Build-A-Bear Workshop (BBW) PT Lowered to $9 at BMO Capital on Significant 4Q16 EPS Miss
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BMO Capital Markets analyst Gerrick Johnson maintains Market Perform rating, but lowers price target on Build-A-Bear Workshop Inc. (NYSE: BBW) to $9 (from $13) , as the company reported 2016 fourth quarter EPS well below estimates and consensus figures.
Johnson comments, "Like the rest of the toy industry, BBW was adversely impacted by a sharp drop-off in retail sales in early December, as well as generally lackluster mall traffic trends. Promotions were up in the quarter and advertising, management admits, did not work. Comp-store sales were up through the end of November, but declined double digits in December. NPD, in several press releases, had cited strength in overall toy sales in the US around Thanksgiving, before a sharp high-single-digit drop through December 2017. We are surprised, though, that the company could not make up more sales in the final week. NPD says retail sales of toys in the week before Christmas had increased 26% yoy. This surge salvaged the season for some other toy companies (HAS), though definitely not all (MAT, JAKK). But even with increased promotions, it seems BBW's business missed the bump."
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