Build-A-Bear Workshop Swings to 2Q Loss

St. Louis Build-A-Bear Workshop Inc. said Thursday it swung to a fiscal second-quarter loss, hurt by weaker demand in the United States.

Quarterly loss totaled $4.8 million, compared with a profit of $1.6 million last year.

Revenue fell 5% to $94.7 million from $100 million last year.

The company said results were hurt by a slowdown in consumer spending, mainly in the United States.

Same-store sales fell 17.9%, including a 20.5% drop in the United States and a 2.2% rise in Europe.

The St. Louis-based company said it should meet analysts' earnings expectations of 68? per share in 2008 and will slow new-store growth and lower capital spending in fiscal 2009 to improve results.

"The slowdown in consumer spending is having a significant impact on our current business," said Maxine Clark, chairman and CEO, Build-A-Bear Workshop. "In response to this environment, we are carefully allocating capital and managing cash, while aggressively reducing expenses." In 2009, Clark said, the company will open six U.S. stores compared to 25 this year.

"This lower store opening plan and the associated lower capital-spending position us to maintain our strong balance sheet and financial flexibility, while continuing to make long-term investments in our brand and returning value to shareholders through the repurchase of our stock," Clark concluded.

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