Boot Barn Ends the Year with 400 Doors, with Q4 Comps Falling in Mid Singles

Boot Barn Holdings, Inc. reported that fiscal fourth quarter net sales decreased 8.7 percent to $388.5 million from $425.7 million in the prior-year Q4 period. Consolidated same-store sales decreased 5.9 percent year-over-year for the fiscal Q4 period ended March 30, 2024, with retail store-same store sales decreasing 5.7 percent and e-commerce same-store sales decreasing 7.6 percent.

The decrease in net sales was said to be the result of the decrease in consolidated same-store sales and the impact of a 13-week quarter when compared to a 14-week quarter in the prior-year Q4 period, partially offset by the incremental sales from new stores opened over the past twelve months.

“I am pleased with our fourth quarter performance and proud of the efforts of the entire Boot Barn team,” offered Jim Conroy, president and CEO, Boot Barn Holdings, Inc. “We crossed the 400-store milestone prior to year-end and extended the Boot Barn brand to 45 states across the country. In the year, revenue showed modest growth despite experiencing a mid-single digit decline in consolidated same store sales and cycling a 53-week fiscal year. We also grew exclusive brand penetration by 370 basis points which contributed to merchandise margin expansion.”

Conroy said fourth quarter same-store sales performance was meaningfully better than the third quarter and, based on the recent trends in the business, he believes they will continue to experience further improvement going forward.

“In fact, we have seen broad-based sequential improvement across virtually all major merchandise departments, both stores and e-commerce channels, and in all four regional geographies,” he said. “This trajectory began as we progressed from our third quarter into the fourth quarter, then improved in April and again into May where we have seen positive same store sales in both channels on a month-to-date basis. While we expect the consumer to continue to be cautious for the foreseeable future, we feel well positioned to further execute on our long-term strategic initiatives.”

Gross margin was 35.9 percent of net sales in the quarter, compared to 36.6 percent of net sales in the prior-year Q4 period. The 70 basis-points decrease in gross margin was said to be driven primarily by 230 basis points of deleverage in buying, occupancy and distribution center costs, partially offset by a 160 basis-point increase in merchandise margin rate. The deleverage in buying, occupancy and distribution center costs was reportedly driven primarily by the higher occupancy costs of new stores, the impact of a 13-week quarter when compared to a 14-week quarter in the prior-year Q4 period, and depreciation expense related to the opening of the new Kansas City distribution center. The increase in merchandise margin rate was driven by a 160 basis-point improvement in freight expense and supply chain efficiencies as a percentage of net sales.

Selling, general and administrative (SG&A) expenses were $101.2 million, or 26.1 percent of net sales, in the fiscal fourth quarter, compared to $93.1 million, or 21.9 percent of net sales, in the prior-year Q4 period. The increase in selling, general and administrative expenses as compared to the prior-year period was primarily a result of normalized incentive-based compensation when compared to the prior-period reversal of incentive-based compensation, higher marketing expenses, and a $2.0 million partial impairment of the Sheplers’ trademark, partially offset by the impact of the 14th week in the prior-year period and lower store labor. Selling, general and administrative expenses as a percentage of net sales increased by 420 basis points primarily as a result of higher marketing expenses, normalized incentive-based compensation when compared to the prior-period reversal of incentive-based compensation, a $2.0 million partial impairment of the Sheplers’ trademark, higher store labor and the impact of a 13-week quarter when compared to a 14-week quarter in the prior year.

Income from operations decreased $24.5 million to $38.2 million, or 9.8 percent of net sales, compared to $62.7 million, or 14.7 percent of net sales, in the prior-year period, primarily due to the factors noted above.

Net income was $29.4 million, or 96 cents per diluted share, in fiscal Q4, compared to net income of $46.4 million, or $1.53 per diluted share in the prior-year Q4 period.

The company opened 18 new stores in Q4, bringing its total store count to 400.

Image courtesy Boot Barn