Boot Barn Holdings Inc. on Wednesday announced net sales for the fiscal first quarter ended June 29 increased 14.7 percent to $185.8 million. Same store sales increased 9.4 percent, including an increase in retail store same store sales of 11.1 percent and an increase in e-commerce sales of 0.9 percent.

Net income was $9.7 million, or $0.33 per diluted share, compared to $6.8 million, or $0.24 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes $0.01 per share of tax benefit from the exercise of stock options compared to $0.09 per share of tax benefit from the exercise of stock options in the prior-year period. Excluding the tax benefit in both years, net income per diluted share in the current-year period grew 113 percent to $0.32, compared to $0.15 in the prior-year period.

Jim Conroy, CEO, commented, “The underlying strength in the business has continued as evidenced by our strong start to fiscal 2020. First quarter same store sales grew 9.4 percent driven by a double-digit retail store comp increase, marking the ninth consecutive quarter of positive gains at our physical locations. At the same time, increases in full-price selling and exclusive brand penetration helped fuel a 150 basis point improvement in merchandise margin, which along with SG&A leverage, resulted in significant operating margin expansion. Importantly, we’ve experienced strength across virtually all geographies and merchandise categories and this momentum has continued into the start of the second quarter with same store sales up high-single digits in July, despite eliminating our long-standing anniversary sale in the current year.”

Operating Results for the First Quarter Ended June 29, 2019

  • Net sales increased 14.7 percent to $185.8 million from $162.0 million in the prior-year period. Consolidated same store sales increased 9.4 percent. Excluding the impact of the 0.9 percent increase in e-commerce same store sales, same store sales increased by 11.1 percent. The increase in net sales was driven by the increase in same store sales, sales from new stores added over the past twelve months and the sales contribution from acquired stores.
  • Gross profit was $62.2 million, or 33.5 percent of net sales, compared to $51.4 million, or 31.8 percent of net sales, in the prior-year period. Gross profit increased primarily due to increased sales and an increase in merchandise margin rate. Gross profit rate increased due to a 150 basis point increase in merchandise margin rate and 20 basis points of leverage in buying and occupancy costs. The higher merchandise margin was driven by better full-price selling and growth in exclusive brand penetration.
  • Selling, general and administrative expense was $46.1 million, or 24.8 percent of net sales, compared to $41.6 million, or 25.7 percent of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of additional costs to support higher sales and expenses for both new and acquired stores. Selling, general and administrative expenses as a percentage of sales decreased by 90 basis points as a result of expense leverage on higher sales.
  • Income from operations grew 63.4 percent to $16.1 million, or 8.6 percent of net sales, compared to $9.8 million, or 6.1 percent of net sales, in the prior-year period. This increase represents approximately 260 basis points of improvement in operating profit margin.
  • Net income was $9.7 million, or $0.33 per diluted share, compared to $6.8 million, or $0.24 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes $0.01 per share of tax benefit from the exercise of stock options compared to $0.09 per share of tax benefit from the exercise of stock options in the prior-year period. Excluding the tax benefit in both years, net income per diluted share in the current-year period grew 113 percent to $0.32, compared to $0.15 in the prior-year period.

Balance Sheet Highlights as of June 29, 2019

  • Cash of $22.7 million.
  • Average inventory per store was up 9.2 percent on a same store basis compared to June 30, 2018.
  • Total net debt of $188.5 million, including an $80.0 million balance under the revolving credit facility.

Fiscal Year 2020 Outlook

For the fiscal year ending March 28, 2020 the Company now expects:

  • To open or acquire 25 stores, including stores opened fiscal year-to-date.
  • Same store sales growth of approximately 6.0 percent, compared to the Company’s prior outlook of 5.0 percent.
  • Income from operations of $75.4 million to $78.6 million, compared to the Company’s prior outlook of $71.5 million to $74.4 million.
  • Interest expense of approximately $14.2 million, compared to the Company’s prior outlook of $15.5 million.
  • Net income of $46.2 million to $48.5 million, compared to the Company’s prior outlook of $41.7 million to $44.0 million.
  • Net income per diluted share of $1.57 to $1.65 based on 29.4 million weighted average diluted shares outstanding, compared to the Company’s prior outlook of $1.42 to $1.50.

For the fiscal second quarter ending September 28, 2019, the Company expects:

  • Same store sales growth of approximately 7.0 percent.
  • Total sales of $182.0 million to $184.0 million.
  • Net income per diluted share of $0.17 to $0.19 based on 29.3 million weighted average diluted shares outstanding.