Sportsman’s Warehouse Holdings Inc., which recently ended its merger efforts with Bass Pro, reported profits, on an adjusted basis, declined 27.9 percent in the third quarter ended October 30 as same-store sales dipped 1.5 percent.

“I am very proud of our team and pleased with the performance of the business during the third quarter,” said Jon Barker, Sportsman’s Warehouse CEO. “Despite a very difficult comparison and the terminated merger agreement with the Great Outdoors Group, Inc., our team has been able to achieve incredible results in the quarter and year-to-date periods.”

Notable Achievements

  • Topline sales growth of 4 percent for the third quarter compared to the third quarter of fiscal year 2020, which includes the opening of seven new stores in an 8 week period. As of today, the company has opened 10 stores in fiscal 2021, including in two new U.S. states. This brings its total store count to 122 stores in 29 states.
  • Same-store sales declined 1.5 percent for the third quarter of fiscal year 2021 compared to the third quarter of fiscal year 2020. Compared to the same period of 2019, the company saw same-store sales growth of 39.4 percent.
  • E-commerce sales growth of over 15 percent for the third quarter of fiscal year 2021 versus the same period of fiscal year 2020. The company saw over 260 percent e-commerce sales growth compared to the same period in fiscal year 2019.
  • Growth of its customer database with new co-branded Explorewards credit card issuances up over 100 percent and collected customer e-mail addresses up over 30 percent year-to-date.

For The Thirteen Weeks Ended October 30, 2021

  • Net sales were $401.0 million, an increase of $15.3 million, or 4.0 percent, compared to the third quarter of fiscal year 2020, primarily due to the opening of seven new stores since October 31, 2020. Compared to the third quarter of fiscal year 2019, net sales increased 65.3 percent from $242.5 million.
  • Same-store sales decreased 1.5 percent during the third quarter of fiscal year 2021 compared to the third quarter of fiscal year 2020. Compared to the same period of 2019, same-store sales increased 39.4 percent.
  • Gross profit was $129.6 million, or 32.3 percent of net sales, compared to $130.6 million, or 33.9 percent of net sales in the comparable prior-year period, a year-over-year decrease of $1.0 million in gross profit and a 160-basis point decrease in gross profit margin. The decrease in gross profit margin could be attributed to an increase in freight costs partially offset by higher product margins and vendor programs.
  • Net income was $21.9 million compared to net income of $30.5 million in the third quarter of fiscal year 2020. Adjusted net income was $22.7 million compared to adjusted net income of $31.5 million in the third quarter of fiscal year 2020. Net income and adjusted net income for the third quarter of fiscal year 2019 was $10.5 million and $10.8 million, respectively.
  • Adjusted EBITDA was $39.3 million compared to $49.9 million in the comparable prior-year period. Adjusted EBITDA for the third quarter of fiscal year 2019 was $23.2 million.
  • Diluted earnings per share were $0.49 compared to diluted earnings per share of $0.68 in the comparable prior-year period. Adjusted diluted earnings per share were $0.51 compared to adjusted diluted earnings per share of $0.71 for the comparable prior-year period. Diluted earnings per share and adjusted diluted earnings per share for the comparable period of fiscal year 2019 was $0.24 and $0.25, respectively.

For The Thirty-Nine Weeks Ended October 30, 2021
Net sales were $1,089.8 million, an increase of $76.2 million, or 7.5 percent, compared to the 39 weeks ended October 31, 2020, primarily due to a combination of opening of seven new stores since October 31, 2020, and an increase in same-store sales of 1.5 percent as it saw demand across all categories. Compared to the first 39 weeks of fiscal 2019, net sales increased 73.5 percent from $628.2 million.

Gross profit was $353.7 million, or 32.5 percent of net sales, compared to $334.5 million, or 33.0 percent of net sales in the comparable prior-year period, a year-over-year increase of $19.3 million in gross profit and a 50 basis point decrease in gross profit margin. The decline in gross profit margin can be attributed to higher freight costs for the period versus the prior year, partially offset by increased product margins and vendor programs.

Net income was $50.0 million compared to net income of $61.8 million in the first 39 weeks of fiscal year 2020. Adjusted net income was $54.7 million compared to adjusted net income of $65.6 million in the first 39 weeks of fiscal year 2020. Net income and adjusted net income for the first 39 weeks of fiscal 2019 was $10.5 million and $11.3 million, respectively.

Adjusted EBITDA was $98.0 million compared to $111.7 million in the comparable prior-year period. Adjusted EBITDA for the first 39 weeks of fiscal year 2019 was $39.4 million.

Diluted earnings per share were $1.13 compared to diluted earnings per share of $1.40 in the comparable prior-year period. Adjusted diluted earnings per share were $1.23 compared to adjusted diluted earnings per share of $1.48 for the comparable prior-year period. Diluted earnings per share and adjusted diluted earnings per share for the first 39 weeks of fiscal year 2019 was $0.24 and $0.26, respectively.

Balance Sheet Highlights As Of October 30, 2021

  • Total net debt was $55.1 million at the end of the third quarter of fiscal year 2021, comprised of $2.5 million of cash on hand and $57.6 million of borrowings outstanding under the company’s revolving credit facility. In comparison, total net debt as of the end of the third quarter of fiscal year 2019 was $160.5 million consisting of $130.8 million outstanding under the company’s revolving credit facility and $29.7 million outstanding under the prior term loan, net of unamortized debt issuance costs.
  • Total liquidity was $151.8 million as of the end of the third quarter of fiscal year 2021 with $149.3 million of availability on the revolving credit facility and $2.5 million of cash on hand. As of December 8, 2021, the company had approximately $57.5 million of cash on hand due to the $55.0 million payment received in conjunction with the termination of the merger agreement with Great Outdoors Group, Inc.
  • Total inventory was $428.5 million as of the end of the third quarter of fiscal year 2021. Inventory per store has recovered as compared to 2020 levels with an increase of 25.2 percent more on a per-store basis.

Q4 2021 and Full Year Outlook
At this time the company will not provie guidance for the fourth quarter or full fiscal year 2021. As reported last week, Great Outdoors Group, owner of Bass Pro, Cabela’s, White River Marine Group, and Sportsman’s Warehouse Holdings, Inc. has called off its merger deal, according to a regulatory filing on Thursday.

Sportsman’s Warehouse said in the filing, “The decision to terminate the Merger Agreement follows feedback from the Federal Trade Commission (FTC) that led the parties to believe that they would not have obtained FTC clearance to consummate the Merger.”

The acquisition was expected to close in the second half of 2021. Under the termination agreement, Great Outdoors Group agreed to pay Sportsman’s Warehouse a termination fee of $55.0 million.

Photo courtesy Sportsman’s Warehouse