Sportsman’s Warehouse Holdings Inc. slightly reduced its outlook for the year after results in the first quarter ended May 4 missed plan.

Jon Barker, chief executive officer, stated, “Our first quarter results were within our expectations on the top line and slightly below on the bottom line as we were up against difficult comparisons in the prior year period for our firearm and ammunition categories. Operationally, I am very pleased with the progress we made on our strategic initiatives centered around our omni-channel strategy, customer acquisition and engagement, and a differentiated merchandising assortment, all of which continue to drive market share gains.”

Barker continued, “As we look to the remainder of the year, we are continuing to strategically invest in the business and focusing on many new initiatives including a new credit card partner, valuable firearm related services and opportunities to selectively expand our exclusive product, among others. We believe these growth strategies, combined with our best in class customer service and expansive product selection at everyday low pricing, will continue to strengthen our competitive positioning in fiscal 2019 and beyond.”

For the thirteen weeks ended May 4, 2019:

  • Net sales decreased by 3.4 percent to $174.0 million from $180.1 million in the first quarter of fiscal year 2018 primarily due to the difficult event-driven comparisons in the firearm and ammunition categories in the first quarter of fiscal year 2018. Guidance had called for sales in the range of $174.0 million and $180.0 million.
  • Same store sales decreased by 5.7 percent from the comparable prior year period. Guidance called for same-store sales to decline in the range of 2.0 percent to 5 percent.
  • Loss from operations was $5.4 million compared to $3.7 million in the first quarter of fiscal year 2018. Adjusted loss from operations was $5.0 million in the first quarter of fiscal 2019, which excludes expenses incurred relating to the transition of the company’s CFO and the recruitment and hiring of various key members of the senior management team. Adjusted loss from operations was $1.0 million in the first quarter of fiscal 2018, which excludes charges incurred in conjunction with the retirement of the company’s former CEO.
  • Interest expense decreased to $2.1 million from $3.6 million in the first quarter of fiscal year 2018.
  • Net loss was $5.5 million compared to net loss of $5.8 million in the first quarter of fiscal year 2018. Guidance called a net loss in the range of $3.5 million to $4.8 million.
  • Adjusted net loss in the first quarter of fiscal 2019 was $5.2 million, which excludes expenses incurred relating to the transition of the company’s CFO and the recruitment and hiring of various key members of the senior management team. Adjusted net loss in the first quarter of fiscal 2018 was $3.6 million, which excludes charges incurred in conjunction with the retirement of the company’s former CEO.
  • Diluted loss per share was $(0.13) compared to diluted loss per share of $(0.14) for the first quarter of fiscal year 2018. Guidance called a net loss in the range of 8 cents to 11 cents a share.
  • Adjusted diluted loss per share was $(0.12) in the first quarter of fiscal 2019 compared to adjusted diluted loss per share of $(0.08) in the first quarter of fiscal 2018.
  • Adjusted EBITDA was $0.4 million compared to $4.8 million in the first quarter of fiscal year 2018.
    Balance sheet highlights as of May 4, 2019:
  • Total debt: $175.2 million consisting of $141.6 million outstanding under the company’s revolving credit facility and $33.6 million outstanding under the term loan, net of unamortized debt issuance costs.
  •  Total liquidity (cash plus $39.3 million of availability on revolving credit facility): $41.0 million

Second Quarter and Fiscal Year 2019 Outlook:

For the second quarter of fiscal year 2019, net sales are expected to be in the range of $205.0 million to $211.0 million based on a change in same-store sales in the range of (0.5 percent) to 1.5 percent compared to the corresponding period of fiscal year 2018. Net income is expected to be in the range of $4.5 million to $5.9 million with diluted earnings per share of $0.10 to $0.14 on a weighted average of approximately 43.2 million estimated common shares outstanding.

For fiscal year 2019, net sales are expected to be in the range of $860.0 million to $884.0 million based on a change in same-store sales in the range of (1.0 percent) to 1.5 percent compared to fiscal year 2018. Adjusted net income is expected to be in the range of $20.8 million to $26.0 million with adjusted earnings per diluted share of $0.48 to $0.60 on a weighted average of approximately 43.2 million estimated common shares outstanding, when adjusted for the executive transition costs incurred in the first quarter of fiscal 2019 relating to the transition of the company’s CFO and the recruitment and hiring of various key members of the senior management team.

Previously, Sportsman’s Warehouse reported sales in the range of $860.0 million to $890.0 million based on a change in same-store sales in the range of (1.0 percent) to 2.0 percent. Net income was expected to land in the range of $22.5 million to $27.5 million with earnings per diluted share of 52 cents to 64 cents.

Photo courtesy Sportsman’s Warehouse