Boot Barn Holdings Inc. reported net sales increased 4.5 percent in the first quarter ended July 1, to $139.4 million from $133.4 million in the prior-year period.
Net sales increased due to the opening of 11 new stores over the past twelve months, a 1.3 percent increase in same store sales, and sales from the recently acquired Country Outfitter site.
Gross profit was $41.4 million, or 29.7 percent of net sales, compared to $40.8 million, or 30.5 percent of net sales in the prior-year period. Gross profit increased primarily due to increased sales. As a percentage of sales, consolidated gross margin declined as a result of increased buying and occupancy costs.
Selling, general and administrative expense was $36.5 million, or 26.2 percent of net sales, compared to $36.3 million, or 27.2 percent of net sales in the prior-year period. Selling, general and administrative expenses declined as a percentage of sales as a result of lower corporate payroll and overhead costs.
Income from operations was $4.9 million, or 3.5 percent of net sales, compared to $4.5 million, or 3.3 percent of net sales in the prior-year period.
The company opened one new store and ended the quarter with 220 stores in 31 states.
Net income was $0.8 million, or 3 cents per diluted share, compared to $0.6 million, or 2 cents per diluted share in the prior-year period.
Jim Conroy, chief executive officer, commented, “We are encouraged with our start to fiscal 2018 as sales and earnings per share both exceeded expectations. Same store sales increased 1.3 percent as low single-digit growth in our physical stores and a strong double-digit gain in our bootbarn.com business more than offset a decline at sheplers.com. We believe our commitment and focus on the store business have helped return us to positive store comps during the quarter, a trend that has carried into the second quarter. Importantly, our stores in oil and gas markets also continued to improve, highlighted by a low single-digit sales increase for our stores in Texas. Meanwhile, we continue to make progress on improving organic search and increasing the site speed at sheplers.com following the technical problems we encountered upon transition of the e-commerce site to a new software platform in February. Despite this temporary setback, we believe an upgraded e-commerce platform was a necessary investment, and will position us well for the next level of omni-channel leadership and contribute to future earnings growth.”
Balance Sheet Highlights as of July 1, 2017
- Cash of $7.3 million.
- Average inventory per store decreased 4 percent compared to June 25, 2016.
- Total net debt of $245.2 million, including $62.8 million outstanding on revolving credit facility.
Fiscal Year 2018 Outlook
For the fiscal year ending March 31, 2018, the company continues to expect:
- To open 12 new stores, including one store opened in the first quarter.
- Flat to slightly positive same store sales growth.
- Income from operations between $37.8 million and $40 million.
- Net income of $14 million to $15.4 million.
- Net income per diluted share of 52 cents to 57 cents based on 27.1 million weighted average diluted shares outstanding.
For the fiscal second quarter ending September 30, 2017 the company expects:
- Same store sales to be roughly in line with first quarter sales.
- Net income per diluted share of 0 cents to 2 cents based on 27 million weighted average diluted shares outstanding.
Photo courtesy Boot Barn