Boot Barn Holdings Inc. reported net earnings jumped 81.7 percent in the fiscal fourth quarter ended March 26 as sales grew 48.1 percent. The footwear retailer raised its store count potential to 900 stores from 500.

For the quarter ended March 26, 2022:

  • Net sales increased 48.1 percent over the prior-year period to $383.3 million. Net sales increased 103.2 percent compared to the quarter ended March 28, 2020, two years ago.
  • Same store sales increased 33.3 percent compared to the prior-year period, comprised of an increase in retail store same store sales of 30.7 percent and an increase in e-commerce same store sales of 49.5 percent.
  • Net income was $44.7 million, or $1.47 per diluted share, compared to $24.6 million, or $0.82 per diluted share in the prior-year period. Net income per diluted share in the prior-year period includes an approximately $0.07 per share benefit primarily due to income tax accounting for share-based compensation. Excluding the tax benefit in the prior-year period, net income per diluted share grew 96.0 percent in the current-year period to $1.47, compared to $0.75 in the prior-year period.
  • The company opened 11 new stores bringing its total store count to 300.

For the fiscal year ended March 26, 2022:

  • Net sales increased 66.6 percent to $1.488 billion. Net sales increased 76.0 percent compared to the fiscal year ended March 28, 2020, two years ago.
  • Same store sales increased 53.7 percent compared to the prior-year period, comprised of an increase in retail store same store sales of 57.2 percent and an increase in e-commerce same store sales of 38.7 percent.
  • Net income was $192.5 million, or $6.33 per diluted share, compared to $59.4 million, or $2.01 per diluted share in the prior-year period. Net income per diluted share in the current-year and prior-year periods includes an approximately $0.17 and $0.09 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $6.16, compared to $1.92 in the prior-year period.
  • The company opened 28 new stores and closed one store.

“It was an incredible year by every measure,” said Jim Conroy, President and Chief Executive Officer. “With our top-line increasing 67 percent over the previous year, we far surpassed the one-billion-dollar mark for the first time, generating $1.5 billion in sales for fiscal 2022. Importantly, our performance was highlighted by very strong full-price selling, which contributed to a 270-basis point increase in merchandise margin and a more than tripling of our earnings per share to a record $6.33. We are excited about the strength in the business through the first six weeks of fiscal 2023, with consolidated same store sales growth of approximately 12 percent compared to the prior-year period.”

Mr. Conroy continued, “Looking forward, I am excited to announce that, based in part on a third-party study, we have updated our estimated total addressable market to $40 billion, compared to our previous $20 billion estimate. Additionally, we have established a new long-term store count target and now believe we can triple from our current base to 900 stores. We believe our progress in expanding our business and attracting new consumers to our brand is proving successful and has established a strong foundation for future growth.”

Operating Results for the Fourth Quarter Ended March 26, 2022 Compared to the Fourth Quarter Ended March 27, 2021

  • Net sales increased 48.1 percent to $383.3 million from $258.9 million in the prior-year period. Consolidated same store sales increased 33.3 percent with retail store same store sales up 30.7 percent and e-commerce same store sales up 49.5 percent. The increase in net sales was the result of an increase of 33.3 percent in consolidated same store sales and the incremental sales from new stores opened over the past twelve months.
  • Gross profit was $148.8 million, or 38.8 percent of net sales, compared to $92.4 million, or 35.7 percent of net sales, in the prior-year period. Gross profit increased primarily due to increased sales. The increase in gross profit rate of 310 basis points was driven by 190 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 120-basis point increase in merchandise margin. Merchandise margin increased 120 basis points primarily as a result of better full-price selling and growth in exclusive brand penetration, partially offset by a 60-basis point increase in freight charges.
  • Selling, general and administrative expenses were $86.4 million, or 22.6 percent of net sales, compared to $59.5 million, or 23.0 percent of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of higher store payroll, higher store overhead and increased marketing expenses in the current-year period compared to the prior-year period. Selling, general and administrative expenses as a percentage of net sales decreased by 40 basis points primarily as a result of expense leverage on higher sales.
  • Income from operations increased $29.5 million to $62.4 million, or 16.3 percent of net sales, compared to $32.9 million, or 12.7 percent of net sales, in the prior-year period. This increase represents 360 basis points of improvement in operating profit margin.
  • Net income was $44.7 million, or $1.47 per diluted share, compared to net income of $24.6 million, or $0.82 per diluted share in the prior-year period. Net income per diluted share in the prior-year period includes an approximately $0.07 per share benefit primarily due to income tax accounting for share-based compensation. Excluding the tax benefit in the prior-year period, net income per diluted share in the current-year period was $1.47, compared to net income per diluted share of $0.75 in the prior-year period.

Operating Results for the Fiscal Year Ended March 26, 2022 Compared to the Fiscal Year Ended March 27, 2021

  • Net sales increased 66.6 percent to $1.488 billion from $893.5 million in the prior-year period. Consolidated same store sales increased 53.7 percent with retail store same store sales up 57.2 percent and e-commerce same store sales up 38.7 percent. The increase in net sales was the result of an increase of 53.7 percent in consolidated same store sales, the incremental sales from new stores opened over the past twelve months, and the sales contribution from temporarily closed stores that were excluded from the comp base. Net sales in the prior-year period were adversely impacted by decreases in retail store sales resulting from decreased traffic in our stores from customers staying at home in response to the COVID-19 crisis and temporary store closures.
  • Gross profit was $575.1 million, or 38.6 percent of net sales, compared to $294.9 million, or 33.0 percent of net sales, in the prior-year period. Gross profit increased primarily due to increased sales. The increase in gross profit rate of 560 basis points was driven by 290 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 270 basis point increase in merchandise margin. Merchandise margin increased 270 basis points primarily as a result of better full-price selling and growth in exclusive brand penetration.
  • Selling, general and administrative expenses were $316.7 million, or 21.3 percent of net sales, compared to $208.6 million, or 23.3 percent of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of higher store payroll, higher store overhead and increased marketing expenses in the current-year period compared to the prior-year period which was impacted by COVID-19. Selling, general and administrative expenses as a percentage of net sales decreased by 210 basis points primarily as a result of expense leverage on higher sales.
  • Income from operations increased $172.0 million to $258.3 million, or 17.4 percent of net sales, compared to $86.3 million, or 9.7 percent of net sales, in the prior-year period. This increase represents 770 basis points of improvement in operating profit margin.
  • Net income was $192.5 million, or $6.33 per diluted share, compared to net income of $59.4 million, or $2.01 per diluted share in the prior-year period. Net income per diluted share in the current-year and prior-year periods includes an approximately $0.17 and $0.09 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $6.16, compared to net income per diluted share of $1.92 in the prior-year period.

Balance Sheet Highlights as of March 26, 2022

  • Cash of $20.7 million.
  • Average inventory per store increased approximately 36 percent on a same store basis compared to March 27, 2021.
  • $28.5 million balance drawn under our $180 million revolving credit facility.

Fiscal Year 2023 Outlook

The company is providing guidance for what it can reasonably estimate at this time. For the fiscal year ending April 1, 2023 the company expects:

  • To open 40 new stores.
  • Same store sales growth of 4.8 percent.
  • Total sales of $1.740 billion.
  • Gross profit of $652 million or 37.5 percent of sales.
  • Selling, general and administrative expenses of $386 million or 22.2 percent of sales.
  • Capital expenditures of $87 million.
  • Income from operations of $266 million or 15.3 percent of sales.
  • Interest expense of $3 million.
  • Effective tax rate of 25.2 percent.
  • Net income of $197 million.
  • Net income per diluted share of $6.41 based on 30.7 million weighted average diluted shares outstanding.
  • Fiscal year 2023 is a 53-week year and the company expects to generate approximately $34 million of sales and earn approximately $0.19 per diluted share in the 53rd week, which is included in the above guidance range.

For the fiscal first quarter ending June 25, 2022, the company expects:

  • Same store sales growth of 10 percent.
  • Total sales of $367 million.
  • Income from operations of $47 million or 12.8 percent of sales.
  • Net income per diluted share of $1.14 based on 30.5 million weighted average diluted shares outstanding.