While comparable store sales growth was expected to be in the range of 2% to 3%, the company is now expecting comparable store sales in the second quarter to decline in the mid-single digit range. The company now expects fiscal 2005 (52 weeks ended December 31, 2005) net income in the range of $25.1 million to $26.3 million, representing net income growth of 26% to 32% compared to fiscal 2004. Diluted shares are expected to be in the range of $1.24 to $1.30, and comparable store sales growth is now expected to be flat. Previous guidance provided on January 27 was $26.1 to $27.3 million, which has been updated to net income of $27.3 million to $28.5 million.

After the company released the news that sluggish sales would affect its second-quarter and full fiscal year earnings, shares of Build-a-Bear plummeted 23%.

Chairman and Chief Executive Maxine Clark blamed the below-expected sales in the second quarter on the early Easter holiday and change in school spring break dates. The company also underestimated the impact of appearing on Oprah in late February last year, which resulted in first quarter results coming in ahead of original plans and lagging second quarter results.