Build-A-Bear Workshop, Inc. (NYSE:BBW) Q1 2025 Earnings Call Transcript

Build-A-Bear Workshop, Inc. (NYSE:BBW) Q1 2025 Earnings Call Transcript May 29, 2025

Build-A-Bear Workshop, Inc. beats earnings expectations. Reported EPS is $1.17, expectations were $0.86.

Operator: Greetings, and welcome to the Build-A-Bear Workshop First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Schnierow, Investor Relations. Thank you, sir. You may begin.

Gary Schnierow: Thank you. Good morning, everyone, and welcome to Build-A-Bear’s first quarter 2025 earnings conference call. With us today are Sharon John, Build-A-Bear’s Chief Executive Officer; Chris Hurt, Chief Operating Officer; and Voin Todorovic, Chief Financial Officer. During this call, we’ll refer to forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the risk factors section. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today’s earnings press release, which is distributed and available to the public through our Investor Relations website. And now, I’ll turn the call over to Sharon.

Sharon Price John: Thank you, Gary. Good morning, and thanks for joining us for Build-A-Bear’s first quarter fiscal 2025 earnings call. Today, we are pleased to share that we have reported the best first quarter results in Build-A-Bear’s history. Double-digit top-line growth drove record revenue, margin expansion, and strong performance across all segments. This represents impressive earnings per share growth of nearly 43%. The record-settings start to the year is largely due to the ongoing execution of our long-term strategy. Part of this strategy is centered on leveraging the high awareness and affinity of the Build-A-Bear brand to successfully expand by: first, introducing new product categories with, for example, the continued success of the many billion collectibles plush line; second, extending consumer reach, such as the ongoing drive to appeal to the growing over 18 kidult segment; and third, introducing our valued workshop experience, the building block of the Build-A-Bear brand to new markets, particularly outside the United States, which has now driven the company’s international presence into 30% countries.

Let’s review the quarter’s highlights, all of which were Q1 records. Revenue increased 11.9% to more than $128 million. Pre-tax income grew 30.6% to nearly $20 million, and EPS increased 42.7% to $1.17. Additionally, we returned over $7 million in capital to shareholders. As a comparison point, reflecting our focus on continuous improvement over the years, the company’s first quarter pre-tax margin rate of 15% compared to 3% for the first quarter of 2019, the last pre-COVID year. Without a doubt, the company’s last 4 years of record-setting results, including a 25% store contribution margin with virtually all of the company’s stores being profitable and mid-teens pre-tax margin followed by this best first quarter in the company’s history bolsters our overall confidence in the company, our team, our overarching strategy, and the strengths of the Build-A-Bear brand.

This is especially true considering those 4 years of positive results were achieved amid various economic and geopolitical headwinds. With this in mind, we are reiterating our 2025 revenue guidance. However, we are updating the company’s pre-tax guidance inclusive of the current tariff rates. Voin will provide more detail in his remarks. We believe the company’s strong performance over the past 4 years is substantially due to our historic ability to successfully perform in volatile environments and is linked to a clean balance sheet, strong cash flow, a vertical flexible retail model, and a relentless focus on controlling the controllable. This success validates the continued commitment to our three key strategic initiatives aimed at delivering long-term profitable growth, specifically: one, the evolution and expansion of the company’s experiential retail footprint; two, the advancement of our comprehensive digital transformation; and three, the continued incremental investments to leverage Build-A-Bear’s brand strength across multiple fronts, while returning capital to shareholders.

For our first strategic initiative, in the past few years, with the benefit of the company’s three retail business models, we have accelerated our location expansion across the globe, ending the first quarter with over 600 locations, 30% of which are outside the United States. To provide some more information relating to the company’s store expansion and evolution initiative, I would like to turn the call over to Chris Hurt, Build-A-Bear’s Chief Operations Officer. Chris?

Christopher Hurt: Thanks, Sharon. We are committed to expanding our brand reach through our key strategic initiatives of the evolution and expansion of our global footprint. We opened 15 net new experience locations in the first quarter, highlighted by the opening of our corporately-operated Dublin, Ireland location on Grafton Street, a highly popular tourist destination. This standalone store features exclusive merchandise curated for tourists of all ages. As we continue to grow the brand in more places, we’ve added two more countries, bringing our total count to 30%, as Sharon noted. As a testament to the enthusiasm for the brand around the globe, current international partners and franchisees continue to add experience locations, including the expansion into two new countries, Helsinki, Finland, and Tallinn, Estonia, where lines for the opening stretched around the mall.

A standalone Denmark location in the Copenhagen airport, one of the busiest in Europe. The addition of two new locations in Italy, one in Milan, and one in Venice, a standalone workshop in the historic district of Piazza San Marco. Three new franchise stores in the UAE, and one opening in Australia, one of our oldest and largest franchise countries, bringing our experience location count to 17 down under. Separately, our partnership with Carnival Cruise Line continued as we opened on their two newest ships. We added three more Girl Scout locations, bringing our total to 28. Although these are designed on a smaller footprint, they serve an important role in our broader Girl Scout multiyear license relationship. As these new experience locations come to fruition, there is no question that we’re adding a little more heart to life in more places and for more people around the world.

This is important as we continue to diversify our revenue streams. As a reminder, we announced on our year-end call that we also have plans to launch a multi-level, one-of-a-kind Build-A-Bear Workshop in ICON Park, located in Orlando, Florida. This is scheduled to open in the summer of 2026 with a groundbreaking planned for this July. Our expansion plans remain on track for 2025, with at least 50 net new locations expected this year, the majority of those being operated by our international partners. We are excited about our continued growth, which will bring the Build-A-Bear brand to more people in more places. With that, I’ll turn the call back over to Sharon.

Sharon Price John: Thank you, Chris. You and the team have been doing a fabulous job bringing the beloved Build-A-Bear experience to kids and kids at heart around the world. Regarding our second initiative of digital transformation across the company, as we enter the final phase of decommissioning our legacy inventory management systems and implementing a new more strategic system with advanced capabilities, the impact on the company’s digital transformation will be far reaching. While we have been making incremental changes over the past few years, the latest tools will enable better real-time inventory visibility and improved data-driven decision-making, which are designed to further drive sales and enhance operational efficiencies.

Finally, the third initiative is to leverage the power of the brand by making strategic investments across a number of fronts to drive profitable growth, while continuing to return value to shareholders. It’s important to note that our ability to invest in longer-range projects that impact the company’s global footprint expansion, digital infrastructure, marketing programs, content, and organizational structure has largely been enabled by Build-A-Bear’s improved and more consistent revenue and cash flow. An example of this from a product and marketing perspective, as I previously noted, is the successful Mini Beans collection, which was launched in February of 2024. Mini Beans were strategically designed to expand beyond make-your-own plush, as well as serving as an accessible grab-and-go entry level price point offering to increase conversion and create a basket builder, all of which have proven to have been the case.

In addition, Mini Beans have already been introduced in retailers outside of our workshops, which we believe represents a growth opportunity. The line continued its momentum in the first quarter of 2025, expanding 30% year-over-year, bringing the company’s total sales to nearly 2 million units to date. To invigorate the collectible nature of the business model, 50 new styles were released in the inaugural year, some of which were miniature replicas of Build-A-Bear’s best-selling classic offering. Plus, we’ve released 15 new Mini Beans already this year, including limited-edition items. Some additional first quarter product focal points included Build-A-Bear’s traditional make-your-own versions of a new Strawberry Highland Cow, the popular Pokémon character, Wooper, and a limited edition April Fool’s Drop of Emo Axolotl, all of which appealed to the teen and adult collector representing 40% of our business.

Regarding our core kids’ consumer, we posted a strong Easter season, highlighted by the popularity of Build-A-Bear’s classic plush and accessories, as well as the fourth edition of our Golden Surprise Eggs, which contain one of a variety of small plush animals, tripling last year’s sale of the assortment. Over the past several years, we have successfully navigated significant external challenges, including the retail apocalypse, Brexit, and the COVID pandemic. We attribute the company’s success to disciplined expense management, a strong balance sheet, the toy industry’s historical resilience, and Build-A-Bear’s position as a one-of-a-kind destination for special occasions. As we’ve noted many times, not only is a teddy bear hug understood in every language, but it is also a universal source of comfort and joy.

As a result, we believe we are well positioned to manage an environment where uncertainty has become the norm rather than the exception, and we remain committed to navigating this current landscape as well. Overall, we have seen the company’s first quarter momentum continue into second quarter, and we have robust plans in place for the remainder of 2025. Given Build-A-Bear’s solid business fundamentals and assuming tariffs remain at current levels, we expect to report record revenue for the year and maintain strong profitability with double-digit pre-tax margins. With that, I would like to thank the entire Build-A-Bear family, our hundreds of partners and millions of amazing guests, for helping us achieve our record first quarter as we strive to continue to deliver on our corporate mission of adding a little more heart to life.

Voin?

Voin Todorovic: Thank you, Sharon, and good morning, everyone. I will discuss the quarterly results and then share more about our updated full year outlook. This was the most profitable first quarter in the company’s history. We grew across all segments, expanded the gross profit margin, and increased pre-tax income to a new record. This reflects the work from our strategic initiatives over the past several years and the business operating at a higher level of profitability. We also continue to return capital to shareholders. We returned $7.1 million for the quarter through dividends and share repurchases, and have $85 million remaining on the board approved authorization. Moving to a more detailed review of our first quarter results.

Total revenues were $128.4 million, an increase of 11.9%. Net retail sales were $119.6 million, an increase of 10.9%. Stores delivered strong performance. All four levers were positive: traffic; conversion; average unit retail; and units per transaction. Our domestic store traffic was up 3%, significantly outpacing the U.S. national traffic, which declined by 3%. E-commerce demand increased 0.5%. Commercial revenue, which primarily represents wholesale sales to our partner operators and continues to be the fastest growing segment of our business, and when including international franchise revenue, rose a combined 28.3%. Gross margin was 56.8%, an improvement of 260 basis points compared to last year, benefiting from both retail and commercial segments.

The leverage from improved merchandise margin, primarily driven by lower discounts, as well as occupancy costs drove retail gross margin expansion. SG&A expenses were $53.7 million or 41.7% of total revenues compared to 41.5% last year. Higher store-level wage rates, healthcare costs, and general inflationary pressures contributed to the 20 basis point increase. Our pre-tax income for the first quarter record of $19.6 million, representing growth of 30.6% year-over-year and 15.3% of total revenues. EPS was $1.17, also a first quarter record, and an increase of 42.7%, reflecting higher pre-tax income, a reduced share count, and lower tax rate. Turning to the balance sheet. At the first quarter end, our cash balance was $44.3 million, representing a $6.1 million or 16% increase year-over-year.

This was after returning $37 million to shareholders over the past 12 months. Inventory at quarter end was $72.3 million, an increase of $8.3 million, much of which is related to an accelerated purchase of core products and in line with our expectations, as well as nearly $2 million of tariff costs. The company remains comfortable with the level and composition of its inventory. Turning to the outlook. Following a strong first quarter and solid start to the second quarter, we have maintained our revenue guidance and we continue to expect the addition of at least 50 net new experience locations, most of which will be operated by our international partners. We continue to expect our commercial segment revenue to grow at least 20% for the year.

Also, we are updating our pre-tax income guidance to a range of $61 million to $67 million, inclusive of the current tariff rates. Let me add some more commentary on tariffs as they relate to Build-A-Bear. First, our global footprint has created an organic hedge as tariffs will not directly affect most of our international stores, whether corporate, partner-operated, or franchise. Second, please note that our retail cost of goods sold not only includes merchandise costs, but also rent, warehousing, and distribution expenses. However, the merchandise portion is the only cost directly impacted. Third, over the past several years, Build-A-Bear has significantly reduced its reliance on China as a primary source of goods, with most products now being sourced from Vietnam.

Additionally, while not all products are dual-sourced, many are, and we have already exercised our ability to redirect China-sourced products to our international locations. Fourth, Build-A-Bear is a meaningful vertical retailer with a unique business model. The company’s core product offerings are less seasonally dependent, with these choices representing over half of our sales. This enables more direct latitude over diversifying sourcing, inventory timing and flow, setting retail values, and managing promotional strategy, compared to traditional importers. Considering those factors, we now expect the tariffs and associated cost impact on our fiscal 2025 P&L net of mitigation to be less than $10 million. Also, our pre-tax guidance continues to reflect approximately $5 million of additional medical and labor costs, which we mentioned on our last call.

Given our previous inventory pull forward and current mix, we anticipate tariffs will have a relatively modest impact on our second quarter results with an expectation of a greater effect starting in the third quarter. In closing, we are pleased with our strong first quarter performance. Looking forward, our objective is to stay focused on our strategy to grow the number of global locations, continue our digital transformation, and invest in our company to drive another year of record revenues and deliver solid pre-tax income margins, while returning capital to shareholders. I want to thank all our store and warehouse associates, corporate team members, and partners for contributing to record first quarter results. Finally, we look forward to sharing our progress as we move through the year and speaking with many of you at upcoming investor conferences, as mentioned in our press release this morning, including the New York Stock Exchange Virtual Investor Access Day on June 5th.

This concludes our prepared remarks. We will now turn the call back over to the operator for questions. Operator?

Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Eric Beder with SCC Research. Please proceed with your question.

Eric Beder: Good morning. Congratulations on the quarter.

Voin Todorovic: Thanks, Eric.

Sharon Price John: Thanks, Eric.

Eric Beder: Great. When we look at the – okay, we have this continuing evolution that we’ve been seeing with movies. Obviously, Stitch this weekend was a significant positive. I know that you are no longer as dependent on this kind of genre to get this through, but how should we be thinking about the ability for you to capitalize on those types of events going forward throughout the year?

Sharon Price John: We still have best-in-class relationships with most of the – well, all of the largest creators of significant family films, and Stitch is a great example of that with our long-term relationship with Disney. Stitch has also been not just focused on children, it’s actually evolved as a brand and character in recent years as more of a collectible teen, tween, adult product. And, we’ve broadened that line to be seasonal and have all sorts of different iterations of Stitch. And that’s been an interesting driver for us that’s beyond this concept that you’re talking about film. I think, certainly, I can’t speak to the strategy of Disney, but I believe that that sort of organic popularity that emerged from Stitch is the reason why there was a film versus the other way around.

But we’re glad to participate in that and happy to have those relationships. Yes, as your point is, for years, that was a bit of a go-to place for us from a summer, we’d expect at least one big summer film and one big holiday film. And in the COVID world, post-COVID world, writer’s strike, that’s been a little more sketchy. But when that and if that returns, we’re perfectly prepared because that cross-section of cultural moments and our co-location in places where there are theaters and malls, it’s a perfect storm for us to participate in. We look at it now and though, not as something that we’re relying on, but something that would ideally be gravy on top of the way we plan our own business. And taking control of our future has been a big part of this overarching strategy.

Eric Beder: Yeah. Actually, I want to talk a little bit about that. So, you have increasingly been able to respond to TikTok trends, like you mentioned, the Highland Cow, your frog. How is the inventory management system going to enable you to be even better at doing that? How do you want to even sharpen that ability to respond when an item that, I don’t know, maybe was initially expected to be X now comes in and because it was on TikTok is now demand is 4 or 5 times X? Thank you.

Sharon Price John: Yeah. We’ve already seen some results of our ability to manage that much better than that. Even that would happen back in the situations that you were expressing earlier on hot films. Like we would not always get that inventory right. The exact unit count perfect for, say, a Frozen movie, um, and be in a chase mode. We’re much more flexible now. And, I think that the comment that I added in the remarks about this final decommissioning of a legacy inventory system, we certainly have plans and beliefs, and this is the entire intention of this multiyear approach to more visibility of inventory across our warehouse, our stores, our ability to move e-com inventory, to store inventory in a more, like, fluid way, which has been more manual, painfully manual sometimes, will increase our confidence in even going longer on some of these things that we think are going to be hot.

And I just want to point out, we’re not always just responding to TikTok trends. We’re often creating TikTok trends.

Eric Beder: Perfect. Thank you, and good luck for the rest of the year.

Sharon Price John: Thank you, Eric.

Operator: Our next question comes from the line of Keegan Cox with D.A. Davidson. Please proceed with your question.

Keegan Cox: Good morning, and congrats on the quarter.

Sharon Price John: Appreciate it.

Voin Todorovic: Thank you.

Keegan Cox: Yeah. So my question is on, you guys had strong growth in all three of your segments, but the one that stood out to me was the retail results were very strong. I was kind of just wondering if you could provide some color on how the company-operated stores performed versus your expectations.

Voin Todorovic: I’ll take that one. So thanks for the question, Keegan. Definitely, we are very pleased with how our stores have performed during the quarter. As I mentioned in our remarks, all four levers were positive. Traffic was about 3%, national traffic or domestic traffic in the U.S., at least the data that we get was down 3%, so that’s a big delta. And on top of that with higher traffic, we were able to increase our conversion, and we were also able to drive units per transaction, as well as with lower discounts, our average unit retail has gone up. So, again, all these levers were moving in the right direction, very pleased how our teams were able to execute. And this is the combination of some of the things that Sharon talked about, having the right product, having the right service model in our stores, and really capitalizing on the traffic that our marketing and our teams are delivering. So, overall, a very successful quarter.

Sharon Price John: I’d also just note that that traffic delta is a strong support point on the fact that Build-A-Bear is a destination. People plan their trip to Build-A-Bear. The best we can do from a research perspective is asking guests and making some assumptions. But our assumptions is that between 60% and 80% of trips that are made to Build-A-Bear are planned in advance. And a lot of that has to do with the fact that we are associated with celebrations, with moments in time, with families coming together, whether it’s birthdays or graduations. And so, they’re making special trips to come to Build-A-Bear, so that bodes well in this type of environment.

Keegan Cox: Great. And then just one follow-up, just an update on your partner-operated store line. I was just wondering, who are these partners, are they kind of larger firms opening multiple stores, and are you seeking any leads for partner-operated stores.

Sharon Price John: They are in their markets and sometimes beyond well-known partners, Giochi Preziosi, as well as we have big players in South America, Nordic. I hand it over to Chris, if you want to add any more color.

Christopher Hurt: Yeah. Domestically, a long relationship with Great Wolf Lodge, Kalahari, Carnival Cruise Line, as I mentioned. Internationally, as Sharon mentioned, Giochi Preziosi, who have multiple toy store locations and a big presence in Italy, that’s our partner. [InnerSource] [ph], Anvol, these are distributors of toys that actually also own toy stores as well that we partner with in these locations. We’re very, very careful to make sure that they can deliver to Build-A-Bear brand experience in these areas. And lots of times, most of the time, they are shopping shops in toy stores located in these countries.

Sharon Price John: To your second question, that’s a yes for certain markets. Now, we are in negotiations with a number of regions and countries, but I note that we have a very high bar on our expectations from a partnership perspective and it’s absolutely crucial that we believe a partner-operated group can deliver the experience, because that is the underlying power of the Build-A-Bear brand. And not everyone is capable of that kind of training and process and oversight.

Keegan Cox: Thank you.

Operator: Our next question comes from the line of Greg Gibas with Northland Securities. Please proceed with your question.

Greg Gibas: Great. Good morning, Sharon and Voin. Congrats on the record results.

Sharon Price John: Thank you, Greg.

Voin Todorovic: Thank you, Greg.

Greg Gibas: I wanted to follow-up. It’s great to see the continued progress with Mini Beans. It sounds like some new introductions this year after the 50 new ones you had last year. You talked about the introduction in retailers outside of the Build-A-Bear Workshop already. I wanted to see if you could provide some color on kind of where you are placing them and plans for continued expansion there.

Sharon Price John: We’re placing them in, interestingly, some of the partners that we noted outside the United States in their own toy stores, but we’ve also recently started a smaller test approach in the United States. And Chris, again, if you want to add some color to that, feel free.

Christopher Hurt: Yeah, we’ve had a relationship with Hudson, which is inside of airports where there is a wholesale model, where we have already stuff for your friends that you can do clothing and accessories in those locations. And we’ve added Mini Beans into several of those locations. Applegreen is a travel type of location retail store. And we’ve added Mini Beans into 50 of those locations here domestically. And as Sharon mentioned, we’ve also added Mini Beans into locations with our partners in Italy and in the Nordics.

Greg Gibas: Great. That’s good to hear. And, if I could follow-up on the kind of commentary on the updated outlook. Could you maybe dive into a little bit more of the incremental impact you’re expecting from tariffs, I guess, with the updated guidance relative to your previous – I think, you previously said maybe a $5 million impact, now it’s kind of less than $10 million, just I guess the assumptions that go into the updated pre-tax income outlook?

Voin Todorovic: Yeah. So, what we mentioned on our call, like our new pre-tax range, now $61 million to $67 million. This range reflects less than $10 million net of mitigation impact of tariffs and associated costs, as well as we haven’t changed our expectations about additional $5 million of related costs to medical and labor costs that we mentioned on our last call. We are still working through a lot of these mitigations. There is a lot of work that teams are doing to move production, to look at ways to mitigate some of the things from the organizational perspective, supply chain perspective. So, there’s been a lot of work in that arena and with successful momentum that we are seeing in our business with things that are within our control, the success of our product and our marketing activities. We were confident to reiterate our revenue guidance, but with some of these additional costs, we lowered our pre-tax expectations for the year.

Greg Gibas: Makes sense. And, yeah, great to hear about the kind of diversification of sourcing there. Thanks, again.

Voin Todorovic: Thank you.

Operator: [Operator Instructions] Our next question comes from the line of Steve Silver with Argus Research. Please proceed with your question.

Steve Silver: Thanks, operator, and I’d like to offer my congratulations as well. It sounds like the company is continuing to make significant progress in just the expansion of the country count outside the U.S., it’s up to 30% already. I’m curious as to how the company is able to access information about how some of these launches are going in new countries, and just really the decision-making that goes into really expanding within a current market versus entering new markets in these partnerships, just trying to get a sense as to how responsive some of these partners can be in terms of adding new locations in current markets versus new ones?

Sharon Price John: Thanks, Steve. I mean, one of the tenets of global expansion is often to work with experts in their own markets. Where we expand, we own and operate most of our stores in the United States with some partners that are associated with hospitality, because that’s a different kind of relationship. But looking in other countries where neither experts in the mall, the retail environment, we don’t have those relationships. So, we like to find these partners, as I mentioned, which have very high bar on how they would operate. And, of course, there’s criteria around the relationship as well as the contracts associated with the use of the brand, the growth of the brand and, we as management approve those plans and work with those teams to build out what we believe is the proper and robust market penetration in each one of those countries.

I mean, this is pretty typical stuff, whether it’s franchising or partner operated which happens to be two different models. But that’s one of the reasons why we wanted to note in Chris’s comments, the enthusiasm that we’re seeing is a reflection of the success that we’re having across many of these markets. I mean, clearly, these are business people as well. They don’t have any intention of continuing to drive new locations. If said it’s already opened locations, they’re not seeing success. So, we wanted to specifically call that out, because it’s the best evidence of the success that we’re seeing. So, we’re excited about it. And some of these countries like Estonia, when we had the lines around the mall, we were more like, do people, what Build-A-Bear is in Estonia?

Well, we’re in a whole new world now of TikTok, social media. Kids seem to know what Build-A-Bear is in Estonia, just FYI for all on the call. And it comes back to that teddy bear hug. And so, even if you don’t know and you see this line and you get in it, it’s still a delightful experience. So, I’m really heartened by what’s going on in that area of our business. And on a business from beyond just that we’re spreading teddy bear joy around the world, we’ll put that over here in a box, that it is, as Voin mentioned in his remarks, the continued global expansion of Build-A-Bear has been on our radar for a long time. And we’ve had these disruptions that I mentioned painfully in my remarks. And I feel like, too, in this process.

particular environment that global, as Voin used the word hedge is also extremely important to understand right now.

Steve Silver: Great. Thanks for that color. And so one more, if I may, with the Q1 strong results in the retail channel, traffic seems to be holding steady in terms of the delta between the national trends, but the positive read through, I guess, to conversion and volume sales, would you attribute a lot of that to just organic demand, or do you think that there was any consumer action, maybe just trying to get ahead of pricing in the broader economy? Just trying to get a sense as to the in-store trends that you might have seen in Q1.

Sharon Price John: That’s an interesting question, because I know there is a lot of discussion out there about pull forward. We are of the belief that people tend not to hoard steady bears. We can have that discussion, but particularly where the majority of our sales are about the experience, as much as the end result, the item, the bear. So, you can’t hoard an experience. And so, when you think through it that way, even though there may be some of that on the collector side, which is a small portion of our business, it’s probably not material.

Steve Silver: Great. Thanks for the additional color, and congratulations again.

Sharon Price John: Thank you.

Operator: We have no further questions at this time. Ms. John, I’d like to turn the floor back over to you for closing comments.

Sharon Price John: Thank you so much for joining us today, and we appreciate you being here to hear our record-breaking results for first quarter fiscal 2025, and look forward to getting back together on our second quarter call. Hope to see you at some of our Investor conferences. Have a great day.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.