Boot Barn’s Q3 Boosted by Sales and Meatier Margins

Boot Barn Holdings, Inc. reported earnings rose 39.7 percent in its third quarter ended Dec. 27, to $8.8 million, or 36 cents a share. Revenues grew 13.1 percent to $130.5 million. Same store sales, which include e-commerce sales, increased 7.2 percent.

The quarter marked its 21st consecutive quarter of positive same-store sales growth, fueled by strong full price selling.

“Our growth in same store sales was broad-based across most of the major departments in the store and most of our store districts across the country,” said Jim Conroy, president and CEO, on a conference call with analysts. “In line with our objectives, we achieved a healthy expansion in our merchandise margin, partially due to increased penetration in private brands.”

Conroy said the 166-unit chain continues to benefit from its focus on Western styles and other basics.

“We do not focus on fleeting fashion trends, but rather servicing and American lifestyle that permeates nearly every state in the country with a category killer assortment of boots, hats, work wear and blue jeans,” said Conroy.

Gross profit was $46.2 million, or 35.4 percent of sales, compared to adjusted gross profit of $41.0 million, or 35.5 percent, a year ago, which excludes $1.3 million of one-time costs last year’s acquisition of Baskins Stores.

Merchandise margin grew in the quarter, primarily driven by improved mark-up across the store, increased penetration of private brands and the improvements the company made to the assortment and pricing at the former Baskins’ stores. This increase was offset by increase in occupancy costs and depreciation expense associated with the higher store count, as well as an increase in procurement and distribution costs.

The western-inspired retailer, which went public last year, opened eight stores in the quarter and 18 in the first half.

Commenting on the declining oil prices and its impact on its retail partners in its core southwest markets, Conroy said 15 of its stores, or less than 10 percent of store base, are relying on the oil and gas industry. Of those, six were focused on refining and aren’t expected to be impacted by falling oil prices. Overall, it expects the benefits of lower gasoline prices to offset any challenges in oil-hit markets and so far in the fourth quarter had “not seen any deceleration in comps” for stores in oil and gas markets.