Sportsman’s Warehouse Holdings Inc. reported net sales for the fiscal fourth quarter ended February 1 of $258.2 million, up 6.4 percent from $242.7 million in the prior-year quarter. That beat Wall Street’s projections by $6.4 million.

The net sales increase was primarily due to a strong performance from eight acquired stores, momentum in the firearm and ammunition categories in January and growth in its e-commerce business compared to the prior year.

The company reported diluted earnings per share of 22 cents, compared to diluted earnings per share of 25 cents for the comparable period in the prior year and ahead of estimates by 3 cents. Adjusted diluted earnings per share were 21 cents compared to adjusted diluted earnings per share of 25 cents for the comparable period in the prior year.

“We are pleased with our fourth quarter and fiscal year 2019 results. Despite some competitive challenges in December, we exceeded the high-end of our updated outlook on net sales, and met the high-end of our updated outlook on earnings per share,” said Jon Barker, Sportsman’s Warehouse CEO. “We made great progress in 2019 executing on our growth initiatives, which included enhancing our omnichannel platform, improving our loyalty program, and broadening our firearms products and services offering. In 2019, we grew to 103 stores through our acquisition of eight Field & Stream stores in October and three additional store openings earlier in the year.”

Barker continued, “Looking forward to 2020, we feel very good about our competitive positioning and the underlying strength of our business. Today, we are announcing two additional new stores for 2020, which increases our new store announcements to seven for the year so far. These seven new stores include two previous Gander locations, two additional Field & Stream locations, and our first small-format concept store.”

“We have gained significant momentum both online and in stores to date in Q1. We believe this is driven by fewer competitors, the current election cycle, and increased demand from COVID-19 uncertainty. However, there is significant uncertainty in the current environment and therefore, we will not be issuing forward guidance at this time.”

“We remain optimistic about the long-term opportunities for our business. As competitors continue to de-emphasize and/or exit the firearm and ammunition categories, we see significant opportunity to capture market share,” Mr. Barker commented. “Our differentiated positioning within a consolidating industry, our dedication to the specialty outdoor retail space, and our talented team are combining to create a competitive advantage for Sportsman’s Warehouse. We look forward to a strong 2020 and beyond.”

For the 13 weeks ended February 1, 2020:

  • Net sales increased by 6.4 percent to $258.2 million from $242.7 million in the fourth quarter of fiscal year 2018. The net sales increase was primarily due to a strong performance from the eight acquired stores, momentum in the firearm and ammunition categories in January, and growth in e-commerce business compared to the prior year. Same-store sales performance was better than anticipated, decreasing by 4.8 percent in the fourth quarter of 2019 as compared to the fourth quarter of 2018.
  • The company ended fiscal year 2019 with 103 stores in 27 states, or square footage growth of 13.6 percent from the end of the fourth quarter of fiscal 2018. To date, the company has announced the planned opening of seven new stores in fiscal year 2020, including two additional Field & Stream locations, in Michigan and Kentucky, acquired from Dick’s Sporting Goods.
  • For the fourth quarter of 2019, gross profit was $85 million or 32.9 percent of net sales, as compared to $79.5 million or 32.8 percent of net sales in the prior-year period, a year-over-year increase of $5.5 million in gross profit and a 10-basis point improvement in gross profit margin.
  • Net income was $9.7 million compared to net income of $10.6 million in the fourth quarter of fiscal year 2018. Adjusted net income in the fourth quarter of fiscal year 2019 was $9.3 million, which excluded a non-recurring tax benefit, acquisition costs, and executive transition costs. There were no non-GAAP adjustments to net income in the fourth quarter of fiscal 2018.
  • For the fourth quarter of 2019, diluted earnings per share were $0.22 compared to diluted earnings per share of $0.25 for the comparable period in the prior year. Adjusted diluted earnings per share were $0.21 compared to adjusted diluted earnings per share of $0.25 for the comparable period in the prior year.
  • Adjusted EBITDA was $19.6 million compared to $22.0 million in the fourth quarter of fiscal year 2018.

For the 52 weeks ended February 1, 2020:

  • Net sales increased by 4.4 percent to $886.4 million from $849.1 million in fiscal year 2018 primarily due to three new store openings and the acquisition of eight new store locations. Same-store sales decreased by 0.9 percent from fiscal year 2018.
  • Gross profit was $296.6 million or 33.5 percent of net sales, as compared to $285.0 million or 33.6 percent of net sales in fiscal year 2018, a year-over-year increase of $11.6 million in gross profit and a 10-basis point decline in gross profit margin.
  • Net income was $20.2 million compared to net income of $23.8 million in fiscal year 2018. Adjusted net income was $20.6 million in fiscal year 2019 as compared to $25.9 million in fiscal year 2018.
  • Diluted earnings per share were $0.46 compared to diluted earnings per share of $0.55 for fiscal year 2018. Adjusted diluted earnings per share were $0.47 for fiscal year 2019 compared to adjusted diluted earnings per share of $0.60 in fiscal year 2018.
  • Adjusted EBITDA was $59.0 million compared to $68.5 million in fiscal year 2018.

Balance sheet highlights as of February 1, 2020:

  • Total debt was $145.8 million as of the end of fiscal year 2019, consisting of $116.1 million outstanding under the company’s revolving credit facility and $29.7 million outstanding under the term loan, net of unamortized debt issuance costs. This is a reduction of $34.1 million of debt year-over-year.
  • Total liquidity (cash plus $44.3 million of availability on revolving credit facility): $46.0 million

First Quarter and Fiscal Year 2020 Outlook:

Sportsman’s Warehouse said it will not be issuing forward guidance at this time.

Editor’s note: Look for an interview with Jon Barker next week in SGB Executive. Topics include Sportsman’s Warehouse’s response to the coronavirus, its status as an “essential” business and how its retail strategy has evolved in light of the pandemic.

Photo courtesy Sportsman’s Warehouse