Greetings, and welcome to the Build-A-Bear Workshop First Quarter 2023 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Schnierow, Vice President of Investor Relations and Corporate Finance. Thank you, sir. You may begin.

Good morning, and thank you for joining us. I'm excited to speak to you on my first earnings call as the Vice President of Investor Relations and Corporate Finance for Build-A-Bear. With me today are Sharon Price John, CEO; and Voin Todorovic, CFO. For today's call, Sharon will begin with a discussion of our first quarter and update the progress we have made on our key priorities. After, Voin will review the financials in more detail and provide our guidance. We will then open the call to take your questions. We ask that you limit your questions to one question and one follow-up. This way, we can get to everyone's questions during this one hour call. Feel free to requeue if you have further questions. Members of the media who may be on our call today should contact us after this conference call with your questions. Please note, the call is being recorded and broadcast live via the Internet. The earnings release is available on the Investor Relations portion of our corporate website. A replay of both our call and webcast will be available later today on the IR site. I will remind everyone that forward-looking statements are inherently subject to risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including those set forth in the Risk Factors section in the company's annual report on Form 10-K. We undertake no obligation to revise any forward-looking statements unless required by law. Also during this call, we may discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items, which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP financial measures should not be considered in isolation or a substitute for results prepared in accordance with GAAP. If non-GAAP measures are presented, you will find information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in the company's earnings release. And now I would like to turn the call over to Sharon.

Thank you, Gary. Good morning, and thank you for joining us for Build-A-Bear's First Quarter 2023 Earnings Call. I'm pleased to share that the year has gotten off to a good start. Following our record-setting results for both fiscal full year 2021 and 2022, we have again posted record results for the first quarter of 2023, and we are reiterating our annual guidance. Before I provide more details regarding our first quarter financial results, I'd like to reflect on some of the reasons why Build-A-Bear Workshop has and continues to resonate with guests of all ages, as greater than 95% aided brand awareness and more than 90% of cold moms agree that Build-A-Bear is a fun experience for a child. First, Build-A-Bear's mission is to add a little more heart to life. And over the past quarter century, we have delivered on that mission in a variety of ways, especially through our well-known store experience. These interactive engagements enable our guests to tailor their toys and furry friends with outfits, accessories, and sounds as well as name their new friends and receive a birth certificate. Most importantly, during the stuffing process, they bond with their new furry friend by giving it a heart during our memorable part ceremony. This memory-making experience often sets the stage for a lifetime relationship with our brands that includes additional visits, social media posts, and membership in our loyalty program. As an example, I'd like to quickly share some recent feedback that is indicative of the relationships we create with our valued guests, like this email: We took our twin nieces to a Build-A-Bear today to celebrate their birthdays. I just wanted to relay how much fun they had, thanks to the wonderful and caring staff. Watching Lidia help them stuff and bring their bears to life was such a treat. Or this Facebook post from just a couple of weeks ago: Kudos to the staff for being so sweet and patient with Millie. It was our first time at the store, and creating her own furry friend was such an experience to watch, and she loved every minute of it. The Build-A-Bear heart ceremony was awesome. Each day, we work hard to ensure that our guests' unique Build-A-Bear experience is at the core of our business model and we take pride in the fact that our nearly 500 corporately managed, partner-managed, and international franchise locations have enabled our guests through their creativity and self-expression to make these powerful one-to-one memorable moments with more than 225 million furry friends made over the past 25 years. Many of our guests have grown up with our brand and they now often wish for their own children to experience the magic of Build-A-Bear too. Additionally, in growing numbers, our older consumers return to Build-A-Bear Workshop or visit our e-commerce site and not only create additional moments for themselves but also create gifts for others. Between our stores and our website, our guests of all ages are creating wonderful joyful experiences and memories at Build-A-Bear. With teens and adults now representing 40% of our sales, we are a brand that multiple generations love and trust. Now with that backdrop, first quarter total revenues topped last year's previous record. We delivered growth across all geographies in our direct-to-consumer segment. We posted growth in our commercial segment, which includes our asset-light partner-operated model, adding 8 stores over the past year, and we posted growth in our international franchising segment. Our first quarter earnings per share of $0.98 represented the highest for a first quarter in Build-A-Bear's history. Recall our direct-to-consumer segment is made up of our corporately managed stores and our e-commerce site. Overall, DTC revenue increased for the quarter, driven by an increase in revenues at our stores, partially offset by a decline in our web demand. We experienced greater volatility in web demand than expected, largely due to continued testing and optimization of the new website and product launch shifts. Web demand is generally more affected by product launches and calendar timing than our workshop, where an estimated 80% of store trips are planned. Digital demand has rebounded with sales increasing at nearly double-digit rates thus far for the second quarter, driven by recent product launches, including Hello Kitty, which will be followed by more launches associated with products tied to key feature films. Also, while we expect web demand to ebb and flow, we are confident in continued e-commerce growth, and our expectation of positive sales growth across segments this year. I would also like to highlight our ongoing capital return to shareholders through special dividends and stock repurchases. Over the past 2 years, we've paid 2 special dividends totaling $2.75 per share, and we have repurchased 2.1 million shares. We believe this capital return effort, along with our strategic initiatives, demonstrates confidence in our future prospects. With record first quarter performance and positive second quarter-to-date trends, we are reiterating the annual guidance provided earlier this year for total revenues to increase in the range of 5% to 7% compared to fiscal 2022, with growth in all 3 of our operating segments and pretax income growth of 10% to 15%, both of which reflect the added benefit of the 53rd week. We continue to expect accelerating sales trends as the year progresses, driven by the phasing of new product launches and other growth initiatives. This includes 20 to 30 new stores inclusive of the Kalahari Resorts openings in tourist locations that were announced in a press release this morning. As well as new marketing and media introductions, including the Build-A-Bear documentary and Merry Mission movies later this year. We are particularly excited about these 2 film releases as they represent Build-A-Bear's continued expansion into content creation, which includes books, through our recently announced relationship with Macmillan Publishing, and digital initiatives, which includes the launch of our Roblox Tycoon game that has more than 9 million users. Specifically, the documentary entitled 'Unstuffed, a Build-A-Bear story' is expected to further enhance the brand's iconic pop culture status by exploring the heartfelt journey of Build-A-Bear's first 25 years. Award-winning Director Taylor Morton has set out to answer the question: What is it about Build-A-Bear that resonates with so many people? And the second film slated for release this holiday season is our first animated feature highlighting Glisten and the Merry Mission based on our successful seasonal collection that was originally launched in 2014. Since its introduction, our Merry Mission product line, which is available only a few weeks each year, has generated over $100 million in revenue, with our Magical Snow Deer at Glisten often being the top item for our holiday season. This story centers on the belief in the spirit of Christmas and our heroine Glisten, who works with Santa and other reindeer to make sure there are enough toys for everyone on the Night before Christmas. In closing, I would like to announce that Gary Schnierow has recently joined the company as our Vice President of Investor Relations and Corporate Finance. Gary brings over 2 decades of experience analyzing public companies as an equity research analyst and portfolio manager and welcomes the opportunity to be a valuable resource for both existing and potential investors. I would also like to thank all the Build-A-Bear associates and partners for their efforts this quarter as we work together to continue to add a little more heart to life while focusing on achieving yet another record-setting year and continuing to return value to our shareholders. Before I turn the call over to Voin to review our financial results in more detail, I would also like to thank the Axiom Space Mission for adding our very GiGi the Bear to its space crew as its zero gravity indicator for their SpaceX Falcon Rocket. With over 500 million PR impressions since the rocket launch this past week, it's one small step for GiGi, but one giant leap for bear-kind. Voin.

Thanks, Sharon, and good morning, everyone. We are pleased to speak with you today and share our solid start to the year. We achieved best-ever results across key financial metrics for the first quarter. This performance was highlighted by increased revenue, expansion in gross profit margin and growth in pretax income, which combined with share repurchase activity led to a 10% rise in first quarter diluted EPS. We attribute our ability to report ongoing positive results in a dynamic environment to the increasing resonance and strength of our brand and the successful execution of our strategy with a business model that delivers strong cash flow. After our planned investment in growth, including retail store expansion, which has benefited from our capital-light partner-operated retail model, we continue to return capital to our shareholders. Year-to-date, we returned $28.6 million in cash to shareholders through dividends and share repurchases. Over the past 6 quarters, we have returned $77 million of capital to our shareholders. Turning to a more detailed review of the first quarter. Total revenues were $120.1 million, including the negative impact of $1.3 million of currency exchange, compared to $117.7 million in the fiscal 2022 first quarter. Net retail sales were $112.1 million compared to $112.9 million in the fiscal 2022 first quarter. Adjusted for the negative currency exchange, store sales increased, while e-commerce demand declined in the period. Store sales increased across all geographies. Overall, for the quarter, sales were driven by an increase in traffic plus pricing, offset by product mix. For our corporately managed stores, year-over-year comparisons became more challenging in late March and April, but have since rebounded in May. Because of the noise and results over the past couple of years from COVID and calendar shifts, when we look at the monthly cadence versus 2019, monthly comparisons are much more consistent. For e-commerce, there was also a bit of noise in the results, as web demand was down 19.6% for the quarter, impacted by the timing and expected strength of product launches compared to last year. In fact, as new products launched in Q2, we have returned to double-digit positive e-commerce demand on a quarter-to-date basis. Based on this year's product launch schedule compared with last year, we continue to expect web growth on a full-year basis. I would also note that when viewed against the first quarter of 2019, web demand grew nearly 150%. Commercial revenues, which primarily represent wholesale sales to our partner operators and international franchise revenues, rose a combined 67% versus the prior year. Gross profit margin was 54.1%, an expansion of 160 basis points compared to last year, driven by lower freight costs as expected, plus leverage of distribution costs. SG&A expenses were $45.6 million, or 38% of total revenues, compared to $43.6 million, or 37% of total revenues in the 2022 first quarter. The $2 million increase in SG&A was driven by planned investment in talent and marketing to support future growth and, to a lesser extent, reflects inflation in store labor costs. Higher gross profit dollars more than offset the increase in SG&A and led to pretax income growth of $1.2 million to $19.4 million, with pretax margin expanding 60 basis points to 16.1% of total revenues compared to pretax income of $18.2 million or 15.5% of total revenues in the first quarter last year. Income tax expense was $4.7 million, with an effective tax rate of 24.5%, compared to income tax expense of $4 million, with an effective tax rate of 22% in the fiscal 2022 first quarter. As a result, net income was $14.6 million, or $0.98 per diluted share, versus net income of $14.2 million or $0.89 per diluted share in the fiscal 2022 first quarter, which is a 10% increase in EPS year-over-year. And EBITDA increased to $22.4 million, which is a record level for the first quarter. Turning to the balance sheet. At the quarter end, we had cash and cash equivalents of $32.8 million compared to $26.1 million at the end of the first quarter last year. Our record business performance over the last 12 months drove strong cash generation, and our quarter end cash position reflects the impact of dividend payments and share repurchases as we continue to return capital to our shareholders. Inventory at quarter end was $66.5 million, declining $10.9 million, or 14.1%, from the end of the first quarter last year and in line with our expectations. Keep in mind, last year's quarter end inventory was intentionally elevated to avoid potential supply chain disruptions. We remain comfortable with the level and composition of our inventory as we begin the second quarter. As it relates to our outlook, we are reaffirming our guidance for fiscal 2023. While our fiscal 2023 is a 53-week year and compares to a 52-week year in fiscal 2022, we expect to deliver growth in total revenues and pretax profit versus the prior year, exclusive of the projected benefit of the 53rd week. For reference, the additional week, which will be reflected in our fourth quarter, is estimated to be $7 million in total revenues with approximately 35% flow-through to EBITDA. For fiscal 2023, we continue to expect total revenues to increase in the range of 5% to 7% compared to fiscal 2022, including expansion in all 3 operating segments. Pretax income growth of 10% to 15% compared to fiscal 2022, surpassing last year's record high. To open 20 to 30 experience locations through a combination of partner and corporately operated business models with the majority planned for the second half of the year. Capital expenditures in the range of $15 million to $20 million, depreciation and amortization of $13 million to $14 million, and tax rate to approximate 25%, excluding discrete items. As we begin the second quarter, we recognize that the macro environment remains uncertain. That said, we believe we remain well positioned to achieve fiscal 2023 revenue and pretax income ahead of the record set last year and in line with our guidance. Our guidance considers various factors ranging from anticipated ongoing inflationary pressures to the expected benefit of reduced freight costs. Additionally, we note that our outlook assumes no further material changes in the operations of our supply chain, including the ability to receive and ship products in a timely manner, the macroeconomic and geopolitical environment, or relevant foreign currency exchange rates. In closing, we are pleased to begin the year with solid performance. We believe our proven track record, the significant growth opportunities we see ahead of the Quarter business, and the agility and discipline with which we have executed has positioned us to deliver on our near, long, and long-term objectives. I would like to thank all of our store and warehouse associates as well as corporate team members who are contributing to our record results and their continued efforts, which has us positioned for another record-breaking year in 2023. We look forward to sharing progress with you as we move through the year and seeing many of you at upcoming investor conferences. This concludes our prepared remarks, and we will now turn the call back over to the operator for questions.

Our first question comes from Steve Silver with Argus Research.

Congratulations on the record results for the first quarter. Voin, in your remarks, you mentioned being comfortable with the inventory position entering Q2. Just hoping you could provide a little more color just in terms of how we should expect inventories to progress over the course of the year, given all the investments that the company is making in terms of content and new expected product launches over the rest of the year?

Sure. Thanks, Steve. Thanks for the nice words. To answer your question, we are definitely feeling good about inventory and the composition of inventories we are starting in the second quarter. As I mentioned in our prepared remarks, there was some noise last year as it relates to inventory flow as we were pulling forward inventory buys to really avoid potential disruptions caused by COVID and supply chain challenges that we were facing in late '21 and early in '22. So this year, we expect inventory flow to be more normalized in line with what we experienced during the high footfall before COVID. One thing that I do want to point out, as we continue to grow our wholesale business and support our partners in some of those relationships, our inventory flow for them, as we sell to them on a wholesale basis, may be a little bit different. And we need to have inventory on hand to support their replenishment. So as we think probably on a full-year basis by year-end, I would still expect to finish the year at an inventory level below last year's level.

Great. That's helpful. And congratulations again.

It seems there are no more questions at this moment. I would now like to hand it back to management for their closing remarks.

Thank you for joining us today, and we look forward to updating you on our progress for the year with our next call for second quarter results.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.