ST. LOUIS -- Build-A-Bear Workshop Inc.'s shares plunged Thursday after the toy retailer posted a third-quarter loss and said it would close up to 60 stores.
The St. Louis-based company, which sells make-it-yourself teddy bears and other dolls, has struggled for some time with weak sales. It hired an outside consulting firm last year to look at ways it could improve its performance and has laid out plans to turn around its business.
However, Build-A-Bear's efforts have yet to really take hold.
Build-A-Bear's CEO Maxine Clark said that the company faced a tough comparison to last year, when its products tied to the "Smurfs" movie increased traffic and sales in its stores.
The company said Thursday that in an effort to improve its profitability, it will close 50 to 60 underperforming stores over the next two years. It owns or franchises more than 400 stores around the world. The company also plans to invest $18 million during the year to update some of its remaining stores. It also will increase its television advertising to help drive up brand awareness ahead of the key holiday shopping season.
Build-A-Bear reported a net loss of $4.3 million, or 26 cents per share, for the quarter that ended Sept. 29. That compares with net income of $854,000, or 5 cents per share, in the third quarter of last year. The most recent quarter includes a 14 cents-per-share charge tied to its tax rate and 2 cent-per-share hit tied to share buybacks.
Its total revenue fell to $86 million from $97.4 million.
Analysts polled by FactSet were expecting the company to earn 10 cents per share on revenue of $97.2 million.
The company said revenue from its stores open at least a year, considered a key indication of operating performance as it strips away recently opened or closed sites, fell 11.1 percent.
Shares of the company fell 25 percent by early afternoon, dropping $1.06 to $3.16. Its stock price has lost more than half its value since February.