BOOT Boot Barn Holdings Inc

Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the third fiscal quarter ended December 30, 2023. A Supplemental Financial Presentation is available at investor.bootbarn.com.

For the quarter ended December 30, 2023:

• Net sales increased 1.1% over the prior-year period to $520.4 million.
• Same store sales decreased 9.7% compared to the prior-year period, cycling 51% same store sales growth on a 2-year stack basis. The 9.7% decrease in consolidated same store sales is comprised of a decrease in retail store same store sales of 9.4% and a decrease in e-commerce same store sales of 11.5%.
• Net income was $55.6 million, or $1.81 per diluted share, compared to $52.8 million, or $1.74 per diluted share in the prior-year period.
• The Company opened 11 new stores, bringing its total store count to 382.

Jim Conroy, President and Chief Executive Officer, commented “I am pleased with our third quarter performance. We added 11 new stores and were able to maintain our consistent track record of delivering growth. Excluding three quarters in calendar 2020 that were impacted by the pandemic, the third quarter marks our 38th consecutive quarter of year-over-year sales growth since our IPO in 2014, nearly ten years ago. Our top line was driven by the sales from the 49 new stores opened over the past 12 months, which more than offset a 9.7% decline in same store sales. We also grew earnings compared to last year through a combination of sales growth, disciplined expense control and an increase in merchandise margin, which benefited from improved freight. These results underscore the strength of the Boot Barn business model and are a testament to solid execution across the organization.”

Operating Results for the Third Quarter Ended December 30, 2023 Compared to the Third Quarter Ended December 24, 2022

• Net sales increased 1.1% to $520.4 million from $514.6 million in the prior-year period. Consolidated same store sales decreased 9.7% with retail store same store sales decreasing 9.4% and e-commerce same store sales decreasing 11.5%. 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 $199.1 million, or 38.3% of net sales, compared to $187.8 million, or 36.5% of net sales, in the prior-year period. Gross profit increased primarily due to merchandise margin expansion and sales growth. The increase in gross profit rate of 180 basis points was driven primarily by a 300 basis-point increase in merchandise margin rate partially offset by 120 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was driven by a 250 basis-point improvement in freight expense as a percentage of net sales and 50 basis points of product margin expansion resulting primarily from lower promotional activity and growth in exclusive brand penetration. The deleverage in buying, occupancy and distribution center costs was driven primarily by the occupancy costs of 49 new stores and operating costs related to the new Kansas City distribution center.

• Selling, general and administrative expenses were $124.0 million, or 23.8% of net sales, compared to $115.3 million, or 22.4% 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 general and administrative expenses, store payroll associated with operating 49 new stores and other operating expenses in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 140 basis points primarily as a result of higher overhead, payroll and other operating expenses.

• Income from operations increased $2.6 million to $75.1 million, or 14.4% of net sales, compared to $72.5 million, or 14.1% of net sales, in the prior-year period, primarily due to the factors noted above.

• Net income was $55.6 million, or $1.81 per diluted share, compared to net income of $52.8 million, or $1.74 per diluted share in the prior-year period. The increase in net income is primarily attributable to the factors noted above.

Operating Results for the Nine Months Ended December 30, 2023 Compared to the Nine Months Ended December 24, 2022

• Net sales increased 3.8% to $1.279 billion from $1.232 billion in the prior-year period. Consolidated same store sales decreased 6.3% with retail store same store sales decreasing 5.6% and e-commerce same store sales decreasing 11.4%. 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 $475.0 million, or 37.2% of net sales, compared to $454.7 million, or 36.9% of net sales, in the prior-year period. Gross profit increased primarily due to sales growth and merchandise margin expansion. The increase in gross profit rate of 30 basis points was driven primarily by a 170 basis-point increase in merchandise margin rate, partially offset by 140 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was driven by a 120 basis-point improvement in freight expense as a percentage of net sales and 50 basis points of product margin expansion resulting primarily from growth in exclusive brand penetration. The deleverage in buying, occupancy and distribution center costs was driven primarily by the occupancy costs of 49 new stores and operating costs related to the new Kansas City distribution center.

• Selling, general and administrative expenses were $315.0 million, or 24.6% of net sales, compared to $285.7 million, or 23.2% 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 49 new stores and general and administrative expenses in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 140 basis points primarily as a result of higher payroll and overhead costs.

• Income from operations decreased $9.1 million to $160.0 million, or 12.5% of net sales, compared to $169.1 million, or 13.7% of net sales, in the prior-year period, primarily due to the factors noted above.

• Net income was $117.6 million, or $3.84 per diluted share, compared to net income of $124.1 million, or $4.09 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 $3.83 in the current-year period, compared to $4.06 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

 

 

 

December 30, 2023

 

 

Fiscal October

 

Fiscal November

 

Fiscal December

 

 

Fiscal January

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Sales Growth

 

1.1

%

 

3.0

%

4.2

%

(1.2)

%

 

(14.8)

%*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Stores SSS

 

(9.4)

%

 

(8.8)

%

(11.5)

%

(8.5)

%

 

(7.4)

%

E-commerce SSS

 

(11.5)

%

 

(16.8)

%

(15.1)

%

(8.4)

%

 

(12.9)

%

Consolidated SSS

 

(9.7)

%

 

(9.7)

%

(11.9)

%

(8.5)

%

 

(8.1)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E-commerce as a % of Net Sales

 

13.0

%

 

9.7

%

10.4

%

16.1

%

 

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Last year’s fiscal January included the week after Christmas, which is a high-sales volume week. In the current year, the week after Christmas was included in the third fiscal quarter.

Balance Sheet Highlights as of December 30, 2023

• Cash of $107 million.
• Zero drawn under our $250 million revolving credit facility.
• Average inventory per store decreased approximately 1% on a same store basis compared to December 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 second quarter earnings report on November 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 $1.654 billion to $1.664 billion, representing a change of (0.2)% to 0.4% over the prior year, which was a 53-week year.
• Same store sales decline of approximately (7.0)% to (6.3)%, with retail store same store sales declines of (6.3)% to (5.5)% and an e-commerce same store sales decline of (11.7)%.
• Gross profit between $605.7 million and $610.6 million, or approximately 36.6% to 36.7% of sales. Gross profit reflects an estimated 170 basis-point increase in merchandise margin, including a 130 basis-point improvement from freight expense. We anticipate 180 basis points of deleverage in buying, occupancy and distribution center costs.
• Selling, general and administrative expenses between $411.8 million and $412.7 million. This represents approximately 24.9% to 24.8% of sales.
• Income from operations between $194.0 million and $198.0 million. This represents approximately 11.7% to 11.9% of sales.
• Net income of $142.8 million to $145.8 million.
• Net income per diluted share of $4.65 to $4.75 based on 30.7 million weighted average diluted shares outstanding.
• Capital expenditures between $95 million and $105 million.

For the fiscal fourth quarter ending March 30, 2024, the Company expects:

• Total sales of $376 million to $386 million, representing a decline of (11.7)% to (9.3)% over the prior year, which was a 14-week quarter.
• Same store sales decline of approximately (9.0)% to (6.3)%, with retail store same store sales declines of (8.5)% to (5.5)% and an e-commerce same store sales decline of (13.0)%.
• Gross profit between $130.7 million and $135.6 million, or approximately 34.8% to 35.2% of sales. Gross profit reflects an estimated 160 basis-point increase in merchandise margin, including a 140 basis-point improvement from freight expense. We anticipate 310 basis points of deleverage in buying, occupancy and distribution center costs.
• Selling, general and administrative expenses between $96.7 and $97.6 million. This represents approximately 25.7% to 25.3% of sales.
• Income from operations between $34.0 million and $38.0 million. This represents approximately 9.0% to 9.8% of sales.
• Net income per diluted share of $0.82 to $0.92 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, January 31, 2024, 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 March 2, 2024, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13744029. 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 382 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)

 

 

 

 

 

 

 

December 30,

 

April 1,

 

 

2023

 

2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

107,166

 

 

$

18,193

 

Accounts receivable, net

 

 

10,380

 

 

 

13,145

 

Inventories

 

 

563,378

 

 

 

589,494

 

Prepaid expenses and other current assets

 

 

54,205

 

 

 

48,341

 

Total current assets

 

 

735,129

 

 

 

669,173

 

Property and equipment, net

 

 

308,085

 

 

 

257,143

 

Right-of-use assets, net

 

 

366,745

 

 

 

326,623

 

Goodwill

 

 

197,502

 

 

 

197,502

 

Intangible assets, net

 

 

60,710

 

 

 

60,751

 

Other assets

 

 

5,334

 

 

 

6,189

 

Total assets

 

$

1,673,505

 

 

$

1,517,381

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Line of credit

 

$

—

 

 

$

66,043

 

Accounts payable

 

 

131,655

 

 

 

134,246

 

Accrued expenses and other current liabilities

 

 

152,704

 

 

 

122,958

 

Short-term lease liabilities

 

 

59,243

 

 

 

51,595

 

Total current liabilities

 

 

343,602

 

 

 

374,842

 

Deferred taxes

 

 

39,949

 

 

 

33,260

 

Long-term lease liabilities

 

 

375,345

 

 

 

330,081

 

Other liabilities

 

 

3,664

 

 

 

2,748

 

Total liabilities

 

 

762,560

 

 

 

740,931

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.0001 par value; December 30, 2023 - 100,000 shares authorized, 30,528 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

 

 

229,322

 

 

 

209,964

 

Retained earnings

 

 

693,587

 

 

 

576,030

 

Less: Common stock held in treasury, at cost, 227 and 192 shares at December 30, 2023 and April 1, 2023, respectively

 

 

(11,967

)

 

 

(9,547

)

Total stockholders’ equity

 

 

910,945

 

 

 

776,450

 

Total liabilities and stockholders’ equity

 

$

1,673,505

 

 

$

1,517,381

 

Boot Barn Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended

 

Thirty-Nine Weeks Ended

 

 

December 30,

 

December 24,

 

December 30,

 

December 24,

 

 

2023

 

2022

 

2023

 

 

2022

 

Net sales

 

$

520,399

 

$

514,553

 

$

1,278,550

 

$

1,231,954

 

Cost of goods sold

 

 

321,292

 

 

326,739

 

 

803,564

 

 

777,214

 

Gross profit

 

 

199,107

 

 

187,814

 

 

474,986

 

 

454,740

 

Selling, general and administrative expenses

 

 

123,960

 

 

115,318

 

 

315,016

 

 

285,669

 

Income from operations

 

 

75,147

 

 

72,496

 

 

159,970

 

 

169,071

 

Interest expense

 

 

522

 

 

2,258

 

 

2,008

 

 

4,345

 

Other income/(loss), net

 

 

351

 

 

63

 

 

525

 

 

(210

)

Income before income taxes

 

 

74,976

 

 

70,301

 

 

158,487

 

 

164,516

 

Income tax expense

 

 

19,352

 

 

17,529

 

 

40,930

 

 

40,372

 

Net income

 

$

55,624

 

$

52,772

 

$

117,557

 

$

124,144

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.84

 

$

1.77

 

$

3.90

 

$

4.17

 

Diluted

 

$

1.81

 

$

1.74

 

$

3.84

 

$

4.09

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

30,293

 

 

29,813

 

 

30,117

 

 

29,790

 

Diluted

 

 

30,649

 

 

30,294

 

 

30,575

 

 

30,340

 

Boot Barn Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Thirty-Nine Weeks Ended

 

 

December 30,

 

December 24,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities

 

 

 

 

Net income

 

$

117,557

 

 

$

124,144

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

35,801

 

 

 

25,968

 

Stock-based compensation

 

 

10,429

 

 

 

9,562

 

Amortization of intangible assets

 

 

41

 

 

 

47

 

Noncash lease expense

 

 

40,361

 

 

 

35,203

 

Amortization and write-off of debt issuance fees and debt discount

 

 

81

 

 

 

101

 

Loss on disposal of assets

 

 

660

 

 

 

250

 

Deferred taxes

 

 

6,689

 

 

 

506

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

2,905

 

 

 

(4,571

)

Inventories

 

 

26,116

 

 

 

(117,851

)

Prepaid expenses and other current assets

 

 

(5,945

)

 

 

(14,430

)

Other assets

 

 

855

 

 

 

(3,194

)

Accounts payable

 

 

2,588

 

 

 

19,571

 

Accrued expenses and other current liabilities

 

 

28,476

 

 

 

32,785

 

Other liabilities

 

 

916

 

 

 

423

 

Operating leases

 

 

(27,071

)

 

 

(21,464

)

Net cash provided by operating activities

 

$

240,459

 

 

$

87,050

 

Cash flows from investing activities

 

 

 

 

Purchases of property and equipment

 

$

(91,297

)

 

$

(83,056

)

Net cash used in investing activities

 

$

(91,297

)

 

$

(83,056

)

Cash flows from financing activities

 

 

 

 

(Payments)/Borrowings on line of credit, net

 

$

(66,043

)

 

$

30,522

 

Repayments on debt and finance lease obligations

 

 

(655

)

 

 

(626

)

Tax withholding payments for net share settlement

 

 

(2,420

)

 

 

(4,501

)

Proceeds from the exercise of stock options

 

 

8,929

 

 

 

329

 

Net cash (used in)/provided by financing activities

 

$

(60,189

)

 

$

25,724

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

88,973

 

 

 

29,718

 

Cash and cash equivalents, beginning of period

 

 

18,193

 

 

 

20,674

 

Cash and cash equivalents, end of period

 

$

107,166

 

 

$

50,392

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

Cash paid for income taxes

 

$

45,637

 

 

$

58,324

 

Cash paid for interest

 

$

1,931

 

 

$

4,002

 

Supplemental disclosure of non-cash activities:

 

 

 

 

Unpaid purchases of property and equipment

 

$

15,427

 

 

$

27,474

 

Boot Barn Holdings, Inc.

Store Count

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

Quarter

Ended

 

 

December 30,

 

September 30,

 

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

 

2023

 

2023

 

2023

 

2023

 

2022

 

2022

 

2022

 

2022

Store Count (BOP)

 

371

 

361

 

345

 

333

 

321

 

311

 

300

 

289

Opened/Acquired

 

11

 

10

 

16

 

12

 

12

 

10

 

11

 

11

Closed

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

Store Count (EOP)

 

382

 

371

 

361

 

345

 

333

 

321

 

311

 

300

Boot Barn Holdings, Inc.

Selected Store Data

 

 

 

 

 

 

 

 

 

 

 

 

Thirteen Weeks Ended

 

Fourteen

Weeks

Ended

 

Thirteen Weeks Ended

 

 

December 30,

 

September 30,

 

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

 

 

2023

 

 

 

2023

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

Selected Store Data:

 

 

 

 

 

 

 

 

 

Same Store Sales (decline)/growth

 

 

(9.7

)%

 

(4.8

)%

 

(2.9

)%

 

(5.5

)%

 

(3.6

)%

 

2.3

%

 

10.0

%

 

33.3

%

Stores operating at end of period

 

 

382

 

 

371

 

 

361

 

 

345

 

 

333

 

 

321

 

 

311

 

 

300

 

Total retail store square footage, end of period (in thousands)

 

 

4,153

 

 

4,027

 

 

3,914

 

 

3,735

 

 

3,598

 

 

3,451

 

 

3,333

 

 

3,194

 

Average store square footage, end of period

 

 

10,872

 

 

10,855

 

 

10,841

 

 

10,825

 

 

10,806

 

 

10,751

 

 

10,717

 

 

10,648

 

Average net sales per store (in thousands)

 

$

1,185

 

$

909

 

$

958

 

$

1,088

 

$

1,320

 

$

966

 

$

1,031

 

$

1,094

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240131235420/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