How Build-A-Bear went from a penny stock to a retail powerhouse

Bear building workshop It wasn’t always a retail winner.

The toy store, known for its interactive building stuffed animal experiences and accessories, has undergone a major transformation since CEO Sharon Price John took the helm of the company more than a decade ago.

“When I first came in in 2013, this brand evaluation was strong,” she told CNBC. “We don’t have a broken brand, we have a broken business, and when I started doing interviews, I really understood how important this brand was to people.”

The company had initial success in malls in the early 2000s, but Build-A-Bear’s shares declined after the 2008 financial crisis, with the company reporting a $49 million loss in fiscal 2012.

Under Price John, the company began investing in e-commerce, shifting orders to stores instead of its distribution center and diversifying its sales beyond just malls to improve the company.

“Overall our goal was to create sustainable, profitable growth, but profit came first,” Price John said.

This strategy has succeeded. Almost all of Build-A-Bear’s stores are now profitable, and the stock saw a similar rally to Nvidia earlier this year, reaching an all-time high of around $76 in September. The stock has fallen somewhat since then, but is still up more than 125% over the past two years.

But tariffs negatively affected business. Build-A-Bear imports more than 90% of its products from China and Vietnam, and the company said in its third-quarter earnings report in early December that it expects to receive nearly $11 million in tariffs for fiscal year 2025.

Company executives also said on a call with analysts that the company saw a slowdown in traffic in October during the government shutdown.

Small Cap Consumer Research analyst Eric Bieder wrote in a note this month that the company lowered its forecast and lowered its price target by $10 due to the company reporting lower-than-expected revenue and “implied deep tariff impacts.”

However, the company is outperforming most of its retail competitors and expects to reach $500 million in annual revenue for the first time.

“You can buy stuffed animals or stuffed animals almost everywhere, from Target to FAO Schwarz and everywhere in between,” Bidder told CNBC. “The difference is that at Build-A-Bear, it’s yours. You helped make it happen.”

Watch the video to learn more about how Build-A-Bear is back.