Sportsman’s Warehouse Holdings Inc. reported that net sales increased by 0.9 percent to $191.5 million in the fiscal second quarter ended July 29, 2017. Same-store sales decreased by 9 percent over the same period.
Income from operations was $14.2 million in Q2 2017 compared to $16.7 million in Q2 2016. Adjusted EBITDA decreased to $20.4 million from $22.3 million in Q2 2016. Net income was $6.6 million compared to $8.3 million in the second quarter 2016. Diluted earnings per share were 15 cents in Q2 compared to 20 cents in the second quarter of fiscal year 2016.
John Schaefer, chief executive officer, stated, “Our second quarter top-line results were in line with our expectations given the anticipated continued softness in firearm demand as we anniversaried difficult comparisons from the Orlando tragedy in June 2016. Our better than expected bottom line results were driven by stronger gross margins resulting primarily from the higher margin product mix shift that we experienced in the second quarter. We remained focused on continuing to capture market share during the quarter and are encouraged by the progress we made against our strategic priorities of expanding our private label segment, maximizing our loyalty program, investing in our best-in-class customer service and enhancing our e-commerce platform.”
Schaefer continued, “For the remainder of the year, we continue to expect softness in firearm demand until we anniversary the pre-election run up that drove increased demand in our firearm and ammunition categories last year. Despite the still challenging operating environment, we will continue to execute our key growth priorities that will be centered around driving same store sales, elevating our omni-channel experience and paying down debt as we focus on delivering long-term sustainable growth.”
SPWH opened four new stores in the second quarter of fiscal 2017 and ended the quarter with 83 stores in 22 states, or square footage growth of 12.2 percent from the end of the second quarter of fiscal year 2016. The company opened eight new stores in the first half of fiscal year 2017.
Third Quarter And Fiscal Year 2017 Outlook
For the third quarter of fiscal year 2017, net sales are expected to be in the range of $220 million to $225 million based on a same-store sales decline in the range of 6 percent to 8 percent compared to the corresponding period of fiscal year 2016. Net income is expected to be in the range of $10 million to $11.2 million, with diluted earnings per share of 23 cents to 26 cents.
For fiscal year 2017, net sales are expected to be in the range of $825 million to $835 million based on a same-store sales decline in the range of 5 percent to 6 percent compared to fiscal year 2016. Adjusted net income is expected to be in the range of $25.7 million to $28.4 million, with adjusted earnings per diluted share of 60 cents to 66 cents when adjusted for the professional fees and other fees incurred in connection with the evaluation of a strategic acquisition in the first quarter of fiscal year 2017.
The company’s fiscal year 2017 will include 53 weeks, while fiscal year 2016 included 52 weeks. The estimated fiscal year 2017 impact of the additional week is roughly $10 million to $12 million in revenue and approximately one cent on earnings per share. There is no impact on expected same store sales as those are presented on a 52-week comparative basis.
Photo courtesy Sportsmans Warehouse
