ST. LOUIS—Build-A-Bear Workshop Inc. reported a third-quarter profit as better retail profit margins offset declining sales. The results beat expectations it would lose money and sent the stock up more than 7 percent.
The retail chain, which sells build-it-yourself teddy bears and other dolls, said its net income for the quarter ended Oct. 1 was $854,000, or 5 cents per share, compared with a loss of $1.4 million, or 7 cents per share, during the same period last year.
The company said its revenue fell slightly to $97.4 million from $100 million during the same period last year.
The results beat analyst expectations for a loss of 2 cents per share on $96.1 million in sales, according to a survey by FactSet.
Shares of Build-A-Bear jumped 43 cents, or 7.4 percent, to $6.26 in morning trading.
The company said its retail revenue rose 3 percent during the quarter to $95.4 million.
Revenue at stores open at least a year, an important retail performance measurement, rose 1.1 percent. In the U.S., the figure rose 0.7 percent, and in Europe, 3 percent.
Total revenue was dragged down by a decline in commercial revenue, which mostly consists of licensing fees. It fell sharply to $1.2 million, compared with $7.6 million last year.
The company offset falling revenue with higher profit margins, with its retail gross profit margin jumping 40 percent during the quarter.
