Key Takeaways Capri posted Q4 adjusted EPS of 22 cents, beating estimates and improving year over year.CPRI sees FY27 low-single-digit revenue growth and nearly 40% EPS growth ahead.Jimmy Choo revenues rose 5.3% in Q4, while Michael Kors showed improving retail trends. Capri Holdings Limited (CPRI - Free Report) delivered fourth-quarter fiscal 2026 results, with revenues missing the Zacks Consensus Estimate and declining year over year. However, earnings surpassed the consensus estimate and improved significantly from the prior-year quarter.
Management highlighted that strategic initiatives introduced last year are gaining traction, with improving trends visible across both Michael Kors and Jimmy Choo. The company noted that actions taken to strengthen product innovation, brand desirability and consumer engagement are resonating well with consumers, providing early validation of its transformation efforts. Capri Holdings also emphasized that fiscal 2026 was focused on stabilizing the business and building a stronger foundation for long-term growth.
Looking ahead, management expressed confidence in returning to revenue and earnings growth in fiscal 2027, projecting low-single-digit revenue growth and nearly 40% earnings-per-share growth. Longer term, the company aims to grow Michael Kors revenues to $4 billion and Jimmy Choo revenues to $800 million while significantly improving profitability and delivering sustainable long-term shareholder value.
More on Capri Holdings’ Q4 ResultsCapri Holdings reported adjusted earnings of 22 cents per share for the fourth quarter, which surpassed the Zacks Consensus Estimate of 11 cents. The bottom line improved significantly from an adjusted loss of $4.55 per share reported in the year-ago period. On a reported basis, the company posted a loss of one cent per share compared with a loss of $4.90 in the prior-year quarter.
Total revenues came in at $796 million, missing the Zacks Consensus Estimate of $804 million. The top line declined 3.7% year over year on a reported basis and 7% on a constant-currency basis.
By geography, The Americas remained the largest region but was also the main drag, with revenues of $433 million compared with $493 million in the year-ago quarter. EMEA improved to $246 million from $223 million, while Asia edged up to $117 million from $111 million, partially offsetting softness in the Americas.
Gross profit increased to $516 million from $495 million in the year-ago quarter. Gross margin expanded 490 basis points to 64.8%, aided by a $40 million reduction in the cost of goods sold tied to estimated IEEPA tariff refunds.
Operating loss narrowed to $27 million from $57 million a year ago. On an adjusted basis, operating loss improved to $1 million from $15 million in the prior-year quarter, with adjusted operating margin improving to negative 0.1% from negative 1.8% a year ago.
CPRI’s Q4 Revenue Insights by SegmentsMichael Kors generated revenues of $656 million, down 5.5% year over year on a reported basis and 8.4% on a constant-currency basis. This missed the Zacks Consensus Estimate of $666 million. The brand experienced sequential improvement in retail trends, with full-price retail channel comparable sales increasing across all regions. Total retail channel average unit retails (AURs) increased by a mid-single-digit percentage, while wholesale sales at the point of sale improved to approximately flat compared with the prior year.
Gross margin expanded to 64.6%, benefiting from an estimated receivable related to IEEPA tariff refunds. Operating income increased to $57 million from $32 million a year ago, while operating margin expanded to 8.7% from 4.6% in the prior-year quarter.
Jimmy Choo delivered a solid performance, with revenues increasing 5.3% year over year to $140 million on a reported basis and remaining flat on a constant-currency basis. This surpassed the Zacks Consensus Estimate of $138 million. Retail sales increased by a mid-single-digit percentage, with sequential improvement across all regions, while wholesale point-of-sale trends also improved sequentially. Gross margin came in at 65.7%. However, the brand reported an operating loss of $20 million compared with an operating loss of $10 million in the prior-year quarter.
Capri Holdings’ Financial Health SnapshotCapri Holdings exited fiscal 2026 with cash and cash equivalents of $135 million and total borrowings of $357 million, resulting in net debt of $222 million, a significant improvement from $1.4 billion in the prior year. Operating cash flow for fiscal 2026 totaled $197 million, while capital expenditures were $63 million, leading to free cash flow of $134 million. Inventory levels declined 17% year over year to $581 million, reflecting improved inventory discipline and operational efficiency.
Capri Holdings resumed a more aggressive capital return stance in the quarter, repurchasing approximately 4 million shares for $79 million. The remaining authorization under the share repurchase program was $921 million at the end of the fourth quarter.
Capri Holdings’ Q1 OutlookFor the first quarter of fiscal 2027, Capri Holdings expects total revenues of approximately $750 million and operating income of around $10 million. Net interest and other income are projected at roughly $20 million, while the effective tax rate is expected to be approximately negative 50%. The company anticipates earnings per share of about 40 cents.
Within the segments, Michael Kors revenues are projected at approximately $585 million, with the operating margin expected in the high-single-digit range. Jimmy Choo revenues are anticipated to be approximately $165 million, with the operating margin in the low-single-digit range.
CPRI’s FY27 GuidanceFor fiscal 2027, Capri Holdings expects total revenues of approximately $3.525 billion, representing growth of nearly 1.5% from fiscal 2026 revenues of $3.474 billion. The company projects operating income of around $190 million compared with $23 million reported in fiscal 2026. Net interest and other income are projected in the range of $85-$90 million, while the effective tax rate is expected to be in the low-teens range. The company anticipates earnings per share of about $2.15. Capri Holdings also plans share repurchases of nearly $200 million and capital expenditures of approximately $125 million during the fiscal year.
For Michael Kors, fiscal 2027 revenues are expected to be approximately $2.9 billion, with the operating margin projected in the low-double-digit range. Jimmy Choo revenues are anticipated to be approximately $625 million, with the operating margin in the low-single-digit range.
CPRI Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have fallen 4.9% over the past three months compared with the industry’s decline of 10.6%.
Key PicksSome better-ranked stocks in the retail space are Tapestry, Inc. (TPR - Free Report) , Victoria's Secret & Co. and Levi Strauss & Co. (LEVI - Free Report) .
Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales indicates growth of 36.3% and a decline of 13.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.
Victoria's Secret is a specialty retailer of women's intimates, sleepwear, apparel, sport and swimwear, and prestige fragrances and body care. It currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 55.1%, on average.
The Zacks Consensus Estimate for VSCO’s current fiscal-year sales and earnings indicates growth of 6.2% and 16.3%, respectively, from the year-ago reported numbers.
Levi Strauss designs and markets jeans, casual wear and related accessories for men, women and children. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Levi Strauss’ current fiscal-year earnings and sales suggests growth of 11.9% and 5.2%, respectively, from the year-ago actuals. LEVI delivered a trailing four-quarter average earnings surprise of 21.4%.
Capri Holdings (NYSE:CPRI) reported fiscal fourth quarter results that showed stronger-than-expected profitability but weaker-than-expected revenue, sending shares down more than 6% on Wednesday afternoon.
The company posted adjusted earnings per share of $0.22, more than double the $0.11 consensus estimate.
Revenue totaled $796 million, below Wall Street expectations of $803.7 million and down 3.7% year-over-year, or down 7% on a constant currency basis.
For fiscal 2027, Capri Holdings expects total revenue of approximately $3.53 billion and operating income of about $190 million.
Capital expenditures are projected to be around $125 million, while diluted earnings per share are expected to come in at approximately $2.15.
“We are building upon the improving trends resulting from the success of our strategic initiatives,” Capri CEO John Idol said. “In fiscal 2027 we expect to return to low single digit revenue growth and approximately 40% earnings per share growth.”
Jefferies analysts described the quarter as mixed, noting that revenue came in slightly below expectations, driven primarily by Michael Kors, while EBIT and EPS beat consensus.
They noted that profit outperformance was supported in part by approximately $40 million in IEEPA tariff refunds, and cautioned that excluding this benefit, underlying EBIT appeared softer, though timing and offsetting factors may have played a role.
Looking ahead, Jefferies highlighted financial year 2027 guidance that came in broadly in line on revenue but above expectations on EBIT and EPS, supported by an anticipated 200 basis point improvement in gross margin.
The firm noted that the outlook also included moving items below the EBIT line, including interest income, tax rate assumptions, and share count benefits from buybacks.
At the same time, Jefferies pointed to a softer-than-expected first-quarter outlook, with both revenue and EBIT guided below Street expectations, even as EPS came in higher due to tax rate dynamics.
On brand performance, the analysts highlighted continued strength in Michael Kors retail full-price comparable sales and sequential improvement in wholesale trends, alongside similar momentum at Jimmy Choo. They also noted that the company repurchased approximately 4 million shares for $79 million during the quarter.
Capri Holdings (NYSE:CPRI) reported fiscal fourth quarter results that showed stronger-than-expected profitability but weaker-than-expected revenue, sending shares down more than 6% on Wednesday afternoon.
The company posted adjusted earnings per share of $0.22, more than double the $0.11 consensus estimate.
Revenue totaled $796 million, below Wall Street expectations of $803.7 million and down 3.7% year-over-year, or down 7% on a constant currency basis.
For fiscal 2027, Capri Holdings expects total revenue of approximately $3.53 billion and operating income of about $190 million.
Capital expenditures are projected to be around $125 million, while diluted earnings per share are expected to come in at approximately $2.15.
“We are building upon the improving trends resulting from the success of our strategic initiatives,” Capri CEO John Idol said. “In fiscal 2027 we expect to return to low single digit revenue growth and approximately 40% earnings per share growth.”
Jefferies analysts described the quarter as mixed, noting that revenue came in slightly below expectations, driven primarily by Michael Kors, while EBIT and EPS beat consensus.
They noted that profit outperformance was supported in part by approximately $40 million in IEEPA tariff refunds, and cautioned that excluding this benefit, underlying EBIT appeared softer, though timing and offsetting factors may have played a role.
Looking ahead, Jefferies highlighted financial year 2027 guidance that came in broadly in line on revenue but above expectations on EBIT and EPS, supported by an anticipated 200 basis point improvement in gross margin.
The firm noted that the outlook also included moving items below the EBIT line, including interest income, tax rate assumptions, and share count benefits from buybacks.
At the same time, Jefferies pointed to a softer-than-expected first-quarter outlook, with both revenue and EBIT guided below Street expectations, even as EPS came in higher due to tax rate dynamics.
On brand performance, the analysts highlighted continued strength in Michael Kors retail full-price comparable sales and sequential improvement in wholesale trends, alongside similar momentum at Jimmy Choo. They also noted that the company repurchased approximately 4 million shares for $79 million during the quarter.
Have you looked into how Capri Holdings (CPRI - Free Report) performed internationally during the quarter ending March 2026? Considering the widespread global presence of this luxury retailer, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While delving into CPRI's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
For the quarter, the company's total revenue amounted to $796 million, experiencing a decline of 23.1% year over year. Next, we'll explore the breakdown of CPRI's international revenue to understand the importance of its overseas business operations.
Unveiling Trends in CPRI's International RevenuesAsia generated $117 million in revenues for the company in the last quarter, constituting 14.7% of the total. This represented a surprise of +7.29% compared to the $109.06 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia accounted for $111 million (10.8%), and in the year-ago quarter, it contributed $172 million (16.6%) to the total revenue.
EMEA accounted for 30.9% of the company's total revenue during the quarter, translating to $246 million. Revenues from this region represented a surprise of +3.67%, with Wall Street analysts collectively expecting $237.29 million. When compared to the preceding quarter and the same quarter in the previous year, EMEA contributed $268 million (26.2%) and $302 million (29.2%) to the total revenue, respectively.
Anticipated Revenues in Overseas MarketsIt is projected by analysts on Wall Street that Capri Holdings will post revenues of $751.5 million for the ongoing fiscal quarter, a decline of 5.7% from the year-ago quarter. The expected contributions from Asia and EMEA to this revenue are 14.4%, and 31.5%, translating into $108.27 million, and $236.75 million, respectively.
For the full year, the company is expected to generate $3.53 billion in total revenue, up 1.6% from the previous year. Revenues from Asia and EMEA are expected to constitute 12.3% ($435.21 million), and 29.3% ($1.03 billion) of the total, respectively.
Key TakeawaysRelying on global markets for revenues presents both prospects and challenges for Capri Holdings. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.
In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.
We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.
Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.
Capri Holdings, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
A Review of Capri Holdings' Recent Stock Market PerformanceOver the past month, the stock has lost 5.7% versus the Zacks S&P 500 composite's 6.3% increase. The Zacks Retail-Wholesale sector, of which Capri Holdings is a part, has declined 1.8% over the same period. The company's shares have increased 3.1% over the past three months compared to the S&P 500's 10.5% increase. Over the same period, the sector has risen 3.6%
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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
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How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Capri Holdings (CPRI - Free Report) Capri Holdings Limited operates in the global personal luxury goods industry.
CPRI is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 9.39; value investors should take notice.
Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.15 to $1.96 per share. CPRI boasts an average earnings surprise of +66.8%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CPRI should be on investors' short list.
RetailMeNot's Summer Issue savings event runs June 4-8, featuring stackable deals, shopping inspiration and seasonal savings across top retailers New summer research reveals Y2K-inspired fashion resurgence and growing demand for polished, versatile alternatives like capris , /PRNewswire/ -- RetailMeNot today announced its first-ever Chief Capri Officer (CCO) search, a summer initiative offering one consumer the opportunity to bring one of the season's biggest fashion comebacks to life. The opportunity is part of RetailMeNot's Summer Issue savings event and is informed by new consumer data showing that shoppers are increasingly rethinking traditional summer staples in favor of more polished, versatile styles.
RetailMeNot's Summer Issue is a new summer savings event running June 4-8 designed to help consumers save on everything they need for the season. Curated to feel like a go-to summer magazine for inspiration and savings, the event brings together promo codes, cash back offers and exclusive deals from top retailers to help shoppers save on everyday summer essentials. Participating retailers span key categories including fashion, beauty, travel and more, with brands such as Ulta, Ray-Ban, Expedia, Kendra Scott and Macy's.
New summer consumer data from RetailMeNot suggests capris are emerging as one of the season's standout fashion trends, with 28% of women planning to purchase a pair this summer and many embracing the style as a more polished, versatile alternative to shorts. To bring this trend to life, RetailMeNot is launching its first-ever Chief Capri Officer search, giving one consumer the opportunity to showcase one of summer's biggest fashion comebacks.
"The Chief Capri Officer search brings one of summer's top trends to life in a way that's fun, relatable, and rooted in real shopping behavior," said Stephanie Carls, Retail Insights Expert at RetailMeNot. "Half of millennial women prefer capris over shorts across occasions. That's a movement, and the Summer Issue is the perfect place to shop it."
Survey Data Signals a Shift in Summer Style
Findings from RetailMeNot's summer consumer survey* reveal a clear shift in how women are approaching warm-weather dressing:
50% of Millennial women say capris are more appropriate than shorts for brunch or casual dining. Only 11% of women believe shorts work across all summer occasions. 28% of women plan to purchase capris this summer, making them one of the top Y2K-inspired fashion trends. Together, the data suggests that shoppers are embracing styles that feel both practical and elevated, easily transitioning from casual outings to more social settings.
RetailMeNot's Chief Capri Officer Program
RetailMeNot will select one Chief Capri Officer to showcase how capris fit into real-life summer wardrobes. The chosen candidate will receive a $5,000 shopping stipend to style and shop the trend. The program reflects how consumers discover trends today, blending inspiration, practicality, and savings to turn aspirational ideas into everyday style.
To learn more or apply to be RetailMeNot's Chief Capri Officer, visit RetailMeNot.com/CCO
RetailMeNot's Summer Issue can be explored at RetailMeNot.com/Summer
How to Apply
Consumers can apply between June 4 and June 18, 2026. Applicants must be U.S. residents, age 21 or older. No purchase is necessary.
To enter:
Submit a short application at RetailMeNot.com/CCO Share why you're the ideal CCO and how you would style capris this summer. The selected winner will:
Receive a $5,000 shopping stipend. Create user-generated content featuring capri styling and have the opportunity to be featured across RetailMeNot's social channels. *Survey Methodology: Source: RetailMeNot Summer 2026 Spending Survey among adults from 18 to 44. N=896. Fielded in April 2026
About RetailMeNot Group: The RetailMeNot Group brings together leading shopping, savings, and deal discovery brands that help people shop smarter and help businesses connect with high-intent consumers at moments of purchase. The RetailMeNot Group portfolio includes RetailMeNot, Offers.com, BlackFriday.com, TechBargains, Deals of America and R BrandWorks, reaching millions of consumers through trusted social content, real-time deals, cash back, and seasonal shopping moments. RetailMeNot Group operates as part of Ziff Davis, a leading digital media and internet company. To learn more, visit www.ziffdavis.com/brands/shopping
About Ziff Davis: Ziff Davis (Nasdaq: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, entertainment, shopping, health, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Capri Holdings (CPRI - Free Report) Capri Holdings Limited operates in the global personal luxury goods industry through two fashion luxury houses: Michael Kors and Jimmy Choo. The company designs, markets and distributes luxury accessories, footwear and apparel through retail stores, e-commerce sites, and wholesale partners, supported by product and geographic licensing agreements. The company sells across three principal geographic markets: the Americas, EMEA and Asia. E-commerce represented approximately 21% of net revenues in fiscal 2026.
CPRI is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Retail-Wholesale stock. CPRI has a Momentum Style Score of A, and shares are up 0.8% over the past four weeks.
Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.20 to $2.01 per share. CPRI boasts an average earnings surprise of +66.8%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CPRI should be on investors' short list.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, today announced the closing of SEMT 2026-MED1, the inaugural Medical Professionals loan securitization issued through Sequoia, Redwood's jumbo mortgage platform. The $482 million transaction marks Sequoia's 165th securitization and represents an important milestone for the platform as a first-of-its-kind securitization backed by m.
Investors may be pursuing opportunities to add income from dividend-paying stocks in the current market environment of uncertainty and volatility surrounding tensions in the Middle East that have led to high energy prices.
Required to pay out at least 90% of their taxable income as dividends to avoid corporate income tax, REITs are typically a great way to add income in a portfolio while getting exposure to valuable real estate assets in the process.
Optimistically, several affordable REITs with high dividend yields have made their way onto the coveted Zacks Rank #1 (Strong Buy) list.
These REITs looked poised for more upside based on a trend of positive EPS revisions, but a further pullback in the broader market may present even more lucrative opportunities to add meaningful income-producing positions.
Blackstone Mortgage – BXMTStock Price: $19
Dividend Yield: 9.74%
Trading just under $20 a share, Blackstone Mortgage Trust (BXMT - Free Report) ) is the most expensive stock on the list and is hovering near a 52-week high with a one-year low of $16 a share. Blackstone is a REIT focused on loans and securities backed by commercial real estate assets, with favorable EPS projections of $1.76 in FY26 (58% increase) and $1.99 per share in FY27.
Blackstone’s tight nit 52-week range makes it appealing to build positions, considering its nearly 10% annual dividend yield and BXMT trades at a reasonable 10X forward earnings multiple.
BXMT has been a long-standing income payer, maintaining quarterly dividends through multiple rate cycles and real-estate market conditions for roughly 12 years.
Chicago Atlantic – REFIStock Price: $11
Dividend Yield: 16.49%
Trading at the low end of its 52-week range, Chicago Atlantic Real Estate Finance (REFI - Free Report) ) offers the highest yield on the list at over 16%. Going public in 2021, Chicago Atlantic offers exposure to first mortgage loans to state-licensed operators in the cannabis industry, secured by real estate, equipment, receivables, licenses, or other assets of the borrowers.
Having a 52-week peak of $16 a share, the risk-to-reward looks priced in with REFI having a low beta reading of 0.23. Securities with betas below 1 have historically been less volatile than the broader market, making this very lofty dividend more enticing to go after.
Furthermore, REFI trades at just 5X forward earnings, with annual EPS projected to be above $1.90 for the foreseeable future.
Chatham Lodging – CLDTStock Price: $8
Dividend Yield: 4.82%
Operating as a hotel REIT, Chatham Lodging Trust (CLDT - Free Report) ) invests in premium-branded upscale extended-stay and select-service hotels, including brands such as Residence Inn by Marriott, Homewood Suites by Hilton, and Summerfield Suites by Hyatt.
At under $10 a share, CLDT has an attractive dividend that’s nearly 5% and trades at a cheap 6X forward earnings multiple with EPS expected to spike 17% this year and projected to increase another 10% in FY27 to $1.32.
Reassuringly, CLDT has a very low volatile 52-week range of $6.08-$8.60. It’s also noteworthy that outside of the hotel-wide industry disruptions during the pandemic (2020-2022 dividend suspension), the company has consistently paid a dividend since going public in 2010. Plus, Chatham Lodging pays its dividends monthly as opposed to quarterly, being the only REIT on the list to do so.
Redwood Trust – RWTStock Price: $5
Dividend Yield: 12.29%
We’ll end with Redwood Trust (RWT - Free Report) ), the cheapest REIT stock on the list at $5 a share and trading at just 4X forward earnings. Redwood specializes in acquiring and managing real estate mortgage assets, which may be acquired as whole loans or as mortgage securities representing interests in or obligations backed by pools of mortgage loans.
RWT has a tight 52-week range of $4.85-$6.97, making its 12% annual dividend yield very appealing. Even better, EPS is expected to leap 45% to $1.28 in FY26 compared to $0.88 per share last year. Fiscal 2027 EPS is projected to contract to $0.98, but estimates are up from $0.92 per share two months ago.
While Redwood Trust doesn’t classify as a Dividend Aristocrat as it hasn’t consistently increased its dividend for at least 25 consecutive years, it has still reliably paid a dividend for 31 years, since going public in 1995 and being the longest standing REIT on the list.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, is scheduled to release its first quarter 2026 results on Wednesday, April 29, 2026 after the close of the New York Stock Exchange. In addition, Redwood's senior management team plans to hold a conference call to discuss its first quarter 2026 financial results that same afternoon at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time.
Webcast Information
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood Trust’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any needed audio software. An audio replay of the call will also be available on Redwood's website following the call.
Conference Call Information
To participate by phone, please dial-in at least 15 minutes prior to the start time to allow for wait times to access the conference call. The live conference call will be accessible domestically or internationally, by dialing 1-877-423-9813 or 1-201-689-8573, respectively. In addition to the aforementioned dial-in information, participants can also access the call, bypassing the live operator and receiving an instant callback, by accessing the callback link on the Investor Relations section of the Company’s website or using the following link (this feature is available 15 minutes prior to the scheduled event): https://callme.viavid.com/viavid/?callme=true&passcode=13721503&h=true&info=company&r=true&B=6.
A replay of the conference call will be available after 9:00 p.m. Eastern Time / 6:00 p.m. Pacific Time on Wednesday, April 29, 2026, through 11:59 p.m. Eastern Time / 8:59 p.m. Pacific Time on Wednesday, May 13, 2026. To access the replay, listeners may use 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13759155.
ABOUT REDWOOD TRUST
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused platforms — Sequoia, Aspire, and CoreVest — alongside a complementary investment portfolio primarily composed of assets we source through these businesses. In addition, through RWT Horizons®, our venture investing initiative, we invest in early-stage companies that have a direct nexus to our operating platforms. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Evergreen Capital Management LLC raised its position in shares of Redwood Trust, Inc. (NYSE:RWT – Free Report) by 52.8% in the fourth quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The firm owned 1,674,009 shares of the real estate investment trust’s stock after purchasing an additional 578,301 shares during the period. Evergreen Capital Management LLC owned 1.32% of Redwood Trust worth $9,257,000 at the end of the most recent quarter.
A number of other hedge funds and other institutional investors have also recently bought and sold shares of RWT. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in Redwood Trust by 26.7% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 492,661 shares of the real estate investment trust’s stock valued at $2,990,000 after purchasing an additional 103,893 shares during the period. Jane Street Group LLC acquired a new position in Redwood Trust during the 1st quarter valued at about $2,018,000. Strs Ohio acquired a new position in Redwood Trust during the 1st quarter valued at about $149,000. XTX Topco Ltd boosted its stake in Redwood Trust by 35.4% during the 2nd quarter. XTX Topco Ltd now owns 14,513 shares of the real estate investment trust’s stock valued at $86,000 after purchasing an additional 3,795 shares during the period. Finally, Russell Investments Group Ltd. boosted its stake in Redwood Trust by 331.8% during the 2nd quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust’s stock valued at $47,000 after purchasing an additional 6,082 shares during the period. 74.34% of the stock is owned by institutional investors and hedge funds.
Analyst Ratings Changes A number of research analysts have issued reports on the stock. Wall Street Zen lowered shares of Redwood Trust from a “hold” rating to a “sell” rating in a research note on Monday, April 6th. Weiss Ratings reissued a “sell (d)” rating on shares of Redwood Trust in a research note on Thursday, January 22nd. Piper Sandler reduced their target price on shares of Redwood Trust from $6.50 to $6.00 and set a “neutral” rating for the company in a research note on Thursday, April 2nd. JonesTrading reaffirmed a “buy” rating and issued a $6.25 price target on shares of Redwood Trust in a research note on Tuesday, March 3rd. Finally, Keefe, Bruyette & Woods upped their price target on shares of Redwood Trust from $5.75 to $7.00 and gave the stock a “market perform” rating in a research note on Wednesday, February 18th. Five research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, Redwood Trust presently has an average rating of “Hold” and an average price target of $6.82.
Read Our Latest Report on Redwood Trust
Redwood Trust Stock Down 1.1% RWT stock opened at $5.94 on Tuesday. Redwood Trust, Inc. has a 12 month low of $5.00 and a 12 month high of $6.97. The firm has a market cap of $741.88 million, a PE ratio of -9.73 and a beta of 1.52. The firm has a 50 day simple moving average of $5.90 and a 200 day simple moving average of $5.67. The company has a debt-to-equity ratio of 24.34, a current ratio of 55.15 and a quick ratio of 55.15.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 EPS for the quarter, missing the consensus estimate of $0.22 by ($0.02). Redwood Trust had a negative net margin of 5.93% and a positive return on equity of 12.00%. The business had revenue of $140.33 million for the quarter, compared to analyst estimates of $24.88 million. Equities research analysts forecast that Redwood Trust, Inc. will post 1.28 earnings per share for the current fiscal year.
Redwood Trust Announces Dividend The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Tuesday, March 24th were paid a dividend of $0.18 per share. The ex-dividend date of this dividend was Tuesday, March 24th. This represents a $0.72 annualized dividend and a yield of 12.1%. Redwood Trust’s dividend payout ratio is currently -118.03%.
About Redwood Trust (Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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The market expects Redwood Trust (RWT - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis specialty finance company is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents a year-over-year change of +100%.
Revenues are expected to be $31.58 million, up 13.2% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 8.96% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Redwood Trust?For Redwood Trust, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +20.00%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Redwood Trust will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Redwood Trust would post earnings of $0.23 per share when it actually produced earnings of $0.33, delivering a surprise of +43.48%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Redwood Trust appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Shares of Redwood Trust, Inc. (NYSE:RWT – Get Free Report) have been given a consensus rating of “Hold” by the ten analysts that are currently covering the stock, MarketBeat Ratings reports. One equities research analyst has rated the stock with a sell recommendation, four have issued a hold recommendation and five have issued a buy recommendation on the company. The average 12-month target price among brokers that have updated their coverage on the stock in the last year is $6.8214.
A number of research analysts have weighed in on RWT shares. Keefe, Bruyette & Woods raised their target price on shares of Redwood Trust from $5.75 to $7.00 and gave the stock a “market perform” rating in a research note on Wednesday, February 18th. JonesTrading reaffirmed a “buy” rating and set a $6.25 price target on shares of Redwood Trust in a research report on Tuesday, March 3rd. Wall Street Zen lowered shares of Redwood Trust from a “hold” rating to a “sell” rating in a research report on Monday, April 6th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Redwood Trust in a research report on Thursday, January 22nd. Finally, Zacks Research lowered shares of Redwood Trust from a “strong-buy” rating to a “hold” rating in a research report on Monday, April 13th.
Read Our Latest Stock Report on RWT
Redwood Trust Trading Up 0.1% RWT opened at $5.72 on Monday. The company has a debt-to-equity ratio of 24.34, a current ratio of 55.15 and a quick ratio of 55.15. The company’s 50 day simple moving average is $5.87 and its two-hundred day simple moving average is $5.67. Redwood Trust has a 1-year low of $5.00 and a 1-year high of $6.97. The firm has a market capitalization of $714.38 million, a price-to-earnings ratio of -9.37 and a beta of 1.52.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 earnings per share for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.02). Redwood Trust had a positive return on equity of 12.00% and a negative net margin of 5.93%.The business had revenue of $140.33 million during the quarter, compared to analysts’ expectations of $24.88 million. Analysts expect that Redwood Trust will post 1.2 EPS for the current fiscal year.
Redwood Trust Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Tuesday, March 24th were given a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 12.6%. The ex-dividend date of this dividend was Tuesday, March 24th. Redwood Trust’s payout ratio is presently -118.03%.
Institutional Trading of Redwood Trust Several institutional investors have recently made changes to their positions in RWT. UBS Group AG raised its position in shares of Redwood Trust by 521.1% during the 4th quarter. UBS Group AG now owns 3,875,226 shares of the real estate investment trust’s stock valued at $21,430,000 after buying an additional 3,251,302 shares during the period. Wellington Management Group LLP raised its position in shares of Redwood Trust by 10.2% during the 3rd quarter. Wellington Management Group LLP now owns 15,020,483 shares of the real estate investment trust’s stock valued at $86,969,000 after buying an additional 1,395,675 shares during the period. Evergreen Capital Management LLC raised its position in shares of Redwood Trust by 52.8% during the 4th quarter. Evergreen Capital Management LLC now owns 1,674,009 shares of the real estate investment trust’s stock valued at $9,257,000 after buying an additional 578,301 shares during the period. Tran Capital Management L.P. purchased a new stake in shares of Redwood Trust during the 4th quarter valued at approximately $2,947,000. Finally, Invesco Ltd. raised its position in shares of Redwood Trust by 25.4% during the 4th quarter. Invesco Ltd. now owns 2,551,067 shares of the real estate investment trust’s stock valued at $14,107,000 after buying an additional 516,630 shares during the period. Hedge funds and other institutional investors own 74.34% of the company’s stock.
About Redwood Trust (Get Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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Redwood Trust (NYSE:RWT – Get Free Report) is expected to release its Q1 2026 results after the market closes on Wednesday, April 29th. Analysts expect Redwood Trust to post earnings of $0.2239 per share and revenue of $89.5440 million for the quarter. Interested persons can find conference call details on the company’s upcoming Q1 2026 earning report page for the latest details on the call scheduled for Wednesday, April 29, 2026 at 5:00 PM ET.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 EPS for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.02). The firm had revenue of $140.33 million during the quarter, compared to analysts’ expectations of $24.88 million. Redwood Trust had a negative net margin of 5.93% and a positive return on equity of 12.00%. On average, analysts expect Redwood Trust to post $1 EPS for the current fiscal year and $1 EPS for the next fiscal year.
Redwood Trust Trading Up 0.1% RWT opened at $5.72 on Monday. The stock has a market cap of $714.38 million, a PE ratio of -9.37 and a beta of 1.52. The company has a quick ratio of 55.15, a current ratio of 55.15 and a debt-to-equity ratio of 24.34. The business has a 50 day moving average of $5.87 and a 200-day moving average of $5.67. Redwood Trust has a 52 week low of $5.00 and a 52 week high of $6.97.
Redwood Trust Announces Dividend The company also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Tuesday, March 24th were paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 12.6%. The ex-dividend date was Tuesday, March 24th. Redwood Trust’s dividend payout ratio (DPR) is presently -118.03%.
Institutional Investors Weigh In On Redwood Trust Institutional investors and hedge funds have recently made changes to their positions in the company. CIBC Bancorp USA Inc. bought a new stake in shares of Redwood Trust in the 3rd quarter worth $82,000. Mercer Global Advisors Inc. ADV bought a new stake in shares of Redwood Trust in the 3rd quarter worth $89,000. Brooklyn Investment Group increased its holdings in shares of Redwood Trust by 1,884.5% in the 3rd quarter. Brooklyn Investment Group now owns 15,400 shares of the real estate investment trust’s stock worth $89,000 after purchasing an additional 14,624 shares in the last quarter. Caption Management LLC bought a new stake in shares of Redwood Trust in the 3rd quarter worth $100,000. Finally, BNP Paribas Financial Markets increased its holdings in shares of Redwood Trust by 53.2% in the 2nd quarter. BNP Paribas Financial Markets now owns 13,506 shares of the real estate investment trust’s stock worth $80,000 after purchasing an additional 4,692 shares in the last quarter. Institutional investors own 74.34% of the company’s stock.
Analyst Upgrades and Downgrades A number of research firms have recently commented on RWT. Wall Street Zen cut Redwood Trust from a “hold” rating to a “sell” rating in a research note on Monday, April 6th. JonesTrading reissued a “buy” rating and issued a $6.25 target price on shares of Redwood Trust in a research note on Tuesday, March 3rd. Keefe, Bruyette & Woods raised their price target on Redwood Trust from $5.75 to $7.00 and gave the company a “market perform” rating in a report on Wednesday, February 18th. Citigroup reaffirmed a “market perform” rating on shares of Redwood Trust in a research report on Wednesday, February 18th. Finally, JPMorgan Chase & Co. upgraded shares of Redwood Trust from a “neutral” rating to an “overweight” rating and set a $6.00 price target on the stock in a research note on Friday, January 23rd. Five research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, Redwood Trust currently has a consensus rating of “Hold” and an average price target of $6.82.
View Our Latest Report on RWT
Redwood Trust Company Profile (Get Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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Key Takeaways Redwood Trust is set to report Q1'26 earnings on April 29, with EPS estimated to rise y/y to 28 cents.RWT mortgage banking income is likely to rise to $56.2M, aided by improved production despite rate volatility.Stabilizing funding costs and cost-cutting efforts likely drove Redwood Trust's net interest income growth. Redwood Trust, Inc. (RWT - Free Report) is slated to report first-quarter 2026 earnings on April 29, after market close.
The company’s fourth-quarter 2025 results benefited from continued momentum across mortgage banking platforms, with higher production revenues translating directly into earnings growth. However, a decline in book value per share (BVPS) was concerning.
RWT earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with an average beat of 11.39%.
Redwood Trust, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for first-quarter 2026 earnings of 28 cents per share has been unchanged over the past week. This indicates a rise from the 14 cents reported in the year-ago quarter.
The Zacks Consensus Estimate for net interest income for the first quarter of 2026 is pegged at $31.5 million, indicating a jump of 13.2% from the year-ago quarter’s actual.
Factors to Impact RWT’s Q1 PerformanceThe first quarter of 2026 was challenging for the mortgage banking business. While rates moved lower early in the quarter, they climbed again toward the end of March as macro uncertainty and geopolitical tensions pushed interest rates higher. Throughout the quarter, the mortgage rate hovered at 6-6.5%. While refinance activity has seen a slight boost from the 2025 lows, purchase volume faced pressure from inventory constraints.
Given this backdrop, Redwood Trust’s mortgage banking business is likely to have been decent. The Zacks Consensus Estimate for mortgage banking activities’ net income of $56.2 million indicates a rise from the $33 million reported in the year-ago quarter.
Also, the Federal Reserve kept interest rates unchanged in the first quarter. As such, given stabilizing funding costs, RWT’s net interest income (NII) is likely to have benefited.
In recent months, the company has taken targeted actions to simplify its operating structure and sharpen its focus on businesses generating strong and sustainable returns. As such, the company is likely to have realized cost savings in the quarter to be reported.
What Our Model Unveils for Redwood TrustOur proven model conclusively predicts an earnings beat for RWT this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: RWT has an Earnings ESP of +20%.
Zacks Rank: Redwood Trust currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of RWT’s PeersAGNC Investment Corp. (AGNC - Free Report) reported first-quarter of 2026 net spread and dollar roll income per common share of 42 cents, topping the Zacks Consensus Estimate by 16.7%. However, the metric declined 4.5% from the year-ago quarter’s 44 cents.
AGNC’s results benefited from rallies in average asset yield and NII. Also, a rise in tangible net BVPS on the portfolio was positive. However, a reduced net interest spread and a higher weighted average cost of funds were concerning.
Annaly Capital Management, Inc. (NLY - Free Report) registered first-quarter 2026 earnings available for distribution per average share of 76 cents, which beat the Zacks Consensus Estimate of 74 cents. The figure increased from 72 cents in the year-ago quarter.
NLY’s NII and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in BVPS was also encouraging. However, a lower economic capital ratio was concerning.
If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Redwood Trust (RWT - Free Report) . This company, which is in the Zacks REIT and Equity Trust industry, shows potential for another earnings beat.
When looking at the last two reports, this specialty finance company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 34.24%, on average, in the last two quarters.
For the last reported quarter, Redwood Trust came out with earnings of $0.33 per share versus the Zacks Consensus Estimate of $0.23 per share, representing a surprise of 43.48%. For the previous quarter, the company was expected to post earnings of $0.16 per share and it actually produced earnings of $0.2 per share, delivering a surprise of 25.00%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Redwood Trust lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Redwood Trust currently has an Earnings ESP of +20.00%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on April 29, 2026.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
, /PRNewswire/ -- Castlelake, L.P. ("Castlelake"), a global alternative investment firm specializing in asset-based private credit, and Redwood Trust Inc. (NYSE: RWT) ("Redwood" or the "Company"), a leader in expanding access to housing for homebuyers and renters, today announced the formation of a strategic joint venture designed to support the continued growth of Redwood's Sequoia platform and provide Castlelake with programmatic purchasing power for fully documented prime jumbo mortgage loans. The joint venture contemplates purchasing up to $8 billion of Sequoia-sourced prime jumbo loans, with flexibility to scale as opportunities emerge, including the acquisition of seasoned loans from bank balance sheets. Under the joint venture, Sequoia will source, aggregate, and diligence loans that meet defined eligibility criteria, with the aim of supporting consistent execution and high-quality asset selection.
"Castlelake is pleased to partner with Redwood and its Sequoia platform to provide our investors with access to what we expect to be high-quality, fully documented prime jumbo assets and to establish a relationship grounded in shared principles of disciplined underwriting and strong institutional governance," said Lucas Jackson, Head of North American Residential Mortgage Finance at Castlelake. "This transaction highlights Castlelake's granular, loan level approach to deploying capital into opportunities that we expect to create attractive, risk‑adjusted outcomes for our investors."
"Sequoia has experienced significant momentum over the past year, with loan acquisition volumes more than doubling as we continue to build share in the jumbo market," said Brooke Carillo, Executive Vice President and Chief Financial Officer at Redwood Trust. "We see a dynamic and expanding opportunity set ahead, and this initiative is aligned with our strategy of scaling our platforms alongside leading capital providers. Castlelake's large, diversified institutional capital base and experience in asset-based investing make them a strong partner as we continue to grow Sequoia."
Redwood is a leading participant in the prime jumbo mortgage market through its Sequoia platform, one of the longest-tenured non-agency correspondent platforms in the industry since Redwood was founded in 1994. Sequoia has consistently provided liquidity across market cycles, purchasing roughly $100 billion of loans and securitizing over $50 billion, reflecting its strong and well-established relationships with market-leading originators.
Castlelake is an experienced investor in the global residential real estate sector, and has acquired or financed more than $10 billion in residential and commercial loans since 2024. Supported by dedicated sector specialists and a long-standing focus on disciplined underwriting and institutional governance, the firm has invested through multiple market cycles and provides reliable, scalable capital for high-quality residential credit opportunities.
About Castlelake
Castlelake, L.P. is a global alternative investment manager specializing in asset-based private credit. Founded in 2005, Castlelake manages approximately $36 billion of assets on behalf of a diversified global investor base and is a strategic partner of Brookfield Asset Management Ltd., a leading global alternative investment manager with over $1 trillion of assets under management. The Castlelake team comprises approximately 250 experienced professionals, including 90 investment professionals, across eight offices in North America, Europe, the Middle East and Asia. For more information, please visit https://www.castlelake.com/.
About Redwood Trust, Inc.
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes.
Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the joint venture's target acquisition volume of $8 billion of prime jumbo loans. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "expect," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, opportunities, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption "Risk Factors". Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-K, 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE:RWT; "Redwood", the "Company"), a leader in expanding access to housing for homebuyers and renters, today reported its financial results for the quarter ended March 31, 2026.
First Quarter 2026 Highlights
On a consolidated basis, GAAP net loss was $(0.07) per basic and diluted common share. Non- GAAP Earnings Available for Distribution ("EAD") was $0.21 per share(1), an increase from the prior quarter and once again exceeding the Company’s dividend Demonstrated sustained momentum in Mortgage Banking despite a more volatile and uncertain macroeconomic backdrop Mortgage Banking production reached a record $8.5 billion, up from $7.3 billion in the previous quarter and marking a third consecutive quarterly record(2) Gross margins remained within targeted ranges despite increased market volatility late in the quarter from changes in interest rates and mortgage spreads Distribution remained strong across platforms, supported by record securitization activity and continued momentum in whole loan sales, enabling efficient risk transfer and consistent market access Variability between Consolidated GAAP and EAD results primarily reflects market-driven changes in portfolio valuations rather than underlying operating performance Key Financial First Quarter 2026 Results and Metrics
GAAP book value per common share was $7.12 at March 31, 2026, compared to $7.36 per share at December 31, 2025 Economic return on book value of (0.8)% for the first quarter 2026(3) GAAP net loss of $(7.3) million or $(0.07) per basic and diluted common share Non-GAAP Earnings Available for Distribution ("EAD") of $27.1 million or $0.21 per basic common share(1) Non-GAAP Core Segments Earnings Available for Distribution ("Core Segments EAD") of $36.5 million, or $0.28 per basic common share(4) Declared and paid a regular quarterly dividend of $0.18 per common share “We delivered a third consecutive quarter of record mortgage banking volume, as Sequoia and Aspire continued to scale while maintaining disciplined margins,” said Christopher Abate, Chief Executive Officer of Redwood Trust. “What stands out in this environment is not just the level of production, but how we’re processing it using active distribution and technology to drive capital turnover and efficiently manage risk. As we expand our product set and deepen relationships across our ecosystem, we are seeing sustained demand from institutional investors seeking consistent access to the high-quality assets we source.”
Three Months Ended
3/31/2026
12/31/2025
Financial Performance
Book Value per Common Share
$
7.12
$
7.36
Economic Return on Book Value (3)
(0.8
)%
2.6
%
Net (Loss) Income per Basic Common Share
$
(0.07
)
$
0.13
Non-GAAP EAD per Basic Common Share (non-GAAP) (1)
$
0.21
$
0.20
Non-GAAP Core Segments EAD per Basic Common Share (4)
$
0.28
$
0.33
Dividends per Common Share
$
0.18
$
0.18
Q1 2026 Segment Highlights (5) GAAP Segment Net (Loss) Income Results Summary
($ in millions)
Three Months Ended
3/31/2026
12/31/2025
Core Segments:
Mortgage Banking Platforms:
Sequoia Mortgage Banking
$
37.8
$
33.3
Aspire Mortgage Banking
2.3
3.3
CoreVest Mortgage Banking
(3.4
)
6.8
Total Mortgage Banking Platforms
$
36.7
$
43.5
Redwood Investments
(8.0
)
15.2
Total Core Segments
$
28.7
$
58.7
Legacy Investments
$
(13.1
)
$
(22.9
)
Corporate/Other
$
(22.9
)
$
(17.5
)
Total GAAP Net (Loss) Income
$
(7.3
)
$
18.3
Mortgage Banking Platforms
Total Mortgage Banking Platforms GAAP net income of $36.7 million Generated 38% annualized return on capital ("ROC")(6) Continued expansion across platforms, including Sequoia’s new medical professional loan program and Aspire’s inaugural non-QM securitization, supporting volume growth and expanded distribution capabilities Aspire Mortgage Banking reported as a separate segment beginning in the first quarter of 2026 Sequoia Mortgage Banking(5)
Gain on sale margin of 96 basis points, at the higher end of the Company’s target range, and partially impacted by market volatility late in the first quarter Locked $6.5 billion of loans, up 22% from the fourth quarter 2025 and 67% from the first quarter 2025(7) Distributed $5.5 billion of loans through a combination of securitizations ($4.6 billion) and whole loan sales ($915 million), a 35% increase from the prior quarter Completed a record level of securitization activity, including the first ever securitization backed by medical professional loans Cost per loan improved to 18 basis points in the first quarter(8), compared to 26 basis points in the prior quarter, reflecting continued operating scale benefits Aspire Mortgage Banking(5)
Gain on sale margins of 73 basis points, compared to 92 basis points in the fourth quarter 2025 Lock volume of $1.6 billion reflects incremental growth from the fourth quarter and strong underlying demand for Aspire products from a growing network of loan sellers(7) Distributed $1.0 billion of loans through a combination of securitizations ($391 million) and whole loan sales ($656 million), a 44% increase from the prior quarter Expanded distribution capabilities through issuance of Aspire’s inaugural securitization CoreVest Mortgage Banking(5)
Segment GAAP net loss of $(3.4) million included $5.0 million of expenses related to organizational changes during the quarter, impacting comparability to the prior quarter. Non-GAAP EAD was $1.8 million Funded $432 million of loans (61% bridge and 39% term), a 6% decrease from the fourth quarter 2025 and a 10% decrease from the first quarter 2025 Distributed $694 million of newly-originated loans through whole loan sales, securitizations and sales to joint ventures ("JVs"), up 19% from the fourth quarter 2025 Volume reflected a more cautious approach late in the quarter, with intentional pipeline discipline during March volatility and heightened month-end activity, as we worked closely with our borrowers to manage execution in response to evolving investor demand Redwood Investments
Generated a segment GAAP net loss of $(8.0) million Results were primarily driven by unrealized market-related valuation changes during the quarter, partially offset by net interest income from portfolio investments Redwood Investments recourse leverage ratio increased to 1.1x at March 31, 2026, from 1.0x at December 31, 2025(10) Legacy Investments
Segment GAAP net loss of $(13.1) million Continued resolution activity within the legacy bridge portfolio supported capital redeployment and a reduction in portfolio exposure Segment capital allocation decreased to 15% of total invested capital, compared to 19% at December 31, 2025 Closed a $225 million securitization backed by a mix of performing/non-performing bridge loans which included $66 million of loans from the legacy investments portfolio Legacy Investments recourse leverage ratio of 1.6x at March 31, 2026(11) Capital and Financing
Maintained strong liquidity and stable recourse leverage, supporting continued investment in operating platforms Unrestricted cash and cash equivalents of $202 million at March 31, 2026 Recourse debt of $4.7 billion at March 31, 2026 compared to $4.4 billion at December 31, 2025(12) Increased overall warehouse capacity and added a new financing counterparty, supporting continued scale across the mortgage operating platforms Renewed or established over $2.8 billion in total financing capacity Total excess warehouse financing capacity of $3.9 billion at March 31, 2026 Tightened financing spreads and improved advance rates across key facilities Earnings available for distribution ("EAD"), EAD per share and EAD ROE are non-GAAP measures. See Non-GAAP Disclosures section that follows for additional information on these measures. Mortgage Banking refers to the combined performance or data related to Sequoia Mortgage Banking, Aspire Mortgage Banking and CoreVest Mortgage Banking segments. Production consists of loan locks from Sequoia Mortgage Banking and Aspire Mortgage Banking, as well as loan fundings from CoreVest Mortgage Banking. Economic return on book value is based on the period change in GAAP book value per common share plus dividends declared per common share in the period. Core Segments EAD is a non-GAAP measure used to present management’s non-GAAP analysis of the combined performance of the Company’s mortgage banking platforms and related investments (which consist of the Company’s Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking and Redwood Investments segments), inclusive of an allocated portion of the Company’s Corporate segment relating to those Core Segments. Core Segments EAD excludes the Company’s Legacy Investments segment and excludes an allocated portion of the Company’s Corporate segment relating to the Legacy Investments segment. Core Segments EAD per basic common share and Core Segments EAD ROE are also non-GAAP financial measures and are calculated using Core Segments EAD. See Non-GAAP Disclosures section that follows for additional information on these measures. Beginning in the first quarter of 2026, we revised our segment reporting to (i) present Aspire Mortgage Banking as a new reportable segment separate from our Sequoia Mortgage Banking segment and (ii) allocate corporate financing costs to our Sequoia, Aspire, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. ROC for the combined Mortgage Banking platforms is a non-GAAP measure calculated as annualized net income for the Company’s combined Mortgage Banking platforms divided by the average capital utilized by the combined Mortgage Banking platforms for the period. Average capital utilized represents management's internal estimate of the average capital deployed to support the activities of each segment and for Q1'26 the combined Mortgage Banking platform average capital was $386 million.
Beginning in the first quarter of 2026, we revised our segment reporting to allocate corporate financing costs to our Sequoia, Aspire, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. Lock volume represents loans identified for purchase from loan sellers. Lock volume does not account for potential fallout from pipeline that typically occurs through the lending process. Cost per loan for the Sequoia Mortgage Banking segment is calculated as general and administrative expenses and loan acquisition costs of this segment divided by loan purchase commitments of this segment. EAD ROC for a segment is calculated as non-GAAP segment EAD annualized divided by average capital utilized for the segment during the period. Non-GAAP EAD is defined as: GAAP net income (loss) available (related) to common stockholders adjusted to: (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition related expenses; (iv) exclude certain organizational restructuring charges (as applicable); and (v) adjust for the hypothetical income taxes associated with these adjustments. Average capital utilized represents management's internal estimate of the average economic capital allocated to support the activities of each segment. Redwood Investments recourse leverage ratio is defined as recourse debt at Redwood Investments divided by capital invested. At March 31, 2026 recourse debt excludes $20.5 billion of consolidated securitization debt (ABS issued and servicer advance financing), other liabilities and other debt that is non-recourse to Redwood at Redwood Investments. Capital invested in our Redwood Investments segment at March 31, 2026 was $510 million. Legacy Investments recourse leverage ratio is defined as recourse debt at Legacy Investments divided by capital invested. At March 31, 2026 recourse debt excludes $181 million of consolidated securitization debt (ABS issued), other liabilities and other debt that is non-recourse to Redwood at Legacy Investments. Capital invested in our Legacy Investments segment at March 31, 2026 was $242 million. At March 31, 2026, and December 31, 2025, recourse debt excluded $21.2 billion and $18.3 billion, respectively, of consolidated securitization debt (ABS issued and servicer advance financing), other liabilities and other debt that is non-recourse to Redwood, and tangible stockholders' equity excluded $32 million and $34 million, respectively, of goodwill and intangible assets. First Quarter 2026 Redwood Review and Supplemental Tables Available Online
A further discussion of Redwood's business and financial results is included in the first quarter 2026 Shareholder Letter and Redwood Review which are available under "Financial Info" within the Investor Relations section of the Company’s website at redwoodtrust.com/investor-relations. Additional supplemental financial tables can also be found within this section of the Company's website.
Conference Call and Webcast
Redwood will host an earnings call today, April 29, 2026, at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss its first quarter 2026 financial results. The number to dial in order to listen to the conference call is 1-877-423-9813 in the U.S. and Canada. International callers must dial 1-201-689-8573. A replay of the call will be available through midnight on Wednesday, May 13, 2026, and can be accessed by dialing 1-844-512-2921 in the U.S. and Canada or 1-412-317-6671 internationally and entering access code #13759155.
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any audio software needed. An audio replay of the call will also be available on Redwood's website following the call. Redwood plans to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission by Monday, May 11, 2026, and also make it available on Redwood’s website.
REDWOOD TRUST, INC.
Consolidated Income Statements (1)
Three Months Ended
($ in millions, except share and per share data)
3/31/26
12/31/25
Net Interest Income
$
34.7
$
25.9
Non-interest income
Mortgage banking activities, net
32.0
53.1
Investment fair value changes, net
(23.2
)
(0.5
)
HEI income, net
7.1
3.0
Servicing income, net
8.0
3.6
Fee income, net
2.9
1.8
Other income, net
2.4
2.2
Realized gains, net
—
(1.8
)
Total non-interest income, net
$
29.2
$
61.3
General and administrative expenses
(49.4
)
(40.8
)
Portfolio management costs
(8.7
)
(4.8
)
Loan acquisition costs
(6.7
)
(5.4
)
Other expenses
(7.1
)
(8.2
)
Benefit from (Provision for) income taxes
2.5
(8.0
)
Net (loss) income
$
(5.5
)
$
20.0
Dividends on preferred stock
(1.8
)
(1.8
)
Net (loss) income (related) available to common stockholders
$
(7.3
)
$
18.3
Weighted average basic common shares (thousands)
124,769
126,295
Weighted average diluted common shares (thousands) (2)
124,769
126,570
(Loss) Earnings per basic common share
$
(0.07
)
$
0.13
(Loss) Earnings per diluted common share
$
(0.07
)
$
0.13
Regular dividends declared per common share
$
0.18
$
0.18
REDWOOD TRUST, INC.
Consolidated Balance Sheets (1)
($ in millions, except share and per share data)
3/31/26
12/31/25
Residential consumer loans
$
21,300
$
17,936
Residential investor loans
3,311
3,617
Real estate securities
476
423
Home equity investments (HEI)
341
330
Servicing investments
300
302
Strategic investments
107
102
Cash and cash equivalents
202
256
Other assets
779
736
Total assets
$
26,816
$
23,701
Asset-backed securities issued, net
$
20,418
$
17,492
Debt obligations, net
4,867
4,799
Other liabilities
574
427
Total liabilities
$
25,859
$
22,718
Stockholders' equity
957
983
Total liabilities and equity
$
26,816
$
23,701
Common shares outstanding at period end (thousands)
125,015
124,460
GAAP book value per common share
$
7.12
$
7.36
Segment Financial Information(1)(2)
Three Months Ended March 31, 2026
(In Millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
61.3
$
18.4
$
4.2
$
268.7
$
4.0
$
0.3
$
356.9
Interest expense
(36.3
)
(14.8
)
(2.1
)
(256.3
)
(12.7
)
—
(322.2
)
Net interest income (expense)
25.0
3.6
2.1
12.4
(8.7
)
0.3
34.7
Non-interest income (loss)
Mortgage banking activities, net
22.1
2.7
7.2
—
—
—
32.0
Investment fair value changes, net
—
—
(0.3
)
(15.4
)
(7.5
)
—
(23.2
)
HEI income, net
—
—
—
0.6
6.5
—
7.1
Servicing Income, net
—
—
—
8.0
—
—
8.0
Fee Income, net
—
—
2.8
0.2
(0.1
)
—
2.9
Other income, net
—
—
0.6
0.9
1.0
—
2.4
Realized gains, net
—
—
—
—
—
—
—
Total non-interest income, net
22.1
2.7
10.4
(5.8
)
(0.1
)
—
29.2
General and administrative expenses
(7.0
)
(2.5
)
(13.0
)
(3.4
)
—
(23.5
)
(49.4
)
Portfolio management costs
—
—
—
(4.2
)
(4.5
)
—
(8.7
)
Loan acquisition costs
(2.8
)
(1.0
)
(2.8
)
—
—
—
(6.7
)
Other expenses
—
—
(2.0
)
(5.1
)
—
—
(7.1
)
Benefit from (Provision for) income taxes
1.2
(0.3
)
2.1
(1.4
)
0.6
0.3
2.5
Net Income (Loss)
$
38.4
$
2.5
$
(3.3
)
$
(7.3
)
$
(12.8
)
$
(22.9
)
$
(5.5
)
Preferred Dividends
(0.5
)
(0.2
)
(0.1
)
(0.7
)
(0.3
)
—
(1.8
)
Net income (loss) available (related) to common stockholders
$
37.8
$
2.3
$
(3.4
)
$
(8.0
)
$
(13.1
)
$
(22.9
)
$
(7.3
)
Total Assets
$
2,573.7
$
891.5
$
329.3
$
21,903.5
$
945.0
$
172.7
$
26,815.8
Three Months Ended December 31, 2025
(In Millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
52.3
$
14.7
$
6.3
$
248.6
$
4.7
$
0.5
$
327.0
Interest expense
(34.3
)
(11.8
)
(4.3
)
(233.7
)
(16.9
)
—
(301.0
)
Net interest income (expense)
17.9
2.9
2.0
14.9
(12.2
)
0.5
25.9
Non-interest income (loss)
Mortgage banking activities, net
35.2
5.2
12.7
—
—
—
53.1
Investment fair value changes, net
—
—
—
7.6
(8.1
)
—
(0.5
)
HEI income, net
—
—
—
0.5
2.5
—
3.0
Servicing Income, net
—
—
—
3.6
—
—
3.6
Fee Income, net
—
—
1.7
0.2
(0.1
)
—
1.8
Other income, net
—
—
1.9
0.8
(0.6
)
—
2.2
Realized gains, net
—
—
—
—
(1.8
)
—
(1.8
)
Total non-interest income, net
35.2
5.2
16.3
12.7
(8.1
)
—
61.3
General and administrative expenses
(10.0
)
(2.7
)
(8.9
)
(1.1
)
—
(18.1
)
(40.8
)
Portfolio management costs
—
—
—
(2.8
)
(2.0
)
—
(4.8
)
Loan acquisition costs
(2.1
)
(0.7
)
(2.7
)
—
—
—
(5.4
)
Other expenses
—
—
(2.0
)
(6.2
)
—
—
(8.2
)
Provision for income taxes
(7.3
)
(1.1
)
2.3
(1.8
)
(0.2
)
0.2
(8.0
)
Net Income (Loss)
$
33.8
$
3.5
$
7.0
$
15.7
$
(22.5
)
$
(17.5
)
$
20.0
Preferred Dividends
(0.5
)
(0.2
)
(0.1
)
(0.6
)
(0.4
)
—
(1.8
)
Net income (loss) available (related) to common stockholders
$
33.3
$
3.3
$
6.8
$
15.2
$
(22.9
)
$
(17.5
)
$
18.3
Total Assets
$
2,411.8
$
909.3
$
357.4
$
18,789.6
$
943.3
$
289.7
$
23,701.1
Non-GAAP Disclosures
To supplement consolidated and segment financial information prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company also provides Earnings Available for Distribution (“EAD”), EAD Return on Equity ("EAD ROE"), Core Segments Earnings Available for Distribution (“Core Segments EAD”) and Core Segments EAD Return on Equity ("Core Segments EAD ROE") as non-GAAP measures.
Management believes these non-GAAP measures provide useful supplemental information to investors and management in evaluating the Company’s operating performance, facilitating comparisons to industry peers, and assessing the current income-generating capacity of the Company’s operating platforms as of the period presented, including the Company’s ability to pay dividends. These measures also assist in evaluating the Company’s ongoing transition to a more scalable and simplified business model, including the wind-down of legacy portfolio holdings within the Legacy Investments segment.
These non-GAAP measures should not be utilized in isolation, nor should they be considered as an alternative to GAAP net income (loss) available (related) to common stockholders, or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.
Earnings Available for Distribution (“EAD”) and EAD ROE are non-GAAP financial measures that the Company has historically reported and continues to use to present management’s non-GAAP analysis of the operating performance of the Company’s different business segments. EAD is defined, as GAAP net income (loss) available (related) to common stockholders, adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition-related expenses; (iv) exclude certain organizational restructuring charges, as applicable; and (v) reflect a hypothetical income tax adjustment associated with these items. EAD ROE is defined as EAD divided by average common equity.
Core Segments EAD and Core Segments EAD ROE represent management’s non-GAAP assessment of the combined performance of the Company’s mortgage banking platforms and related investments, which include the Sequoia Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments segments (collectively, the “Core Segments”), together with an allocated portion of the Corporate segment attributable to those operations.
Core Segments EAD excludes the Legacy Investments segment and the portion of the Corporate segment attributable to Legacy Investments. Core Segments EAD ROE is calculated as Core Segments EAD divided by the average capital utilized by the Core Segments during the period, which represents management’s internal estimate of the average economic capital allocated to support Core Segments activities.
Non-GAAP Disclosures (continued) Reconciliation of GAAP to non-GAAP EAD – First Quarter 2026 (1)
Three Months Ended March 31, 2026
($ in millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Total
Core Segments (4)
Legacy
Investments
Corporate/
Other (3)
Total
GAAP Net Income (Loss)
$
37.8
$
2.3
$
(3.4
)
$
(8.0
)
$
28.7
$
(13.1
)
$
(22.9
)
$
(7.3
)
EAD Adjustments:
Investment fair value changes, net (5)
—
—
—
15.4
15.4
7.5
—
22.9
Realized (gains)/losses, net (6)
—
—
—
—
—
—
—
—
Acquisition related expenses (7)
—
—
2.0
—
2.0
—
—
2.0
Organizational restructuring charges (8)
—
—
5.0
2.1
7.1
—
0.3
7.4
Tax effect of adjustments(9)
—
—
(1.8
)
3.8
2.0
0.1
(0.1
)
1.9
Non-GAAP EAD (2)
$
37.8
$
2.3
$
1.8
$
13.3
$
55.2
$
(5.5
)
$
(22.7
)
$
27.1
Adjustment for allocation of Corporate segment (10)
(7.0
)
(2.6
)
(1.1
)
(8.0
)
(18.7
)
(3.9
)
22.7
—
Non-GAAP EAD with Allocated Corporate Segment
$
30.8
$
(0.3
)
$
0.7
$
5.3
$
36.5
$
(9.4
)
$
—
$
27.1
Net Income (loss) (GAAP)
$
(7.3
)
EAD (Non-GAAP)
$
27.1
Core Segments EAD (Non-GAAP)
$
36.5
Net Income (loss) per Basic Common Share (GAAP)
$
(0.07
)
EAD per Basic common share (Non-GAAP)
$
0.21
Core Segments EAD per Basic Common Share (Non-GAAP) (11)
Certain totals may not foot due to rounding. Earnings Available for Distribution (“EAD”) is a non-GAAP measure that the Company has historically reported and continues to use to present management’s non-GAAP analysis of the operating performance of the Company’s different business segments. EAD is defined, as GAAP net income (loss) available (related) to common stockholders, adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition-related expenses; (iv) exclude certain organizational restructuring charges, as applicable; and (v) reflect a hypothetical income tax adjustment associated with these items. Beginning in the first quarter of 2026, we revised our segment reporting to allocate corporate financing costs to our Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. Core Segments EAD and Core Segments EAD ROE are non-GAAP measures and are used to present management’s non-GAAP analysis of the combined performance of the Company’s mortgage banking platforms and related investments (which are defined as the "Core Segments" and which consist of the Company’s Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking and Redwood Investments segments), inclusive of an allocated portion of the Company’s Corporate segment relating to those Core Segments. Core Segments EAD excludes the Company’s Legacy Investments segment and excludes an allocated portion of the Company’s Corporate segment relating to the Legacy Investments segment.
Core Segments EAD is defined as: GAAP net income (loss) available (related) to common stockholders adjusted to (i) exclude GAAP net loss from the Legacy Investments Segment, (ii) exclude the portion of the Corporate Segment allocation relating to the Legacy Investments segment, (iii) exclude investment fair value changes, net; (iv) exclude realized gains and losses; (v) exclude acquisition related expenses; (vi) exclude certain organizational restructuring charges (as applicable); and (vii) adjust for the hypothetical income taxes associated with these adjustments.
Refer to footnote 13 below for the definition of Core Segments EAD ROE. Investment fair value changes, net includes all amounts within that same line item in our consolidated statements of (loss) income that are attributable to each segment, which primarily represents both realized and unrealized gains and losses on our investments held in each segment and associated hedges. Realized and unrealized gains and losses on our HEI investments are reflected in a separate line item on our consolidated income statements titled "HEI income, net". Realized (gains)/losses, net includes all amounts within that line item on our consolidated statements of (loss) income that are attributable to each segment. Acquisition related expenses include transaction costs paid to third parties, as applicable, and the ongoing amortization of intangible assets related to the Riverbend and CoreVest acquisitions. Organizational restructuring charges for the first quarter of 2026 represent costs associated with employee severance and related transition expenses. Tax effect of adjustments represents the hypothetical income taxes associated with EAD adjustments used to calculate each segment EAD. Allocation of Corporate Segment is based on the average capital utilized by the segment during the period, which represents management’s internal estimate of the average economic capital allocated to support the activities of each segment. Core Segments EAD per basic common share is a non-GAAP measure and is defined as Core Segments EAD divided by basic weighted average common shares outstanding at the end of the period. ROE consists of consolidated GAAP net income annualized divided by average common equity for the period. Core Segments EAD ROE is a non-GAAP measure and is defined as Core Segments EAD annualized divided by average capital utilized by the Core Segments of $762 million and $726 million for the three months ended March 31, 2026 and December 31, 2025, respectively. Average capital utilized is management's internal estimate of the average economic capital allocated to support the activities of the Core Segments. About Redwood
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes.
Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Cautionary Statement; Forward-Looking Statements:
This press release and the related conference call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected timing for the filing of Redwood's Quarterly Report on Form 10-Q. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan” and similar expressions or their negative forms, or by references to strategy, plans, opportunities, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption “Risk Factors”. Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-K, 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Redwood Trust (RWT - Free Report) came out with quarterly earnings of $0.28 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +1.82%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.23 per share when it actually produced earnings of $0.33, delivering a surprise of +43.48%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Redwood Trust, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $34.7 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 9.90%. This compares to year-ago revenues of $27.9 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Redwood Trust shares have added about 4% since the beginning of the year versus the S&P 500's gain of 4.3%.
What's Next for Redwood Trust?While Redwood Trust has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Redwood Trust was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.31 on $36.23 million in revenues for the coming quarter and $1.20 on $142.96 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Granite Point Mortgage Trust (GPMT - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 5.
This real estate investment trust is expected to post quarterly loss of $0.19 per share in its upcoming report, which represents a year-over-year change of +66.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Granite Point Mortgage Trust's revenues are expected to be $7.4 million, down 8% from the year-ago quarter.
Redwood Trust (RWT - Free Report) reported $34.7 million in revenue for the quarter ended March 2026, representing a year-over-year increase of 24.4%. EPS of $0.28 for the same period compares to $0.14 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $31.58 million, representing a surprise of +9.9%. The company delivered an EPS surprise of +1.82%, with the consensus EPS estimate being $0.28.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Redwood Trust performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Net interest income: $34.7 million compared to the $31.45 million average estimate based on two analysts.Total non-interest income (loss), net- Mortgage banking activities, net: $32 million versus the two-analyst average estimate of $56.19 million.Total non-interest income (loss), net- HEI income, net: $7.1 million compared to the $3.8 million average estimate based on two analysts.Total non-interest income (loss), net: $29.2 million versus the two-analyst average estimate of $59.74 million.View all Key Company Metrics for Redwood Trust here>>>
Shares of Redwood Trust have returned +2.5% over the past month versus the Zacks S&P 500 composite's +12.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
U.S. equity markets advanced for a fifth straight week - their longest winning streak since 2024 - as strong earnings, resilient data, and hopes for lasting Iran peace fueled optimism. Investors looked through another oil-price surge and inflationary pressure, focusing instead on corporate resilience and economic strength despite a complex macro backdrop shaped by geopolitical and policy uncertainty. The Fed held rates steady in an unusually fractured 8-4 vote, while Powell's plan to remain on the Board broke precedent and raised politically charged succession questions.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”) today announced the pricing of an underwritten public offering of $125,000,000 aggregate principal amount of its 9.75% senior notes due 2031 (the “Notes”). In connection with the offering, Redwood granted the underwriters a 30-day option to purchase up to an additional $18,750,000 aggregate principal amount of Notes, to cover over-allotments. The offering is expected to close on May 27, 2026, subje.
Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”) today announced the pricing of an underwritten public offering of $125,000,000 aggregate principal amount of its 9.75% senior notes due 2031 (the “Notes”). In connection with the offering, Redwood granted the underwriters a 30-day option to purchase up to an additional $18,750,000 aggregate principal amount of Notes, to cover over-allotments. The offering is expected to close on May 27, 2026, subject to the satisfaction of certain closing conditions.
Redwood intends to apply to list the Notes on the New York Stock Exchange under the symbol “RWTR” and, if the application is approved, trading of the Notes on the New York Stock Exchange is expected to begin within 30 days after the Notes are first issued.
Redwood intends to use the net proceeds from the offering for general corporate purposes, including funding its operating businesses and investment activities, such as its Sequoia, Aspire, and CoreVest mortgage banking platforms, acquiring related assets for its Redwood Investments portfolio, and pursuing strategic acquisitions and investments.
The Notes will be senior unsecured obligations of Redwood. The Notes will bear interest at a rate equal to 9.75% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on September 1, 2026. The Notes will mature on June 1, 2031. The Notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof or in units.
Redwood will have the right to redeem the Notes, in whole or in part, at its option at any time and from time to time, on or after June 1, 2028 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence of a change of control, Redwood will be required to make an offer to repurchase all outstanding Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Investment Bank, Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC and Piper Sandler & Co., are acting as joint book-running managers for the proposed offering. Mischler Financial Group, Inc. and Seaport Global Securities LLC are acting as co-managers for the proposed offering.
The public offering will be made pursuant to an automatic shelf registration statement on Form S-3 that was filed by Redwood with the Securities and Exchange Commission (“SEC”) and became effective on March 3, 2025, as amended on August 22, 2025. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus may be obtained by contacting:
Morgan Stanley & Co. LLC
180 Varick Street
New York, NY 10014
Attention: Prospectus Department
Or by telephone: (866) 718-1649
Or by email: [email protected]
RBC Capital Markets, LLC
Attention: Transaction Management
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281-8098
Or by telephone: 866-375-6829
Or by email: [email protected]
UBS Investment Bank Attention: Prospectus Department
11 Madison Avenue
New York, NY 10010
Or by telephone: 833-481-0269
Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Attention: WFS Customer Service
Or by telephone: (800) 645-3751
Or by email: [email protected]
Goldman Sachs & Co. LLC
Attention: Prospectus Department
200 West Street
New York, NY 10282
Or by telephone: 866-471-2526
Or by email: [email protected]
Piper Sandler & Co.
Attention: Debt Capital Markets
1251 Avenue of the Americas, 6th Floor
New York, NY 10020
Or by email: [email protected]
This announcement shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About Redwood Trust
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes.
CAUTIONARY STATEMENT: This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, such as statements related to the offering, including the terms thereof, the anticipated closing date, the intention to apply to list the securities on the New York Stock Exchange and the expected use of the net proceeds. Forward-looking statements involve numerous risks and uncertainties. Redwood’s actual results may differ materially from those projected, and Redwood cautions investors not to place undue reliance on the forward-looking statements contained in this release. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan,” and similar expressions or their negative forms, or by references to strategy, plans, or intentions. No assurance can be given that the offering will be completed on the terms described, or at all, or that the net proceeds of the offering will be used as indicated. Completion of the offering on the terms described, the application to list the securities on the New York Stock Exchange and the application of the net proceeds, are subject to numerous conditions, risks and uncertainties, many of which are beyond the control of Redwood, including, among other things, those described in Redwood’s preliminary prospectus supplement dated May 19, 2026, the accompanying prospectus dated March 3, 2025, as amended on August 22, 2025, and the documents incorporated in the prospectus supplement and the prospectus by reference. Redwood undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260519834881/en/
Redwood Trust reported a Q1 2026 GAAP loss due to fair value declines in retained securitization tranches amid rising rates. RWT issued $125M in 9.75% senior unsecured notes due 2031, diversifying funding and capitalizing on open capital markets despite rate pressures. RWT.PR.A preferred shares yield 10% but offer limited upside and high duration risk, especially as long-term rates rise.
Redwood Trust recently issued RWTS, a 9.75% senior note maturing in 2031, now trading slightly below par. RWT's recourse leverage has doubled year-over-year to above 5x, raising concerns about capital structure and debt coverage. RWTS offers one of the highest yields among mREIT baby bonds, but increasing leverage and sector risks warrant caution.
Build-A-Bear Workshop, Inc. remains a buy despite a challenging small/mid-cap environment and recent 30% share price decline. BBW FY26 guidance calls for mid-single-digit revenue growth but a potential ~1 point operating margin reduction, reflecting tariff and digital reinvestment headwinds. Margin pressure stems from both a 10% tariff assumption and necessary investments to revamp e-commerce amid declining SEO visibility and AI-driven search disruption.
Brand launches at scale with Mini Beans™, Bluey and Personalization in 1,500+ stores nationwide this Spring
, /PRNewswire/ -- Build-A-Bear Workshop, the iconic experiential retailer known for "adding a little more heart to life," is launching its first-ever wholesale partnership with Walmart. Beginning today, Build-A-Bear Mini Beans™, new collectible Micro Mini Beans™, and the highly anticipated Build-A-Bear x Bluey™ collection in partnership with BBC Studios, are available in 1,500+ Walmart stores nationwide, a major new distribution milestone for the nearly 30-year-old brand.
Build-A-Bear Debuts in Walmart In store, the brand's signature "Choose Me, Name Me, Dress Me" journey comes to life through curated displays that spotlight styling and self-expression. Guests can select their furry friend and personalize the look with outfits and accessories, creating a character that feels uniquely their own. Mini Beans come with hang tags inspired by the iconic birth certificate customers have become accustomed to in Workshops reinforcing the personal connection that makes Build-A-Bear so memorable, as do the Build-A-Bear hearts inside the plush on shelves.
The launch of Build‑A‑Bear's new Micro Mini Beans™ at Walmart taps directly into the growing consumer appetite for collectible toys and blind‑bag surprises, delivering big personality in a pint‑sized format. Available in mystery‑pack singles as well as multi‑packs, Micro Mini Beans introduce a playful "what‑will‑you‑get" experience that fuels repeat discovery and trading - key drivers of modern collectibility. By pairing beloved Build‑A‑Bear characters with a blind‑bag reveal and accessible price points, the assortment invites kids and collectors alike to build their collections one surprise at a time, extending the brand's heart‑led storytelling into a trend‑forward retail experience.
"This is a defining growth milestone for Build-A-Bear," said Dave Henderson, Chief Revenue Officer of Build-A-Bear Workshop. "For nearly three decades, we've built our brand around personalization and emotional connection. Launching our first wholesale partnership with Walmart allows us to introduce Build-A-Bear to millions of new guests while staying true to the creativity and individuality that set us apart."
The full assortment includes:
Build-A-Bear X Bluey™ — Beloved characters from Bluey, including Bluey, Bingo, Rusty, Socks, Muffin and Winton, are available in Mini Beans and/or Micro Mini Beans, and Bluey in full-size plush, introducing Build-A-Bear's distinctive plush formats to Walmart's Bluey lineup through a licensed partnership with BBC Studios. Mini Beans™ — The highly collectible plush line from Build-A-Bear arrives in style offering guests Micro Mini Beans in mystery-pack singles, 3-packs and 6-packs with a mystery plush inside, a first-ever offering for the brand. An assortment of Original Mini Beans options with select outfits and accessories to personalize as desired are also available. From bears to frogs to axolotls, Mini Beans continue to drive strong guest enthusiasm and repeat visits. Tan Bear — The classic bear that defines the brand is available in full size, along with assorted accessories like denim overalls, hoodies and a bucket hat for guests to personalize as desired. With sought-after, beloved plush characters, collectible formats and personalization through styling, this limited-time launch positions Build-A-Bear to drive strong guest momentum this spring.
This collection will hit shelves at select Walmart stores nationwide and online at Walmart.com starting today, available through May 15 while supplies last. Guests can also visit Build-A-Bear locations across the country and online at Buildabear.com for even more of the stuff they love.
For images and additional information click HERE.
About Build-A-Bear Workshop, Inc.
Founded in 1997, Build-A-Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build-A-Bear has grown into a multi-generational phenomenon, positioned at the intersection of pop-culture trends. Beyond its signature retail experience, the brand also offers pre-stuffed plush, gifting, partnerships with best-in-class licensed and collectible characters, and original storytelling through Build-A-Bear Entertainment, LLC. Build-A-Bear's current brand platform and message, "The Stuff You Love," crosses ages and cultures while celebrating nearly 30 years of helping people mark life's meaningful moments.
Today, Build-A-Bear operates more than 650 company-owned, partner-operated and franchise experience locations across more than 30 countries, complemented by buildabear.com. Build-A-Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the company's 5th consecutive year of record results. Learn more at the Investor Relations section of buildabear.com.
Build-A-Bear Workshop remains a hold as margin pressures from tariffs and higher SG&A offset ongoing buybacks and store expansion. BBW's 2026 guidance implies mid-single-digit revenue growth but continued EBIT margin contraction, with tariff and marketing costs already factored in. The CEO transition appears low-risk, with the incoming CEO promoted internally and outgoing leadership providing continuity.
Build-A-Bear faces temporary headwinds but offers compelling upside with a forward P/E below 10x and over 60% price appreciation potential to a $62 target. Recent results showed mixed performance: EPS beats, revenue misses, margin compression, and persistent impacts from tariffs, weather, and e-commerce softness. BBW maintains a debt-free balance sheet, robust cash, ongoing buybacks, and a modest dividend increase, supporting shareholder returns amid volatility.
Build-A-Bear Workshop, Inc. (NYSE:BBW – Get Free Report) has earned an average rating of “Moderate Buy” from the six ratings firms that are currently covering the company, Marketbeat reports. One investment analyst has rated the stock with a hold rating and five have assigned a buy rating to the company. The average 1 year target price among brokerages that have covered the stock in the last year is $64.75.
Several equities research analysts have recently weighed in on BBW shares. Zacks Research raised Build-A-Bear Workshop from a “strong sell” rating to a “hold” rating in a research note on Tuesday, March 3rd. DA Davidson cut their price objective on Build-A-Bear Workshop from $85.00 to $70.00 and set a “buy” rating on the stock in a research note on Friday, December 5th. Wall Street Zen cut Build-A-Bear Workshop from a “buy” rating to a “hold” rating in a report on Saturday, December 6th. CJS Securities started coverage on shares of Build-A-Bear Workshop in a report on Wednesday, December 10th. They set a “market outperform” rating and a $70.00 price target for the company. Finally, Weiss Ratings restated a “buy (b)” rating on shares of Build-A-Bear Workshop in a report on Tuesday, December 23rd.
Get Our Latest Research Report on BBW
Build-A-Bear Workshop Stock Performance Shares of NYSE:BBW opened at $37.23 on Friday. Build-A-Bear Workshop has a 52 week low of $32.55 and a 52 week high of $75.85. The firm has a market cap of $482.08 million, a PE ratio of 9.33 and a beta of 1.08. The firm’s fifty day moving average is $50.50 and its 200-day moving average is $55.86.
Build-A-Bear Workshop (NYSE:BBW – Get Free Report) last posted its quarterly earnings data on Thursday, March 12th. The specialty retailer reported $1.26 earnings per share for the quarter, missing analysts’ consensus estimates of $1.27 by ($0.01). The company had revenue of $154.51 million during the quarter, compared to analyst estimates of $155.71 million. Build-A-Bear Workshop had a net margin of 9.85% and a return on equity of 34.44%. Sell-side analysts forecast that Build-A-Bear Workshop will post 3.71 EPS for the current year.
Build-A-Bear Workshop Increases Dividend The company also recently disclosed a quarterly dividend, which will be paid on Thursday, April 9th. Stockholders of record on Thursday, March 26th will be given a dividend of $0.23 per share. This represents a $0.92 annualized dividend and a dividend yield of 2.5%. This is a boost from Build-A-Bear Workshop’s previous quarterly dividend of $0.22. The ex-dividend date is Thursday, March 26th. Build-A-Bear Workshop’s dividend payout ratio is currently 23.06%.
Hedge Funds Weigh In On Build-A-Bear Workshop Several hedge funds and other institutional investors have recently bought and sold shares of BBW. Kestra Advisory Services LLC acquired a new stake in Build-A-Bear Workshop during the 4th quarter worth about $28,000. IFP Advisors Inc lifted its stake in shares of Build-A-Bear Workshop by 68.1% in the 3rd quarter. IFP Advisors Inc now owns 501 shares of the specialty retailer’s stock valued at $33,000 after purchasing an additional 203 shares during the period. Larson Financial Group LLC boosted its position in shares of Build-A-Bear Workshop by 453.1% during the 3rd quarter. Larson Financial Group LLC now owns 542 shares of the specialty retailer’s stock valued at $35,000 after purchasing an additional 444 shares in the last quarter. Blue Trust Inc. boosted its position in shares of Build-A-Bear Workshop by 163.0% during the 4th quarter. Blue Trust Inc. now owns 668 shares of the specialty retailer’s stock valued at $41,000 after purchasing an additional 414 shares in the last quarter. Finally, State of Alaska Department of Revenue acquired a new stake in Build-A-Bear Workshop during the third quarter worth approximately $45,000. Institutional investors and hedge funds own 79.30% of the company’s stock.
About Build-A-Bear Workshop (Get Free Report)
Build-A-Bear Workshop, Inc operates a specialty retail business focused on interactive “workshop” experiences that allow customers to create customized stuffed animals. Through its in-store and online platforms, the company offers a wide range of plush toys, apparel, accessories and sound modules, enabling guests to personalize each creation. In addition to its core bear products, Build-A-Bear has expanded its portfolio to include licensed characters from leading entertainment and media franchises.
Founded in 1997 by Maxine Clark and headquartered in St.
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What started as an April Fools' prank is now a real plush that fans can buy in Build-A-Bear Workshops and online while supplies last
, /PRNewswire/ -- Build-A-Bear, the experiential retailer known for "adding a little more heart to life," is celebrating April Fools' Day with a week-long prank that culminated in a real product reveal of the special-edition Alien Cow plush, now available at Build-A-Bear Workshops nationwide and on buildabear.com, but only while supplies last.
Build-A-Bear Special Edition Alien Cow Plush In the days leading up to April 1, fans and guests began noticing something unusual across Build-A-Bear's social channels and Workshops. Posts appeared to glitch, strange messages popped up, and in some locations, things got a little weird. For example, furry friends were found "floating" upside down in Workshops, green lights flickered inside cub condos, and even occasional unexpected "moo" sounds came from plush that were indeed not cows.
Local outlet KMOV in St. Louis even picked up on the strange activity, covering the unexplained moments as they unfolded and adding to the speculation.
The strange activity was not random. It was all part of a coordinated April Fools' Day stunt that built toward the arrival of Alien Cow — a playful, otherworldly take on a classic Build-A-Bear favorite.
The Alien Cow plush blends traditional cow features with subtle extraterrestrial details, including green accents and a graphic t-shirt that reads "Legendairy." With its soft fur, friendly embroidered face, and tongue-in-cheek design, the plush offers a lighthearted twist for fans looking to add something a little unexpected to their collection.
"The Alien Cow campaign is a great example of how we continue to bring a sense of fun and creativity to the brand," said Jazzy Danziger, VP of Brand Creative and Innovation at Build-A-Bear. "For April Fools, we wanted to create something that felt playful from the start, build curiosity throughout the week, and then deliver on it with something real that fans could take home. After seeing how fans responded to Emo Axolotl last year, we knew there was an opportunity to keep leaning into that kind of unexpected energy in a way that still feels authentic to who we are."
The campaign extended beyond stores, with social content — including alien-encounter-themed videos across Instagram and TikTok — helping to build intrigue throughout the week.
The Alien Cow plush is available now at buildabear.com and in Build-A-Bear Workshops nationwide while supplies last.
Stay tuned for more exciting updates and product releases by following @buildabear on Instagram, TikTok and X. For images click here.
About Build-A-Bear Workshop, Inc.
Founded in 1997, Build-A-Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build-A-Bear has grown into a multigenerational phenomenon, positioned at the intersection of pop-culture trends. Beyond its signature retail experience, the brand also offers pre-stuffed plush, gifting, partnerships with best-in-class licensed and collectible characters, and original storytelling through Build-A-Bear Entertainment, LLC. Build-A-Bear's current brand platform and message, "The Stuff You Love," crosses ages and cultures while celebrating nearly 30 years of helping people mark life's meaningful moments.
Today, Build-A-Bear operates more than 650 company-owned, partner-operated and franchise experience locations across more than 30 countries, complemented by buildabear.com. Build-A-Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the company's 5th consecutive year of record results. Learn more at the Investor Relations section of buildabear.com.
SG Americas Securities LLC raised its holdings in Build-A-Bear Workshop, Inc. (NYSE:BBW – Free Report) by 199.7% in the 4th quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 28,858 shares of the specialty retailer’s stock after purchasing an additional 19,229 shares during the period. SG Americas Securities LLC owned 0.22% of Build-A-Bear Workshop worth $1,768,000 at the end of the most recent reporting period.
Other institutional investors also recently modified their holdings of the company. Thrivent Financial for Lutherans boosted its holdings in Build-A-Bear Workshop by 22.0% in the 3rd quarter. Thrivent Financial for Lutherans now owns 917,479 shares of the specialty retailer’s stock worth $59,828,000 after buying an additional 165,159 shares during the period. American Century Companies Inc. raised its holdings in Build-A-Bear Workshop by 6.7% during the 3rd quarter. American Century Companies Inc. now owns 535,791 shares of the specialty retailer’s stock valued at $34,939,000 after acquiring an additional 33,445 shares during the period. Arrowstreet Capital Limited Partnership lifted its position in shares of Build-A-Bear Workshop by 3.1% during the third quarter. Arrowstreet Capital Limited Partnership now owns 307,662 shares of the specialty retailer’s stock worth $20,063,000 after acquiring an additional 9,221 shares in the last quarter. Qube Research & Technologies Ltd boosted its holdings in shares of Build-A-Bear Workshop by 17.7% in the third quarter. Qube Research & Technologies Ltd now owns 271,520 shares of the specialty retailer’s stock worth $17,706,000 after acquiring an additional 40,743 shares during the period. Finally, Marshall Wace LLP boosted its holdings in shares of Build-A-Bear Workshop by 69.9% in the third quarter. Marshall Wace LLP now owns 237,927 shares of the specialty retailer’s stock worth $15,515,000 after acquiring an additional 97,917 shares during the period. 79.30% of the stock is currently owned by hedge funds and other institutional investors.
Analyst Ratings Changes BBW has been the topic of a number of analyst reports. CJS Securities initiated coverage on Build-A-Bear Workshop in a research note on Wednesday, December 10th. They set a “market outperform” rating and a $70.00 price objective on the stock. Zacks Research upgraded Build-A-Bear Workshop from a “strong sell” rating to a “hold” rating in a research note on Tuesday, March 3rd. Finally, Weiss Ratings reiterated a “buy (b-)” rating on shares of Build-A-Bear Workshop in a research report on Friday, March 27th. Five research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $64.75.
Get Our Latest Stock Analysis on BBW
Build-A-Bear Workshop Price Performance BBW opened at $38.05 on Monday. The firm has a market capitalization of $492.76 million, a P/E ratio of 9.54 and a beta of 1.22. Build-A-Bear Workshop, Inc. has a one year low of $32.55 and a one year high of $75.85. The company has a fifty day moving average price of $47.69 and a 200-day moving average price of $54.57.
Build-A-Bear Workshop (NYSE:BBW – Get Free Report) last issued its quarterly earnings data on Thursday, March 12th. The specialty retailer reported $1.26 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $1.27 by ($0.01). Build-A-Bear Workshop had a return on equity of 34.44% and a net margin of 9.85%.The business had revenue of $154.51 million during the quarter, compared to analysts’ expectations of $155.71 million. On average, analysts expect that Build-A-Bear Workshop, Inc. will post 3.71 earnings per share for the current year.
Build-A-Bear Workshop Increases Dividend The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, April 9th. Stockholders of record on Thursday, March 26th will be issued a dividend of $0.23 per share. The ex-dividend date of this dividend is Thursday, March 26th. This is a positive change from Build-A-Bear Workshop’s previous quarterly dividend of $0.22. This represents a $0.92 annualized dividend and a dividend yield of 2.4%. Build-A-Bear Workshop’s payout ratio is presently 23.06%.
Build-A-Bear Workshop Profile (Free Report)
Build-A-Bear Workshop, Inc operates a specialty retail business focused on interactive “workshop” experiences that allow customers to create customized stuffed animals. Through its in-store and online platforms, the company offers a wide range of plush toys, apparel, accessories and sound modules, enabling guests to personalize each creation. In addition to its core bear products, Build-A-Bear has expanded its portfolio to include licensed characters from leading entertainment and media franchises.
Founded in 1997 by Maxine Clark and headquartered in St.
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New social media poll by brand reveals the importance of love, patience and hands-on experience when preparing for a real pet
, /PRNewswire/ -- In honor of National Pet Day on April 11, Build-A-Bear Workshop, known for adding a little more heart to life, is celebrating the moments behind pet ownership, where love meets learning and responsibility. New insights from a poll of the brand's social media community underscore a simple truth: while pet care undeniably starts with love, it's shaped through everyday responsibility and hands-on experience.
Build-A-Bear's Promise Pets That same spirit is at the heart of Build-A-Bear's Promise Pets™ collection, created to encourage responsibility and reinforce the emotional value of pet care, while supporting worry-free, thoughtful plush pet adoption. Promise Pets aim to help families, especially kids, practice empathy and patience through hands-on play, storytelling, and accessories that mirror real-world pet care. For parents, Promise Pets allow kids to learn important lessons in caretaking and responsibility, in preparation for perhaps a real pet someday.
Highlights from the Build-A-Bear pet parent survey include:
Names as Unique as They Are: The variety of pet names reported with little to no redundancy indicates just how unique and creative the naming process has become for pet owners. While "Bruno" was more common, it still only accounted for under 2% of responses. Dogs vs. Cats: Dogs were the most reported breed of adopted pets at 45%, but cats followed closely behind at 38%. Of cats, domestic short hair (26%) and tabby (23%) stole the most hearts, while labs (22%), terriers (20%) and chihuahuas (10%) were the most common dog breeds. Cuddles Come First: At 32%, cuddling was the number one caretaking activity, followed by brushing (23%) and going on walks (20%). Love Is the Non-Negotiable: Half of pet parents said love is the most important part of caring for a pet, followed by patience (24%) and dedication (18%). Practice Makes Paw-fect: When asked the best way to prepare for the responsibility of a pet, 86% said hands-on experience is key. The top responses included helping a friend or family member, volunteering at a shelter, and practicing with a toy or stuffed animal. Build-A-Bear's current Promise Pets™ lineup reflects these real-life insights, offering a range of furry friends and accessories designed to encourage nurturing play. The Make-Your-Own Promise Pets collection includes a Calico Cat, Ocicat, Pug and Bernese Mountain Dog, with additional breeds such as the Dachshund, Golden Retriever and Frenchie available online. New this month are Promise Pets Mini Beans™, available in breeds including Calico Cat, Ocicat, Bernese Mountain Dog, and Pug.
The collection also features pet care accessories that help complete the experience, from pet carriers and leashes to bowls, beds, and an Adopt-A-Pup book created specifically for Promise Pets. Families can get everything they need to bring home their new pet and step into the plush pet parent role.
Promise Pets are available for adoption at Build-A-Bear Workshop locations nationwide and online at buildabear.com.
For the latest updates, visit Build-A-Bear.com or follow @buildabear on TikTok, Instagram, Facebook and X. For additional images of the collection click here.
About Build-A-Bear Workshop, Inc.
Founded in 1997, Build-A-Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build-A-Bear has grown into a multi-generational phenomenon, positioned at the intersection of pop-culture trends. Beyond its signature retail experience, the brand also offers pre-stuffed plush, gifting, partnerships with best-in-class licensed and collectible characters, and original storytelling through Build-A-Bear Entertainment, LLC. Build-A-Bear's current brand platform and message, "The Stuff You Love," crosses ages and cultures while celebrating nearly 30 years of helping people mark life's meaningful moments.
Today, Build-A-Bear operates more than 650 company-owned, partner-operated and franchise experience locations across more than 30 countries, complemented by buildabear.com. Build-A-Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the company's 5th consecutive year of record results. Learn more at the Investor Relations section of buildabear.com.
Build-A-Bear Workshop (BBW) is transitioning toward a capital-light, partner-operated and franchise model, driving higher ROIC, margin intensity, and cash generation versus legacy corporate stores. BBW's forward strategy emphasizes international asset-light expansion, organic growth, and product personalization, with the majority of new units in high-ROIC third-party channels. Recent Walmart wholesale partnership expands BBW's reach, but is treated as a test event with potential brand dilution risk if not managed carefully.
Flareon leads the first wave of rotating releases, inviting fans to build their collection throughout the year
, /PRNewswire/ -- Build-A-Bear Workshop® announces the launch of its Eevee Evolution campaign, transforming its Pokémon launch into an ongoing plush search inspired by the excitement of discovery. Centered on Eevee and its iconic Evolutions, the campaign introduces a rotating series of limited-time plush releases available in select Build-A-Bear Workshop locations and for limited-time online throughout the year.
Build-A-Bear's New Pokeman Collection; Eevee Evolution Campaign The campaign begins with the debut of Vaporeon, Jolteon, and Flareon, with additional Eevee Evolutions set to appear in future chapters throughout 2026 and early 2027. Each Evolution will be released for a limited window, with timing and availability varying by Build-A-Bear location and online to build excitement in the search to catch each of the special Pokémon friends.
"This campaign is designed to showcase each of the iconic Eevee Evolutions that are beloved by Pokémon fans," says Kim Utlaut, Build-A-Bear Senior Vice President, Chief Brand Officer. "By releasing these plushies in waves, we're creating a collectible experience that feels surprising, immersive, and fun, whether you're discovering your first Evolution or tracking down the next one."
As the journey continues, fans will have opportunities to uncover more fan-favorite Evolutions, with no two moments of the campaign feeling the same. Not all Eevee Evolutions will be available at once, turning each visit into a new chance to discover a new Pokémon friend, online or in store.
Guests are encouraged to follow along and check back as new Eevee Evolutions are unveiled throughout the year. For the latest updates, visit Build-A-Bear.com or follow @buildabear on TikTok, Instagram, and X.
About Build‑A‑Bear Workshop, Inc.
Founded in 1997, Build‑A‑Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing, and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build‑A‑Bear has grown into a multi‑generational phenomenon, positioned at the intersection of pop‑culture trends. Beyond its signature retail experience, the brand also offers pre‑stuffed plush, gifting, partnerships with best‑in‑class licensed and collectible characters, and original storytelling through Build‑A‑Bear Entertainment, LLC. Build‑A‑Bear's current brand platform and message, "The Stuff You Love," crosses ages and cultures while celebrating nearly 30 years of helping people mark life's meaningful moments.
Today, Build‑A‑Bear operates more than 650 company-owned, partner-operated and franchise experience locations across more than 30 countries, complemented by Build-A-Bear.com. Build‑A‑Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the company's 5th consecutive year of record results. Learn more at the Investor Relations section of Build-A-Bear.com.
Build-A-Bear Workshop has achieved consistent top-line growth, diversifying revenue streams through international franchising and commercial expansion. BBW faces macro headwinds, including weak consumer confidence, Middle East tensions, and elevated energy prices, which may pressure margins and growth. Receivables growth outpaces revenue due to commercial segment expansion, lengthening cash conversion cycles, and potentially reducing financial flexibility.
The retailtainment brand introduces a creative twist on summer with new Slushie Plushies, Mashimals and Beary Goods
, /PRNewswire/ -- Build-A-Bear Workshop, Inc., the iconic retail brand known for "adding a little more heart to life," today launched Slushie Plushies, its first-ever wearable plush, alongside its Summer Stuff You Love collection. The summer collection features the brand's new Mashimals and Beary Goods innovation, marking expansion into formats built around consumer trends, gifting, customization and style.
Build-A-Bear Debuts Its First Wearable Plush Inspired by nostalgic summer drinks and bold, color-driven aesthetics, Slushie Plushies are a Make-Your-Own collection that turns slushie flavors into customizable furry friends, including the electric Blue Raspberry Cow, tropical Coconut Lime Koala, bold Fruit Punch Lobster, and Strawberry Lemonade Bear. Each can be customized in-store or online with a matching scent that captures the drink it's named for and a recorded sound, for a full sensory experience.
The Slushie Plushies each come with hidden clips that can be attached to an optional crossbody strap sold separately, turning the plush into something you wear, not just cuddle. The lineup extends into Mini Beans, including Strawberry Axolotl, Pineapple Pig and Coconut Lime Koala, along with bag charms featuring Mango Monkey, Blueberry Capybara, and Pineapple Pig, all made for layering and styling.
"We're seeing a real shift in how our guests engage with plush; it's no longer just something you own, it's something you style and show off," says Kim Utlaut, Build-A-Bear Senior Vice President, Chief Brand Officer. "Slushie Plushies tap into that, introducing a wearable format that brings plush into the world of personal style."
Build-A-Bear is also launching its Summer Stuff You Love collection, a cheerful assortment of plush inspired by sunny days, beachside adventures, and carefree summer moments. Featuring bright colors, expressive characters, and playful details, the collection brings summer to life through soft, huggable plush made for imaginative play. With Build-A-Bear's signature personalization at the heart of the experience, kids and families can create a summer-ready furry friend designed to travel wherever memories are made.
The Summer Stuff You Love collection includes two new formats as well as other furry friends inspired by summertime:
Mashimals: A Make-Your-Own line that mashes animals with unexpected objects, including a Crab 'n' Go Cooler Mashimal, Escargot to the Beach Mashimal, Octopail Mashimal, and Shellcastle Mashimal. These are the plush you didn't know you needed until you saw them. Beary Goods: A pre-stuffed line that turns simple summer moments into loveable plush characters featuring the brand's beloved bear face. From beach days to backyard escapes, each piece feels recognizable and instantly fun, including Beary Goods Wave, Beary Goods Sun, Beary Goods Palm Tree, and Beary Goods Sandcastle. Additional furry friends in the collection include Too Cute Toucan, Chummy Shark, an online-exclusive Lightning Bug, and summertime Mini Beans. The collection rolls out today in Build-A-Bear Workshops and online, bringing a fresh lineup of plush and new formats to guests throughout the summer season.
Please find additional image assets here.
About Build‑A‑Bear Workshop, Inc.
Founded in 1997, Build‑A‑Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build‑A‑Bear has grown into a multi‑generational phenomenon, positioned at the intersection of pop‑culture trends. Beyond its signature retail experience, the brand also offers pre‑stuffed plush, gifting, partnerships with best‑in‑class licensed and collectible characters, and original storytelling through Build‑A‑Bear Entertainment, LLC. Build‑A‑Bear's current brand platform and message, "The Stuff You Love," crosses ages and cultures while celebrating nearly 30 years of helping people mark life's meaningful moments.
Today, Build‑A‑Bear operates more than 650 company-owned, partner-operated and franchise experience locations across more than 30 countries, complemented by buildabear.com. Build‑A‑Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the company's 5th consecutive year of record results. Learn more at the Investor Relations section of buildabear.com.
Build-A-Bear Workshop and Abbott Laboratories are compelling dividend stocks, each trading near lows with yields close to 3%. BBW offers a debt-free balance sheet, aggressive share repurchases, and international expansion, positioning for 9.3% earnings CAGR and over 70% upside to its $62 target. ABT, trading at a forward P/E of 15.31x, is undervalued with robust liquidity, ongoing buybacks, and insider buying, despite segment weakness and lowered guidance.
ST. LOUIS--(BUSINESS WIRE)--Build-A-Bear Workshop, Inc. (NYSE: BBW) today announced results for the first quarter of fiscal year 2026 ended May 2, 2026.
First-quarter total revenues were $125.3 million, compared to $128.4 million First-quarter pre-tax income was $23.9 million, compared to $19.6 million; adjusted pre-tax income was $16.9 million1 First-quarter diluted earnings per share (“EPS”) totaled $1.45, compared to $1.17; adjusted EPS totaled $1.03 1 For the first quarter of 2026, the Company returned $14.2 million to shareholders through share repurchases and quarterly dividends The Company updates its fiscal 2026 revenue and pre-tax income outlook, incorporating revised sales expectations and tariff refund “Although there were positive highlights for the period, given a more uncertain economic environment, with consumer traffic posing a challenge, our results were lower-than-expected for the quarter. While we are taking steps to address this, our focus remains on executing the strategic initiatives designed to leverage the power of the Build-A-Bear brand as we transition to Chris Hurt’s leadership,” commented Sharon Price John, President and Chief Executive Officer of Build-A-Bear Workshop.
Chris Hurt, Chief Operations Officer and Chief Executive Officer-elect of Build-A-Bear Workshop, added, “Looking to the balance of the year, we remain focused on continuing to drive long-term growth by increasing the number of experience locations across the globe, including the back-half grand opening of our new multi-level store in Orlando, and expanding our wholesale business. Even with that, when reflecting on our less-than-expected first quarter direct-to-consumer performance and the overall economic environment, we have chosen to lower our annual revenue guidance, while, notably, still maintaining a range above last year’s record result. Separately, given the tariff refund, we have simultaneously increased our pre-tax outlook.”
Voin Todorovic, Chief Financial Officer of Build-A-Bear Workshop, concluded, “Supported by the continued strong profitability and diversification of our business, solid cash flow generation and disciplined capital allocation enabled us to return $46 million to shareholders over the past 12 months through share repurchases and quarterly dividends, including over $14 million in the first quarter.”
First Quarter Fiscal 2026 Results
(13 weeks ended May 2, 2026, compared to the 13 weeks ended May 3, 2025)
Total revenues were $125.3 million and decreased 2.4% Net retail sales were $113.5 million and decreased 5.1% Consolidated e-commerce demand (online orders fulfilled from either the Company’s warehouses or its stores) decreased 26.1% Commercial and international franchise revenues were a combined $11.8 million and increased 34.1% Pre-tax income was $23.9 million, or 19.0% of total revenues, compared to $19.6 million, or 15.3% of total revenues, in the prior-year quarter. The 370-basis point increase in pre-tax margin reflects a 700-basis-point increase in gross margin, including a 560 basis-point benefit from the $7 million International Emergency Economic Powers Act (“IEEPA”) tariff refund related to prior fiscal year costs, with the remaining 140-basis-points primarily driven by selective price increases, and deleverage from higher occupancy costs. These gains were partially offset by a 310-basis-point increase in selling, general, and administrative expense (“SG&A”), mainly from higher total compensation costs, general inflationary pressures, and longer-range investments, as well as lower interest income. Excluding the $7 million tariff refund related to prior fiscal year costs, adjusted pre-tax income was $16.9 million,1 or 13.5% of revenue. Diluted EPS of $1.45, compared with $1.17, reflecting higher pre-tax income and a lower share count, partially offset by a higher income tax rate. Excluding the $7 million impact from the tariff refund related to prior fiscal year costs, adjusted EPS totaled $1.03. 1 Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $27.8 million, increased by 20.2%, and represented 22.2% of total revenues. Excluding the $7 million impact from the tariff refund related to prior fiscal year costs, adjusted EBITDA was $20.8 million, representing 16.6% of total revenues. 1 Store Activity
For the quarter, the Company delivered net new unit growth of seven global experience locations, comprised of one corporately-managed location, three partner-operated locations, and three franchise locations. At the end of the quarter, Build-A-Bear had 669 global locations, comprised of 376 corporately-managed locations, 181 partner-operated locations, and 112 franchise locations.
Balance Sheet
At the end of the first quarter, cash and cash equivalents totaled $26.2 million, a decrease of $18.1 million, or 40.9%, compared to $44.3 million at the end of the first quarter last year. The Company finished the quarter with no borrowings under its revolving credit facility.
Inventory at quarter end was $77.8 million, an increase of $5.6 million, or 7.7%, mainly driven by tariffs, as well as inventory levels required to support expected increases in sales activity. The Company remains comfortable with the level and composition of its inventory.
For the first quarter, capital expenditures totaled $6.9 million, compared to $2.9 million last year.
Return of Capital to Shareholders
For the first quarter, the Company utilized $11.4 million in cash to repurchase 248,118 shares of common stock and paid shareholders a $2.9 million quarterly cash dividend.
Since the end of the first quarter through May 27, the Company has utilized $3.3 million in cash to repurchase an additional 89,966 shares of its common stock. The Company has $47.0 million remaining under the board-authorized $100.0 million stock repurchase program adopted on September 11, 2024.
2026 Outlook
The Company updates its 2026 outlook, decreasing revenue and revising pre-tax income guidance.
Specifically, for fiscal 2026 the Company now expects:
Total revenue of $530 million to $550 million Pre-tax income of $72 million to $78 million This updated pre-tax income outlook reflects an approximately $13 million IEEPA tariff refund, partially offset by lower-than-expected operating performance. Excluding the approximately $7 million impact from the tariff refund related to prior fiscal year costs, for fiscal 2026 the Company expects adjusted pre-tax income of $65 million to $71 million.1
Our outlook also reflects approximately $10 million of ongoing Section 122 tariffs and related costs, assuming the current 10% tariff rate remains in effect for the balance of the year, as well as approximately $3 million in longer-range investments.
In addition, for fiscal 2026, the Company continues to expect:
Net new unit growth of at least 50 experience locations through a combination of corporately-managed, partner-operated, and franchise business models Commercial revenue growth of at least 20% Capital expenditures of $22 million to $25 million Depreciation and amortization to approximate $16 million Income tax rate to approximate 24%, excluding discrete items The Company’s outlook considers various factors, including tariffs, labor costs, changes in freight expense, and ongoing inflationary challenges. Separately, the Company’s outlook does not contemplate any further material changes in the geopolitical environment, macroeconomic conditions, relevant foreign currency exchange rates, or tariffs, including the timing and amount of tariff refund recoveries.
Note Regarding Non-GAAP Financial Measures
In this press release, the Company’s financial results are provided in accordance with generally accepted accounting principles (GAAP) and using certain non-GAAP financial measures. In particular, the Company provides historic income adjusted to exclude certain costs, which are non-GAAP financial measures. These results are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help identify underlying trends in the Company’s business and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. These measures should not be considered a substitute for or superior to GAAP results. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measure later in this document.
Webcast and Conference Call Information
Today, at 9:00 a.m. ET, Build-A-Bear Workshop will host a conference call with investors and financial analysts to discuss its financial results. The call will be webcast on Build-A-Bear’s Investor Relations website at https://IR.buildabear.com.
The dial-in number for the live conference call is (201) 493-6780 (toll/international) or (877) 407-3982 (toll-free). The access code is Build-A-Bear. The live Internet broadcast may be accessed at https://IR.buildabear.com. The call is expected to conclude by 10:00 a.m. ET.
A replay of the conference call webcast will be available on the investor relations website for one year. A telephone replay will be available from approximately 1:00 p.m. ET on Thursday, May 28, 2026, until 11:59 p.m. ET on Thursday, June 18, 2026, and can be accessed by calling (412) 317-6671 (toll/international) or (844) 512-2921 (toll-free). The access code is 13759998.
About Build-A-Bear
Founded in 1997, Build‑A‑Bear is a leading global retailtainment brand on a mission to add a little more heart to life. At Build-A-Bear, guests are invited to create personalized furry friends through a unique stuffing, dressing, accessorizing and naming process, accentuated by a memorable "heart ceremony" that creates moments of connection for people of all ages.
Over the years, Build‑A‑Bear has grown into a multi‑generational phenomenon, positioned at the intersection of pop‑culture trends. Beyond its signature retail experience, the brand also offers pre‑stuffed plush, gifting, partnerships with best‑in‑class licensed and collectible characters, and original storytelling through Build‑A‑Bear Entertainment, LLC. Build‑A‑Bear’s current brand platform and message, “The Stuff You Love,” crosses ages and cultures while celebrating nearly 30 years of helping people mark life’s meaningful moments.
Today, Build‑A‑Bear operates more than 650 company-owned, partner-operated, and franchise experience locations across more than 30 countries, complemented by buildabear.com. Build‑A‑Bear Workshop, Inc. (NYSE: BBW) reported $529.8 million in total revenues for fiscal 2025, representing the Company's 5th consecutive year of record results. Learn more at the Investor Relations section of buildabear.com.
Forward-Looking Statements
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These statements are based only on our current expectations and projections about future events. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by these forward-looking statements, including those factors discussed under the captions entitled “Risk Factors” and “Forward-Looking Statements” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 16, 2026, and other periodic reports filed with the SEC which are incorporated herein.
All our forward-looking statements are as of the date of this Press Release only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or other risks and uncertainties referred to in this Press Release or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our continuing operations and our future financial results, cash flows, available credit, prospects, and liquidity. Except as required by law, the Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
All other brand names, product names, or trademarks belong to their respective holders.
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (dollars in thousands, except share and per share data) 13 Weeks 13 Weeks Ended Ended May 2, % of Total May 3, % of Total 2026
Revenues(1) 2025
Revenues(1) Revenues: Net retail sales $ 113,466
90.6
$ 119,589
93.1
Commercial revenue 10,948
8.7
7,623
5.9
International franchising revenue 856
0.7
1,183
1.0
Total revenues 125,270
100.0
128,395
100.0
Costs and expenses: Cost of merchandise sold - retail (1) 40,338
35.6
51,571
43.1
Cost of merchandise sold - commercial (1) 4,419
40.4
3,014
39.5
Cost of merchandise sold - international franchising (1) 641
74.9
824
69.7
Total cost of merchandise sold 45,398
36.2
55,409
43.2
Consolidated gross profit 79,872
63.8
72,986
56.8
Selling, general and administrative expense 56,126
44.8
53,555
41.7
Interest expense (income), net (134
)
(0.1
)
(200
)
(0.2
)
Income before income taxes 23,880
19.1
19,631
15.3
Income tax expense 5,581
4.5
4,312
3.4
Net income $ 18,299
14.6
$ 15,319
11.9
Income per common share: Basic $ 1.45
$ 1.17
Diluted $ 1.45
$ 1.17
Shares used in computing common per share amounts: Basic 12,584,388
13,080,301
Diluted 12,638,710
13,144,243
(1)
Selected statement of operations data expressed as a percentage of total revenues, except cost of merchandise sold - retail, cost of merchandise sold - commercial and cost of merchandise sold - international franchising that are expressed as a percentage of net retail sales, commercial revenue and international franchising revenue, respectively. Percentages will not total due to cost of merchandise sold being expressed as a percentage of net retail sales, commercial revenue or international franchising revenue and immaterial rounding. BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) May 2, January 31, May 3, 2026
2026
2025
ASSETS Current assets: Cash, cash equivalents and restricted cash $
26,247
$
26,755
$
44,342
Inventories, net 77,806
82,203
72,299
Receivables, net 31,630
21,459
13,800
Prepaid expenses and other current assets 12,149
9,603
12,156
Total current assets 147,832
140,020
142,597
Operating lease right-of-use asset $
119,622
121,129
92,699
Property and equipment, net 73,778
70,926
59,260
Deferred tax assets 7,243
7,370
7,667
Other assets, net 5,610
6,008
6,080
Total Assets $
354,085
$
345,453
$
308,303
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 15,994
$
15,318
$
15,890
Accrued expenses 33,932
26,104
24,273
Operating lease liability short term 28,276
28,651
26,507
Gift cards and customer deposits 14,260
15,289
14,851
Deferred revenue and other 4,142
5,264
3,830
Total current liabilities 96,604
90,626
85,351
Operating lease liability long term 97,414
98,647
72,957
Other long-term liabilities 1,048
1,152
1,313
Stockholders' equity: Common stock, par value $0.01 per share 126
128
132
Additional paid-in capital 59,919
60,821
61,602
Accumulated other comprehensive loss (10,939
)
(10,760
)
(11,295
)
Retained earnings 109,913
104,839
98,243
Total stockholders' equity 159,019
155,028
148,682
Total Liabilities and Stockholders' Equity $
354,085
$
345,453
$
308,303
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Unaudited Selected Financial and Store Data (dollars in thousands) 13 Weeks 13 Weeks Ended Ended May 2, May 3, 2026
2025
Other financial data: Retail gross margin ($) (1) $
73,128
$
68,018
Retail gross margin (%) (1) 64.4
%
56.9
%
Capital expenditures (2) $
6,869
$
2,907
Depreciation and amortization $
4,002
$
3,700
Store data (3): Number of corporately-managed retail locations at end of period North America 334
328
Europe 42
41
Total corporately-managed retail locations 376
369
Number of franchise stores at end of period 112
96
Number of third-party retail locations at end of period 181
148
Corporately-managed store square footage at end of period (4) North America 748,434
733,675
Europe 58,166
57,015
Total square footage 806,600
790,690
(1)
Retail gross margin represents net retail sales less cost of merchandise sold - retail. Retail gross margin percentage represents retail gross margin divided by net retail sales. Store impairment is excluded from retail gross margin. (2)
Capital expenditures represents cash paid for property, equipment, and other assets. (3)
Excludes e-commerce. North American stores are located in the United States, Puerto Rico and Canada. In Europe, stores are located in the United Kingdom and Ireland. Seasonal locations not included in store count. (4)
Square footage for stores located in North America is leased square footage. Square footage for stores located in Europe is estimated selling square footage. Seasonal locations not included in the store count. * Non-GAAP Financial Measures
BUILD-A-BEAR WORKSHOP, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP figures (dollars in thousands except per share data) The following table provides a reconciliation of pre-tax income to adjusted pre-tax income for the periods indicated: 13 Weeks 13 Weeks Ended Ended May 2, May 3, 2026
2025
Income before income taxes (pre-tax) $
23,880
$
19,631
IEEPA tariff refund related to fiscal 2025(1) (7,000
)
-
Adjusted income before income taxes (pre-tax) $
16,880
$
19,631
The following table provides a reconciliation of net income to adjusted net income and net income per diluted share to adjusted net income per diluted share for the periods indicated: 13 Weeks 13 Weeks Ended Ended May 2, May 3, 2026
2025
Net income $
18,299
$
15,319
IEEPA tariff refund related to fiscal 2025, tax affected(2) (5,338
)
-
Adjusted net income $
12,961
$
15,319
Net income per diluted share (EPS) 1.45
1.17
Adjusted net income per diluted share (adjusted EPS) 1.03
1.17
The following table provides a reconciliation of pre-tax income to Earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA for the periods indicated: 13 Weeks 13 Weeks Ended Ended May 2, May 3, 2026
2025
Income before income taxes (pre-tax) $
23,880
$
19,631
Interest (income) expense, net (134
)
(200
)
Depreciation and amortization expense 4,002
3,700
EBITDA $
27,748
$
23,131
Adjustments to EBITDA IEEPA tariff refund related to fiscal 2025(1) (7,000
)
-
Adjusted EBITDA $
20,748
$
23,131
The following table provides a reconciliation of fiscal 2026 pre-tax income outlook to Adjusted pre-tax income outlook: Fiscal 2026 outlook Income before income taxes (pre-tax) $
72,000
$
78,000
IEEPA tariff refund related to fiscal 2025(1) (7,000
)
(7,000
)
Adjusted income before income taxes (pre-tax) $
65,000
$
71,000
(1)
Relates to tariff refund attributable mainly to the second half of fiscal 2025 (2)
Relates to tariff refund attributable mainly to the second half of fiscal 2025 net of income tax effect More News From Build-A-Bear Workshop, Inc.
Build-A-Bear (BBW - Free Report) came out with quarterly earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.76 per share. This compares to earnings of $1.17 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +36.42%. A quarter ago, it was expected that this toy retailer would post earnings of $1.27 per share when it actually produced earnings of $1.26, delivering a surprise of -0.79%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Build-A-Bear, which belongs to the Zacks Retail - Miscellaneous industry, posted revenues of $125.27 million for the quarter ended April 2026, missing the Zacks Consensus Estimate by 3.72%. This compares to year-ago revenues of $128.4 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Build-A-Bear shares have lost about 38.3% since the beginning of the year versus the S&P 500's gain of 9.9%.
What's Next for Build-A-Bear?While Build-A-Bear has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Build-A-Bear was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.68 on $129.5 million in revenues for the coming quarter and $3.86 on $553.85 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Miscellaneous is currently in the bottom 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Five Below (FIVE - Free Report) , is yet to report results for the quarter ended April 2026. The results are expected to be released on June 3.
This discount retailer is expected to post quarterly earnings of $1.67 per share in its upcoming report, which represents a year-over-year change of +94.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Five Below's revenues are expected to be $1.2 billion, up 23.9% from the year-ago quarter.
For the quarter ended April 2026, Build-A-Bear (BBW - Free Report) reported revenue of $125.27 million, down 2.4% over the same period last year. EPS came in at $1.03, compared to $1.17 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $130.11 million, representing a surprise of -3.72%. The company delivered an EPS surprise of +36.42%, with the consensus EPS estimate being $0.76.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Build-A-Bear performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Revenues- International Franchising: $0.86 million versus the two-analyst average estimate of $1.26 million.Revenues- Commercial: $10.95 million versus $9.02 million estimated by two analysts on average.Revenues- Net retail sales: $113.47 million versus $119 million estimated by two analysts on average.View all Key Company Metrics for Build-A-Bear here>>>
Shares of Build-A-Bear have returned +3% over the past month versus the Zacks S&P 500 composite's +5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Bath & Body Works Stock Surged Despite Falling Sales—Here’s WhyBuild-A-Bear Workshop NYSE: BBW reported lower first-quarter fiscal 2026 revenue as weaker store and online traffic offset growth in its commercial segment, while management reduced its full-year revenue outlook and pointed to a more cautious consumer environment.
The company also used the call to mark a leadership transition. Sharon John, who has served as chief executive officer for 13 years, said her last day as CEO will be June 11. Chris Hurt, currently chief operating officer and CEO-elect, will take the helm. John said Hurt has played a central role in global retail operations, location expansion and the company’s product and brand go-to-market strategy.
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First-quarter sales decline as traffic softens Bath & Body Works Hits Multi-Year Lows: Bargain or Trap?Build-A-Bear posted total revenue of $125.3 million, down 2.4% from the prior year. Hurt said the company had expected revenue to be approximately flat year over year based on trends through mid-March, but traffic and results weakened as the quarter progressed.
Hurt said management believes part of the softness reflects “a broader macro shift,” citing cautious consumer sentiment, geopolitical concerns and related price increases. He said the company still saw strength around key occasions, including its best Valentine’s Day in North American history and a solid Easter performance.
How Bath & Body Works Is a Perfect Example of a Value Stock Chief Financial Officer Voin Todorovic said the direct-to-consumer segment declined as transactions fell, primarily because of reduced store traffic. Domestic traffic was down 7%, lagging U.S. national retail traffic trends, while e-commerce demand declined 26.1% as web traffic remained soft. Average unit retail and units per transaction increased, helping lift dollars per transaction when customers did engage with the brand.
The commercial segment, which primarily represents wholesale revenue, continued to grow. Todorovic said commercial revenue, combined with international franchise revenue, rose 34.1% in the quarter.
Tariff refund boosts profit and gross margin Gross margin was 63.8%, up 700 basis points from a year earlier. Todorovic said the increase included a 560-basis-point benefit from a $7 million tariff refund related to prior-year costs, along with 140 basis points from higher average unit retail, partially offset by occupancy cost deleverage.
SG&A expenses were $56.1 million, or 44.8% of revenue, compared with 41.7% a year earlier. Todorovic attributed the increase to higher wage rates, talent investments, inflationary pressures and the timing of longer-range investments.
Pre-tax income was $23.9 million, compared with $19.6 million a year earlier. Excluding the $7 million tariff benefit related to fiscal 2025, adjusted pre-tax income was $16.9 million. Earnings per share were $1.45, and adjusted earnings per share were $1.03.
At quarter-end, Build-A-Bear had $26.2 million in cash, down $18.1 million from the prior year, which Todorovic said was mainly due to tariff payments and elevated capital expenditures tied to strategic investments. Inventory was $77.8 million, up $5.6 million, driven by tariffs embedded in product costs and inventory needed to support expected sales activity in the back half of the year.
Guidance lowered for revenue, raised for pre-tax income Build-A-Bear lowered its fiscal 2026 revenue guidance to a range of $530 million to $550 million, representing roughly flat revenue to 4% growth year over year. The company had previously guided for mid-single-digit revenue growth.
Management said the updated outlook reflects first-quarter results, second-quarter-to-date trends and a more conservative view of macroeconomic and geopolitical conditions. Hurt said the company expects the second quarter to be weaker than the first, with easier comparisons and planned growth in the third and fourth quarters.
The company raised its pre-tax income outlook to $72 million to $78 million, reflecting $13 million of IEEPA tariff refunds previously paid, partially offset by the impact of lower expected revenue. Excluding roughly $7 million of tariff refunds tied to prior-year costs, Build-A-Bear expects adjusted pre-tax income of $65 million to $71 million.
Todorovic said the outlook assumes the current Section 122 tariffs and related costs of about $10 million, along with a 10% tariff rate for the remainder of the fiscal year. He added that second-quarter profitability is expected to decline year over year.
Management emphasizes expansion, wholesale and product strategy Hurt said Build-A-Bear’s longer-term growth strategy continues to rest on four pillars: organic growth, location expansion, wholesale and outbound brand licensing, and gifting and personalization.
On organic growth, Hurt said some first-quarter launches resonated with older collectors, or “kidults,” including the Fresh Frosted Animal Cookies collection, which sold through most products in less than two weeks. He also highlighted the Promise Pets collection, which more than doubled sales year over year, and the Mini Beans line, which has sold nearly 4 million units since launch across all channels.
The company plans several product initiatives in the back half of the year, including a Halloween collection in August, the October kickoff of its year-long 30th anniversary celebration and a refreshed Harry Potter collection in December tied to the premiere of a new HBO series.
Build-A-Bear opened seven net new locations in the first quarter and continues to expect at least 50 net new experience locations this year, most operated by international partners. The company added the Philippines as a new market, bringing its international footprint to 37 countries, up from 19 two years ago. Hurt said Germany has become the company’s fastest-expanding market after re-entry late last year.
In the U.S., the company opened additional Build-A-Bear and Hello Kitty and Friends workshops at Mall of America and American Dream, with early results outpacing expectations. It also continues to plan a multi-level ICON Park location in Orlando later this year.
On wholesale, Hurt said Build-A-Bear launched into 1,500 Walmart locations with its Mini Beans collection and opened a Los Angeles showroom to support wholesale accounts. Todorovic said the company still expects commercial segment revenue to grow by at least 20% for the year.
Despite the lower revenue outlook, Todorovic said Build-A-Bear still expects fiscal 2026 to be one of the strongest years in the company’s history, with potential for record revenue, solid pre-tax income margins and continued capital returns. The company returned $14.3 million to shareholders in the first quarter through dividends and share repurchases.
About Build-A-Bear Workshop NYSE: BBWBuild-A-Bear Workshop, Inc operates a specialty retail business focused on interactive “workshop” experiences that allow customers to create customized stuffed animals. Through its in-store and online platforms, the company offers a wide range of plush toys, apparel, accessories and sound modules, enabling guests to personalize each creation. In addition to its core bear products, Build-A-Bear has expanded its portfolio to include licensed characters from leading entertainment and media franchises.
Founded in 1997 by Maxine Clark and headquartered in St.
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Build-A-Bear Workshop faces near-term volatility from inflation, but aggressive international expansion and a debt-free balance sheet underpin long-term upside. BBW revised 2026 revenue guidance downward, but the pre-tax income outlook improved due to tariff refunds, supporting an 11.6% projected growth from last year. Shareholder returns remain robust, with $14.3 million returned in Q1 and continued buybacks leveraging suppressed share prices.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of BBW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Callodine Capital Management LP increased its stake in shares of Shutterstock, Inc. (NYSE: SSTK) by 86.0% during the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 768,705 shares of the business services provider's stock after buying an additional 355,478 shares during
, /PRNewswire/ -- Shutterstock, Inc. (NYSE: SSTK), a family of brands delivering scalable creative and GenAI solutions to help customers fuel great work, today announced that it is accelerating the future of generative AI with a major expansion of its training datasets. This expansion provides developers, researchers, and enterprise partners with unprecedented access to multimodal data high-quality licensed content for the full model training lifecycle, marking the next phase in Shutterstock's rapidly growing data licensing business.
Shutterstock's expanded data catalog now features templates, fonts, long-form video, premium metadata, and specialized podcast and science imagery to power the next generation of generative models. A Strategic AI Data Licensing Partner to Global Technology Leaders
"Generative AI models are not static; they must be continuously trained and refined to remain relevant, competitive, and accurate," said Daniel Mandell, Senior Vice President of Data Licensing and AI at Shutterstock. "While compute power often dominates headlines, it is high-quality, diverse, and rights-cleared data that fuels a model's ability to evolve and perform in a rapidly changing world. A continuous flow of fresh data has become as essential to AI infrastructure and ongoing retraining pipelines as compute power itself."
Already recognized for its extensive library of images, video, audio, and 3D content, Shutterstock has become a strategic AI partner and critical enabler of enterprise AI innovation, powering systems built by some of the world's largest technology companies, including OpenAI. Shutterstock also supports global brands and startups like Black Forest Labs and Runway, as well as AI research and product companies, like ElevenLabs, that rely on high-quality data to power discovery, personalization, and content experiences at scale.
Expanded Dataset Categories and Content Types for AI Model Training
Its expanded data catalog now features a growing range of assets—from templates and fonts to long-form video, premium metadata, and specialized podcast and science imagery—giving developers even greater depth and diversity of training material to power the next generation of generative models. New categories and content types are continuously being added to meet the evolving needs of model builders worldwide.
Addressing Global Demand for Transparent, Rights-Cleared AI Training Data
This expansion reflects the accelerating demand for high-quality training data as generative AI development reaches critical mass globally. By broadening access to rights-cleared, high-quality content across new formats and categories, Shutterstock is meeting the growing need while upholding the standards of transparency and data integrity and compliance that define its approach to AI. As developers seek richer, more diverse training materials to refine and evolve their models, Shutterstock continues to bridge the worlds of creativity and technology, empowering developers and enterprises to build smarter, more capable AI systems.
"The demand for high-quality, diverse data has never been greater," added Mandell. "As generative AI evolves, the performance and reliability of every model depend on the integrity of the data behind it. This expansion strengthens Shutterstock's position as the most trusted source of multimodal data, rights-cleared content, and long-term AI lifecycle partnership for AI development and ensures our partners have the breadth, depth, and quality they need to push the boundaries of innovation."
Full AI Lifecycle Enablement
Shutterstock's platform, powered by its scale, curation expertise, and global contributor network, is uniquely positioned to meet growing demand. The company continues to invest in data structuring, labeling, rights management, training orchestration, and MLOps deployment and monitoring to ensure its content is both rights-cleared and technically optimized for AI development.
To support the full spectrum of AI innovation, Shutterstock offers both research and commercial data licensing options. Researchers and startups can begin with a research license to explore, experiment, and validate models before transitioning to a commercial license for scaled deployment. With this expansion, innovators gain access to even more high-quality content to power discovery, iteration, and real-world application.
This announcement follows Shutterstock's recent launch of its AI Services offering, which deepened the company's role in end-to-end model training and evaluation for global partners. Together, these initiatives reflect Shutterstock's end-to-end approach to enabling generative AI development, from foundational data access to full-scale solutions that accelerate innovation.
Shutterstock Data Licensing & AI Services
Shutterstock is an end-to-end AI model training partner that unifies data licensing, services, and long-term collaboration under a single provider—reducing operational complexity and helping teams bring higher-performing AI systems to market faster and with greater confidence. Shutterstock combines access to one of the world's largest rights-cleared multimodal datasets with advanced data curation and custom training datasets to power high-performing, deployment-ready generative models. This licensable training data includes high-quality labeled and continuously updated multimodal content with clear data provenance to support AI compliance. Shutterstock leverages ML-assisted evaluation tools to provide model training, fine-tuning, alignment, evaluation, and retraining. Through human-in-the-loop workflows, expert creative feedback, and structured preference data, Shutterstock delivers aesthetic preference signals, benchmarking, and regression testing to drive continuous model improvement.
Learn more and start the conversation at shutterstock.com/data-licensing.
About Shutterstock
Shutterstock is in the business of turning ideas into impact. Powered by a global network of millions of creators and our cutting-edge technology, we provide businesses, creatives, and brand leaders with the essential, universal ingredients to make their work more effective. Shutterstock offers access to one of the world's largest and most diverse collections of high-quality licensable assets, specialized training datasets, evaluation tools, and end-to-end strategic partnerships for the full model training lifecycle, as well as advertising and distribution solutions, exclusive editorial content, and full-service studio production—delivering unparalleled resources to fuel great work.
Discover our impact at www.shutterstock.com and connect with us on LinkedIn, Instagram, X, Facebook and YouTube.
, /PRNewswire/ -- Shutterstock, Inc. (NYSE: SSTK), a family of brands delivering scalable creative and GenAI solutions to help customers fuel great work, today announced the launch of its Shutterstock app in ChatGPT, enabling users to discover images, videos, music, and sound effects from one of the world's largest content collections directly in ChatGPT.
Embedding Licensable Visual & Audio Content into AI-Native Workflows
Shutterstock now enables users to discover images, videos, music, and sound effects from one of the world’s largest content collections directly in ChatGPT. As AI platforms increasingly become a medium for creative ideation, Shutterstock is embedding high-quality, licensable content directly into AI-native workflows—positioning itself as the licensed content layer that fuels AI-driven creativity. Users can now leverage AI's powerful reasoning and conversational capabilities to find what they need faster by connecting the Shutterstock app in ChatGPT and accessing assets available for licensing on Shutterstock.com, without interrupting their creative process.
Meeting Users Where AI Discovery Begins
OpenAI's growing user base generates more than one billion queries per day, underscoring the scale of AI-native discovery and the opportunity to embed licensable content directly within those workflows. Creators, innovators, marketers, and businesses are increasingly beginning their workflows within conversational AI tools. Shutterstock's app ensures that when users discover content needs in ChatGPT, commercial-ready assets are immediately accessible through a trusted, rights-cleared source. For example, a marketer drafting a campaign brief in ChatGPT can surface licensable hero imagery in the same conversation, preview options, and move directly from prompt to production without breaking workflow.
"Our customers trust Shutterstock as a leading source of high-quality, licensable content, powered by sophisticated AI technology," said Paul Teall, Vice President, Marketplace Strategy at Shutterstock. "This launch brings commercial confidence directly in ChatGPT, enabling teams to move from discovery to content production."
The launch reflects the growing importance of AI-native workflows, and Shutterstock's role as an early leader in providing licensable creative content within those Environments.
Commercial Confidence In ChatGPT
Unlike general search links that redirect users through traditional web experiences, the Shutterstock app in ChatGPT creates a gateway for AI-driven discovery, allowing content to be surfaced, previewed, and moved toward commercial production within AI and agentic workflows. By launching an app in ChatGPT, Shutterstock reduces creative and discovery friction and strengthens its position as the licensable content layer across emerging AI ecosystems.
Shutterstock is the Creative Infrastructure Layer for AI-Driven Workflows
This launch reinforces Shutterstock's strategy to embed AI across the creative experience, from discovery and licensed content, to AI-powered editing and generation. Rather than positioning AI as a separate destination, Shutterstock is integrating it directly into core workflows, ensuring licensable content can be discovered, adapted, and activated within AI-native environments. Together with its broader investments in model training, generative tools, AI editing, and data licensing, this integration reinforces Shutterstock's role as the infrastructure layer for AI-driven creativity.
Shutterstock Data Licensing & AI Services
Shutterstock is an end-to-end AI model training partner that unifies data licensing, services, and long-term collaboration under a single provider—reducing operational complexity and helping teams bring higher-performing AI systems to market faster and with greater confidence. Shutterstock combines access to one of the world's largest rights-cleared multimodal datasets with advanced data curation and custom training datasets to power high-performing, deployment-ready generative models. This licensable training data includes high-quality labeled and continuously updated multimodal content with clear data provenance to support AI compliance. Shutterstock leverages ML-assisted evaluation tools to provide model training, fine-tuning, alignment, evaluation, and retraining. Through human-in-the-loop workflows, expert creative feedback, and structured preference data, Shutterstock delivers aesthetic preference signals, benchmarking, and regression testing to drive continuous model improvement.
Learn more and start the conversation at shutterstock.com/data-licensing.
About Shutterstock
Shutterstock is in the business of turning ideas into impact. Powered by a global network of millions of creators and our cutting-edge technology, we provide businesses, creatives, and brand leaders with the essential, universal ingredients to make their work more effective. Shutterstock offers access to one of the world's largest and most diverse collections of high-quality licensable assets, specialized training datasets, evaluation tools, and end-to-end strategic partnerships for the full model training lifecycle, as well as advertising and distribution solutions, exclusive editorial content, and full-service studio production—delivering unparalleled resources to fuel great work.
Discover our impact at www.shutterstock.com and connect with us on LinkedIn, Instagram, X, Facebook and YouTube.
