The Teddy Bear Stock That Roared 1,500% in 5 years
5 Things Investors Should Know Build-A-Bear Workshop (BBW)
Dear Investors.
Zee here. Remember visiting Build-A-Bear as a kid, carefully stuffing your new teddy and making that special wish?
Well, investors who bet on the company five years ago got their wish and then some. With returns exceeding 1,500%, Build-A-Bear Workshop has become the little stock that could, defying retail's doom-and-gloom narrative. But this isn't just a nostalgia play anymore.
Adults now make up over 40% of customers, international stores are multiplying, and digital sales are soaring. Here's what savvy investors need to know about this cuddly stock's potential.
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1. Impressive Financial Performance Despite Headwinds
Build-A-Bear is approaching a major milestone, expecting to reach $500 million in annual revenue for the first time. The company has posted four consecutive years of record results, with fiscal 2024 revenue hitting $496 million. In its most recent quarter, the company demonstrated resilience with revenue growing nearly 3% to $122.7 million, though profits faced pressure from external factors.
The stock has been on a remarkable journey, hitting an all-time high of $75.85 in September 2025 before pulling back slightly. With a market cap hovering around $827 million and a reasonable price-to-earnings ratio of 14, the company trades at what many analysts consider attractive levels given its growth trajectory.
2. Tariffs Present a Significant Challenge
The biggest near-term concern for investors is the impact of tariffs. Build-A-Bear imports over 90% of its products from China and Vietnam, making it highly vulnerable to trade policy changes. In its third quarter, the company took a $4 million hit from tariff-related costs, and management projects an $11 million total impact for fiscal 2025.
The tariff situation caused the stock to drop over 15% in early December when the company warned about continued pressure through 2026. However, management has been proactive, working with Asian suppliers to reduce costs and implementing selective price increases where possible. Their forward planning has helped mitigate what could have been even more severe impacts.
3. Explosive International Expansion Through Smart Partnerships
Build-A-Bear’s growth strategy has shifted dramatically toward an asset-light international expansion model. The company now operates over 650 locations across 32 countries, with the majority of new openings coming through partner-operated and franchise models rather than company-owned stores.
This approach is brilliant from a capital efficiency standpoint. Partner-operated stores require minimal investment from Build-A-Bear while generating strong returns. In just Q3 2025 alone, 70% of the 24 new store openings occurred outside the United States. Italy has been particularly successful, expanding from one partner store in 2023 to 14 locations. The company has raised its 2025 guidance to at least 60 net new unit openings, up from an initial target of 50.
4. The “Kidult” Market Is a Game-Changer
Here’s a surprising statistic: over 40% of Build-A-Bear’s revenue now comes from teenagers and adults aged 16 and up. This “kidult” demographic has become a goldmine for the company, as millennials and Gen Z adults embrace nostalgia and aren’t shy about treating themselves to stuffed animals.
The company has leaned into this trend with sophisticated marketing and product lines that appeal to adult tastes, including licensed partnerships with franchises like Harry Potter, Pokémon, and Star Wars. This demographic shift has fundamentally changed Build-A-Bear’s business model from primarily serving children to becoming a multi-generational brand.
5. Digital Innovation Driving E-Commerce Growth
While Build-A-Bear is known for its in-store experience, the company has successfully built a robust digital presence. E-commerce demand surged 15% in recent quarters, with online sales becoming an increasingly important revenue driver.
The company’s Mini Beans collection—smaller, pre-stuffed toys—has been particularly successful online, with sales approaching 3 million units and revenue jumping 80% in some quarters. These products extend Build-A-Bear’s reach beyond its workshop locations and appeal to consumers looking for more convenient purchase options without sacrificing the brand’s emotional appeal.
The Bottom Line
Build-A-Bear Workshop represents a fascinating turnaround story—a company that evolved from a struggling mall retailer into a nimble, internationally expanding brand. The tariff situation creates near-term uncertainty, but the company’s asset-light expansion model, appeal to adult consumers, and proven ability to navigate challenges suggest the growth story may have more chapters to write.
For investors, the stock’s recent pullback from its September highs might present an opportunity, though tariff impacts will need close monitoring throughout 2026. With a reasonable valuation, international growth potential, and strong brand loyalty, Build-A-Bear offers an intriguing mix of nostalgia and genuine business transformation that continues to surprise skeptics.
All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.