Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its
financial results for the second fiscal quarter ended September 30,
2023. A Supplemental Financial Presentation is available at
investor.bootbarn.com.
For the quarter ended September 30, 2023:
- Net sales increased 6.5% over the prior-year period to $374.5
million, cycling 12.4% net sales growth in the prior-year
period.
- Same store sales decreased 4.8% compared to the prior-year
period, cycling 64% same store sales growth on a 2-year stack
basis. The 4.8% decrease in consolidated same store sales is
comprised of a decrease in retail store same store sales of 3.8%
and a decrease in e-commerce same store sales of 11.7%.
- Net income was $27.7 million, or $0.90 per diluted share,
compared to $32.1 million, or $1.06 per diluted share in the
prior-year period. Net income per diluted share in the current-year
period includes an approximately $0.01 per share tax expense,
primarily due to changes to state tax rates, partially offset by
income tax accounting for share-based compensation. Excluding this
net tax effect, net income per diluted share was $0.91 in the
current-year period.
- The Company opened 10 new stores, bringing its total store
count to 371.
Jim Conroy, President and Chief Executive Officer, commented “I
am pleased with our second quarter results which included solid
sales growth, merchandise margin expansion and earnings achievement
which was at the high end of our guidance range. We opened 10 new
stores in the quarter and continue to be encouraged by the new
store performance across the country. Exclusive brand penetration
expanded more than 600 basis points as our brands are resonating
well with the consumer. Our average store sales volume remains at
elevated levels with a modest 3.8% decline in retail store same
store sales for the quarter.
Throughout the quarter, we saw a sequential decline in same
store sales, which we believe to be driven by a macro pull back in
consumer demand. We believe that our inventory levels and expense
structure are well positioned as we enter the holiday season.”
Operating Results for the Second Quarter Ended September 30,
2023 Compared to the Second Quarter Ended September 24,
2022
- Net sales increased 6.5% to $374.5 million from $351.5 million
in the prior-year period. Consolidated same store sales decreased
4.8% with retail store same store sales decreasing 3.8% and
e-commerce same store sales decreasing 11.7%. The increase in net
sales was the result of the incremental sales from new stores
opened over the past twelve months, partially offset by the
decrease in consolidated same store sales.
- Gross profit was $133.9 million, or 35.8% of net sales,
compared to $129.1 million, or 36.7% of net sales, in the
prior-year period. Gross profit increased primarily due to higher
sales. The decrease in gross profit rate of 90 basis points was
driven primarily by 140 basis points of deleverage in buying,
occupancy and distribution center costs driven primarily by
occupancy costs of 50 new stores and operating costs related to the
new Kansas City distribution center, partially offset by a 50
basis-point increase in merchandise margin rate. The increase in
merchandise margin rate was driven by 35 basis points of product
margin expansion resulting primarily from growth in exclusive brand
penetration and a 15 basis-point improvement from lower freight
expense as a percentage of net sales.
- Selling, general and administrative expenses were $95.3
million, or 25.5% of net sales, compared to $84.9 million, or 24.2%
of net sales, in the prior-year period. The increase in selling,
general and administrative expenses as compared to the prior-year
period was primarily a result of higher store payroll and
store-related expenses associated with operating 50 new stores and
general and administrative expenses in the current year. Selling,
general and administrative expenses as a percentage of net sales
increased by 130 basis points primarily as a result of higher store
payroll and store-related expenses.
- Income from operations decreased $5.6 million to $38.6 million,
or 10.3% of net sales, compared to $44.2 million, or 12.6% of net
sales, in the prior-year period, primarily due to the factors noted
above.
- Net income was $27.7 million, or $0.90 per diluted share,
compared to net income of $32.1 million, or $1.06 per diluted share
in the prior-year period. The decrease in net income is primarily
attributable to the factors noted above. Net income per diluted
share in the current-year period includes an approximately $0.01
per share tax expense, primarily due to changes to state tax rates,
partially offset by income tax accounting for share-based
compensation. Excluding this net tax effect, net income per diluted
share was $0.91 in the current-year period.
Operating Results for the Six Months Ended September 30, 2023
Compared to the Six Months Ended September 24, 2022
- Net sales increased 5.7% to $758.2 million from $717.4 million
in the prior-year period. Consolidated same store sales decreased
3.8% with retail store same store sales decreasing 2.8% and
e-commerce same store sales decreasing 11.3%. The increase in net
sales was the result of the incremental sales from new stores
opened over the past twelve months, partially offset by the
decrease in consolidated same store sales.
- Gross profit was $275.9 million, or 36.4% of net sales,
compared to $266.9 million, or 37.2% of net sales, in the
prior-year period. Gross profit increased primarily due to higher
sales. The decrease in gross profit rate of 80 basis points was
driven primarily by 150 basis points of deleverage in buying,
occupancy and distribution center costs driven primarily by
occupancy costs of 50 new stores and operating costs related to the
new Kansas City distribution center, partially offset by a 70
basis-point increase in merchandise margin rate. The increase in
merchandise margin rate was driven by 60 basis points of product
margin expansion resulting primarily from growth in exclusive brand
penetration and a 10 basis-point improvement from lower freight
expense as a percentage of net sales.
- Selling, general and administrative expenses were $191.1
million, or 25.2% of net sales, compared to $170.4 million, or
23.7% of net sales, in the prior-year period. The increase in
selling, general and administrative expenses as compared to the
prior-year period was primarily a result of higher store payroll
and store-related expenses associated with operating 50 new stores
and general and administrative expenses in the current year.
Selling, general and administrative expenses as a percentage of net
sales increased by 150 basis points primarily as a result of higher
store payroll, store-related expenses and general and
administrative expenses.
- Income from operations decreased $11.8 million to $84.8
million, or 11.2% of net sales, compared to $96.6 million, or 13.5%
of net sales, in the prior-year period, primarily due to the
factors noted above.
- Net income was $61.9 million, or $2.03 per diluted share,
compared to net income of $71.4 million, or $2.35 per diluted share
in the prior-year period. Net income per diluted share in the
current-year period includes an approximately $0.01 per share tax
benefit, primarily due to income tax accounting for share-based
compensation, partially offset by changes to state tax rates. Net
income per diluted share in the prior-year period includes an
approximately $0.03 per share tax benefit, primarily due to income
tax accounting for share-based compensation. Excluding these net
tax effects, net income per diluted share was $2.02 in the
current-year period, compared to $2.32 in the prior-year
period.
Sales by Channel
The following table includes total net sales growth, same store
sales (“SSS”) growth/(decline) and e-commerce as a percentage of
net sales for the periods indicated below.
Thirteen Weeks
Preliminary
Ended
Four Weeks
Four Weeks
Five Weeks
Four Weeks
September 30, 2023
Fiscal July
Fiscal August
Fiscal September
Fiscal October
Total Net Sales Growth
6.5
%
13.2
%
4.8
%
3.1
%
2.8
%
Retail Stores SSS
(3.8)
%
1.1
%
(3.7)
%
(7.3)
%
(8.2)
%
E-commerce SSS
(11.7)
%
(11.9)
%
(13.0)
%
(10.6)
%
(16.7)
%
Consolidated SSS
(4.8)
%
(0.5)
%
(4.8)
%
(7.7)
%
(9.2)
%
E-commerce as a % of Net
Sales
9.9
%
9.5
%
9.8
10.4
%
9.6
%
Balance Sheet Highlights as of September 30, 2023
- Cash of $38.7 million.
- Zero drawn under our $250 million revolving credit
facility.
- Average inventory per store decreased approximately 14% on a
same store basis compared to September 24, 2022.
Fiscal Year 2024 Outlook
The Company is providing updated guidance for the fiscal year
ending March 30, 2024, superseding in its entirety the previous
guidance issued in its first quarter earnings report on August 2,
2023. As a result, for the fiscal year ending March 30, 2024, the
Company now expects:
- To open 52 new stores.
- Total sales of $1.677 billion to $1.702 billion, representing
growth of 1.2% to 2.7% over the prior year, which was a 53-week
year.
- Same store sales decline of approximately (6.5)% to (5.0)%,
with retail store same store sales declines of (5.5)% to (4.0)% and
an e-commerce same store sales decline of (13.0)% to (11.0)%.
- Gross profit between $618.5 million and $630.7 million, or
approximately 36.9% to 37.1% of sales. Gross profit reflects an
estimated 190 basis-point increase in merchandise margin, including
a 130 basis-point improvement from freight expense. We anticipate
170 basis points of deleverage in buying, occupancy and
distribution center costs.
- Selling, general and administrative expenses between $419.6
million and $420.8 million. This represents approximately 25.0% to
24.7% of sales.
- Income from operations between $198.9 million and $209.9
million. This represents approximately 11.9% to 12.3% of
sales.
- Interest expense of $2.4 million.
- Net income of $145.2 million to $153.4 million.
- Net income per diluted share of $4.75 to $5.00 based on 30.7
million weighted average diluted shares outstanding.
- Capital expenditures between $95 million and $105 million.
For the fiscal third quarter ending December 30, 2023, the
Company expects:
- Total sales of $522 million to $535 million, representing
growth of 1.4% to 4.0% over the prior year.
- Same store sales decline of approximately (10.5)% to (8.0)%,
with retail store same store sales declines of (9.5)% to (7.0)% and
e-commerce same store sales declines of (15.5)% to (12.5)%.
- Gross profit between $197.8 million and $204.2 million, or
approximately 37.9% to 38.2% of sales. Gross profit reflects an
estimated 310 basis-point increase in merchandise margin, including
a 260 basis-point improvement from freight expense. We anticipate
150 basis points of deleverage in buying, occupancy and
distribution center costs.
- Selling, general and administrative expenses between $128.2 and
$129.4 million. This represents approximately 24.6% to 24.2% of
sales.
- Income from operations between $69.6 million and $74.8 million.
This represents approximately 13.3% to 14.0% of sales.
- Net income per diluted share of $1.67 to $1.79 based on 30.7
million weighted average diluted shares outstanding.
Conference Call Information
A conference call to discuss the financial results for the
second quarter of fiscal year 2024 is scheduled for today, November
2, 2023, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts
interested in participating in the call are invited to dial (877)
451-6152. The conference call will also be available to interested
parties through a live webcast at investor.bootbarn.com. Please
visit the website and select the “Events and Presentations” link at
least 15 minutes prior to the start of the call to register and
download any necessary software. A Supplemental Financial
Presentation is also available on the investor relations section of
the Company’s website. A telephone replay of the call will be
available until December 2, 2023, by dialing (844) 512-2921
(domestic) or (412) 317-6671 (international) and entering the
conference identification number: 13742403. Please note
participants must enter the conference identification number in
order to access the replay.
About Boot Barn
Boot Barn is the nation’s leading lifestyle retailer of western
and work-related footwear, apparel and accessories for men, women
and children. The Company offers its loyal customer base a wide
selection of work and lifestyle brands. As of the date of this
release, Boot Barn operates 374 stores in 44 states, in addition to
an e-commerce channel www.bootbarn.com. The Company also operates
www.sheplers.com, the nation’s leading pure play online western and
work retailer and www.countryoutfitter.com, an e-commerce site
selling to customers who live a country lifestyle. For more
information, call 888-Boot-Barn or visit www.bootbarn.com.
Forward Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact included in this press release are
forward-looking statements. Forward-looking statements refer to our
current expectations and projections relating to, by way of example
and without limitation, our financial condition, liquidity,
profitability, results of operations, margins, plans, objectives,
strategies, future performance, business and industry. You can
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements
may include words such as “anticipate”, “estimate”, “expect”,
“project”, “plan“, “intend”, “believe”, “may”, “might”, “will”,
“could”, “should”, “can have”, “likely”, “outlook” and other words
and terms of similar meaning in connection with any discussion of
the timing or nature of future operating or financial performance
or other events, but not all forward-looking statements contain
these identifying words. These forward-looking statements are based
on assumptions that the Company’s management has made in light of
their industry experience and on their perceptions of historical
trends, current conditions, expected future developments and other
factors they believe are appropriate under the circumstances. As
you consider this press release, you should understand that these
statements are not guarantees of performance or results. They
involve risks, uncertainties (some of which are beyond the
Company’s control) and assumptions. These risks, uncertainties and
assumptions include, but are not limited to, the following:
decreases in consumer spending due to declines in consumer
confidence, local economic conditions or changes in consumer
preferences; the Company’s ability to effectively execute on its
growth strategy; and the Company’s failure to maintain and enhance
its strong brand image, to compete effectively, to maintain good
relationships with its key suppliers, and to improve and expand its
exclusive product offerings. The Company discusses the foregoing
risks and other risks in greater detail under the heading “Risk
factors” in the periodic reports filed by the Company with the
Securities and Exchange Commission. Although the Company believes
that these forward-looking statements are based on reasonable
assumptions, you should be aware that many factors could affect the
Company’s actual financial results and cause them to differ
materially from those anticipated in the forward-looking
statements. Because of these factors, the Company cautions that you
should not place undue reliance on any of these forward-looking
statements. New risks and uncertainties arise from time to time,
and it is impossible for the Company to predict those events or how
they may affect the Company. Further, any forward-looking statement
speaks only as of the date on which it is made. Except as required
by law, the Company does not intend to update or revise the
forward-looking statements in this press release after the date of
this press release.
Boot Barn Holdings,
Inc.
Consolidated Balance
Sheets
(In thousands, except per share
data)
(Unaudited)
September 30,
April 1,
2023
2023
Assets
Current assets:
Cash and cash equivalents
$
38,665
$
18,193
Accounts receivable, net
9,321
13,145
Inventories
585,573
589,494
Prepaid expenses and other current
assets
39,044
48,341
Total current assets
672,603
669,173
Property and equipment, net
293,702
257,143
Right-of-use assets, net
348,788
326,623
Goodwill
197,502
197,502
Intangible assets, net
60,724
60,751
Other assets
4,887
6,189
Total assets
$
1,578,206
$
1,517,381
Liabilities and stockholders’
equity
Current liabilities:
Line of credit
$
—
$
66,043
Accounts payable
139,762
134,246
Accrued expenses and other current
liabilities
132,860
122,958
Short-term lease liabilities
56,209
51,595
Total current liabilities
328,831
374,842
Deferred taxes
36,253
33,260
Long-term lease liabilities
357,478
330,081
Other liabilities
3,258
2,748
Total liabilities
725,820
740,931
Stockholders’ equity:
Common stock, $0.0001 par value; September
30, 2023 - 100,000 shares authorized, 30,511 shares issued; April
1, 2023 - 100,000 shares authorized, 30,072 shares issued
3
3
Preferred stock, $0.0001 par value; 10,000
shares authorized, no shares issued or outstanding
—
—
Additional paid-in capital
226,379
209,964
Retained earnings
637,963
576,030
Less: Common stock held in treasury, at
cost, 227 and 192 shares at September 30, 2023 and April 1, 2023,
respectively
(11,959
)
(9,547
)
Total stockholders’ equity
852,386
776,450
Total liabilities and stockholders’
equity
$
1,578,206
$
1,517,381
Boot Barn Holdings,
Inc.
Consolidated Statements of
Operations
(In thousands, except per share
data)
(Unaudited)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
September 30,
September 24,
September 30,
September 24,
2023
2022
2023
2022
Net sales
$
374,456
$
351,545
$
758,151
$
717,401
Cost of goods sold
240,540
222,449
482,272
450,475
Gross profit
133,916
129,096
275,879
266,926
Selling, general and administrative
expenses
95,338
84,946
191,056
170,351
Income from operations
38,578
44,150
84,823
96,575
Interest expense
463
1,362
1,486
2,087
Other (loss)/income, net
(50
)
—
174
(273
)
Income before income taxes
38,065
42,788
83,511
94,215
Income tax expense
10,385
10,734
21,578
22,843
Net income
$
27,680
$
32,054
$
61,933
$
71,372
Earnings per share:
Basic
$
0.92
$
1.08
$
2.06
$
2.40
Diluted
$
0.90
$
1.06
$
2.03
$
2.35
Weighted average shares outstanding:
Basic
30,137
29,808
30,029
29,778
Diluted
30,627
30,313
30,540
30,351
Boot Barn Holdings,
Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Twenty-Six Weeks Ended
September 30,
September 24,
2023
2022
Cash flows from operating
activities
Net income
$
61,933
$
71,372
Adjustments to reconcile net income to net
cash provided by/(used in) operating activities:
Depreciation
22,597
16,792
Stock-based compensation
7,833
7,143
Amortization of intangible assets
27
32
Noncash lease expense
26,487
22,951
Amortization and write-off of debt
issuance fees and debt discount
54
74
Loss on disposal of assets
298
250
Deferred taxes
2,993
1,479
Changes in operating assets and
liabilities:
Accounts receivable, net
3,046
(972
)
Inventories
3,921
(166,721
)
Prepaid expenses and other current
assets
9,243
(5,857
)
Other assets
1,302
(3,329
)
Accounts payable
7,051
36,472
Accrued expenses and other current
liabilities
13,600
(27,199
)
Other liabilities
510
244
Operating leases
(15,435
)
(14,868
)
Net cash provided by/(used in) operating
activities
$
145,460
$
(62,137
)
Cash flows from investing
activities
Purchases of property and equipment
$
(64,687
)
$
(52,459
)
Net cash used in investing activities
$
(64,687
)
$
(52,459
)
Cash flows from financing
activities
(Payments)/Borrowings on line of credit,
net
$
(66,043
)
$
118,281
Repayments on debt and finance lease
obligations
(428
)
(419
)
Tax withholding payments for net share
settlement
(2,412
)
(4,501
)
Proceeds from the exercise of stock
options
8,582
247
Net cash (used in)/provided by financing
activities
$
(60,301
)
$
113,608
Net increase/(decrease) in cash and cash
equivalents
20,472
(988
)
Cash and cash equivalents, beginning of
period
18,193
20,674
Cash and cash equivalents, end of
period
$
38,665
$
19,686
Supplemental disclosures of cash flow
information:
Cash paid for income taxes
$
2,822
$
45,519
Cash paid for interest
$
1,399
$
1,642
Supplemental disclosure of non-cash
activities:
Unpaid purchases of property and
equipment
$
14,103
$
21,551
Boot Barn Holdings,
Inc.
Store Count
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
September 30,
July 1,
April 1,
December 24,
September 24,
June 25,
March 26,
December 25,
2023
2023
2023
2022
2022
2022
2022
2021
Store Count (BOP)
361
345
333
321
311
300
289
278
Opened/Acquired
10
16
12
12
10
11
11
11
Closed
—
—
—
—
—
—
—
—
Store Count (EOP)
371
361
345
333
321
311
300
289
Boot Barn Holdings,
Inc.
Selected Store Data
Thirteen Weeks Ended
Fourteen
Weeks Ended
Thirteen Weeks Ended
September 30,
July 1,
April 1,
December 24,
September 24,
June 25,
March 26,
December 25,
2023
2023
2023
2022
2022
2022
2022
2021
Selected Store Data:
Same Store Sales (decline)/growth
(4.8
)
%
(2.9
)
%
(5.5
)
%
(3.6
)
%
2.3
%
10.0
%
33.3
%
54.2
%
Stores operating at end of period
371
361
345
333
321
311
300
289
Total retail store square footage, end of
period (in thousands)
4,027
3,914
3,735
3,598
3,451
3,333
3,194
3,063
Average store square footage, end of
period
10,855
10,841
10,825
10,806
10,751
10,717
10,648
10,597
Average net sales per store (in
thousands)
$
909
$
958
$
1,088
$
1,320
$
966
$
1,031
$
1,094
$
1,372
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102110392/en/
Investor Contact: ICR, Inc. Brendon Frey, 203-682-8216
BootBarnIR@icrinc.com
or
Company Contact: Boot Barn Holdings, Inc. Mark Dedovesh,
949-453-4489 Senior Vice President, Investor Relations &
Financial Planning BootBarnIRMedia@bootbarn.com
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