Boot Barn Holdings announced that CEO Jim Conroy, who has been with the company since 2012, will step down to assume the CEO role of Ross Stores, Inc. The footwear chain also reported second-quarter results topped guidance on healthy same-store gains.

Conroy will step down as president, CEO, and member of the company’s Board of Directors, effective November 22. On that date, John Hazen, the company’s chief digital officer, will assume the role of interim CEO.

Boot Barn said Hazen joined the company in 2018 and is responsible for e-commerce, marketing and customer experience. Additionally, Peter Starrett, the company’s chairman of the Board of Directors, will assume the role of executive chairman, effective November 22.

Conroy will remain with the company through November 22 to assist with an orderly transition.

Starrett stated, “John Hazen is very highly regarded within the Boot Barn organization and has a diverse background that includes brand building, digital, and store roles. He has a strong track record of growing sales and profits both at Boot Barn and prior to joining the company. He also has been extremely instrumental in advancing Boot Barn’s customer-facing technology capabilities, including many industry-leading applications of artificial intelligence. I am confident in his ability to step into the role as interim CEO. Personally, I am looking forward to providing oversight and mentorship as Executive Chairman while the Board conducts an internal and external search before making a permanent decision on our next CEO.”

John Hazen commented, “I am deeply honored to step into this role and incredibly grateful to Jim for his visionary leadership and unwavering support. I also want to express my heartfelt thanks to the Board for their trust and to every member of this incredible team for their dedication that makes this company exceptional. Together, we will continue building on the strong foundation that we have created and will move forward with confidence, tenacity, and purpose.”

Starrett added, “The Board recognizes the great contributions Jim has made during his tenure as Boot Barn’s CEO. When he assumed the CEO reins 12 years ago, Boot Barn was one of several regional retail chains specializing in western and work products. His focused approach on the execution of our strategic initiatives has led to one of the most exceptional growth stories in the retail industry. Today, Boot Barn is a national chain of 426 stores and the industry leader by a wide margin. On behalf of all Boot Barn partners, we wish Jim continued success in his next endeavor.”

Conroy commented, “After 12 incredible years, I am filled with immense gratitude for this company and the extraordinary people who have been by my side throughout this journey. Together, we’ve built something truly special, and I will forever cherish the shared successes, challenges, and memories we created. Thank you for your trust, dedication, and passion—I leave with a heart full of pride and appreciation for every one of you.”

Second Quarter Fiscal Year 2025 Financial Results
For the quarter ended September 28, 2024 compared to the quarter ended September 30, 2023:

  • Net sales increased 13.7 percent over the prior-year period to $425.8 million.
  • Same store sales increased 4.9 percent compared to the prior-year period, comprised of an increase of 4.3 percent in retail store same store sales and an increase of 10.1 percent in e-commerce same store sales.
  • Net income was $29.4 million, or 95 cents per diluted share, compared to $27.7 million, or 90 cents per diluted share, in the prior-year period.
  • The company opened 15 new stores, bringing its total store count to 425.

Boot Barn’s guidance for the quarter had called for sales in the range of $405 million to $412 million, a same store sales decline of approximately 0.5 percent to growth of 1.4 percent, and EPS between 81 cents and 87 cents.

Conroy said, “Our fiscal second quarter saw broad-based growth in same store sales, the addition of 15 new stores and a healthy beat to guidance in earnings per diluted share. Our team’s excellent execution has driven improving trends across all channels, store geographies, and major merchandise classifications, positioning us well for the upcoming holiday season. As we manage through an orderly transition over the next month, I feel great about the condition of the business and am confident in the team’s ability, under John’s leadership, to execute on the four strategic initiatives and to drive future growth in sales and earnings.”

Operating Results for the Second Quarter Ended September 28, 2024
(compared to the second quarter ended September 30, 2023)

  • Net sales increased 13.7 percent to $425.8 million from $374.5 million in the prior-year period. Consolidated same store sales increased 4.9 percent, with retail store same store sales increasing 4.3 percent and e-commerce same store sales increasing 10.1 percent. The increase in net sales was the result of incremental sales from new stores and the increase in consolidated same-store sales.
  • Gross profit was $152.9 million, or 35.9 percent of net sales, compared to $133.9 million, or 35.8 percent of net sales, in the prior-year period. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. The increase in gross profit rate of 10 basis points was driven primarily by a 70 basis-point increase in merchandise margin rate, partially offset by 60 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was primarily the result of supply chain efficiencies, while the deleverage in buying, occupancy and distribution center costs was driven by the occupancy costs of new stores.
  • Selling, general and administrative expenses were $112.9 million, or 26.5 percent of net sales, compared to $95.3 million, or 25.5 percent 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 more stores, incentive-based compensation, marketing expenses, and legal expenses in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 100 basis points primarily as a result of higher incentive-based compensation, legal expenses, and marketing expenses in the current year, partially offset by lower store payroll expenses.
  • Income from operations increased $1.4 million to $40.0 million, or 9.4 percent of net sales, compared to $38.6 million, or 10.3 percent of net sales, in the prior-year period, primarily due to the factors noted above.
  • Net income was $29.4 million, or $0.95 per diluted share, compared to net income of $27.7 million, or $0.90 per diluted share, in the prior-year period. The increase in net income is primarily attributable to the factors noted above.

Operating Results for the Six Months Ended September 28, 2024
(compared to the six months ended September 30, 2023)

  • Net sales increased 12.0 percent to $849.2 million from $758.2 million in the prior-year period. Consolidated same store sales increased 3.1 percent, with retail store same store sales increasing 2.5 percent and e-commerce same store sales increasing 8.4 percent. The increase in net sales was the result of incremental sales from new stores and the increase in consolidated same store sales.
  • Gross profit was $309.6 million, or 36.5 percent of net sales, compared to $275.9 million, or 36.4 percent of net sales, in the prior-year period. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. The increase in gross profit rate of 10 basis points was driven primarily by an 80 basis-point increase in merchandise margin rate, partially offset by 70 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was the result of supply chain efficiencies, while the deleverage in buying, occupancy and distribution center costs was driven primarily by the occupancy costs of new stores.
  • Selling, general and administrative expenses were $219.4 million, or 25.8 percent of net sales, compared to $191.1 million, or 25.2 percent 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 more stores, marketing expenses, and incentive-based compensation in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 60 basis points primarily as a result of higher incentive-based compensation and marketing expenses in the current year, partially offset by lower store payroll and store-related expenses.
  • Income from operations increased $5.4 million to $90.2 million, or 10.6 percent of net sales, compared to $84.8 million, or 11.2 percent of net sales, in the prior-year period, primarily due to the factors noted above.
  • Net income was $68.3 million, or $2.21 per diluted share, compared to net income of $61.9 million, or $2.03 per diluted share, in the prior-year period. The increase in net income is primarily attributable to the factors noted above.

Balance Sheet Highlights as of September 28, 2024

  • Cash of $37 million.
  • Zero drawn under the $250 million revolving credit facility.
  • Average inventory per store increased approximately 10.5 percent on a same store basis compared to September 30, 2023.

Fiscal Year 2025 Outlook
The company is providing updated guidance for the fiscal year ending March 29, 2025, superseding in its entirety the previous guidance issued in its first quarter earnings report on August 7, 2024. Please note that the company’s guidance excludes any benefits and costs related to the CEO transition.

For the fiscal year ending March 29, 2025 the company now expects:

  • To open a total of 60 new stores.
  • Total sales of $1.874 billion to $1.907 billion, representing growth of 12.4 percent to 14.4 percent over the prior year. (Previously, $1.816 billion to $1.850 billion, representing growth of 8.9% to 11.0% over the prior year.)
  • Same store sales growth of approximately 3.0 percent to 5.0 percent, with retail store same store sales growth of approximately 2.5 percent to 4.5 percent and e-commerce same store sales growth of approximately 7.5 percent to 9.5 percent.
  • Gross profit between $696.9 million and $713.4 million, or approximately 37.2 percent to 37.4 percent of sales.
  • Selling, general and administrative expenses between $476.5 million and $480.4 million, or approximately 25.4 percent to 25.2 percent of sales.
  • Income from operations between $220.4 million and $233.0 million, or approximately 11.8 percent to 12.2 percent of sales.
  • Effective tax rate of 26.6 percent for the remaining six months of the fiscal year.
  • Net income of $164.4 million to $173.7 million.
  • Net income per diluted share of $5.30 to $5.60, based on 31.0 million weighted average diluted shares outstanding.
  • Capital expenditures between $115.0 million and $120.0 million, which is net of estimated landlord tenant allowances of $30.2 million.

Under its prior guidance, sales were expected in the range of $1.816 billion to $1.850 billion, representing growth of 8.9 percent to 11.0 percent over the prior year. Same-store sales were expected to range from a decline of approximately (1.0) percent to growth of 1.2 percent, with a retail store same store sales decline of approximately (1.3) percent to growth of 0.7 percent and e-commerce same store sales growth of approximately 3.0 percent to 5.5 percent. Net income per diluted share was expected to range between $5.05 to $5.35.

For the fiscal third quarter ending December 28, 2024, the company now expects:

  • Total sales of $582 million to $595 million, representing growth of 11.8 percent to 14.3 percent over the prior-year period.
  • Same store sales growth of approximately 3.5 percent to 6.0 percent, with retail store same store sales growth of approximately 3.0 percent to 5.0 percent and e-commerce same store sales growth of approximately 7.5 percent to 10.0 percent.
  • Income from operations between $82.7 million and $87.3 million, or approximately 14.2 percent to 14.7 percent of sales.
    Net income per diluted share of $1.96 to $2.07, based on 31.0 million weighted average diluted shares outstanding.

Image courtesy Boot Barn