Sportsman’s Warehouse Holdings, Inc. President & CEO Paul Stone told analysts on Tuesday afternoon that the big box hunt/fish/camp retailer experienced headwinds for the second quarter as its core customer continues to be pressured by tough macroeconomic conditions, including fuel prices that remain persistently elevated. Still, the retailer managed to beat estimates on both the top- and bottom-line for the quarter ended August 1.
Same-store sales in the second quarter were said to be “essentially flat” compared to Q2 last year, and in line with expectations. Net sales came in at $295.6 million for the quarter, up 0.6 percent from $293.9 million in the year-ago period. The 2026 Q2 number came in slightly above the $294.9 million Street estimate.
E-commerce continued to outperform total company sales for the ninth straight quarter, growing nearly 3 percent in the quarter. Online results were said to be led by Fishing (+10 percent) and Hunting (+6 percent), with over 70 percent of online orders picked up in-store converting directly into store traffic.
“As a true omni-channel retailer, we see customers shop us both in our stores and online, so a better website experience drives traffic and sales into the store, not just online,” Stone noted. “Providing the customer with a tailored online assortment and a website that is easy to navigate and shop is an important part of the winning experience, and we continue to make meaningful improvements on both fronts.”
By combining an improved e-commerce solution-based experience with in-store expertise, Stone said they believe they can expand gross margins in the Hunting & Shooting Sports department while reinforcing the retailer’s outdoor authority.
Overall, the retailer’s core Hunting & Shooting Sports department remained the strongest business for the quarter, with same-store sales increasing 6.7 percent year-over-year (y/y), including 8 percent growth in Firearms and nearly 11 percent growth in Ammunition for the period. Stone said “demand remained strong, partially influenced by event-driven demand.”
Sales in the Fishing department, which has been a leader for the retailer for the past few quarters, decreased roughly 2 percent in Q2, but was still up nearly double digits on a two-year comp stack.
Stone said drought conditions negatively impacted the Fishing business in key western states.
“To give you a regional perspective, our western stores were down mid-single digits, while our eastern stores were up mid-single digits in the quarter,” he detailed. “This headwind pressured our Q2 results, but inventory levels are bought accordingly for the back half, and we continue to see a long-term growth opportunity in this category.”
Company CFO Jennifer Fall Jung said the company posted a 1 percent y/y increase in the Optics, Electronics, Accessories, and “Other” departments.
Stone said the Camping and Softlines departments experienced declines in Q2. Still, he emphasized that their inventory position in these categories is clean.
“Our fall assortment is better aligned with the products and brands that support our core pursuits of hunting, fishing, shooting, and personal protection,” he said. “We are encouraged by the improved August trends in these two departments, and while they have not turned positive, we believe they are moving in the right direction.”
The CEO went on to say that close management of inventory remains a key priority, and made that point by noting that total inventory was down over $44 million year-over-year at quarter-end.
“With the cleanup of inventory now behind us and as we come into the fall season, a new, fresher assortment is landing, and we believe these categories are set up for success in the back half of the year,” said Fall Jung.
“I’m pleased with how the team is managing our flow of merchandise to ensure we are regionally and seasonally relevant and timed to meet the shopper demand,” he continued. “Our core in-stocks are significantly improved, and our category-level inventory is the healthiest it has been in many years. This will remain a focus as we expect to further improve turns and inventory efficiency in the balance of 2026.” In-stocks on core products have reportedly improved from about 50 percent two years ago to over 80 percent this year.
“We’ve spent the last couple years selling down inventory in Camping, Apparel, Footwear, and even Firearms, where we did not have the right assortment or were carrying aged merchandise that was tying up much needed working capital dollars,” he explained. “That sell-down is now largely behind us, providing us the working capital needed to buy into both core products and new products in the categories I just mentioned. That product is now landing, and we believe a much improved assortment is a back-half tailwind for the business.”
Profitability & Expenses
Gross margin for the quarter was 32.5 percent of net sales, a 50 basis-point improvement compared to 32.0 percent in Q2 last year.
Fall Jung said, “Although we mixed higher in our Hunting & Shooting Sports department in Q2, which carries a lower overall margin, and we were more aggressive with our promotional cadence to offer value to the customer, we were able to offset margins through more disciplined inventory management, reducing overall freight costs, and a one-time tariff benefit.”
She said management made a strategic decision to use the tariff refund to reinvest back into providing value to the consumer.
SG&A expenses were $97.1 million, or 32.9 percent of net sales, versus $97.2 million, or 33.1 percent, in Q2 last year. The decrease in SG&A expense was said to be primarily driven by a decrease in depreciation expense and continued cost management discipline.
The net loss for the second quarter was $4.4 million, or a loss of 11 cents per diluted share, compared with a net loss of $7.1 million, or a loss of 18 cents per diluted share, in the second quarter last year. The EPS figure came in just under Street estimates calling for a loss of 11.33 cents per share for the quarter.
Adjusted net loss in Q2 was $3.1 million, or a loss of 8 cents per diluted share, compared with an Adjusted net loss of $4.7 million, or a loss of 12 cents per diluted share, in the year-ago quarter.
Adjusted EBITDA for the second quarter was $8.7 million, compared with adjusted EBITDA of $8.3 million in the second quarter of 2025.
Balance Sheet
Total inventory at the end of Q2 was $399 million, down $44.5 million, or down 10 percent versus Q2 quarter-end last year.
Fall Jung said the decrease in year-over-year inventory was said to be part of an ongoing inventory efficiency strategy and the refinement of receipt timing to match seasonal demand.
“We continue to expect average inventory to be lower throughout the year as we improve seasonal inventory timing and further eliminate slow-moving inventory, resulting in better overall churn,” she said. “We continue to expect to end the year with less total inventory than 2025. We believe the SKU reduction initiative is now largely behind us, and we are confident we have the right go-forward assortment to grow the business.”
Sportsman’s ended the second quarter with a net debt balance of $169 million, a decrease of $26 million compared to Q2 last year, and total liquidity of $105 million.
“We believe that our liquidity position remains strong, and we continue to actively manage working capital to ensure flexibility as we navigate throughout the year in a tough consumer environment,” Fall Jung stated.
She said the company recently amended its $45 million ABL term loan and extended its maturity to June of 2031.
“We also amended our revolving credit facility, aligning the commitment to our operating needs of $315 million and extending its maturity to the same date, actions that provide a longer-dated capital structure and continued financial flexibility,” she explained.
The CFO said tight management of variable expenses and inventory efficiency remain a key focus.
“We remain committed to generating positive free cash flow and using excess cash to reduce debt and strengthen the balance sheet with debt reduction as our top capital allocation priority,” she continued.
Outlook
Stone said Sportsman’s is a seasonal business and the third and fourth quarter are the two largest and most important quarters for the business.
“We have been capital constrained the last two years and now have these volumes in motion and ready for the relevant regions and seasons,” he noted. “We do not control the macro. We do control our assortment, our in-stocks, and our channels. And on every one of those, we are in a stronger position than we’ve been in years.”
Stone said they have a strong assortment for both the hunting and holiday season, including unique gift-giving items.
“With Q3 centered around hunting pursuit and Q4 focused on holiday, we believe we are well positioned with curated assortments and improved seasonal merchandise to ensure localization across our fleet of 147 stores,” he explained. “We also believe we have built more value into our key holiday gift-giving items with compelling price points for a customer who is shopping carefully this year.”
Fall Jung reinforced the feeling that the company is optimistic about the plan and the strategic initiatives underway to support growth.
“While we expect consumer headwinds to continue to persist, including ongoing elevated fuel prices, we are reiterating our guidance for the full year,” the CFO stated.
SPWH continues to expect:
- Fiscal 2026 net sales to range between down 1 percent to up 2 percent compared to last year;
- Adjusted EBITDA to be between $30 million and $36 million, driven by better gross margin performance, continued expense management, and disciplined inventory management; and
- Capital expenditures between $20 million and $25 million, primarily related to technology investments to improve store service and merchandising productivity, as well as general store maintenance.
Image courtesy Sportsman’s Warehouse Holdings, Inc.
