50 unchanged sentences
Additionally, we offer products in non-plush consumer categories via outbound licensing agreements with leading manufacturers.
−Removed: Our strategy includes leveraging our brand strength to continue to evolve our brick-and-mortar retail footprint with a versatile range of formats and locations, including tourist destinations, expand into international markets primarily via our partner-operated and franchise store models, and grow our e-commerce business.
+Added: Our strategy includes leveraging our brand strength to continue to evolve our brick-and-mortar retail footprint with a versatile range of formats and locations, including tourist destinations, expanding into international markets primarily via our partner-operated and franchise store models, and growing our e-commerce business.
By leveraging our brand strength and owned intellectual properties through the creation of engaging short-form and long-form content for kids and adults, we endeavor to develop a circle of continuous engagement to increase purchase occasions and to continue to broaden the consumer base beyond children with tweens, teens and adults.
−Removed: As of August 2, 2025, we had 368 corporately-managed stores globally, 157 partner-operated locations operating through our partner-operated model in which we sell our products on a wholesale basis to other companies that execute our retail experience, and 102 international franchised stores, all under the Build-A-Bear Workshop brand.
+Added: As of November 1, 2025, we had 375 corporately-managed stores globally, 168 partner-operated locations operating through our partner-operated model in which we sell our products on a wholesale basis to other companies that execute our retail experience, and 108 international franchised stores, all under the Build-A-Bear Workshop brand.
We also operate a limited number of seasonal locations.
4 unchanged sentences
International franchising – Royalties as well as products and fixtures sales from other international operations under franchise agreements.
−Removed: Selected financial data attributable to each segment for the thirteen and twenty-six weeks ended August 2, 2025 and August 3, 2024 are set forth in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
+Added: Selected financial data attributable to each segment for the thirteen and thirty-nine weeks ended November 1, 2025 and November 2, 2024 are set forth in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Business Update
12 unchanged sentences
The global expansion of our unique experience locations.
−Removed: During the first twenty-six weeks of fiscal 2025, we opened a net 29 Build-A-Bear Workshop retail experience locations, through a combination of corporately-managed, partner operated, and franchise business models.
−Removed: In fiscal 2025, we expect net new unit growth of at least 60 locations in North America and internationally through our three business models.
+Added: During the first thirty-nine weeks of fiscal 2025, we opened a net 52 Build-A-Bear Workshop retail experience locations, through a combination of corporately-managed, partner operated, and franchise business models.
+Added: In fiscal 2025, we expect net new unit growth of a t least 60 locations in North America and internationally through our three business models.
We have made a concerted effort to shift to non-traditional locations, including family-centric tourist and hospitality sites, as well as asset-light partner-operated and franchise locations, and now have more than a third of total stores in non-traditional settings.
9 unchanged sentences
The table below sets forth the number of Build-A-Bear Workshop corporately-managed stores in North America and Europe for the periods presented:
−Removed: Twenty-six weeks ended
−Removed: August 2, 2025
−Removed: August 3, 2024
+Added: Thirty-nine weeks ended
+Added: November 1, 2025
+Added: November 2, 2024
North America
2 unchanged sentences
End of period
−Removed: As of August 2, 2025, 53% of our corporately-managed stores were in an updated Discovery format.
+Added: As of November 1, 2025, 53% of our corporately-managed stores were in an updated Discovery format.
We also expect to close certain stores in accordance with natural lease events as an ongoing part of our real estate management and day-to-day operational plans.
2 unchanged sentences
The number of third-party retail locations opened and closed for the periods presented below is summarized as follows:
−Removed: Twenty-six weeks ended
−Removed: August 2, 2025
−Removed: August 3, 2024
+Added: Thirty-nine weeks ended
+Added: November 1, 2025
+Added: November 2, 2024
Beginning of period
End of period
−Removed: Through our partner-operated model, there were 157 stores in operation at the end of the second quarter of 2025 with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry's and Girl Scouts of the USA.
+Added: Through our partner-operated model, there were 168 stores in operation at the end of the third quarter of 2025 with relationships that included Carnival Cruise Line, Great Wolf Lodge Resorts, Landry's and Girl Scouts of the USA.
The partner-operated model is capital light for us, with the partner company building out and operating the workshops including providing the real estate location and covering the cost of labor and inventory, which is purchased from us on a wholesale basis.
3 unchanged sentences
All franchised stores have similar signage, store layout, merchandise characteristics and guest experience as our corporately-managed stores.
−Removed: As of August 2, 2025, we had five master franchise agreements, which typically grant franchise rights for a particular country or group of countries, covering a total of eight countries.
+Added: As of November 1, 2025, we had five master franchise agreements, which typically grant franchise rights for a particular country or group of countries, covering a total of eight countries.
The number of franchised stores opened and closed for the periods presented below are summarized as follows:
−Removed: Twenty-six weeks ended
−Removed: August 2, 2025
−Removed: August 3, 2024
+Added: Thirty-nine weeks ended
+Added: November 1, 2025
+Added: November 2, 2024
Beginning of periods(1)
11 unchanged sentences
Thirteen weeks ended
−Removed: Twenty-six weeks ended
+Added: Thirty-nine weeks ended
Net retail sales
18 unchanged sentences
retail gross margin percentage represents retail gross margin divided by net retail sales.
−Removed: Thirteen weeks ended August 2, 2025 compared to thirteen weeks ended August 3, 2024
+Added: Thirteen weeks ended November 1, 2025 compared to thirteen weeks ended November 2, 2024
Total revenues.
−Removed: Consolidated revenues increased $12.4 million or 11.1%, primarily driven by a $11.2 million or 10.8% increase in Net Retail sales and a $1.3 million or 18% increase in Commercial revenue when compared to the second fiscal quarter of 2024.
+Added: Consolidated revenues increased $3.2 million or 2.7%, primarily driven by a $2.8 million or 2.5% increase in Net Retail sales and a $0.4 million or 4% increase in Commercial revenue when compared to the third fiscal quarter of 2024.
The increase in net retail sales was driven primarily by growth at existing stores and sales at new stores.
−Removed: The increased commercial revenue was due to higher sales to our wholesale customers, including sales to new wholesale customers resulting from the opening of 50 partner-operated locations since the second quarter of 2024.
−Removed: Net retail sales for the thirteen weeks ended August 2, 2025 were $114.6 million, compare d to $103.5 mi llion for the thirteen weeks ended August 3, 2024.
+Added: The increased commercial revenue was due to higher sales to our wholesale customers, including sales to new wholesale customers resulting from the opening of 45 partner-operated locations s ince the third quarter of 2024.
+Added: Net retail sales for the thirteen weeks ended November 1, 2025 were $112.3 million, compare d to $109.5 mi llion for the thirteen weeks ended November 2, 2024.
The components of the improved performance are as follows (dollars in thousands):
Thirteen weeks ended
−Removed: August 2, 2025
+Added: November 1, 2025
Existing stores
5 unchanged sentences
The higher retail revenue performance was primarily the result of increased sales at existing stores and sales at new stores partially offset by the effect of store closures.
−Removed: Commercial revenue was $8.6 million for the thirteen weeks ended August 2, 2025 compared to $7.3 million for the thirteen weeks ended August 3, 2024.
−Removed: The $1.3 million increase is primarily due to increased sales volume from our wholesale accounts through our partner-operated retail model.
−Removed: International franchising revenue was $1.0 million for the thirteen weeks ended August 2, 2025 compared to $1.0 million for the thirteen weeks ended August 3, 2024.
+Added: Commercial revenue was $8.9 million for the thirteen weeks ended November 1, 2025 compared to $8.6 million for the thirteen weeks ended November 2, 2024.
+Added: The $0.4 million increase i s primarily due to increased sales volume from our wholesale accounts through our partner-operated retail model.
+Added: International franchising revenue was $1.5 million for the thirteen weeks ended November 1, 2025 compared to $1.3 million for the thirteen weeks ended November 2, 2024.
+Added: The $0.2 million increase is primarily due to timing of product shipments.
Retail gross margin.
−Removed: Retail gross margin dollars increased $10.3 million to $66.1 million from $55.8 million for the thirteen weeks ended August 3, 2024.
−Removed: The retail gross margin rate increased 370 basis points compared to the prior year driven primarily by improved merchandise margin compared to the second quarter of fiscal 2024.
+Added: Retail gross margin dollars increased $1.1 million to $60.5 million from $59.4 million for the thirteen weeks ended November 2, 2024.
+Added: The retail gross margin rate decreased 30 basis points compared to the prior year driven primarily by improved merchandise margin compared to the third quarter of fiscal 2024.
Selling, general and administrative.
−Removed: SG&A expenses were $56.4 million, or 45.4% of consolidated revenue, for the thirteen weeks ended August 2, 2025, compared to $49.2 million, or 44.0% of consolidated revenue, for the thirteen weeks ended August 3, 2024.
+Added: SG&A expenses were $55.3 million, or 45.1% of consolidated revenue, for the thirteen weeks ended November 1, 2025, compared to $51.7 million, or 43.3% of consolidated revenue, for the thirteen weeks ended November 2, 2024.
The increase was driven by higher store-level compensation, corporate costs and general inflationary pressures.
1 unchanged sentence
Interest income, net.
−Removed: Interest income was $0.2 million for the thirteen weeks ended August 2, 2025, compared to interest income of $0.2 million for the thirteen weeks ended August 3, 2024.
+Added: Interest income was $0.2 million for the thirteen weeks ended November 1, 2025, compared to interest income of $0.1 million for the thirteen weeks ended November 2, 2024.
Provision for income taxes .
−Removed: Income tax expense was $3.0 million with a tax rate of 19.3% for the thirteen weeks ended August 2, 2025, as compared to $2.8 million with a tax rate of 24.0% for the thirteen weeks ended August 3, 2024.
−Removed: The second quarter of fiscal 2025 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense offset by the tax impact of equity awards vesting, the foreign-derived intangible income deduction and discrete benefits related to settlement of a prior period tax position.
−Removed: The second quarter of fiscal 2024 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense.
−Removed: In addition, in the second quarter of fiscal 2025 and 2024, the Company remains in a full valuation allowance in certain foreign jurisdictions.
−Removed: Twenty-six weeks ended August 2, 2025 compared to twenty-six weeks ended August 3, 2024
+Added: Income tax expense was $2.6 million with a tax rate of 24.3% for the thirteen weeks ended November 1, 2025, as compared to $3.2 million with a tax rate of 24.5% for the thirteen weeks ended November 2, 2024.
+Added: The third quarter of fiscal 2025 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense offset by the tax impact of equity awards vesting and the foreign-derived intangible income deduction.
+Added: The third quarter of fiscal 2024 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense.
+Added: In addition, in the third quarter of fiscal 2025 and 2024, the Company remains in a full valuation allowance in certain foreign jurisdictions.
+Added: Thirty-nine weeks ended November 1, 2025 compared to thirty-nine weeks ended November 2, 2024
Total revenues.
−Removed: Consolidated revenues increased $26.1 million or 11.5%, primarily driven by a $22.9 million or 10.8% increase in Net Retail sales and a $3.0 million or 22% increase in Commercial revenue when compared to the second fiscal quarter of 2024.
−Removed: The increase in net retail sales was driven primarily by growth at existing stores and sales at new stores.
−Removed: The increased commercial revenue was due to higher sales to our wholesale customers, including sales to new wholesale customers resulting from the opening of 50 partner-operated locations since the second quarter of 2024.
−Removed: Net retail sales for the twenty-six weeks ended August 2, 2025 were $234.2 million, compare d to $211.3 mi llion for the twenty-six weeks ended August 3, 2024.
+Added: Consolidated revenues increased $29.4 million or 8.5%, primarily driven by a $25.7 million or 8.0% increase in Net Retail sales and a $3.3 million or 15% increase i n Commercial revenue when compared to the third fiscal quarter of 2024.
+Added: The increase i n net retail sales was driven primarily by growth at existing stores and sales at new stores.
+Added: The increased co mmercial revenue was due to higher sales to our wholesale customers, including sales to new wholesale customers resulting from the opening of 45 partner-operated l ocations since the third quarter of 2024.
+Added: Net retail sales for the thirty-nine weeks ended November 1, 2025 were $346.5 million, compare d to $320.8 mi llion for the thirty-nine weeks ended November 2, 2024.
The components of the improved performance are as follows (dollars in thousands):
−Removed: Twenty-six weeks ended
−Removed: August 2, 2025
+Added: Thirty-nine weeks ended
+Added: November 1, 2025
Existing stores
5 unchanged sentences
The higher retail revenue performance was primarily the result of increased sales at existing stores and sales at new stores partially offset by the effect of store closures.
−Removed: Commercial revenue was $16.3 million for the twenty-six weeks ended August 2, 2025 compared to $13.3 million for the twenty-six weeks ended August 3, 2024.
−Removed: The $3.0 million increase is primarily due to increased sales volume from our wholesale accounts through our partner-operated retail model.
−Removed: International franchising revenue was $2.2 million for the twenty-six weeks ended August 2, 2025 compared to $1.9 million for the twenty-six weeks ended August 3, 2024.
−Removed: The change is primarily the result of the timing of product shipments and the opening of 13 franchise stores since the second quarter 2024.
+Added: Commercial revenue was $25.2 million for the thirty-nine weeks ended November 1, 2025 compared to $21.9 million for the thirty-nine weeks ended November 2, 2024.
+Added: The $3.3 million increase i s primarily due to increased sales volume from our wholesale accounts through our partner-operated retail model.
+Added: International franchising revenue was $3.6 million for the thirty-nine weeks ended November 1, 2025 compared to $3.3 million for the thirty-nine weeks ended November 2, 2024.
+Added: The change is primarily the result of the timing of product shipments and the opening of 19 franchise stores since the third quarter 2024.
Retail gross margin.
−Removed: Retail gross margin dollars increased $19.8 million to $134.1 million from $114.3 million for the twenty-six weeks ended August 3, 2024.
−Removed: The retail gross margin rate increased 320 basis points compared to the prior year driven primarily by improved merchandise margin compared to the first half of fiscal 2024.
+Added: Retail gross margin dollars increased $20.9 million to $194.6 million from $173.7 million for the thirty-nine weeks ended November 2, 2024.
+Added: The retail gross margin rate increased 210 basis points compared to the prior year driven primarily by improved merchandise margin compared to the first three quarters of fiscal 2024.
Selling, general and administrative.
−Removed: SG&A expenses were $110.0 million, or 43.5% of consolidated revenue, for the twenty-six weeks ended August 2, 2025, compared to $96.8 million, or 42.7% of consolidated revenue, for the twenty-six weeks ended August 3, 2024.
+Added: SG&A expenses were $165.3 million, or 44.0% of consolidated revenue, for the thirty-nine weeks ended November 1, 2025, compared to $148.4 million, or 42.9% of consolidated revenue, for the thirty-nine weeks ended November 2, 2024.
The increase was driven by higher store-level compensation, corporate costs and general inflationary pressures.
1 unchanged sentence
Interest income, net.
−Removed: Interest income was $0.4 million for the twenty-six weeks ended August 2, 2025 compared to interest income of $0.6 million for the twenty-six weeks ended August 3, 2024.
+Added: Interest income was $0.6 million for the thirty-nine weeks ended November 1, 2025 compared to interest income of $0.7 million for the thirty-nine weeks ended November 2, 2024.
Provision for income taxes .
−Removed: Income tax expense was $7.3 million with a tax rate of 20.8% for the twenty-six weeks ended August 2, 2025 as compared to $6.3 million with a tax rate of 23.8% for the twenty-six weeks ended August 3, 2024.
+Added: Income tax expense was $9.9 million with a tax rate of 21.6% for the thirty-nine weeks ended November 1, 2025 as compared to $9.5 million with a tax rate of 24.1% for the thirty-nine weeks ended November 2, 2024.
The fiscal 2025 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense offset by the tax impact of equity awards vesting, the foreign-derived intangible income deduction and discrete benefits related to settlement of a prior period tax position.
The fiscal 2024 effective tax rate differed from the statutory rate of 21% primarily due to state income tax expense partially offset by the tax impact of equity awards vesting.
−Removed: In addition, in the second quarter of fiscal 2025 and 2024, the Company remains in a full valuation allowance in certain foreign jurisdictions.
+Added: In addition, in the third quarter of fiscal 2025 and 2024, the Company remains in a full valuation allowance in certain foreign jurisdictions.
Earnings before Interest, Taxes, Depreciation, and Amortization
7 unchanged sentences
Thirteen weeks ended
−Removed: Twenty-six weeks ended
−Removed: August 2, 2025
−Removed: August 3, 2024
−Removed: August 2, 2025
−Removed: August 3, 2024
+Added: Thirty-nine weeks ended
+Added: November 1, 2025
+Added: November 2, 2024
+Added: November 1, 2025
+Added: November 2, 2024
Income before income taxes (pre-tax)
2 unchanged sentences
Earnings before interest, taxes, depreciation, and amortization
−Removed: EBITDA for the thirteen weeks ended August 2, 2025 increased $3.8 million, or 25.3% to $18.8 million from $15.0 million for the thirteen weeks ended August 3, 2024.
−Removed: The increase was driven by gross profit resulting from increased retail and commercial margins partially offset by higher SG&A expenses.
−Removed: EBITDA for the twenty-six weeks ended August 2, 2025 increased $8.7 million, or 26.0% to $41.9 million from $33.3 million for the twenty-six weeks ended August 3, 2024.
−Removed: The increase was driven by gross profit resulting from increased retail and commercial margins partially offset by higher SG&A expenses.
+Added: EBITDA for the thirteen weeks ended November 1, 2025 decreased $2.5 million, or 14.7% to $14.2 million from $16.7 million for the thirteen weeks ended November 2, 2024.
+Added: The decrease was driven by gross profit resulting from increased retail and commercial margins partially offset by higher SG&A expenses.
+Added: EBITDA for the thirty-nine weeks ended November 1, 2025 increased $6.2 million, or 12.4% to $56.1 million from $49.9 million for the thirty-nine weeks ended November 2, 2024.
+Added: Th e increase was driven by gross profit resulting from increased retail and commercial margins partially offset by higher SG&A expenses.
Seasonality and Quarterly Results
24 unchanged sentences
Liquidity and Capital Resources
−Removed: As of August 2, 2025, we had a consolidated cash balance of $39.1 million, 82% of which w as domiciled within the U.S.
+Added: As of November 1, 2025, we had a consolidated cash balance of $27.7 million, 79% of which w as domiciled within the U.S.
Historically, our cash requirements have been primarily for the relocation and remodeling of existing stores in our new design, opening of new stores, investments in information technology infrastructure and working capital.
Over the past several years, we have met these requirements through capital generated from cash flow provided by operations.
−Removed: Additionally, during 2025 we have used cash on-hand to invest in short-term, highly liquid investments with original maturities of three months or less resulting in interest income of $0.4 million during the twenty-six weeks ended August 2, 2025.
+Added: Additionally, during 2025 we have used cash on-hand to invest in short-term, highly liquid investments with original maturities of three months or less resulting in interest income of $0.6 million during the thirty-nine weeks ended November 1, 2025.
A summary of our operating, investing and financing activities is shown in the following table (dollars in thousands):
−Removed: Twenty-six weeks ended
+Added: Thirty-nine weeks ended
Net cash provided by operating activities
2 unchanged sentences
Effect of exchange rates on cash
−Removed: Increase/(Decrease) in cash, cash equivalents, and restricted cash
+Added: Decrease in cash, cash equivalents, and restricted cash
Operating Activities.
−Removed: Cash provided by operating activities increased $19.6 million for the twenty-six weeks ended August 2, 2025, as compared to the twenty-six weeks ended August 3, 2024.
+Added: Cash provided by operating activities increased $12.7 million for the thirty-nine weeks ended November 1, 2025, as compared to the thirty-nine weeks ended November 2, 2024.
This increase in cash from operating activities was primarily the result of increased net income, decreased accounts receivable driven by lower receivables from commercial accounts and an increase in accounts payable and accrued expenses.
1 unchanged sentence
Investing Activities.
−Removed: Cash used in investing activities increased $0.6 million for the twenty-six weeks ended August 2, 2025, as compared to the twenty-six weeks ended August 3, 2024.
+Added: Cash used in investing activities increased $3.3 million for the thirty-nine weeks ended November 1, 2025, as compared to the thirty-nine weeks ended November 2, 2024.
The increase in cash used in investing activities was primarily driven by increased spending on capital expenditures.
Financing Activities.
−Removed: Cash used in financing activities decreased $11.4 million for the twenty-six weeks ended August 2, 2025, as compared to the twenty-six weeks ended August 3, 2024.
−Removed: This decrease in cash used in financing activities during the first twenty-six weeks of fiscal 2025 was driven by a decrease in the amount utilized to repurchase shares compared to the prior year.
+Added: Cash used in financing activitie s decreased $5.9 million for the thirty-nine weeks ended November 1, 2025, as compared to the thirty-nine weeks ended November 2, 2024.
+Added: Thi s decrease in cash used in financing activities during the first thirty-nine weeks of fiscal 2025 was driven by a decrease in the amount utilized to repurchase shares compared to the prior year.
Capital Resources:
We have a revolving credit and security agreement with PNC Bank, as agent, that provides for a secured revolving loan in aggregate principal of up to $25.0 million, subject to a borrowing base formula.
−Removed: As of August 2, 2025, borrowings under the agreement would bear interest at (a) a base rate determined under the agreement, or (b) the borrower's option, at a rate based on SOFR, plus in either case a margin based on average undrawn availability as determined in accordance with the agreement.
−Removed: As of August 2, 2025, our borrowing base was $25.0 million and the Company had no outstanding borrowings as of the end of the quarter.
+Added: As of November 1, 2025, borrowings under the agreement would bear interest at (a) a base rate determined under the agreement, or (b) the borrower's option, at a rate based on SOFR, plus in either case a margin based on average undrawn availability as determined in accordance with the agreement.
+Added: As of November 1, 2025, our borrowing base was $25.0 million and the Company had no outstanding borrowings as of the end of the quarter.
Most of our corporately-managed retail stores are located within shopping malls and all are operated under leases classified as operating leases.
12 unchanged sentences
If we cannot do so, our results of operations and financial condition could be harmed, and we may be required to record significant additional impairment charges.
−Removed: Capital spending through the twenty-six weeks ended August 2, 2025 totaled $6.3 million for information technology projects and new store openings, and we expect to spend approximately $20 to $25 million on capital expenditures in fiscal 2025 .
−Removed: Total inventory at quarter end was $81.8 million, an increase of $14.8 million or 22% from the end of the fiscal 2024 second quarter.
+Added: Capital spending through the thirty-nine weeks ended November 1, 2025 totaled $12.9 million for information technology projects and new store openings, and we expect to spend approximately $20 to $25 million on capital expenditures in fiscal 2025 .
+Added: Total inventory at quarter end was $83.3 million, an increase of $12.5 million or 18% from the end of the fiscal 2024 third quarter.
The increase in inventory was the result of additional tariff costs and accelerated purchases of core products that began in the second half of fiscal 2024 and continued into the first quarter of fiscal 2025 as part of the Company's tariff-mitigation plans.
1 unchanged sentence
We have various contractual or other obligations, including operating lease commitments and obligations under deferred compensation plans.
−Removed: As of August 2, 2025, we had purchase obligations totaling approximately $108.8 million, of whi ch $27.1 million are due in the next 12 months.
+Added: As of November 1, 2025, we had purchase obligations totaling approximately $119.7 million, of whi ch $27.4 million are due in the next 12 months.
We believe our operating cash flows are sufficient to meet our material cash requirements for at least the next 12 months.
−Removed: We utili zed $7.3 million in cash to repurchase 167,585 shares during the twenty-six weeks ended August 2, 2025 under our current September 2024 Stock Repurchase Program, compared to using $18.2 million in cash to repurchase 685,027 shares during the twenty-six weeks ended August 3, 2024 under our prior August 2022 Stock Repurchase Program.
+Added: We utili zed $17.4 million in cash to repurchase 336,041 shares during the thirty-nine weeks ended November 1, 2025under our current September 2024 Stock Repurchase Program, compared to using $23.0 million in cash to repurchase 832,944 shares during the thirty-nine weeks ended November 2, 2024 under our September 2024 Stock Repurchase plan and completed August 2022 program .
Off-Balance Sheet Arrangements
−Removed: The impact of inflation on the Company's business operations was seen throughout fiscal 2024, predominately through rising store labor costs.
−Removed: However, we continue to take mitigating actions, such as select strategic price increases on highly sought-after products and leveraging distribution costs.
−Removed: We expect the inflationary pressures experienced in fiscal 2024 to continue into fiscal 2025, specifically through wage increases and tariffs on inventory purchases.
−Removed: We continue to monitor the impact of inflation on our business operations on an ongoing basis and may need to adjust our prices further to mitigate the impacts of changes to the rate of inflation during 2025 or in future years.
−Removed: Future volatility of general price inflation and the impact of inflation on costs and availability of materials, costs for shipping and warehousing and other operational overhead could adversely affect our financial results.
−Removed: Inflationary pressures may be exacerbated by higher transportation costs due to war and other geopolitical conflicts, such as the current Russia/Ukraine conflict, tension between China and Taiwan, and the Israel-Hamas conflict.
+Added: Inflation continued to impact the Company’s operations during fiscal years 2024 and 2025, most notably through higher store labor costs and increased input prices.
+Added: We implemented certain mitigating actions such as further cost reductions and process efficiencies, in addition to selective strategic price adjustments.
+Added: We anticipate inflationary pressures to persist throughout fiscal 2025 and beyond, driven by wage growth, tariff and tariff-related costs that extend beyond inventory purchases to broader supply chain and other operational areas.
+Added: In August 2025, the U.S.
+Added: Court of Appeals for the Federal Circuit ruled that several tariffs imposed under the Trump Administration exceeded presidential authority and were therefore invalid, although the decision remains stayed pending U.S.
+Added: Supreme Court review.
+Added: This ruling introduces uncertainty regarding the scope and durability of current and future tariff measures.
+Added: Even if certain tariffs affecting our Company are ultimately invalidated, we may not be able to fully recover increased costs associated with product delivery and related services from international vendors.
+Added: We continue to monitor the impact of inflation on our business operations and may need to adjust pricing strategies as needed to offset cost increases during fiscal 2025 and beyond.
+Added: Fluctuations in general price inflation could negatively affect our financial results by adversely impacting material availability, shipping and warehousing expenses, and other operational overhead.
+Added: Inflationary pressures may be compounded by elevated transportation costs linked to geopolitical conflicts, including the Russia-Ukraine war, tensions between China and Taiwan, and the Israel-Hamas conflict.
We cannot provide an estimate or range of impact that such inflation may have on our future results of operations.
−Removed: However, if we are unable to recover the impact of these costs through price increases to our guests, or if consumer spending decreases as a result of inflation, our business, results of operations, financial condition and cash flows may be adversely affected.
−Removed: In addition, ongoing inflation in product costs may result in lower gross margin rates if we elect to maintain higher inventory reserves to mitigate anticipated higher costs.
+Added: However, failure to recover increased costs through pricing adjustments or a decline in consumer spending could negatively affect our business, results of operations, financial condition, and cash flows.
Critical Accounting Estimates
13 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.