BOOT Boot Barn Holdings Inc

Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the first fiscal quarter ended July 1, 2023. A Supplemental Financial Presentation is available at investor.bootbarn.com.

For the quarter ended July 1, 2023:

• Net sales increased 4.9% over the prior-year period to $383.7 million, cycling 19.4% net sales growth in the prior-year period.
• Same store sales decreased 2.9% compared to the prior-year period, cycling 10.0% same store sales growth in the prior-year period. The 2.9% decrease in consolidated same store sales is comprised of a decrease in retail store same store sales of 1.8% and a decrease in e-commerce same store sales of 10.8%.
• Net income was $34.3 million, or $1.13 per diluted share, compared to $39.3 million, or $1.29 per diluted share in the prior-year period. Net income per diluted share in the current-year and prior-year period includes an approximately $0.02 and $0.03 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefits, net income per diluted share was $1.11 and $1.26 in the current-year and prior-year period, respectively.
• The Company opened 16 new stores, bringing its total store count to 361.

Jim Conroy, President and Chief Executive Officer, commented “I am quite pleased with the results of the quarter as we exceeded our quarterly guidance across nearly every measure. Total revenue continued to grow, driven by the performance of new stores. From a same store sales growth perspective, we saw a modest 2.9% decline despite cycling outsized comp sales growth in the first quarter for each of the past two years. Once again, we were able to expand our merchandise margin through a significant increase in the penetration of our margin enhancing exclusive brands which reached 38% of sales for the quarter. Earnings also surpassed our expectations, driven by a steadily improving retail store same store sales trend which turned positive in June and remained positive in July. While uncertainty in the macro environment persists, we are pleased with the positive momentum we have seen in the business.”

Operating Results for the First Quarter Ended July 1, 2023 Compared to the First Quarter Ended June 25, 2022

• Net sales increased 4.9% to $383.7 million from $365.9 million in the prior-year period. Consolidated same store sales decreased 2.9% with retail store same store sales decreasing 1.8% and e-commerce same store sales decreasing 10.8%. 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. Higher average unit retail prices, driven in part by inflation, contributed to the increase in net sales.

• Gross profit was $142.0 million, or 37.0% of net sales, compared to $137.8 million, or 37.7% of net sales, in the prior-year period. Gross profit increased primarily due to higher sales. The decrease in gross profit rate of 70 basis points was driven primarily by 160 basis points of deleverage in buying, occupancy and distribution center costs partially offset by a 90 basis-point increase in merchandise margin rate. The increase in merchandise margin rate was driven by 80 basis points of product margin expansion resulting primarily from growth in exclusive brand penetration and a 10 basis-point tailwind from lower freight expense as a percentage of net sales.

• Selling, general and administrative expenses were $95.7 million, or 24.9% of net sales, compared to $85.4 million, or 23.3% 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 corporate overhead costs in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 160 basis points primarily as a result of higher payroll and overhead costs.

• Income from operations decreased $6.2 million to $46.2 million, or 12.1% of net sales, compared to $52.4 million, or 14.3% of net sales, in the prior-year period, primarily due to the factors noted above.

• Net income was $34.3 million, or $1.13 per diluted share, compared to net income of $39.3 million, or $1.29 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 and prior-year period includes approximately $0.02 and $0.03 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefits, net income per diluted share was $1.11 and $1.26 in the current-year and prior-year period, respectively.

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

Ended

July 1, 2023

 

 

Four Weeks

Fiscal April

 

Four Weeks

Fiscal May

 

Five Weeks

Fiscal June

 

 

Preliminary

Four Weeks

Fiscal July

  Total Net Sales Growth

4.9

%

2.1

%

4.2

%

7.8

%

12.9

%

  Retail Stores SSS

(1.8

)%

(5.0

)%

(2.6

)%

1.5

%

1.0

%

E-commerce SSS

(10.8

)%

(19.1

)%

(9.0

)%

(3.5

)%

(11.4

)%

Consolidated SSS

(2.9

)%

(6.9

)%

(3.3

)%

1.0

%

(0.5

)%

  E-commerce as a % of Net Sales

9.9

%

10.5

%

10.0

%

9.3

%

9.6

%

   

Balance Sheet Highlights as of July 1, 2023

• Cash of $17.1 million.
• $26.2 million drawn under our $250 million revolving credit facility.

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 fourth quarter and fiscal year 2023 earnings report on May 17, 2023. As a result, for the fiscal year ending March 30, 2024, the Company now expects:

• To open 52 new stores.
• Total sales of $1.715 billion to $1.748 billion, representing growth of 3.5% to 5.5% over the prior year, which was a 53-week year.
• Same store sales decline of approximately (5.0)% to (3.0)%, with retail store same store sales declines of (5.5)% to (3.5)% and an e-commerce same store sales decline of (4.0)% to flat.
• Gross profit between $629.7 million and $645.7 million, or approximately 36.7% to 36.9% of sales. Gross profit reflects an estimated 160 basis-point increase in merchandise margin, including a 100 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 $419.3 million and $422.9 million. This represents approximately 24.4% to 24.2% of sales.
• Income from operations between $210.4 million and $222.8 million. This represents approximately 12.3% to 12.7% of sales.
• Interest expense of $3.2 million.
• Net income of $154.2 million to $163.4 million.
• Net income per diluted share of $5.05 to $5.35 based on 30.6 million weighted average diluted shares outstanding.
• Capital expenditures between $90 million and $95 million.

For the fiscal second quarter ending September 30, 2023, the Company expects:

• Total sales of $372 million to $379 million, representing growth of 5.8% to 7.8% over the prior year.
• Same store sales decline of approximately (5.5)% to (3.5)%, with retail store same store sales declines of (4.5)% to (2.5)% and e-commerce same store sales declines of (11.0)% to (9.0)%.
• Gross profit between $130.7 million and $134.2 million, or approximately 35.1% to 35.4% of sales. Gross profit reflects 180 basis points of deleverage in buying, occupancy and distribution center costs, and an estimated 50 basis-point increase in merchandise margin, including flat freight expense year-over-year.
• Selling, general and administrative expenses between $95.3 and $96.4 million. This represents approximately 25.6% to 25.4% of sales.
• Income from operations between $35.4 million and $37.8 million. This represents approximately 9.5% to 10.0% of sales.
• Net income per diluted share of $0.84 to $0.90 based on 30.6 million weighted average diluted shares outstanding.

Conference Call Information

A conference call to discuss the financial results for the first quarter of fiscal year 2024 is scheduled for today, August 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 September 2, 2023, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13740369. 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 363 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)

 

 

 

 

 

 

 

July 1,

 

April 1,

 

 

 

2023

 

 

 

2023

 

Assets Current assets: Cash and cash equivalents

$

17,099

 

 

$

18,193

 

Accounts receivable, net

 

11,803

 

 

 

13,145

 

Inventories

 

566,294

 

 

 

589,494

 

Prepaid expenses and other current assets

 

36,828

 

 

 

48,341

 

Total current assets

 

632,024

 

 

 

669,173

 

Property and equipment, net

 

275,969

 

 

 

257,143

 

Right-of-use assets, net

 

334,403

 

 

 

326,623

 

Goodwill

 

197,502

 

 

 

197,502

 

Intangible assets, net

 

60,737

 

 

 

60,751

 

Other assets

 

5,835

 

 

 

6,189

 

Total assets

$

1,506,470

 

 

$

1,517,381

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Line of credit

$

26,215

 

 

$

66,043

 

Accounts payable

 

108,203

 

 

 

134,246

 

Accrued expenses and other current liabilities

 

123,997

 

 

 

122,958

 

Short-term lease liabilities

 

54,670

 

 

 

51,595

 

Total current liabilities

 

313,085

 

 

 

374,842

 

Deferred taxes

 

33,987

 

 

 

33,260

 

Long-term lease liabilities

 

342,456

 

 

 

330,081

 

Other liabilities

 

3,246

 

 

 

2,748

 

Total liabilities

 

692,774

 

 

 

740,931

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value; July 1, 2023 - 100,000 shares authorized, 30,195 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

 

215,262

 

 

 

209,964

 

Retained earnings

 

610,283

 

 

 

576,030

 

Less: Common stock held in treasury, at cost, 226 and 192 shares at July 1, 2023 and April 1, 2023, respectively

 

(11,852

)

 

 

(9,547

)

Total stockholders’ equity

 

813,696

 

 

 

776,450

 

Total liabilities and stockholders’ equity

$

1,506,470

 

 

$

1,517,381

 

Boot Barn Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

Thirteen Weeks Ended

 

 

July 1,

 

June 25,

 

 

2023

 

2022

Net sales

$

383,695

 

$

365,856

 

Cost of goods sold

 

241,732

 

 

228,026

 

Gross profit

 

141,963

 

 

137,830

 

Selling, general and administrative expenses

 

95,718

 

 

85,405

 

Income from operations

 

46,245

 

 

52,425

 

Interest expense

 

1,023

 

 

725

 

Other income/(loss), net

 

224

 

 

(273

)

Income before income taxes

 

45,446

 

 

51,427

 

Income tax expense

 

11,193

 

 

12,109

 

Net income

$

34,253

 

$

39,318

 

 

 

 

Earnings per share:

 

 

 

Basic

$

1.14

 

$

1.32

 

Diluted

$

1.13

 

$

1.29

 

Weighted average shares outstanding:

 

 

 

Basic

 

29,922

 

 

29,747

 

Diluted

 

30,444

 

 

30,386

 

Boot Barn Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Thirteen Weeks Ended

 

 

July 1,

 

June 25,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities Net income

$

34,253

 

 

$

39,318

 

Adjustments to reconcile net income to net cash provided by/(used in) operating activities:

 

 

 

Depreciation

 

10,603

 

 

 

8,022

 

Stock-based compensation

 

4,953

 

 

 

4,701

 

Amortization of intangible assets

 

14

 

 

 

16

 

Noncash lease expense

 

13,117

 

 

 

11,119

 

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

 

27

 

 

 

44

 

Loss on disposal of assets

 

176

 

 

 

177

 

Deferred taxes

 

727

 

 

 

1,575

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

1,452

 

 

 

600

 

Inventories

 

23,200

 

 

 

(60,080

)

Prepaid expenses and other current assets

 

11,486

 

 

 

(20,630

)

Other assets

 

354

 

 

 

(173

)

Accounts payable

 

(24,872

)

 

 

18,024

 

Accrued expenses and other current liabilities

 

158

 

 

 

(21,523

)

Other liabilities

 

498

 

 

 

150

 

Operating leases

 

(5,344

)

 

 

(7,108

)

Net cash provided by/(used in) operating activities

$

70,802

 

 

$

(25,768

)

Cash flows from investing activities

 

 

 

Purchases of property and equipment

$

(29,895

)

 

$

(20,835

)

Net cash used in investing activities

$

(29,895

)

 

$

(20,835

)

Cash flows from financing activities

 

 

 

(Payments)/Borrowings on line of credit, net

$

(39,828

)

 

$

46,324

 

Repayments on debt and finance lease obligations

 

(213

)

 

 

(220

)

Tax withholding payments for net share settlement

 

(2,305

)

 

 

(4,408

)

Proceeds from the exercise of stock options

 

345

 

 

 

247

 

Net cash (used in)/provided by financing activities

$

(42,001

)

 

$

41,943

 

 

 

 

Net decrease in cash and cash equivalents

 

(1,094

)

 

 

(4,660

)

Cash and cash equivalents, beginning of period

 

18,193

 

 

 

20,674

 

Cash and cash equivalents, end of period

$

17,099

 

 

$

16,014

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for income taxes

$

646

 

 

$

19,226

 

Cash paid for interest

$

1,151

 

 

$

534

 

Supplemental disclosure of non-cash activities:

 

 

 

Unpaid purchases of property and equipment

$

17,517

 

 

$

17,473

 

Boot Barn Holdings, Inc.

Store Count

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

December 25,

 

September 25,

2023

 

2023

 

2022

 

2022

 

2022

 

2022

 

2021

 

2021

Store Count (BOP)

345

333

321

311

300

289

278

276

 

Opened/Acquired

16

12

12

10

11

11

11

3

 

Closed

—

—

—

—

—

—

—

(1

)

Store Count (EOP)

361

345

333

321

311

300

289

278

 

Boot Barn Holdings, Inc.

Selected Store Data

 

 

 

 

 

 

 

 

 

Thirteen

Weeks Ended

 

Fourteen

Weeks Ended

 

Thirteen Weeks Ended

 

 

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

December 25,

 

September 25,

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

Selected Store Data: Same Store Sales (decline)/growth

 

(2.9

)%

 

(5.5

)%

 

(3.6

)%

 

2.3

%

 

10.0

%

 

33.3

%

 

54.2

%

 

61.7

%

Stores operating at end of period

 

361

 

 

345

 

 

333

 

 

321

 

 

311

 

 

300

 

 

289

 

 

278

 

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

 

3,914

 

 

3,735

 

 

3,598

 

 

3,451

 

 

3,333

 

 

3,194

 

 

3,063

 

 

2,940

 

Average store square footage, end of period

 

10,841

 

 

10,825

 

 

10,806

 

 

10,751

 

 

10,717

 

 

10,648

 

 

10,597

 

 

10,575

 

Average net sales per store (in thousands)

$

958

 

$

1,088

 

$

1,320

 

$

966

 

$

1,031

 

$

1,094

 

$

1,372

 

$

965

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802948361/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