Greetings, and welcome to the Build-A-Bear Workshop second quarter 2026 earnings conference call. At this time, all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Gary Schnierow, Vice President, Investor Relations. Please go ahead. Thank you. Good morning, everyone, and welcome to Build-A-Bear's second quarter 2026 earnings conference call. With us today are Chris Hurt, Build-A-Bear's Chief Executive Officer, and Voin Todorovic, our Chief Financial Officer and Chief Administrative Officer. During this call, we will refer to forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the Risk Factors section. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our investor relations website. Now, I will turn the call over to Chris. Thank you, Gary, and good morning, everyone. I appreciate you joining us today for Build-A-Bear's second quarter fiscal 2026 earnings call. As we communicated earlier this year, we expected fiscal 2026 to be a tale of two halves, with more difficult comparisons impacting the first half, followed by less challenging comparisons and anticipated improved performance in the back half of the year. Although we continue to expect a stronger second half than the first, second quarter results fell short of our projections, driven mainly by continued traffic challenges due to the performance of our summer trend collection, in addition to macroeconomic conditions. As a result, we have moderated our direct-to-consumer expectations for the balance of the year. Together with our updated outlook for our commercial segment, we reduced our full-year guidance. Voin will discuss the updated guidance in more detail in his remarks. Second quarter was up against a particularly strong performance last year, when DTC revenue increased 11% and web demand increased 15%. These results were driven by a number of strong summer collections, including trend product with our innovative Fruit Stand assortment, exclusive licensed offerings such as the Sanrio Sweet Shop, and a selection of movie-related items, highlighted by the How to Train Your Dragon launch featuring a new Toothless, which through the years has proven to be one of our most successful movie characters. Following the success of summer 2025, we used this year's assortment to push even further into product innovation, including novel designs such as Slushie Plushie and Beary Goods. While these less customizable concepts did not resonate as strongly as anticipated and contributed to weaker performance than last year, the quarter also reinforced an important insight. Guests continue to respond positively to products that highlight Build-A-Bear's signature customization experience. For example, our dressable Chummy Shark, one of the key characters in our Make Your Own Summer collection, sold out during the quarter. Promise Pets, our own intellectual property, continues to be a meaningful growth platform, driving higher-than-average dollar per transaction due to strong attachment rates of clothing and accessories. These insights and learnings will help us strike a better balance between continued product innovation and the core elements of the Build-A-Bear experience that resonate most strongly with our guests. Even as DTC sales came in short of last year's record level, it's important to note they represented our second-highest second quarter DTC sales performance in the history of the company. Turning to the numbers. Second quarter revenue was $115.3 million, and pre-tax income was $11.6 million. For the first half of fiscal 2026, revenue was $240.6 million, pre-tax income was $35.5 million, and adjusted pre-tax income was $28.5 million, excluding the $7 million IEEPA tariff refund related to 2025. Importantly, while our second quarter performance and revised guidance reflect near-term pressures, we remain confident in the strength of our brand, our long-term strategy, and our ability to execute against the opportunities ahead. Notably, our Halloween launch delivered the highest non-fourth quarter sales week in the company's history and the third highest U.S. e-commerce sales week behind only Black Friday weeks of 2020 and 2025. While August remains part of the difficult comparison period, our third-quarter sales performance to date has improved over the first half. These early third-quarter results reinforce our view that guests continue to respond strongly to trend-right product offerings and beloved characters, such as our recently redesigned Harry Potter bear, that build on the customization and engagement inherent in the Build-A-Bear experience. With that as a backdrop, we remain focused on the four strategic pillars we have discussed over the past two quarters. One, drive organic growth. Two, location expansion. Three, wholesale and outbound brand licensing. Four, gifting and personalization. Together, these priorities are designed to evolve and extend the Build-A-Bear brand, including into large addressable markets beyond our traditional vertical retail channel. Our first pillar is organic growth. We must continue to drive our core business through trend-right products and compelling experiences while remaining true to what makes Build-A-Bear unique. Guests continue to value the creativity, self-expression, and connection that comes from building and personalizing their own furry friend. We remain focused on enhancing that experience across demographics and occasions. Just as importantly, our success has not been limited to core offerings. We have consistently demonstrated an ability to identify, create, and capitalize on powerful consumer trends, particularly those related to nostalgia, pop culture, collectibility, and the adult market. Products such as Spring Green Frog, Pink Axolotl, and Capybara began as trend-right offerings, but have since become enduring parts of our assortment, illustrating our ability to transform emerging trends into evergreen products while maintaining the core elements of the Build-A-Bear experience. The Halloween season has become another compelling example of our ability to identify, create, and capitalize on consumer trends, while also representing an increasingly important growth opportunity for the brand. This year's assortment featured trend-right products, including a reintroduction of our fan favorite Posable Bat, a new Jumping Spider, and Mini Beans of those respective products. All of which help drive the record-breaking launch week of the seasonal collection. As a reminder, these seasonal and trend-driven launches often generate significant user-created content, helping drive engagement, traffic, and ultimately sales. As we approach our 30th anniversary in 2027, we will kick off a year-long celebration commemorating three decades of memory-making experiences. Throughout the coming year, we plan to continue to reintroduce some of our most popular, nostalgic furry friends from our vault, reconnecting guests and fans with the Build-A-Bear characters from the past. As part of that celebration, beginning in October, we will also introduce a special version of our beloved mascot, Bearemy, one of our most recognizable characters, both to longtime fans as well as to a new generation of guests. We also continue to see meaningful opportunities within licensed products and collector-driven engagement. Today, we launch our new Sanrio Halloween collection, highlighted by the popular Lloromannic duo, Berry and Cherry. This launch establishes Build-A-Bear as the first retailer in the U.S., Canada, and the U.K. to offer Lloromannic in plush form, further strengthening our position as a destination for sought-after licensed characters for all ages. Looking ahead, we continue to amplify the Build-A-Bear brand by leveraging the powerful combination of nostalgia, licensing, and innovation that differentiates us in the marketplace. Our upcoming collaboration with McDonald's is a great example. Later this year, McDonald's will begin rolling out Build-A-Bear-themed Happy Meal in the United Kingdom, bringing together two iconic brands in a way that introduces Build-A-Bear to new customers while reinforcing engagement with existing fans. We believe this collaboration represents a unique opportunity to increase brand awareness, create cultural relevance, and introduce Build-A-Bear to new customers through one of the world's most recognizable brands. Turning to our second pillar, location expansion. During the second quarter, we added five net new locations, bringing total net new openings to 12 through the first half of physical 2026 and ending the second quarter with 674 locations across 37 countries. We remain on track to achieve our objective of opening at least 50 net new locations this year, with the majority expected to be international partner-operated locations. This expansion reflects the global appeal of the Build-A-Bear brand and enables us to extend our reach efficiently into new markets. Turning to the third pillar, we remain committed to extending the reach of the Build-A-Bear brand through wholesale and licensing opportunities. As a reminder, our wholesale business remains largely program-driven and opportunistic as we continue to make investments to grow our traditional wholesale channel and do not yet have broad replenishment capabilities. We are disappointed that this business has not developed at the pace we anticipated. We were unable to repeat the multimillion-dollar Walmart program, and other wholesale opportunities have progressed more slowly than expected. However, our experience with Walmart, namely the successful sell-through of our Build-A-Bear branded non-licensed products, demonstrated that a brand can extend into large-scale third-party distribution and reach consumers beyond our traditional channel. We continue to view wholesale and outbound licensing as attractive opportunities to further leverage the strength of our intellectual property, generate incremental profitable revenue, and extend the Build-A-Bear brand to new customers. Our fourth pillar focuses on enhancing gifting and personalization. Our new highly immersive, multi-level location at Icon Park in Orlando, which remains on track to open in the third quarter, will showcase an elevated expression of the Build-A-Bear experience and will debut a number of premium gifting and personalizations offerings. Among them are our first-ever design studio, a high-touch, appointment-based experience where guests work one-on-one with a design consultant to create a truly one-of-a-kind furry friend by selecting elements such as the animal, fur type, eye color, and again, creating a truly one-of-a-kind design. A new Personalize Me station offering furry friend embroidery and clothing customization that creates lasting keepsakes. Enhancements to our Hear Me station that highlights our record your voice functionality, which is a critical differentiator for our brand. A new Scent Bar, where guests can personalize a scent to be added to their furry friend. Build-A-Bear Bake Shop, featuring guided dessert experiences that extend the creativity and personalization of the workshop, while providing guests with a unique way to celebrate special occasions. These are just some of the many features we are introducing to create a highly differentiated experience at our new location at Icon Park, allowing us to showcase the full breadth of the Build-A-Bear brand while creating new opportunities for personalization, gifting, celebration, and gift engagement in a premier tourism destination. We intend to apply relevant successes and learnings from our Icon Park location to evolve other offerings within our store portfolio. In summary, our first half performance fell below our expectations. We have revised our fiscal 2026 outlook. Importantly, the early response to our Halloween launch and recent product introductions reinforces our confidence in the enduring strength of the Build-A-Bear brand, and we remain focused on our strategic growth initiatives. With that, I will turn the call over to Voin to review our financial results and updated outlook in greater detail. Thank you, Chris, and good morning, everyone. I will discuss the quarterly results and then share more about our updated full-year outlook. As we shared on our last call, we expected a year-over-year decline this quarter. However, results fell short of our projections, primarily due to underperformance from summer trend products as well as ongoing macroeconomic challenges, both contributing to weaker traffic. Specifically, for the second quarter, total revenues were $115.3 million, a decrease of 7.2%, mainly driven by a decline in our direct-to-consumer business. In the direct-to-consumer segment, transactions declined primarily due to lower store traffic. Average unit retail also decreased, partially offset by an increase in units per transaction. Domestic store traffic was down and lagged broader U.S. traffic trends. Last year's second quarter benefited from particularly strong traffic and robust demand for new collections, especially among teens and adults. Despite the year-over-year decline versus second quarter, total direct-to-consumer revenue grew 3% versus 2024. E-commerce demand declined 15.6% compared to last year as web traffic remained soft. However, demand improved sequentially from the first quarter, reflecting progress against our initiatives to strengthen the digital business. While year-to-date performance remained below last year, the team continues to make progress toward returning this channel to growth. Gross margin for the quarter was 54.2%, a decrease of 340 basis points compared to last year, reflecting occupancy cost deleverage and increased promotional activity. SG&A expenses were $51.4 million or 44.6% of total revenues, compared to 45.4% last year. The 80 basis point decrease in SG&A was driven mainly by lower incentive compensation expense. Our pre-tax income was $11.6 million compared to $15.3 million last year, a decline of 24.1%. Turning to the balance sheet. At the second quarter end, our cash balance was $14 million, representing a $25.1 million decrease versus last year, mainly driven by a higher level of stock repurchases compared to the same timeframe last year, and the timing of capital expenditure activity that was more front-loaded in this year to support our strategic initiatives. Inventory at quarter end was $81.1 million, a decrease of $600,000 compared to the same period last year. The company remains comfortable with the level and composition of its inventory, and we currently expect to finish the year at or below last year's level. We continue to deliver capital to shareholders as we returned $8.5 million to shareholders during the quarter. Over the past 12 months, we have reduced our share count by more than 5%, and we currently have $43.2 million remaining under the board-authorized $100 million share repurchase program. Turning to the outlook. We reduced our revenue and pre-tax income guidance as well as our expectations for commercial segment growth. We continue to expect the addition of at least 50 net new experience locations, most of which will be operated by our international partners. We have lowered our revenue guidance to a range of $500 million-$525 million. Down from our previous range of $530 million-$550 million. This reflects second quarter results below our expectations, continuing traffic uncertainty, and no longer expecting to anniversary our multimillion-dollar Walmart order from last year. For the second half, we expect third quarter performance to improve sequentially, supported by a more favorable year-over-year comparison. As Chris noted, we are seeing positive momentum in our stores and e-com at the beginning of our third quarter, but our performance is still slightly below our prior expectations. Looking ahead, as is typical, we expect the fourth quarter to be our strongest quarter, even with an anticipated year-over-year decline in commercial segment revenue. Moving to our updated pre-tax income guidance. We have lowered our pre-tax income guidance to a range of $60 million-$68 million, down from our previous range of $72 million-$78 million. Excluding the approximately $7 million of the tariff refund related to prior year costs, we expect adjusted pre-tax income to be in the range of $53 million-$61 million. The outlook also reflects $10 million-$11 million of ongoing traffic tariffs and related costs based on the current increased tariff rate of 12.5%, as well as approximately $3 million in longer-term investments. In closing, we continue to see opportunities to expand our global footprint and to further develop our wholesale business. Even with our updated guidance, we expect 2026 to be one of the stronger years in Build-A-Bear history, and we are focused on working to build teams and strengthen our foundation for fiscal 2027 and beyond. With that, we would like to thank our store and warehouse associates, along with our corporate team members and partners, for their dedication to the Build-A-Bear brand as we continue to work toward delivering on our strategic mission to add a little bit more heart to life around the world. This concludes our prepared remarks. We will now turn the call back over to the operator for questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull for questions. Our first question today will come from Chris Moore with CJS Securities. Please proceed with your question. Hey, good morning, guys. Thank you for taking a couple. Yeah, maybe we will start on the commercial side. You lost four partners. Maybe talk a little bit about what happened there and what is behind the updated guide, assuming no commercial growth in 2026. Yeah, thanks, Chris, and good morning. From our commercial segment, we had guided to a +20% for the full-year. With the reduction of the Walmart multimillion dollar that we now do not anticipate that that will happen in the back half of the year, that was a reduction in that guidance. We do anticipate to still be close to our original guidance with our commercial segment with our international partners and our domestic partners. There is certainly a repositioning of some of those store locations, and we still have our guidance to open at least 50 net new locations this year. Got you. With respect to Walmart, it sounded like things were going pretty well there. Any other details you can provide on that front? Yeah. As we talked about, for the Walmart last year, that was an opportunistic opportunity for us with a direct program going into those locations. This year, we were unable to anniversary that particular program, and there has been some slowness in anticipation of other wholesale opportunities within the back half. We are continuing to work on those wholesale systems to be able to provide replenishment and to be able to work into those as we move forward. We still see this as an important opportunity and growth strategy for Build-A-Bear. As we talked about with that Walmart last year, we did see a strong sell-through with the Build-A-Bear branded license products, and we believe that that is the opportunity for us in the future to be able to take advantage of these opportunistic wholesale opportunities. Got it, that's helpful. Just in thinking in terms of wild cards, looking at what's going on in Iran and the potential China response, is that one of the bigger potential negative wild cards if U.S. really presses China reacts unfavorably? Is there a potential there from a kind of Chinese tariff perspective that could have a meaningful negative impact on you guys later this year or 2027? I'll take that, Chris. Thank you for the question. It is very challenging to answer some of those things clearly. The geopolitical and macro environment do impact us in some cases more or less. Tariffs, even this quarter, have, or in the year, have changed from 10%, what we assumed, to 12.5%. Again, that's something that's outside of our control, and if and when it will happen, if it happens at all. We continue to stay focused on what we can control. We are working with our partners around the world, really to find ways to mitigate some of those things and strengthen our supply chain to support our business across the globe. Clearly, some of those challenges, especially if there is a hike in oil prices, will impact us directly or indirectly, but it is really challenging to think about what those impacts are. I n the past, we have a strong history and good history of finding ways to mitigate some of the challenges during those times of these unusual spikes, if you will. Fair enough, I will leave it there. Thank you, guys. Thank you. And our next question, we will hear from Eric Beder with SCC Research. Please go ahead. Good morning. Good morning, Eric. Morning. In terms of the consumer, what are you seeing in terms of their purchasing, in terms of imperative to purchase, and are they trading down for some of the other pieces now that you have the Mini Beans and some other pieces? Is that part of the issue, too? Thanks for the question, Eric. As you know, we stated our second quarter performance was below our expectations, and we've seen a continuation of persistent traffic challenges throughout the quarter. We have seen, as we move into the first half of the third quarter, as I talked about with our Halloween launch, we have seen a change into those traffic patterns to the positive, and we've seen a change in our sales performance. While slightly still below our expectations, that performance of our Halloween product really demonstrates the ability of people to come in and go through the full experience. We are seeing our four levers as far as DPT be above last year, and we've been able to take people through that, as we said, that entire experience. Those items on our Halloween collection are more back to our core items, where people are able to dress those, be able to go through the full experience. That has given us the outlook of the third quarter as we move through. Although August is still a part of our difficult comparison period, we see this as a positive sign moving forward, but again, slightly below our prior expectations. Great. When you look at, are the inventories somewhat distorted? Are the inventory comparisons here somewhat also distorted here in Q2 by the tariffs being now part of the cost of goods, and last year they weren't? How should we think about the inventories going forward? I know you said at the end of the year, it's going to be flattish. Is that because from general, A, you do a good job, but B, it also has to do with the tariff kind of normalizing, too? I'll try to answer that, Eric. Tariffs have been really We've seen significant fluctuations since they were implemented, at least for our business, in April of last year. They fluctuated from 50% to 20% down to 10%, and again, they were increased to 12.5% recently. In addition to this really complicated story, we got some refunds from IEEPA tariffs that were enforced last year. That went through our P&L mostly in Q1, and portion of that was in Q2. W e were really in this situation during the Q2 that our tariff impact with the lower rates this year versus last year, and last year, they were starting late in the second quarter for us. We had about a $1 million impact in both quarters, so that wasn't that much of an impact this time around. As we go for the back half of the year and we go for assuming they stay at 12.5%, clearly that will have some smaller impact on our pre-tax projection for the remainder of the year that's reflected in our guidance. W e should see some benefit from the overall total inventory as the rate would be lower compared where the rate was at the end of last year. Got it. Okay, last question here. When you look at last year, the spring launch was a huge positive. This year wasn't as strong. What are the takeaways from that as you look forward to what you're going to do for the next spring, summer launch for that going forward? Thank you. Yeah, thanks, Eric. You're right. We talked about that. We were going up against very high comparisons in the second quarter for last year based on an innovation that I talked about of our Fruit Stand assortment, along with a licensed product of our Sanrio Sweet Shop. That drove us after five years of record-breaking results over 20 quarters, to take the summer as an opportunity to push our innovation, and we did do that. We pushed our innovation with a line of Slushie Plushies, Beary Goods, and even Mashimals in that time period. Summer is a time when you would want to push that envelope. Other times of the season, there are products that consumers are really looking for, whether that's Valentine, Easter, Halloween, as we've seen success, and holiday. Summer is when we traditionally push that innovation. The reality is, we pushed it too far. That product did not resonate as well with our consumers. It wasn't as dressable. It didn't go through the full customization experience. As a result, we saw weaker results from that product line. As we move into Halloween, it's more into our core line that resonates with our guests, that gives them that full customization experience. We centered on a fan favorite from last year with the Posable Bat, introducing a new trend item in there with the spider. Both of those able to be dressable, stuffable, be able to record your voice in, along with others in that line. That's what we see going forward. Our holiday collections are in that more core item, along with licensed characters and trend products. We believe that that going forward. We will still push trend. We have been very good at being able to get on emerging trends and look at those. I n the summer line, we did push it too far, in our opinion, and it did not resonate with our guests. Okay. Good luck on the back half. Thank you. Next, I'll move to Keegan Cox with D.A. Davidson. Please go ahead. Yeah, thanks for the question. I kind of wanted to get in on the commercial stores a little bit more, maybe just a follow-up. I know last quarter you talked about commercial partners closing smaller footprints to open larger stores. I was wondering if that dynamic played out in the four closures we saw this quarter or if anything has changed on that front? Yeah, thanks, Keegan. Again, we still expect to open at least 50 net new locations this year, and predominantly those being our partner-operated stores. That did play out. There are partners that first opened in these smaller shop-in-shops and now have opened standalone stores. There is timing that is happening within that. Historically, we've had very small percent of store closures, and our partners are repositioning as they understand their business and they understand where these locations should be in the country and in the cities. We are seeing some repositioning. Again, the majority of our openings will be in the back half of the year, and those will be with our international partners. It's actually, we're very early into our international expansion. Over this two-year period, we've seen this growth and doubled the number of countries that we're in. With new partners, they are looking at where the best opportunities are for them, as they have some test and learn abilities, and to be able to reposition their stores and now some of them move into higher volume standalone locations. Got it. My follow-up is on the gross margins. I know part of the decline was occupancy deleverage, but you did mention promotional activity. I just wanted to kind of get an idea of what items you had to promote, sounds like the summer trend? Then, if you're seeing any trade-down aspects? So, thank you for. Yes, Keegan. Yes. You are right about our margin was down and some of that's caused by the increased promotional activity. Really, that was more focused to drive our move through some of the summer trend product that missed our expectations. A s Chris pointed out, we had strength in our dollar per transaction. We still are. I mentioned our units per transaction were up. S ome of those things are helping out. B ecause of some of those, for us, heavier promotions, again, we still have very low discount rates that impacted our average unit retail, but still, dollar per transactions were up. Got it. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. We will next move to Greg Gibas with Northland Securities. Please go ahead. Hey, good morning, Chris and Voin. Thanks for taking the question. Good morning. Maybe to just follow up on your prepared remarks. I think you said early Q3 results have improved over the first half. Can you maybe clarify what metrics you are referring to and maybe what you attribute that to? Is that simply the Halloween launch versus the summer products? Any color there would be helpful. Yeah, Greg, thank you. Yes, as we talked about, we have seen some sequential improvement in both traffic and both in our early sales reads with the Halloween launch. We are going up against, as we talked about, early comparisons in the back half of the year. However, August is still part of that difficult comparison period. T hese improvements in both our traffic and both in our sales performance are encouraging as we move forward into the back half of the year. This is, as I talked about moving into that Halloween, two years ago, we brought our Halloween product forward, this launch forward, and we saw great success. We did that again last year. W e are going up against two years of very successful Halloween launches, so, to be able to come across that in the third year, is encouraging as we move forward. Y es, both a positivity in traffic and a sales increase, while not to our prior expectations, it has increased in both of those areas. Got it. That is great to hear. To maybe quickly follow up on the Walmart program, not repeating there, what is your understanding of the reasoning there, and are you able to quantify its impact to guidance? I will start with that. That was a multimillion-dollar deal that we had with Walmart, and it did have an impact on guidance because we were not able to anniversary that opportunistic program from last year. A t the same time, some of the other initiatives have not panned out at the pace that we anticipated them. W hen you think about that, we said our total commercial segment would grow at least 20%. Now we are bringing it down to basically being flat. Pretty much all of that decline, it is tied back to our traditional wholesale miss. As we think about the context of guidance, we also did miss our expectation in Q2 and driven again by that summer trend product performance and persistent traffic pressures. As we talked about the rest of the year, even though we are seeing some positive momentum and we are positive, we are slightly behind our original expectations. W e are cautiously optimistic about the back half of the year, and that is reflected in our guidance. Okay, that is helpful. Thanks, guys. There are no further questions at this time. I would like to turn the floor back to Chris Hurt for closing remarks. Thank you for joining us today and your interest in Build-A-Bear. We appreciate your continued support and look forward to speaking with you again next quarter. Have a great day. Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.