Boot barn holdings, inc. announces second quarter fiscal year 2021 financial results
Irvine, calif.--(business wire)--boot barn holdings, inc. (nyse: boot) today announced its financial results for the second fiscal quarter ended september 26, 2020. for the quarter ended september 26, 2020: net sales decreased 1.4% to $184.5 million. same store sales decreased 5.1%, comprised of a decrease in retail store same store sales of 9.1% and an increase in e-commerce sales of 17.6%. net income was $5.8 million, or $0.20 per diluted share, compared to net income of $7.7 million, or $0.26 per diluted share in the prior-year period. net income per diluted share in the prior-year period includes a $0.02 per share benefit due to income tax accounting for share-based compensation. the company opened 1 new store during the quarter. cash and cash equivalents were $35.7 million. jim conroy, chief executive officer, commented, “our business continues to show resilience amidst challenging operating conditions. following a slow start to the second quarter due to the changing sentiment around covid-19, same store sales trends improved each month, turning positive in september driven by stronger store traffic. our teams have done an outstanding job serving our customers in whichever channel they choose to engage with us and we have adjusted our merchandise assortments to reflect the shift in demand towards more functional and work-related categories. the speed at which we adapted our operations and reconfigured our inventory drove strong full price selling in the quarter. i am particularly pleased with the contributions from our e-commerce business, whose second quarter operating income more than doubled when compared to the prior-year period.” mr. conroy continued, “our third quarter has started well with retail store same store sales improving to flat and e-commerce sales trends remaining strong. in addition to solid demand for work boots, we’ve also seen a nice sequential improvement in western boots, western apparel, and hats. as we approach the beginning of the holidays, we are encouraged with our current momentum and are prepared to execute well as we enter the busy holiday shopping season.” operating results for the second quarter ended september 26, 2020 net sales decreased 1.4% to $184.5 million from $187.2 million in the prior-year period. consolidated same store sales decreased 5.1% with retail store same store sales down 9.1% and e-commerce same store sales up 17.6%. the decrease in retail store sales was primarily due to decreased traffic in our stores that resulted from customers staying at home in response to the covid-19 crisis. gross profit was $55.5 million, or 30.1% of net sales, compared to $59.3 million, or 31.7% of net sales, in the prior-year period. gross profit decreased primarily due to decreased sales resulting from the covid-19 crisis. the decrease in gross profit rate of 160 basis points was driven by 110 basis points of deleverage in buying and occupancy costs and a 50-basis point decline in merchandise margin rate. the deleverage in buying and occupancy costs was primarily a result of lower volume sales. merchandise margin declined 50 basis points primarily as a result of 30 basis points of pressure from e-commerce mix shift. higher freight, partially offset by improved product margin, comprised the balance of the decline. selling, general and administrative expenses were $45.4 million, or 24.6% of net sales, compared to $46.4 million, or 24.8% of net sales, in the prior-year period. the decrease in selling, general and administrative expenses and 20 basis points of leverage as a percentage of sales was primarily a result of lower marketing and pay-per-click expenses. income from operations decreased 22.4% to $10.0 million, or 5.4% of net sales, compared to $12.9 million, or 6.9% of net sales, in the prior-year period. this decline in income from operations is a result of the negative impact on sales and gross margin from decreased traffic in our stores that resulted from customers staying at home in response to the covid-19 crisis. net income was $5.8 million, or $0.20 per diluted share, compared to net income of $7.7 million, or $0.26 per diluted share in the prior-year period. net income per diluted share in the prior-year period includes a $0.02 per share benefit due to income tax accounting for share-based compensation. operating results for the six months ended september 26, 2020 net sales decreased 10.9% to $332.3 million from $373.0 million in the prior-year period. consolidated same store sales decreased 9.7% with retail store same store sales down 17.4% and e-commerce same store sales up 33.7%. the decrease in retail store sales was primarily due to decreased traffic in our stores that resulted from customers staying at home in response to the covid-19 crisis and temporary store closures. gross profit was $95.7 million, or 28.8% of net sales, compared to $121.5 million, or 32.6% of net sales, in the prior-year period. gross profit decreased primarily due to decreased sales resulting from the covid-19 crisis. the decrease in gross profit rate of 380 basis points was driven by 260 basis points of deleverage in buying and occupancy costs and a 120-basis point decline in merchandise margin rate. the deleverage in buying and occupancy costs was primarily a result of lower volume sales. merchandise margin declined 120 basis points primarily as a result of 80 basis points of pressure from e-commerce mix shift. selling, general and administrative expenses were $83.9 million, or 25.2% of net sales, compared to $92.5 million, or 24.8% of net sales, in the prior-year period. the decrease in selling, general and administrative expenses was primarily a result of lower payroll and reduced marketing expenses. selling, general and administrative expenses as a percentage of sales increased by 40 basis points as a result of deleverage from lower sales. income from operations decreased 59.2% to $11.8 million, or 3.6% of net sales, compared to $29.0 million, or 7.8% of net sales, in the prior-year period. this decline in income from operations is a result of the negative impact on sales, gross margin and selling, general and administrative expenses from decreased traffic in our stores that resulted from customers staying at home in response to the covid-19 crisis and temporary store closures. net income was $5.3 million, or $0.18 per diluted share, compared to net income of $17.4 million, or $0.60 per diluted share in the prior-year period. net income per diluted share in the prior-year period includes a $0.03 per share benefit due to income tax accounting for share-based compensation. current business the following table includes same store sales, net sales and e-commerce as a percentage of net sales for the periods indicated below: four weeks fiscal july four weeks fiscal august five weeks fiscal september thirteen weeks ended september 26, 2020 preliminary four weeks fiscal october retail stores sss (15)% (13)% (1)% (9)% 0% e-commerce sss 24% 16% 14% 18% 13% total sss (10)% (9)% 1% (5)% 2% net sales (7)% (4)% 5% (1)% 6% e-commerce as % of net sales 18% 17% 16% 17% 16% fiscal year 2021 outlook the covid-19 crisis continues to adversely affect the company’s results. due to the ongoing uncertainty created by covid-19, the company is not providing third quarter and fiscal year 2021 guidance at this time. conference call information a conference call to discuss the financial results for the second quarter of fiscal year 2021 is scheduled for today, october 28, 2020, at 4:30 p.m. et (1:30 p.m. pt). investors and analysts interested in participating in the call are invited to (877) 451-6152. the conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. please visit the website and select the “events and presentations” link at least 15 minutes prior to the start of the call to register and download any necessary software. a telephone replay of the call will be available until november 28, 2020, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13712343. please note participants must enter the conference identification number in order to access the replay. about boot barn boot barn is the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. the company offers its loyal customer base a wide selection of work and lifestyle brands. as of the date of this release, boot barn operates 266 stores in 36 states, in addition to an e-commerce channel www.bootbarn.com. the company also operates www.sheplers.com, the nation’s leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. for more information, call 888-boot-barn or visit www.bootbarn.com. forward looking statements this press release contains forward-looking statements that are subject to risks and uncertainties. all statements other than statements of historical fact included in this press release are forward-looking statements. forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. you can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. these statements may include words such as "anticipate", "estimate", "expect", "project", "plan“, "intend", "believe", “may”, “might”, “will”, “could”, “should”, “can have”, “likely”, “outlook” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. these forward-looking statements are based on assumptions that the company’s management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. as you consider this press release, you should understand that these statements are not guarantees of performance or results. they involve risks, uncertainties (some of which are beyond the company’s control) and assumptions. these risks, uncertainties and assumptions include, but are not limited to, the following: the effect of covid-19 on our business operations, growth strategies, store traffic, employee availability, financial condition, liquidity and cash flow; decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the company’s ability to effectively execute on its growth strategy; and the company’s failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. the company discusses the foregoing risks and other risks in greater detail under the heading “risk factors” in the periodic reports filed by the company with the securities and exchange commission. although the company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. because of these factors, the company cautions that you should not place undue reliance on any of these forward-looking statements. new risks and uncertainties arise from time to time, and it is impossible for the company to predict those events or how they may affect the company. further, any forward-looking statement speaks only as of the date on which it is made. except as required by law, the company does not intend to update or revise the forward-looking statements in this press release after the date of this press release. boot barn holdings, inc. consolidated balance sheets (in thousands, except per share data) (unaudited) september 26, march 28, 2020 2020 $ 35,672 $ 69,563 13,281 12,087 260,940 288,717 14,428 14,284 324,321 384,651 107,764 109,603 171,601 170,243 197,502 197,502 60,929 60,974 2,189 1,738 $ 864,306 $ 924,711 $ 67,763 $ 129,900 81,003 95,334 53,180 52,612 35,941 34,779 237,887 312,625 19,551 19,801 109,402 109,022 166,243 160,935 1,189 635 534,272 603,018 3 3 — — 172,839 169,249 158,909 153,641 (1,717 ) (1,200 ) 330,034 321,693 $ 864,306 $ 924,711 consolidated statements of operations (in thousands, except per share data) (unaudited) thirteen weeks ended twenty-six weeks ended september 26, september 28, september 26, september 28, 2020 2019 2020 2019 $ 184,515 $ 187,183 $ 332,281 $ 372,950 129,025 127,845 236,590 251,456 55,490 59,338 95,691 121,494 45,448 46,404 83,851 92,499 10,042 12,934 11,840 28,995 2,383 3,310 5,024 7,214 78 3 142 14 7,737 9,627 6,958 21,795 1,979 1,947 1,690 4,394 $ 5,758 $ 7,680 $ 5,268 $ 17,401 $ 0.20 $ 0.27 $ 0.18 $ 0.61 $ 0.20 $ 0.26 $ 0.18 $ 0.60 28,860 28,502 28,843 28,441 29,223 29,161 29,165 29,091 consolidated statements of cash flows (in thousands) (unaudited) twenty-six weeks ended september 26, september 28, 2020 2019 $ 5,268 $ 17,401 11,948 9,757 3,529 2,145 44 72 16,757 15,115 442 503 42 12 295 (193 ) 384 — (250 ) (835 ) 3,681 1,865 27,777 (58,642 ) (206 ) (4,239 ) (450 ) (369 ) (9,985 ) 24,599 568 3,014 554 302 (16,507 ) (14,645 ) $ 43,891 $ (4,138 ) $ (14,881 ) $ (15,475 ) — (3,688 ) $ (14,881 ) $ (19,163 ) $ (62,137 ) $ 85,000 (308 ) (65,300 ) — (1,233 ) (517 ) (483 ) 61 1,922 $ (62,901 ) $ 19,906 (33,891 ) (3,395 ) 69,563 16,614 $ 35,672 $ 13,219 $ 1,182 $ 4,704 $ 4,905 $ 6,494 $ 1,349 $ 3,543 store count quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended september 26, june 27, march 28, december 28, september 28, june 29, march 30, december 29, 2020 2020 2020 2019 2019 2019 2019 2018 store count (bop) 264 259 251 248 240 240 234 232 opened/acquired 1 5 8 3 8 1 6 2 closed — — — — — (1 ) — — store count (eop) 265 264 259 251 248 240 240 234 boot barn holdings, inc. selected store data thirteen weeks ended september 26, june 27, march 28, december 28, september 28, june 29, march 30, december 29, 2020 2020 2020 2019 2019 2019 2019 2018 selected store data: same store sales (decline)/growth (5.1 ) % (14.9 ) % (4.7 ) % 6.7 % 7.8 % 9.4 % 8.7 % 9.2 % stores operating at end of period 265 264 259 251 248 240 240 234 total retail store square footage, end of period (in thousands) 2,779 2,770 2,722 2,639 2,616 2,537 2,539 2,486 average store square footage, end of period 10,486 10,491 10,508 10,514 10,549 10,570 10,580 10,624 average net sales per store (in thousands) $ 565 $ 410 $ 590 $ 903 $ 635 $ 660 $ 666 $ 862 debt covenant ebitda reconciliation (unaudited) thirteen weeks ended september 26, 2020 june 27, 2020 march 28, 2020 december 28, 2019 september 28, 2019 boot barn's net income/(loss) $ 5,758 $ (490 ) $ 5,729 $ 24,819 $ 7,680 income tax expense/(benefit) 1,979 (289 ) 930 7,040 1,947 interest expense, net 2,383 2,641 2,941 3,155 3,310 depreciation and intangible asset amortization 6,282 5,710 5,872 5,682 5,027 boot barn's ebitda $ 16,402 $ 7,572 $ 15,472 $ 40,696 $ 17,964 non-cash stock-based compensation (a) $ 1,705 $ 1,824 $ 1,582 $ 1,181 $ 1,180 non-cash accrual for future award redemptions (b) 372 (302 ) (447 ) 575 (11 ) loss/(gain) on disposal of assets (c) 46 (4 ) 28 377 - loss on adjustment of right-of-use assets and lease liabilities (d) 295 - - 7 - store impairment charge (e) 384 - 191 - - boot barn's adjusted ebitda $ 19,204 $ 9,090 $ 16,826 $ 42,836 $ 19,133 additional adjustments (f) 1,115 1,590 2,269 1,404 1,442 consolidated ebitda per loan agreements $ 20,319 $ 10,680 $ 19,095 $ 44,240 $ 20,575
