Sportsman’s Warehouse Holdings Inc. reported earnings grew five-fold in the second quarter. Sales surged 79 percent primarily due to a surge in demand across all major categories, led by hunting and shooting.

“The second quarter was record-breaking for Sportsman’s Warehouse. I am very proud of the Sportsman’s Warehouse team as they worked to keep our associates and customers safe during this sustained surge in our business,” said Jon Barker, Sportsman’s Warehouse CEO. “Same-store sales were up 61 percent in the second quarter of 2020 as compared to the same period last year, primarily due to market share gains, a significant increase in participants in outdoor activities and social unrest.”

Barker continued, “We are very pleased with the growth of our eCommerce-driven business, which increased over 300 percent for the quarter versus the prior year. We are also highly encouraged by the strong start of our new small-format store in Laramie, Wyoming that opened at the beginning of August. We believe this concept will facilitate our ability to profitably penetrate many small and mid-sized markets across the country.”

“Thanks to the strong financial performance of our business so far this year, we paid down a significant portion of our debt and ended the second quarter nearly debt-free. We see our financial flexibility as a competitive advantage enabling us to invest for long-term growth and profitability.”

For The Thirteen Weeks Ended August 1, 2020:

  • Net sales were $381.0 million, an increase of $169.2 million, or 79.9 percent, as compared to the second quarter of the fiscal year 2019. The net sales increase was primarily due to a surge in demand across all major categories led by the hunting and shooting category as well as strong growth in its e-e-commerce platform compared to the prior-year period. Sales were well ahead of Wall Street’s consensus estimate of $286.06 million.
  • Same-store sales increased 61.0 percent during the second quarter of 2020 compared to the second quarter of 2019.
  • Gross profit was $129.1 million, or 33.9 percent of net sales, as compared to $73.2 million, or 34.6 percent of net sales, in the comparable prior-year period, a year-over-year increase of $55.9 million in gross profit and a 70-basis point decrease in gross profit margin.
  • Net income was $32.5 million compared to a net income of $5.5 million in the second quarter of 2019. Adjusted net income was $33.6 million compared to an adjusted net income of $5.7 million in the second quarter of 2019.
  • Adjusted EBITDA was $53.6 million compared to $15.8 million in the comparable prior-year period.
  • Diluted earnings per share were $0.73 compared to diluted earnings per share of $0.13 in the comparable prior-year period. Adjusted diluted earnings per share were $0.76 compared to adjusted diluted earnings per share of $0.13 for the comparable prior-year period. Adjusted earnings were more than double Wall Street’s consensus estimate of 32 cents.

For The Twenty-Six Weeks Ended August 1, 2020:

  • Net sales were $627.8 million, an increase of $242.0 million, or 62.7 percent, as compared to the first half of the fiscal year 2019. The net sales increase was primarily due to a surge in demand across all major categories, led by its hunting and shooting category, as well as strong growth in its eCommerce platform compared to the prior-year period.
  • Same-store sales increased 46.5 percent during the first half of 2020 compared to the first half of 2019.
  • Gross profit was $203.9 million or 32.5 percent of net sales, as compared to $127.4 million or 33.0 percent of net sales for the comparable prior-year period, a year-over-year increase of $76.5 million in gross profit and a 60-basis point decrease in gross profit margin.
  • Net income was $31.3 million compared to net income of $0.0 million in the first half of 2019. Adjusted net income was $34.0 million compared to an adjusted net income of $0.5 million in the first half of 2019.
  • Adjusted EBITDA was $61.8 million compared to $16.2 million in the first half of 2019.
  • Diluted earnings per share were $0.71 for the twenty-six weeks ended August 1, 2020, compared to diluted earnings per share of $0.00 for the same period last year. Adjusted diluted earnings per share were $0.77 for the twenty-six weeks ended August 1, 2020, compared to adjusted diluted earnings per share of $0.01 for the same period last year.

Balance Sheet Highlights As Of August 1, 2020:

  • Total net debt was $6.5 million, consisting of $12.3 million in cash on hand, $2.9 million outstanding under the company’s revolving credit facility, and $15.9 million outstanding under the term loan, net of unamortized debt issuance costs. This is a reduction of $150.9 million of net debt year-over-year.
  • Total liquidity was $183.5 million, as of the end of the second quarter of 2020, comprised of $171.2 million of availability on the revolving credit facility and $12.3 million of cash as compared to $52.9 million in total liquidity at the end of the second quarter of 2019.

Third Quarter and Fiscal Year 2020 Outlook
The company is not issuing forward guidance at this time.

Photo courtesy Sportsman’s Warehouse