down 6% versus the previous year and profit was cut in half.
The stock took it on the chin.