Boot Barn sales doubled in the first quarter
Boot Barn Holdings Inc. reported profit against a small loss in the first quarter ended June 26, as sales increased 107%. The retailer also cited strong growth from its first fiscal quarter ended June 29, 2019.
Boot Barn highlighted comparisons to the first quarter of 2019 due to the impact of COVID-19 on company results in its first fiscal quarter ended June 27, 2020
For the quarter ended June 26, 2021
- Net sales increased 64.9% to $ 306.3 million compared to June 29, 2019;
- Compared to June 29, 2019, same store sales increased by 52.3%, including an increase in comparable store sales of 51.7% and an increase in e-commerce same store sales of 55.8 %;
- Net income was $ 40.6 million, or $ 1.35 per diluted share, compared to $ 9.7 million, or $ 0.33 per diluted share, in the two-year period previously. . Diluted net earnings per share for the current year and two-year periods include a benefit of approximately $ 0.09 and $ 0.01 per share, respectively, due to the recognition of the Profit tax for stock-based compensation. Excluding the tax benefit for the two periods, net income per diluted share for the current year period was $ 1.26, compared to $ 0.32 for the two-year period previously; and
- The company opened three new stores in the thirteen weeks ended June 26, 2021.
Jim Conroy, President and CEO of Boot Barn, commented, “This has been a fantastic start to fiscal 2022 with sales and profitability increasing significantly on a two-year basis. While we believe macro winds are at play, our strategy of expanding our addressable market, coupled with excellent execution by the whole team to secure merchandise and staff stores to meet additional demand. , resulted in another exceptional quarter. We believe that our strong focus on our merchandise, marketing and omnichannel initiatives over the past few years, combined with expanding our store base, has increased our market share and strengthened our base for disproportionate growth. We have maintained our strong momentum so far in Q2 as the team continues to perform manage the continued strength of demand very well.
Results of operations for the first quarter ended June 26, 2021 compared to the first quarter ended June 27, 2020
- Net sales increased 107.3% to $ 306.3 million compared to $ 147.8 million the previous year. Consolidated comparable store sales increased 78.9%, with comparable retail store sales increasing 104.5% and comparable store e-commerce sales increasing 9.8%. The increase in net sales is the result of a 78.9% increase in consolidated same-store sales, the contribution to sales from temporarily closed stores that were excluded from the calculation basis and additional sales from new stores. opened in the last twelve months. Net sales for the previous year period were impacted by lower retail store sales resulting from lower traffic to its stores of customers who remained at home in response to COVID-19 and temporary store closures.
- Gross margin was $ 116.4 million, or 38.0% of net sales, compared to $ 40.2 million, or 27.2% of net sales, during the period of the year former. Gross margin increased mainly due to higher sales. The increase in the gross margin rate of 1,080 basis points is explained by a leverage effect of 660 basis points on purchase and occupancy costs due to the leverage effect of expenses on the increase sales and a 420 basis point increase in the merchandise margin rate. The merchandise margin increased by 420 basis points, mainly due to the increased penetration of in-store sales, which generates higher merchandise margins than e-commerce, compared to the previous year, in more from better selling at full price and growing the penetration of exclusive brands.
- Selling, general and administrative expenses were $ 62.8 million, or 20.5% of net sales, compared to $ 38.4 million, or 26.0% of net sales, during the period of the previous year. The increase in selling, general and administrative expenses is mainly due to an increase in the store payroll, higher overheads and increased marketing expenses during the current year period compared to the period of the previous year that was affected by COVID-19. Selling, general and administrative expenses as a percentage of net sales decreased 550 basis points, primarily due to the leverage of spending on higher sales.
- Operating income increased $ 51.8 million to $ 53.6 million, or 17.5% of net sales, from $ 1.8 million, or 1.2% of net sales, in the during the period of the previous year. This increase represents 1,630 basis points of improvement in the operating margin.
- Net income was $ 40.6 million, or $ 1.35 per diluted share, compared to a net loss of $ 0.5 million, or $ 0.02 per diluted share during the period. the previous year. Diluted net earnings per share for the current year period includes a benefit of approximately $ 0.09 per share due to the recognition of income taxes for stock-based compensation. Excluding the tax benefit for the current year period, net income per diluted share for the current year period was $ 1.26, compared to a net loss per diluted share of $ 0.02 for the period of the previous year.
Highlights of the balance sheet as of June 26, 2021
- Cash of $ 49.6 million;
- The average stock per store is stable on a comparable store basis compared to June 29, 2020;
- The Company prepaid $ 61.5 million of its term loan facility, reducing total indebtedness to $ 50.0 million, including a zero balance drawn on the $ 165 million revolving credit facility; and
- After June 26, 2021, the Company extended its revolving credit facility to $ 180.0 million.
Outlook for 2022
The company provides the following forecasts for fiscal year 2022:
- New unit growth of 10%;
- Exclusive brand penetration growth of 350 basis points, which is an increase from the Company’s previous outlook of 250 basis points;
- Effective tax rate of 26.0%; and
- Capital expenditure between $ 33.0 and $ 36.0 million.
Photo courtesy of Boot Barn