Boston, MA 05/02/2014 (wallstreetpr) – Build-A-Bear Workshop, Inc (NYSE:BBW) announced that it signed a new franchise stores agreement in Turkey of which it expects to one the first store in June. That development comes when a company is consolidation operations in some markets especially the U.S. where it is closing some stores. The company can be seen trying to put resources in areas of high-growth and high-margin as it seeks to improve earnings.
In addition to expanding into promising markets and closing underperforming stores, the company is also making internal improvements so as to reduce costs and expenses. As such, the company announced that the strong performance in the latest quarter was due to austerity measures that the company has put in place.
Though revenue declined in the latest quarter compared to a year ago, the management had a word for that. CEO Sharon John observed that Q1 was impacted by the fact that Easter fell in the second quarter. Nonetheless, she noted that the company is poised to realize improving performance for the balance of the year.
Q1 in summary
Build-A-Bear Workshop, Inc (NYSE:BBW) reported a profit of $5.03 million. That was better than profit of $13,000 that the company reported in the same quarter a year earlier. However, revenue came in weaker than the previous year at $97.9 million. That signaled a decline of more than 6 percent from revenue of $104.3 million in Q12013.
Executive comment
According to the CEO, although the latest quarter showed a decline in revenue, the quarter marked the fifth consecutive quarter that the company realized operation improvements and left the management excited about the future. As such, shareholders need not be worried about the mixed Q1 but instead focus on the next quarter and the rest of the year that are expected to show great improvements given the combination of expansion and austerity measures.
Expenses declined from $43.7 million a year ago to $37.8 million in the latest quarter. The decline in expenses was accompanied by improvement in gross margin that perched at 44 percent ahead of 42 percent in Q12013.
