SPWH Sportsmans Warehouse Holdings Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 02, 2024

 

 

SPORTSMAN'S WAREHOUSE HOLDINGS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-36401	39-1975614
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1475 West 9000 South Suite A
West Jordan, Utah				84088
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 801 566-6681

 

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $.01 par value		SPWH		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On December 10, 2024, Sportsman’s Warehouse Holdings, Inc. (“the Company”) issued a press release reporting its results of operations for the thirteen weeks ended November 2, 2024, a copy of which is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information in this Item 2.02 and the related information in Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01 Financial Statements and Exhibits.

 

Exhibit 99.1.	Press Release, dated November 2, 2024
Exhibit 104.	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Date:	December 10, 2024	By:	/s/ Jeff White
		Name: Title	Jeff White Secretary and Chief Financial Officer

 

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Sportsman's Warehouse Holdings, Inc. Announces

Third Quarter 2024 Financial Results

WEST JORDAN, Utah, December 10, 2024--Sportsman's Warehouse Holdings, Inc. (“Sportsman's Warehouse” or the “Company”) (Nasdaq: SPWH) today announced third quarter financial results for the thirteen and thirty-nine weeks ended November 2, 2024.

“Despite a pressured consumer and complex macroeconomic environment, we focused our efforts on driving sales and achieved growth in our fishing, camping and gift bar categories during the quarter,” said Paul Stone, Sportsman’s Warehouse President and Chief Executive Officer. “We continue to make progress on our business reset initiatives with a focus on improved in-stocks, in-store and online customer experience and our Great Gear | Great Service program.”

“To improve our holiday relevancy and drive traffic during the season, we introduced an omni-channel marketing campaign highlighting gear perfect for gifting or for treating yourself, primarily centered around value,” continued Stone. “This is a new approach to engaging our customers, which we coupled with an upgraded store experience creating a fully integrated customer experience. As we move through the balance of the holiday season and navigate a pressured consumer environment, we’ll continue to prioritize traffic-driving marketing and product pricing initiatives, exceptional customer service and prudent inventory management. Emphasizing the balance sheet and ending the year with positive free cash flow remain our primary objectives.”

For the thirteen weeks ended November 2, 2024:

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For the thirty-nine weeks ended November 2, 2024:

Balance sheet and capital allocation highlights as of November 2, 2024:

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Company Outlook:

“Given the current consumer environment and the shift towards value and promotion-driven shopping, we intensified our marketing and advertising campaigns to drive sales, which placed additional pressure on our margins this quarter,” said Jeff White, Chief Financial Officer of Sportsman’s Warehouse “To ensure strong core product in-stocks and to bring fresh offerings to our stores, we made strategic inventory investments aimed at improving sales during the hunting and holiday seasons. As we progress through the remainder of the year, we will remain disciplined in managing our expenses, and will reduce total inventory levels to generate positive free cash flow. Our mid and long-term objectives will be centered on improving our topline with a focus on margins and profitability.”

The Company is adjusting its guidance for fiscal year 2024 and expects net sales to be in the range of $1.18 billion to $1.20 billion, adjusted EBITDA to be in the range of $23 million to $29 million and total inventory to be below $350 million. The low end of the adjusted EBITDA range still assumes positive free cash flow for the full year. The Company now expects capital expenditures for 2024 to be in the range of $17 million to $20 million, primarily consisting of technology investments relating to merchandising and store productivity. No new store openings for the remainder of fiscal year 2024 are currently anticipated and we plan to open one new store in fiscal year 2025.

The Company has not reconciled expected adjusted EBITDA for fiscal year 2024 to GAAP net income because the Company does not provide guidance for net (loss) income and is not able to provide a reconciliation to net (loss) income without unreasonable effort. The Company is not able to estimate net (loss) income on a forward-looking basis without unreasonable efforts due to the variability and complexity with respect to the charges excluded from Adjusted EBITDA, including stock-based compensation expense.

Conference Call Information

A conference call to discuss third quarter 2024 financial results is scheduled for December 10, 2024, at 5:00 PM Eastern Time. The conference call will be held via webcast and may be accessed via the Investor Relations section of the Company’s website at www.sportsmans.com.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (the “SEC”) and that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”): adjusted net (loss) income, adjusted diluted (loss) earnings per share and adjusted EBITDA. The Company defines adjusted net (loss) income as net (loss) income plus expenses incurred relating to director and officer transition costs, costs related to the implementation of our cost reduction plan, costs related to legal settlements and related fees and expenses, and fees and expenses related to a settlement in the cancellation of a contract related to our information technology systems. Net (loss) income is the most comparable GAAP financial measure to adjusted net (loss) income. The Company defines adjusted diluted (loss) earnings per share as adjusted net (loss) income divided by diluted weighted average shares outstanding. Diluted (loss) earnings per share is the most comparable GAAP financial measure to adjusted diluted (loss) earnings per share. The Company defines Adjusted EBITDA as net (loss) income plus interest expense, income tax (benefit) expense, depreciation and amortization, stock-based compensation expense, director and officer transition costs, costs related to the implementation of our cost reduction plan, a legal settlement and related fees and expenses, and fees and

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expenses related to a settlement in the cancellation of a contract related to our information technology systems. Net (loss) income is the most comparable GAAP financial measure to adjusted EBITDA. The Company has reconciled these non-GAAP financial measures to the most directly comparable GAAP financial measures under “GAAP and Non-GAAP Financial Measures” in this release. As noted above, the Company has not provided a reconciliation of fiscal year 2024 guidance for Adjusted EBITDA, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K.

The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors and are frequently used by analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a more meaningful comparison of its diluted (loss) earnings per share and actual results on a period-over-period basis. The Company has provided this information as a means to evaluate the results of its ongoing operations. Management uses this information as additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. Other companies in the Company’s industry may calculate these items differently than the Company does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company’s management believes that these non-GAAP financial measures allow investors to evaluate the Company’s operating performance and compare its results of operations from period to period on a consistent basis by excluding items that management does not believe are indicative of the Company’s core operating performance. The presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that the Company’s future results, cash flows or leverage will be unaffected by other unusual or non-recurring items.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include, but are not limited to, statements regarding our progress on our business reset initiatives; our prioritization of traffic-driving marketing and product pricing initiatives, exceptional customer service and prudent inventory management; our emphasis on the balance sheet and ending the year with positive free cash flow; our ability to manage expenses, reduce total inventory levels to generate positive free cash flow; and our guidance for net sales and Adjusted EBITDA for fiscal year 2024. Investors can identify these statements by the fact that they use words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” and similar terms and phrases. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to many factors including, but not limited to: current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the supply and demand for the Company’s products and ability to conduct its business; the Company’s retail-based business model which is impacted by general economic and market conditions and economic, market and financial uncertainties that may cause a decline in consumer spending; the Company’s

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concentration of stores in the Western United States which makes the Company susceptible to adverse conditions in this region, and could affect the Company’s sales and cause the Company’s operating results to suffer; the highly fragmented and competitive industry in which the Company operates and the potential for increased competition; changes in consumer demands, including regional preferences, which we may not be able to identify and respond to in a timely manner; the Company’s entrance into new markets or operations in existing markets, including the Company’s plans to open additional stores in future periods, which may not be successful; the Company’s implementation of a plan to reduce expenses in response to adverse macroeconomic conditions, including an increased focus on financial discipline and rigor throughout the Company’s organization; impact of general macroeconomic conditions, such as labor shortages, inflation, elevated interest rates, economic slowdowns, and recessions or market corrections; and other factors that are set forth in the Company's filings with the SEC, including under the caption “Risk Factors” in the Company’s Form 10-K for the fiscal year ended February 3, 2024, which was filed with the SEC on April 4, 2024, and the Company’s other public filings made with the SEC and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company’s assumptions prove incorrect, the Company’s actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About Sportsman's Warehouse Holdings, Inc.

Sportsman’s Warehouse Holdings, Inc. is an outdoor specialty retailer focused on meeting the needs of the seasoned outdoor veteran, the first-time participant, and everyone in between. We provide outstanding gear and exceptional service to inspire outdoor memories.

For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmans.com.

Investor Contact:

Riley Timmer

Vice President, Investor Relations

Sportsman’s Warehouse

(801) 304-2816

investors@sportsmans.com

 

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Condensed Consolidated Statements of Operations (Unaudited)

(amounts in thousands, except per share data)

 

For the Thirteen Weeks Ended
	November 2, 2024				% of net sales		October 28, 2023				% of net sales		YOY Variance
Net sales	$	324,261			100.0%		$	340,569			100.0%		$	(16,308	)
Cost of goods sold		221,173			68.2%			237,384			69.7%			(16,211	)
Gross profit		103,088			31.8%			103,185			30.3%			(97	)
Operating expenses:
Selling, general and administrative expenses		99,973			30.8%			100,113			29.4%			(140	)
Income from operations		3,115			1.0%			3,072			0.9%			43
Interest expense		3,317			1.1%			3,944			1.2%			(627	)
Other losses		-			0.0%			-			0.0%			-
Loss before income taxes		(202	)		(0.1%)			(872	)		(0.3%)			670
Income tax expense		162			0.0%			459			0.1%			(297	)
Net loss	$	(364	)		(0.1%)		$	(1,331	)		(0.4%)		$	967
Loss per share
Basic	$	(0.01	)				$	(0.04	)				$	0.03
Diluted	$	(0.01	)				$	(0.04	)				$	0.03
Weighted average shares outstanding
Basic		37,869						37,393						476
Diluted		37,869						37,393						476

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Condensed Consolidated Statements of Operations (Unaudited)

(amounts in thousands, except per share data)

 

For the Thirty-Nine Weeks Ended
	November 2, 2024				% of net sales		October 28, 2023				% of net sales		YOY Variance
Net sales	$	857,235			100.0%		$	917,593			100.0%		$	(60,358	)
Cost of goods sold		590,343			68.9%			633,547			69.0%			(43,204	)
Gross profit		266,892			31.1%			284,046			31.0%			(17,154	)
Operating expenses:
Selling, general and administrative expenses		288,727			33.6%			301,450			32.9%			(12,723	)
Loss from operations		(21,835	)		(2.5%)			(17,404	)		(1.9%)			(4,431	)
Interest expense		9,408			1.1%			9,518			1.0%			(110	)
Other losses		457			0.1%			-			0.0%			457
Loss before income taxes		(31,700	)		(3.7%)			(26,922	)		(2.9%)			(4,778	)
Income tax benefit		(7,364	)		(0.9%)			(6,664	)		(0.7%)			(700	)
Net loss	$	(24,336	)		(2.8%)		$	(20,258	)		(2.2%)		$	(4,078	)
Loss per share
Basic	$	(0.65	)				$	(0.54	)				$	(0.11	)
Diluted	$	(0.65	)				$	(0.54	)				$	(0.11	)
Weighted average shares outstanding
Basic		37,729						37,500						229
Diluted		37,729						37,500						229

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Condensed Consolidated Balance Sheets (Unaudited)

(amounts in thousands, except par value data)

 

		November 2,				February 3,
		2024				2024
Assets
Current assets:
Cash and cash equivalents		$	2,666			$	3,141
Accounts receivable, net			1,447				2,119
Income tax receivable			523				—
Merchandise inventories			438,136				354,710
Prepaid expenses and other			19,745				20,078
Total current assets			462,517				380,048
Operating lease right of use asset			320,729				309,377
Property and equipment, net			175,181				194,452
Goodwill			1,496				1,496
Deferred tax asset			7,480				505
Definite lived intangibles, net			282				327
Total assets		$	967,685			$	886,205
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	112,690			$	56,122
Accrued expenses			95,094				83,665
Income taxes payable			—				126
Operating lease liability, current			48,866				48,693
Revolving line of credit			130,042				126,043
Total current liabilities			386,692				314,649
Long-term liabilities:
Term loan, net			23,969				—
Operating lease liability, noncurrent			313,454				307,000
Total long-term liabilities			337,423				307,000
Total liabilities			724,115				621,649
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 20,000 shares authorized; 0 shares issued and outstanding			—				—
Common stock, $.01 par value; 100,000 shares authorized; 37,957 and 37,529 shares issued and outstanding, respectively			379				375
Additional paid-in capital			85,144				81,798
Accumulated earnings			158,047				182,383
Total stockholders' equity			243,570				264,556
Total liabilities and stockholders' equity		$	967,685			$	886,205

 

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Condensed Consolidated Statements Cash Flows (Unaudited)

(amounts in thousands)

 

		Thirty-Nine Weeks Ended
		November 2,				October 28,
		2024				2023
Cash flows from operating activities:
Net loss		$	(24,336	)		$	(20,258	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of property and equipment			30,491				28,367
Amortization of discount on debt and deferred financing fees			217				114
Amortization of definite lived intangible			45				45
Loss on asset dispositions			501				—
Noncash lease expense			3,239				24,493
Deferred income taxes			(6,975	)			(6,664	)
Stock-based compensation			3,438				3,341
Change in operating assets and liabilities, net of amounts acquired:
Accounts receivable, net			673				(1,051	)
Operating lease liabilities			(7,964	)			(10,539	)
Merchandise inventories			(83,426	)			(47,196	)
Prepaid expenses and other			220				(7,403	)
Accounts payable			56,128				26,081
Accrued expenses			9,727				(4,413	)
Income taxes payable and receivable			(649	)			(1,554	)
Net cash used in operating activities			(18,671	)			(16,637	)
Cash flows from investing activities:
Purchase of property and equipment, net of amounts acquired			(11,305	)			(71,170	)
Proceeds from sale of property and equipment			55				—
Net cash used in investing activities			(11,250	)			(71,170	)
Cash flows from financing activities:
Net borrowings on line of credit			3,999				97,885
Borrowings on term loan			25,000				—
Increase (Decrease) in book overdraft			1,670				(5,611	)
Proceeds from issuance of common stock per employee stock purchase plan			208				456
Payments to acquire treasury stock			—				(2,748	)
Payment of withholdings on restricted stock units			(296	)			(1,649	)
Payment of deferred financing costs and discount on term loan			(1,135	)			—
Net cash provided by financing activities			29,446				88,333
Net change in cash and cash equivalents			(475	)			526
Cash and cash equivalents at beginning of period			3,141				2,389
Cash and cash equivalents at end of period		$	2,666			$	2,915

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

GAAP and Non-GAAP Financial Measures (Unaudited)

(amounts in thousands, except per share data)

 

The following table presents the reconciliations of (i) GAAP net loss to adjusted net loss and (ii) GAAP diluted loss per share to adjusted diluted loss per share:
		For the Thirteen Weeks Ended										For the Thirty-Nine Weeks Ended
		November 2, 2024					October 28, 2023					November 2, 2024					October 28, 2023
Numerator:
Net loss		$		(364	)		$		(1,331	)		$		(24,336	)		$		(20,258	)
Director and officer transition costs (1)				279					1,180					709					3,067
Cancelled contract (2)				205					-					911					-
Cost reduction plan (3)				-					351					-					1,216
Legal settlement (4)				1,750					-					1,750					687
Less tax benefit				(519	)				(398	)				(783	)				(1,292	)
Adjusted net loss		$		1,351			$		(198	)		$		(21,749	)		$		(16,580	)
Denominator:
Diluted weighted average shares outstanding				37,869					37,393					37,729					37,500
Reconciliation of loss per share:
Diluted loss per share:		$		(0.01	)		$		(0.04	)		$		(0.65	)		$		(0.54	)
Impact of adjustments to numerator and denominator				0.05					0.03					0.07					0.10
Adjusted diluted loss per share:		$		0.04			$		(0.01	)		$		(0.58	)		$		(0.44	)
(1) Expenses incurred relating to the departure of directors and officers and the recruitment of directors and key members of our senior management team.
(2) Represents fees and expenses related to a settlement in the cancellation of a contract related to our information technology systems.
(3) Severance expenses paid as part of our cost reduction plan implemented during the 13 weeks ended July 29, 2023.
(4) Represents costs related to legal settlements and related fees and expenses.

 

 

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

GAAP and Non-GAAP Financial Measures (Unaudited)

(amounts in thousands, except per share data)

 

The following table presents the reconciliation of GAAP net loss to adjusted EBITDA for the periods presented:
		For the Thirteen Weeks Ended										For the Thirty-Nine Weeks Ended
		November 2, 2024					October 28, 2023					November 2, 2024					October 28, 2023
Net loss		$		(364	)		$		(1,331	)		$		(24,336	)		$		(20,258	)
Interest expense				3,317					3,944					9,408					9,518
Income tax benefit				162					459					(7,364	)				(6,664	)
Depreciation and amortization				9,984					10,663					30,536					28,412
Stock-based compensation expense (1)				1,047					965					3,438					3,341
Director and officer transition costs (2)				279					1,180					709					3,067
Cancelled contract (3)				205					-					911					-
Cost reduction plan (4)				-					351					-					1,216
Legal settlement (5)				1,750					-					1,750					687
Adjusted EBITDA		$		16,380			$		16,231			$		15,052			$		19,319
(1) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our equity incentive plan and employee stock purchase plan.
(2) Expenses incurred relating to the departure of directors and officers and the recruitment of directors and key members of our senior management team.
(3) Represents fees and expenses related to a settlement in the cancellation of a contract related to our information technology systems.
(4) Severance expenses paid as part of our cost reduction plan implemented during the 13 weeks ended July 29, 2023.
(5) Represents costs related to legal settlements and related fees and expenses.

 

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v3.24.3

Document And Entity Information	Nov. 02, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 02, 2024
Entity Registrant Name	SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Entity Central Index Key	0001132105
Entity Emerging Growth Company	false
Entity File Number	001-36401
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	39-1975614
Entity Address, Address Line One	1475 West 9000 South
Entity Address, Address Line Two	Suite A
Entity Address, City or Town	West Jordan
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84088
City Area Code	801
Local Phone Number	566-6681
Entity Information, Former Legal or Registered Name	Not applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	SPWH
Security Exchange Name	NASDAQ

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