Sportsman’s Warehouse Holdings, Inc. reported earnings on an adjusted basis declined 42 percent in the second quarter ended July 31 as same-store sales declined 10 percent. The retailer was facing elevated demand in the year-ago period tied to the pandemic.
“The business continued to perform well during the second quarter,” said Jon Barker, Sportsman’s Warehouse CEO. “While second-quarter same-store sales decreased 9.9 percent compared to the same period last year, I believe this was a favorable result considering the many factors that drove our elevated second quarter 2020 sales. For the first half of fiscal year 2021, same-store sales increased 3.4 percent compared to the same period last year.”
Barker continued, “We believe customers are responding favorably to our brand, product assortment and customer service. I am grateful to the entire Sportsman’s Warehouse team who continue to provide outstanding gear and exceptional service to inspire outdoor memories.”
Pending Merger With Great Outdoors Group, LLC
As previously announced on December 21, 2020, Great Outdoors Group, LLC agreed to acquire Sportsman’s Warehouse Holdings, Inc. for $18.00 per share in an all-cash transaction. The transaction was approved by the Board of Directors of Sportsman’s Warehouse and subsequently approved by the stockholders of Sportsman’s Warehouse at a special stockholders meeting held on March 23, 2021. Completion of the merger is subject to the satisfaction of several conditions, including the expiration or termination of any applicable waiting period (and any extensions thereof) relating to the merger under the Hart-Scott-Rodino Act. Assuming receipt of required clearance pursuant to the Hart-Scott-Rodino Act and timely satisfaction of other conditions to closing, it currently expects the closing of the merger to occur in the second half of calendar year 2021.
Due to the pending acquisition by Great Outdoors Group, LLC, Sportsman’s Warehouse management will not host an earnings conference call and will not provide forward-looking guidance.
For The Thirteen Weeks Ended July 31, 2021:
- Net sales were $361.8 million, a decrease of $19.2 million, or 5.0 percent, compared to the second quarter of fiscal year 2020. The net sales decrease was primarily due to lower demand across our hunting and shooting, fishing and camping categories compared to significantly elevated sales in the prior year period;
- Same-store sales decreased 9.9 percent during the second quarter of 2021 compared to the second quarter of 2020;
- Gross profit was $120.1 million, or 33.2 percent of net sales, compared to $129.1 million, or 33.9 percent of net sales in the comparable prior year period, a year-over-year decrease of $9.0 million in gross profit and a 70-basis point decrease in gross profit margin;
- Net income was $17.7 million compared to net income of $32.5 million in the second quarter of 2020. Adjusted net income was $19.5 million compared to adjusted net income of $33.6 million in the second quarter of 2020;
- Adjusted EBITDA was $35.2 million compared to $53.6 million in the comparable prior year period; and
- Diluted earnings per share were $0.40 compared to a diluted earnings per share of $0.73 in the comparable prior-year period. Adjusted diluted earnings per share were $0.44 compared to adjusted diluted earnings per share of $0.76 for the comparable prior year period.
For The Twenty-Six Weeks Ended July 31, 2021:
- Net sales were $688.8 million, an increase of $60.9 million, or 9.7 percent, compared to the first half of the fiscal year 2020. The net sales increase was primarily due to increased demand across all categories and strong growth in its eCommerce platform compared to the prior-year period;
- Same-store sales increased 3.4 percent during the first half of 2021 compared to the first half of 2020;
- Gross profit was $224.1 million, or 32.5 percent of net sales, compared to $203.9 million, or 32.5 percent of net sales in the comparable prior-year period, a year-over-year decrease of $20.2 million in gross profit;
- Net income was $28.2 million compared to net income of $31.3 million in the first half of 2020. Adjusted net income was $32.0 million compared to adjusted net income of $34.0 million in the first half of 2020;
- Adjusted EBITDA was $58.7 million compared to $61.8 million in the comparable prior-year period; and
- Diluted earnings per share were $0.63 compared to a diluted earnings per share of $0.71 in the comparable prior-year period. Adjusted diluted earnings per share were $0.72 compared to adjusted diluted earnings per share of $0.77 for the comparable prior-year period.
Balance Sheet Highlights As Of July 31, 2021:
- Total net debt was $17.6 million at the end of the second quarter of fiscal year 2021, comprised of $2.6 million of cash on hand and $20.2 million of borrowings outstanding under the company’s revolving credit facility; and
- Total liquidity was $188.6 million as of the end of the second quarter of fiscal 2021 with $186.0 million of availability on the revolving credit facility and $2.6 million of cash on hand.
Photo courtesy Sportsman’s Warehouse