Build-A-Bear reported that total revenues for it fiscal 2004 third quarter, the 13-week period ending October 2, 2004, were $66.5 million, up 38.7% compared to $48.0 million in Q303. Net income was $3.6 million for the third quarter, compared to $0.9 million for last year's third quarter, and diluted earnings per share were $0.19 for the fiscal Q304, compared to $0.03 for last year's third quarter.
The company reported these numbers in the wake of its IPO, which closed on Nov. 2, from which Build-A-Bear received a net total of $25.7 million. The company is still in its regulatory-mandated quiet period, which lasts until Nov. 22, and thus had no financial projections to offer about its fourth quarter.
However, Clark did note that during the fourth quarter, the company plans to open its first two Friends 2B Made stores, an interactive concept focused on the doll-making experience. The two test stores, one in Pittsburgh and the other in Columbus, OH, will be physically connected yet separate from established Build-A-Bear stores. Also in the fourth quarter, the company plans to open a temporary holiday Build-A-Bear store in Rockefeller Center in New York, and plans international franchise store openings in Australia, Japan and United Kingdom.
Clark attributed the good third-quarter numbers to the success of the company's expansion, along with its brand-building efforts. "We've taken action to increase our brand recognition, especially using marketing to grow brand awareness, as opposed to markdowns and promotions," Clark said, adding that TV advertising--about five weeks' worth every quarter--is especially important, focusing on kid's and family cable channels.
The company spent about $4 million to market itself in Q304, and about $11.9 million thus far in 2004, compared with $1.4 million in the third quarter of 2003 and $3.5 million in the first nine months of that year. "We believe that this increased spending has generated over $11 million in net income growth so far this year," Clark said. "As we speak today, our holiday mailers are arriving in our customers' homes, our TV commercials are back on the air, and Rudolph the Red-Nosed Reindeer will be launched this weekend."
Make Your Own Rudolph, which allows customers to build their own 16-inch stuffed reindeer with a ruddy nose for $22, represents an obvious seasonal tie-in for the company, but there have been others recently as well, according to Clark. "Our Halloween offering was a great success," she noted. "With Spider-Man being not only the most number-one costume for kids in America, but also for bears."
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