Equity Research Focusing on the Consumer Sector, Small Cap Consumer Research

Small Cap Consumer Research

Equity Research Focusing on the Consumer Sector

Small Cap Consumer Research, LLC is a leading company-sponsored equity research provider focusing on the consumer sector (apparel, brand licensing and specialty retailing segments).

Equity Bottom-Up

Build-A-Bear Workshop, Inc. is an interactive, entertainment mall-based retailer that invites guests to create their own customized stuffed animals through a bear-making process.  The Company operates various locations in the United States and other countries.

<ul><li>We are reiterating our Buy rating, but lowering our projections and reducing our price target of BBW to $65 (from $75) after Build-A-Bear reported solid 3Q EBITDA & EPS upside, but lighter than expected revenue, and implied deep tariff impacts into 1HFY26 will serve to offset near-term positives and materially impact operating results.</li><li>3Q tariffs negatively impacted the company by $4 million (or a projected $0.23 in EPS) with a $6 million further negative impact in 4Q (projected $0.35 in EPS) and, we believe approximately $7 million to $9 million (projected $0.41 to $0.53 in EPS) in the first five months of FY26.</li><li>While we view this scenario as potentially conservative, we have to face the facts that overall gross margins, if tariff impacts remain similar to 2HFY25 in 1HFY26 without any further material offsets, will significantly decline.</li></ul>

We are reiterating our Buy rating, but lowering our projections and reducing our price target of BBW to $65 (from $75) after Build-A-Bear reported solid 3Q EBITDA & EPS upside, but lighter than expected revenue, and implied deep tariff impacts into 1HFY26 will serve to offset near-term positives and materially impact operating results.3Q tariffs negatively impacted the company by $4 million (or a projected $0.23 in EPS) with a $6 million further negative impact in 4Q (projected $0.35 in EPS) and, we believe approximately $7 million to $9 million (projected $0.41 to $0.53 in EPS) in the first five months of FY26.While we view this scenario as potentially conservative, we have to face the facts that overall gross margins, if tariff impacts remain similar to 2HFY25 in 1HFY26 without any further material offsets, will significantly decline.

BBW: 3Q Review: Tariffs To Be Even Further  Drag into FY26; Lowering EPS & PT

Vera Bradley, Inc. designs, produces and retails fashion accessories for women. The Company markets handbags, accessories and travel and leisure items through its chain of retail stores and independent retailers.

<ul><li>We are reiterating our Hold rating and projections for Vera Bradley with the company announcing 3QFY26 (October) results before the open on Thursday, December 11th.</li><li>Given the continuing initial shifts under new management (who joined in July) and the limited ability to change product offerings until 1Q2026 (at the earliest), we believe overall financial results are not as important as are customer responses to the shift back to heritage looks, the return of key silhouettes, the launch of Outlet 2.0 at the end of the quarter and what further changes are in store going forward.</li><li>We continue to view the changes as a positive, but await clarification on the overall implications for the company (and returns) before becoming more aggressive in VRA.</li></ul>

We are reiterating our Hold rating and projections for Vera Bradley with the company announcing 3QFY26 (October) results before the open on Thursday, December 11th.Given the continuing initial shifts under new management (who joined in July) and the limited ability to change product offerings until 1Q2026 (at the earliest), we believe overall financial results are not as important as are customer responses to the shift back to heritage looks, the return of key silhouettes, the launch of Outlet 2.0 at the end of the quarter and what further changes are in store going forward.We continue to view the changes as a positive, but await clarification on the overall implications for the company (and returns) before becoming more aggressive in VRA.

VRA: 3Q Preview: Hints of What's to Come; Reiterate Hold

Betterware de Mexico Sab de CV / Equity Bottom-Up

Betterware de Mexico SAB de CV sells household products. The Company offers furniture, sink, electronics, utensils, laundry equipment, cleaners, bath accessories, personal care, and other goods. Betterware de Mexico serves customers in Mexico.

<ul><li>We are reiterating our Buy rating, projections and $22.50 price target for Betterware de Mexico after reviewing the December catalog.</li><li>With the Holidays in full force, management has remained focused on driving higher overall returns and offering proven and winning items.</li><li>December was another month of lower YoY SKUS, reduced discounting and near record average SKU pricing.</li></ul>

We are reiterating our Buy rating, projections and $22.50 price target for Betterware de Mexico after reviewing the December catalog.With the Holidays in full force, management has remained focused on driving higher overall returns and offering proven and winning items.December was another month of lower YoY SKUS, reduced discounting and near record average SKU pricing.

BWMX: Snapping the Catalog: Remaining Focused on Returns; Reiterate Buy, PT

Vince Holding Corp. is a holding company. The Company, through its subsidiaries, develops branded fashion apparels for men and women and recreational products.

<ul><li>We are reiterating our Buy rating, $4 price target and projections for Vince Holding with the company announcing 3QFY25 (October) results before the open on Tuesday.</li><li>We believe, with a focus on the higher end consumer, compelling fashion offerings, continued wholesale expansion and the company continuing to work to offset the impact of tariffs, Vince is poised to drive 3Q top line upside, with the potential for better than expected bottom line results (even with tariffs exerting a material negative impact).</li><li> Further, we expect management to remain upbeat on 4Q, with product flows normalizing and the Black Friday sale events inline with prior years.</li></ul>

We are reiterating our Buy rating, $4 price target and projections for Vince Holding with the company announcing 3QFY25 (October) results before the open on Tuesday.We believe, with a focus on the higher end consumer, compelling fashion offerings, continued wholesale expansion and the company continuing to work to offset the impact of tariffs, Vince is poised to drive 3Q top line upside, with the potential for better than expected bottom line results (even with tariffs exerting a material negative impact). Further, we expect management to remain upbeat on 4Q, with product flows normalizing and the Black Friday sale events inline with prior years.

VNCE: 3Q Preview: Showing the Strength of the Model; Reiterate Buy, $4 PT

Lands' End, Inc. manufactures men's, women's and children's apparel and accessories. The Company produces and distributes swimwear, clothing, bedding, totes, furniture, bath accessories, uniforms, outter wear and various related products. Lands' End offers its products through its catalog and website around the world.

<ul><li>We are reiterating our Buy rating, projections and $20 price target for Lands' End with the company reporting 3QFY25 (October) results before the open on Tuesday.</li><li>We believe, as the company begins to: 1) anniversary the shift to deeper levels of licensed goods/selling segments; 2) continues their focus on lifestyle driven looks and offering key solutions for their customer base (increasingly driven by customization), and 3) further expands the Outfitters uniform business, top line growth will become more obvious and, even more so, margin expansion will drive material free cash flow and EPS upside.</li><li>As such, we remain highly positive on the overall potential for LE and reiterate our Buy rating and $20 price target</li></ul>

We are reiterating our Buy rating, projections and $20 price target for Lands' End with the company reporting 3QFY25 (October) results before the open on Tuesday.We believe, as the company begins to: 1) anniversary the shift to deeper levels of licensed goods/selling segments; 2) continues their focus on lifestyle driven looks and offering key solutions for their customer base (increasingly driven by customization), and 3) further expands the Outfitters uniform business, top line growth will become more obvious and, even more so, margin expansion will drive material free cash flow and EPS upside.As such, we remain highly positive on the overall potential for LE and reiterate our Buy rating and $20 price target

LE: 3Q Preview: Opportunities Becoming More Obvious; Reiterate Buy, $20 PT