Sportsman’s Warehouse Holdings, Inc. (SPWH) President and CEO Paul Stone said the company once again saw improvements in both units per transaction and average order value for the fiscal first quarter ended May 2, driven by the retailer’s merchandising strategy, better in-stocks, and a strategic shift to solution selling.
Net sales for the first quarter were $256.1 million, a 2.8 percent increase from $249.1 million in the Q1 period last year. The increase was seen as a 1.2 percent beat against Wall Street’s 1.6 percent growth estimate. An Adjusted EPS loss of 39 cents per share was a 33 percent beat versus analyst estimates for 58 cents Adjusted EPS loss.
Same-store sales (comps) were up 2.1 percent year-over-year (y/y) for the period, slightly ahead of the 2.0 percent comps gain in the prior-year quarter.
“We continue to refine our assortment to meet the current needs of the customer with regionally specific products and brands that strategically align to our core pursuits,” Stone commented.
Company CFO Jennifer Fall Jung said performance for Q1 was driven by 6.3 percent same-store sales growth in the Hunting and Shooting Sports department, led by firearms, ammunition and less lethal personal protection. Fishing department comps also continued to perform, growing 6.0 percent y/y in the quarter. “This is a key category where we see significant growth upside for the business,” she noted.
Other categories, such as Camping and Softgoods, declined in Q1, partially offsetting overall growth.
Stone said first-quarter net sales in the retailer’s Hunting and Shooting Sports department increased by more than 7 percent y/y, owing in part to a successful Spring Range Days event that showcased pursuit-led solutions for the shooting sports customer through curated products and accessories.
“While event-driven demand further supported sales of firearms and ammunition during the quarter, we will continue to strategically build on our authority as a leader in both shooting sports and personal protection,” the CEO stated.
Net sales in the retailer’s Fishing department, which led all departments the last few quarters, increased nearly 6 percent in Q1 and are up about 17 percent on a two-year comp stack.
Stone said that a softer-than-expected ice fishing season put pressure on the category in the quarter, but also said they were still confident in their assortment and market position to continue capturing share during the late spring and summer seasons.
The lead growth positions in these two departments are clearly not by happenstance, as the company last quarter designated the categories within the departments as its “core pursuits” areas of focus. Stone said the decision to eliminate slow-moving and low gross margin ROI products in the Camping and Softgoods departments from the assortment caused a short-term softening of sales in those departments, but it allowed SPWH to free up working capital dollars to buy into the product and brands in the core pursuits of hunting, fishing, shooting and personal protection in the two departments.
“We will continue to build out these two complementary categories to provide a full solution for our passionate outdoor customers,” Stone noted.
“These are the core pursuits that make up the DNA of Sportsman’s Warehouse,” Stone stated. “During the first quarter, we made meaningful improvements to our website to enhance the online fishing experience. Early results have been encouraging, contributing to strong e-commerce sales growth in the quarter. We will continue to integrate content with commerce to help anglers more easily build their fishing solution. With participation rates continuing to grow each year, we believe this category represents significant growth upside for the business.”
Stone also mentioned a new partnership with the Field & Stream brand, where Sportsman’s Warehouse is working with leading fishing influencers to create shareable content that enhances its brand exposure, showcases trending new products, and drives traffic to the stores.
“While we are in the early stages of this partnership, we are encouraged by the early results,” Stone noted.
On the firearms front, the CEO outlined the company’s “firearm solution bundling strategy.”
Stone said the company made solid progress in Q1 on this initiative, with a full solution offering now available online for top-selling products. “Many of our customers are first-time firearm owners, so offering carefully selected pairings like gun safes, hearing and eye protection, and our firearm service plan helps first-time buyers feel confident in their initial purchase decisions,” he explained.
The online business reportedly “outperformed again” with e-commerce-driven sales up over 6 percent in the quarter.
He said that experience then carries into the Sportsman’s Warehouse stores, where customers can build on those pairings with support from experienced outfitters, tailored to local needs and pursuits.
“This experience supports responsible ownership while increasing the attachment and basket size,” the CEO noted.
“This underscores the strength of our omni-channel model and the growth potential in our core pursuits because firearms, and in certain states, ammunition require in-store pickup, our e-comm business naturally drives traffic into our stores. We continue to strategically leverage this advantage to support growth across both digital and store sales,” Stone explained.
By combining curated e-commerce pairings with in-store experience, Stone said they believe they can expand gross margins in the hunting and shooting sports category while reinforcing leadership in these key pursuits.
Profitability & Expenses
Gross profit was $75.8 million, or 29.6 percent of net sales, in fiscal Q1, compared to $75.6 million, or 30.4 percent of net sales, in the prior-year Q1 period. The decrease, as a percentage of sales, was said to be primarily driven by category mix.
Selling, general and administrative (SG&A) expenses were $93.9 million, or 36.7 percent of net sales in Q1, versus $95.3 million, or 38.2 percent in Q1 last year. The decrease in SG&A expense was attributed to disciplined cost management, lower payroll expense, and decreased depreciation.
Net loss was $21.8 million in Q1, compared to a net loss of $21.3 million in the prior-year Q1 period. Adjusted net loss was $15.1 million, or a loss of 39 cents per share, in the quarter compared to an Adjusted net loss of $15.6 million, or a loss of 41 cents, in the prior-year Q1 period.
Adjusted EBITDA for the first quarter was negative $8.1 million compared with adjusted EBITDA of negative $9 million in the first quarter of 2025, an improvement of $900,000.
Balance Sheet Summary
The company ended the first quarter with net debt of $148.4 million, comprised of $2.1 million in cash on hand, $44.3 million in net borrowings outstanding under the company’s term loan facility, and $106.2 million in net borrowings outstanding under the company’s revolving credit facility.
“Our liquidity position remains strong, and we continue to actively manage working capital to ensure flexibility as we navigate through the year,” said Fall Jung. “Tight management of variable expenses and inventory efficiency remains 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.”
Total inventory at the end of the first quarter was $387.1 million, a decrease of $25.1 million, or 6.1 percent, compared to last year, reflecting a strategy to improve seasonally timed inventory and increase efficiency in the company’s operating model.
“The decrease in year-over-year inventory is part of our ongoing inventory efficiency strategy, including the refinement of receipt timing to match seasonal demand,” explained Fall Jung. “We expect average inventory to be lower throughout the year as we improve seasonal inventory timing and eliminate slow-moving inventory, resulting in better overall turns. We continue to expect to end the year with less total inventory than in 2025.”
Fiscal Year 2026 Outlook
The company is reiterating its guidance for fiscal year 2026 and estimates same-store sales to be in the range of down 1.0 percent to up 2.0 percent and adjusted EBITDA to be in the range of $30 million to $36 million. The company said it also expects capital expenditures for 2026 to be in the range of $20 million to $25 million, primarily consisting of technology investments and general store maintenance. There are no new store openings planned for 2026.
“Looking ahead, the U.S. consumer remains under pressure with high fuel costs adding additional weight to discretionary spending,” offered CEO Stone, “We feel optimistic about our position in the market, our curated assortment of iconic American brands, and our summer readiness, where we will celebrate and showcase red, white and blue for America’s 250th anniversary. Our focus remains on driving profitable growth, disciplined management of inventory, generating positive free cash flow to pay down debt and executing against our strategic priorities.”
Fall Jung concluded, “To reiterate, our priorities for 2026 are driving profitable comp store sales growth through the execution of our strategic initiatives, managing our inventory efficiently and using excess free cash flow to pay down our debt and strengthen our balance sheet.”
Image courtesy Byrna
