Build-A-Bear CEO: ‘We are well-staffed’ for the holiday season

Build-A-Bear CEO Sharon Price John joins Yahoo Finance Live to discuss earnings, supply chain disruptions, holiday staffing, and the growth of the stuffed toy maker's digital business.

Video Transcript

KARINA MITCHELL: And we will stay on stocks and market news. Build-A-Bear stock is on a tear today, up as much as 34% on strong earnings, now down to about 28% after the broader pullback in the market after that omicron variant case in the US was detected. But strong third quarter earnings that beat the Street. The company also raised its guidance and announced a share buyback.

Joining us to discuss is Sharon Price John, Build-A-Bear CEO, at the New York Stock Exchange. Thank you so much for your time today, and congratulations. Want to go through some of the numbers. The shares have quadrupled since the start of the year. Third quarter revenue came in at $95.1 billion-- a record. Earnings came in at $0.36 a share compared to 11% year over year. You declared a special dividend and $25 million share buyback. So safe to say that profit is good and the business looks like it's in good shape. Tell us a little bit about the dividend.

SHARON PRICE JOHN: Yeah, so we did announce yesterday evening a special dividend to directly repay or to directly provide value for our shareholders. We're very happy to be able to do that, as well as a $25 million stock buyback program on the heels of the announcement this morning of record earnings for Build-A-Bear. As you mentioned, the top line numbers that are the best in a decade, as well as our pre-tax profit, which is the best in our company's history.

ALEXIS CHRISTOFOROUS: I want to talk a little bit about the holiday season, what the fourth quarter is shaping up to look like after coming off of a record third quarter, Sharon. And also, what is the supply chain situation like for you there at Build-A-Bear? Are you having sort of the same challenges lots of retailers are having right now?

SHARON PRICE JOHN: Well, absolutely. You know, first of all, yes, we are doing quite well. As we mentioned on the call that our fourth quarter year-to-date, we are still seeing positive trends. We did see a good Black Friday. We're very excited about the potential future. And that does follow on to your second question concerning our supply chain.

And although absolutely, we are seeing issues with the supply chain, with our inventory and how we manage that inventory further out in the future, but we stated on the call that we feel very confident that we have enough inventory to manage, as well as meet, the demands of the consumers through the fourth quarter and from our expectations perspective. And we also have a robust sales team ready to serve our guests to come in. And we're going to make sure that there's a teddy bear under every Christmas tree this year.

KARINA MITCHELL: And I want to ask you about labor concerns. Has that been an issue at all for you as a lot of other sectors, particularly in retail, have been struggling to attract and retain workers?

SHARON PRICE JOHN: Well, that's one of the reasons why I wanted to mention that we are well-staffed. Build-A-Bear is a fun place to work. It is wonderful to be able to bring joy to people and make memories with families. And in general terms, people love to come to work at Build-A-Bear.

And thus far, we have not seem to have had the same challenges as some of the other retailers for a wide variety of reasons. We're quite proud of that. We also train our Build-A-Bear builders to make sure that we can give the best possible experience at our retail stores that are scattered across the country and certainly have a lot of variety of products from licensed products to holiday products to classic teddy bears for people this Christmas.

ALEXIS CHRISTOFOROUS: You know, I certainly have spent time in your stores, Sharon, with three children over the years. And I feel like it's a very hands-on experience, right? You stuff the bear. You put the heart in the bear. How has your digital transformation sort of come to pass? And how are you having that experience exist virtually for lots of folks?

SHARON PRICE JOHN: Yeah, that's a great question. And although the retailtainment piece of our business is absolutely critical to creating that relationship that we have with many of our guests, the e-commerce piece has been on a high growth trajectory, particularly as it related to the COVID time period, like so many other retailers. But we had already seen multiple quarters of double digit growth moving into that. They've done a tremendous amount of work preparing ourselves for a much more robust omnichannel approach to our business.

We now have buy online, pick-ups at store, buy online, ship in store, relationships with Shipped, relationship with Klarna. We have multiple ways for people to engage with us online. You can do a quick, very seamless approach to buying some of our collectible products if you're an adult affinity guest for things like Harry Potter or something like Grogu from Star Wars.

Or you can go through what we've recently launched, something called Bear Builder 3D, where it's an experience that's a little bit like a reimagined Build-A-Bear store where the bear actually comes to life in an animated type form for you to go through and dress your new furry friend and purchase the product in an entirely different way. So we are absolutely in the business of trying to meet the consumer where they want to be and engage with them in the way they want to engage with Build-A-Bear for different occasions, different age grades, different reasons, lots of different ways to participate in the brand this holiday.

KARINA MITCHELL: And I want to ask you just in that collectible space as well, I believe you do have-- it's an area of tremendous growth, and I'm told that you may have a possible collaboration with ABG. Is there anything you can tell us about that?

SHARON PRICE JOHN: Not quite yet, but we do have some really great collectibles out there. We just launched a relationship with Friends. We also just launched Marvel's Wandavision. We will be replenishing Deadpool there, which is a real exciting sort of surprise hit for us. Very, very fun. But again, some of these bigger Evergreen properties like Pokemon or Harry Potter have been such a delight for our guests. And they love to collect every house in Harry Potter and all the Pokemon new characters as they come out.

KARINA MITCHELL: All right, well, congratulations on some stellar earnings. Sharon Price John, Build-A-Bear CEO at the New York Stock Exchange, thank you.