For 26-year-old Cammie Craycroft’s friends, the perfect birthday activity this summer was a group trip to Build-A-Bear Workshop.

Craycroft said she and her friends grew up going to the retailer, which is known for its experiential shopping product where customers can choose their stuffed animal and then pick its outfits, accessories and more.

“Build-A-Bear means a lot to me. I had so many birthday parties at Build-A-Bear,” Craycroft told CNBC. “It really is a nostalgic place, and I have so many happy memories there.”

The company has recently been targeting adults like Craycroft as it diversifies its portfolio and leans into the nostalgia of the brand. Despite macroeconomic headwinds, the company posted record-breaking revenue in the first half of fiscal 2025, reaching $252.6 million, an increase of nearly 12% from the year-ago period.

And in its second-quarter earnings report at the end of August, the retailer raised its outlook after the success of its tariff mitigation strategies — namely, increasing its inventory in the first quarter while operating under the assumption that tariffs would raise prices.

Build-A-Bear’s stock is up roughly 60% year-to-date and is fast approaching a $1 billion market cap, even as other retailers struggle to recover losses from tariffs.

Founded in 1997, the company has been focused on scenario-planning and ensuring its brand stays true to its nostalgic roots while also adapting to the ever-changing macroenvironment, according to CEO Sharon Price John, who took over the company in 2013.

Though the “retail apocalypse” means retailers have seen less foot traffic in malls over the past decade, John said Build-A-Bear has evolved to be “so much more” than just a storefront. The company has diversified its positions beyond malls into cruise ships, amusement parks, hospitality and more.

“It’s a really emotional, memorable experience that creates a tremendous amount of of equity,” John told CNBC. “Those strong feelings that consumers have for brands are very stretchable beyond just that one experience.”

With more than 600 stores across 32 countries, the company has been exploring new options to offer its signature experience in different ways, including expanding with a host of international stores and creating a line of “Mini Beans,” which are smaller, pre-stuffed toys.

John attributed the company’s success to its forward-looking strategies. Though Build-A-Bear imports a “vast majority” of its products from China and Vietnam, John said the tariff impacts were not as drastic as they could have been because the company planned ahead.

“Success isn’t an accident, and it often takes years of planning to be able to weather difficult situations,” John said.

But the company’s core brand success goes beyond just the keeping the balance sheet clean, she added.

“The other piece is that I think that we’re in the right place at the right time,” John said. “There’s a lot of planning, but sometimes you just happen to be in the right zeitgeist. Gifting is in the zeitgeist, ‘kidulting’ is a part of the zeitgeist, personalization is a part of the zeitgeist, returning to comfort things is a part of the zeitgeist, stuffed animals is in the zeitgeist right now.”

D. A. Davidson analyst Keegan Cox said there are a multitude of reasons that Build-A-Bear has seen growth even as the macroenvironment shows signs of a potential economic slowdown.

One of the factors that’s helping the company, Cox said, is its ability to “discreetly” raise prices of certain items without customers noticing because it’s constantly creating new products to stick with current trends that are priced differently.

“No consumer is really going to be able to tell, because there’s no direct comparable product,” he told CNBC. “I think that’s a good little tariff mitigation strategy that’s kind of just built into their model.”

Cox said the company’s diverse revenue stream, between new products and new demographics, has been significantly helping it to stay afloat and successful. The analyst said he’s seeing “momentum” in the company, especially as it ramps up inventory ahead of the holiday season.

Its expansion into international stores has been a particularly effective tool, he added.

“In my opinion, those stores just are a super high return on capital, and there’s a large runway for growth there that I think is finally starting to show up in the share price,” Cox said.

Craycroft and her friends aren’t the only ones leaning into the brand. After making a TikTok about her adult relationship with the toy company, she said she saw most of her views on the video came from people searching for “Build-A-Bear” on the app.

According to a recent survey conducted by Build-A-Bear, 92% of adults still own their childhood teddy bears, and nearly 100% of the respondents said stuffed animals are for all ages, not just kids.

The nostalgia of Build-A-Bear for its older customers, and those who want to carry it on for the next generation, is a huge factor in continuously driving sales, according to University of Pennsylvania marketing professor Americus Reed.

“If we learn anything from the Cracker Barrel saga,” Reed said, referring to the internet turmoil over the restaurant chain’s attempt at a rebrand, “it is that nostalgia matters, and I think it’s a big part of it.”

In what’s become an “attention deficit” economy, with a plethora of options available to consumers at all times, Reed said Build-A-Bear’s ability to build upon its existing footprint while also innovating its digital and social media presence has helped it to retain its attention among consumers of all ages.

Because of the “ritualistic” experience of buying a stuffed animal at Build-A-Bear, Reed said, the identity of the brand becomes closely intertwined with the customers.

“As you toil with putting something together and personalizing it, you’re essentially creating this extension of yourself, and that’s incredibly powerful,” Reed said. “And then you go home with it, and you can think about it and look at it. That’s really hard to replicate.”

Reed added that Build-A-Bear has become a good case example of how to effectively build a brand that creates deeper relationships with its consumers than others, creating a sense of loyalty.

“The pressure to create something that’s special enough to break through the sort of attention deficit economy is going to be the pressure test of who’s going to be able to be successful in the future,” he said. “They’re going to have the most traction.”