Boot barn holdings, inc. announces second quarter fiscal year 2022 financial results and appoints jim watkins chief financial officer
Irvine, calif.--(business wire)--boot barn holdings, inc. (nyse:boot) today announced its financial results for the second fiscal quarter ended september 25, 2021. due to the impact of covid-19 on the company’s results in its second fiscal quarter ended september 26, 2020, it has provided the below quarterly highlights in comparison to its second fiscal quarter ended september 28, 2019, two years ago. for the quarter ended september 25, 2021: net sales increased 67.1% to $312.7 million, compared to the quarter ended september 28, 2019, two years ago. compared to the quarter ended september 28, 2019, same store sales increased 53.6%, comprised of an increase in retail store same store sales of 53.0% and an increase in e-commerce same store sales of 57.1%. net income was $37.9 million, or $1.25 per diluted share, compared to $7.7 million, or $0.26 per diluted share in the two-year ago period. net income per diluted share in the current-year and two-year ago periods include an approximately $0.03 and $0.02 per share benefit, respectively, due to income tax accounting for share-based compensation. excluding the tax benefit in both periods, net income per diluted share in the current-year period was $1.22, compared to $0.24 in the two-year ago period. the company opened 3 new stores and closed 1 during the thirteen weeks ended september 25, 2021. the company has also provided the below table which includes year-over-year comparisons of retail store sales, e-commerce sales, and total net sales for each of the periods indicated below. in addition, the following table includes retail store sales and e-commerce sales as a percentage of total net sales for the periods indicated below: 268,403 152,932 158,895 76 % 69 % 44,314 31,583 28,288 40 % 57 % 312,717 184,515 187,183 69 % 67 % 86 % 83 % 85 % 14 % 17 % 15 % jim conroy, president and chief executive officer, commented, “our business continued to grow at an exceptional pace in the second quarter as our teams are doing an excellent job executing our strategic initiatives and capitalizing on heightened consumer demand to expand our market share. we are experiencing strong gains both in stores and online fueled by an increasing customer count, a compelling assortment and a fulfilling shopping experience. the consistency and duration of the outsized growth in sales seems to indicate that we have captured significant market share which should be sustainable. with our sales momentum continuing thus far in the third quarter and inventories in a solid position, we are optimistic about our prospects for the upcoming holiday season. looking further ahead, we see a long runway for sustained growth and believe the company is poised to deliver increased shareholder value for years to come.” operating results for the second quarter ended september 25, 2021 compared to the second quarter ended september 26, 2020 net sales increased 69.5% to $312.7 million from $184.5 million in the prior-year period. consolidated same store sales increased 61.7% with retail store same store sales up 66.0% and e-commerce same store sales up 41.6%. the increase in net sales was the result of an increase of 61.7% in consolidated same store sales and the incremental sales from new stores opened over the past twelve months. net sales in the prior-year period were adversely impacted by decreases in retail store sales resulting from decreased traffic in our stores from customers staying at home in response to the covid-19 crisis. gross profit was $118.2 million, or 37.8% of net sales, compared to $55.5 million, or 30.1% of net sales, in the prior-year period. gross profit increased primarily due to increased sales. the increase in gross profit rate of 770 basis points was driven by 410 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 360-basis point increase in merchandise margin. merchandise margin increased 360 basis points primarily as a result of better full-price selling and growth in exclusive brand penetration. selling, general and administrative expenses were $68.0 million, or 21.8% of net sales, compared to $45.4 million, or 24.6% of net sales, in the prior-year period. the increase in selling, general and administrative expenses was primarily a result of higher store payroll, higher overhead and increased marketing expenses in the current-year period compared to the prior-year period which was impacted by covid-19. selling, general and administrative expenses as a percentage of net sales decreased by 290 basis points primarily as a result of expense leverage on higher sales. income from operations increased $40.1 million to $50.1 million, or 16.0% of net sales, compared to $10.0 million, or 5.4% of net sales, in the prior-year period. this increase represents 1,060 basis points of improvement in operating profit margin. net income was $37.9 million, or $1.25 per diluted share, compared to a net income of $5.8 million, or $0.20 per diluted share in the prior-year period. net income per diluted share in the current-year period includes an approximately $0.03 per share benefit due to income tax accounting for share-based compensation. excluding the tax benefit in the current year period, net income per diluted share in the current-year period was $1.22, compared to net income per diluted share of $0.20 in the prior-year period. operating results for the six months ended september 25, 2021 compared to the six months ended september 26, 2020 net sales increased 86.3% to $619.0 million from $332.3 million in the prior-year period. consolidated same store sales increased 69.1% with retail store same store sales up 81.5% and e-commerce same store sales up 24.4%. the increase in net sales was the result of an increase of 69.1% in consolidated same store sales, the sales contribution from temporarily closed stores that were excluded from the comp base, and the incremental sales from new stores opened over the past twelve months. net sales in the prior-year period were adversely impacted by decreases in retail store sales resulting from decreased traffic in our stores from customers staying at home in response to the covid-19 crisis and temporary store closures. gross profit was $234.6 million, or 37.9% of net sales, compared to $95.7 million, or 28.8% of net sales, in the prior-year period. gross profit increased primarily due to increased sales. the increase in gross profit rate of 910 basis points was driven by 520 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 390 basis point increase in merchandise margin. merchandise margin increased 390 basis points primarily as a result of better full-price selling, increased penetration of store sales compared to the prior year, and growth in exclusive brand penetration. selling, general and administrative expenses were $130.8 million, or 21.1% of net sales, compared to $83.9 million, or 25.2% of net sales, in the prior-year period. the increase in selling, general and administrative expenses was primarily a result of higher store payroll, higher overhead and increased marketing expenses in the current-year period compared to the prior-year period which was impacted by covid-19. selling, general and administrative expenses as a percentage of net sales decreased by 410 basis points primarily as a result of expense leverage on higher sales. income from operations increased $92.0 million to $103.8 million, or 16.8% of net sales, compared to $11.8 million, or 3.6% of net sales, in the prior-year period. this increase represents 1,320 basis points of improvement in operating profit margin. net income was $78.5 million, or $2.59 per diluted share, compared to net income of $5.3 million, or $0.18 per diluted share in the prior-year period. net income per diluted share in the current-year period includes a $0.12 per share benefit due to income tax accounting for share-based compensation. excluding the tax benefit in the current year period, net income per diluted share in the current-year period was $2.47, compared to net income per diluted share of $0.18 in the prior-year period. current business the following table includes retail store sales, e-commerce sales, and total net sales for the periods indicated below. it also includes the year-over-year change in retail store sales, e-commerce sales, and total net sales for each of the periods indicated below: 97,166 61,311 58,233 58 % 67 % 17,804 11,262 10,542 58 % 69 % 114,970 72,573 68,775 58 % 67 % balance sheet highlights as of september 25, 2021 cash of $39.5 million. average inventory per store increased 8.8% on a same store basis compared to september 26, 2020. total debt of $50.0 million, including a zero balance under the revolving credit facility. on july 26, 2021, the company expanded its revolving credit facility to $180.0 million. fiscal year 2022 outlook the company provides the following full-year fiscal 2022 guidance: new unit growth of 10%. exclusive brand penetration growth of 350 basis points compared to full-year fiscal 2021. effective tax rate of 25.4%. capital expenditures between $36.0 to $39.0 million. cfo appointment boot barn also announced the appointment of jim watkins as chief financial officer, effective november 1, 2021. jim has worked at boot barn in a variety of roles since october 2014, most recently as the company’s senior vice president, finance and investor relations. prior to joining boot barn, jim was the vice president, corporate controller and principal accounting officer of mindspeed technologies, a publicly traded semiconductor company. prior to mindspeed, jim worked as an auditor at ernst & young for 12 years. jim is a certified public accountant in the state of california. greg hackman will continue as boot barn’s executive vice president and chief operating officer. greg joined boot barn in 2015 as the chief financial officer and has also held the role of chief operating officer since august 2020. jim conroy stated, “i feel fortunate to have the chance to work with both greg and jim as we continue to build the boot barn business. this new alignment will give jim the well-deserved acknowledgment of his contributions to the company and the finance organization. it also demonstrates the leadership capabilities of greg as he has helped position jim for this expanded role. given the outsized growth we are presently experiencing, i believe we will benefit greatly from greg’s more intense focus on sales support functions to help ensure we can continue to scale the business to support the future needs of a national multi-billion-dollar retailer.” conference call information a conference call to discuss the financial results for the second quarter of fiscal year 2022 is scheduled for today, october 27, 2021, 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 27, 2021, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13724517. 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 281 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 25, march 27, 2021 2021 39,545 73,148 13,202 12,771 350,274 275,760 38,072 12,777 441,093 374,456 124,021 110,444 209,964 186,827 197,502 197,502 60,849 60,885 3,990 3,467 1,037,419 933,581 140,530 104,641 96,959 77,615 42,992 39,400 280,481 221,656 15,363 21,993 49,399 109,781 206,988 181,836 3,931 3,424 556,162 538,690 3 3 — — 194,323 183,815 291,533 213,027 (4,602 ) (1,954 ) 481,257 394,891 1,037,419 933,581 boot barn holdings, inc. consolidated statements of operations (in thousands, except per share data) (unaudited) thirteen weeks ended twenty-six weeks ended september 25, september 26, september 25, september 26, 2021 2020 2021 2020 312,717 184,515 619,044 332,281 194,566 129,025 384,466 236,590 118,151 55,490 234,578 95,691 68,037 45,448 130,821 83,851 50,114 10,042 103,757 11,840 1,162 2,383 3,725 5,024 14 78 118 142 48,966 7,737 100,150 6,958 11,105 1,979 21,644 1,690 37,861 5,758 78,506 5,268 1.28 0.20 2.67 0.18 1.25 0.20 2.59 0.18 29,555 28,860 29,458 28,843 30,356 29,223 30,312 29,165 boot barn holdings, inc. consolidated statements of cash flows (in thousands) (unaudited) twenty-six weeks ended september 25, september 26, 2021 2020 78,506 5,268 12,871 11,948 5,968 3,529 36 44 18,737 16,757 1,189 442 90 42 (247 ) 295 — 384 (6,630 ) (250 ) 5,852 3,681 (74,514 ) 27,777 (25,366 ) (206 ) (523 ) (450 ) 36,312 (9,985 ) 14,634 568 507 554 (18,794 ) (16,507 ) 48,628 43,891 (22,251 ) (14,881 ) (22,251 ) (14,881 ) — (62,137 ) (61,872 ) (308 ) (2,648 ) (517 ) 4,540 61 (59,980 ) (62,901 ) (33,603 ) (33,891 ) 73,148 69,563 39,545 35,672 26,005 1,182 2,495 4,905 7,195 1,349 boot barn holdings, inc. store count quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended september 25, june 26, march 27, december 26, september 26, june 27, march 28, december 28, 2021 2021 2021 2020 2020 2020 2020 2019 276 273 266 265 264 259 251 248 3 3 8 1 1 5 8 3 (1 ) — (1 ) — — — — — 278 276 273 266 265 264 259 251 boot barn holdings, inc. selected store data september 25, june 26, march 27, december 26, september 26, june 27, march 28, december 28, 2021 2021 2021 2020 2020 2020 2020 2019 61.7 % 78.9 % 26.9 % 4.6 % (5.1 )% (14.9 )% (4.7 )% 6.7 % 278 276 273 266 265 264 259 251 2,940 2,915 2,854 2,787 2,779 2,770 2,722 2,639 10,575 10,563 10,455 10,477 10,486 10,491 10,508 10,514 965 942 792 889 565 410 590 903 debt covenant ebitda reconciliation (unaudited) 37,861 40,645 24,552 29,566 5,758 7,680 11,105 10,539 6,264 9,909 1,979 1,947 1,162 2,563 2,115 2,303 2,383 3,310 6,737 6,170 6,162 5,994 6,282 5,027 56,865 59,917 39,093 47,772 16,402 17,964 2,767 3,201 2,147 1,482 1,705 1,180 303 339 (255 ) 697 372 (11 ) 94 (4 ) 64 (19 ) 46 - (214 ) (33 ) - - 295 - - - - - 384 - 59,815 63,420 41,049 49,932 19,204 19,133 1,569 1,046 673 165 1,115 1,442 61,384 64,466 41,722 50,097 20,319 20,575 (a) represents non-cash compensation expenses related to stock options, restricted stock units and performance share units granted to certain of our employees and directors. (b) represents the non-cash accrual for future award redemptions in connection with our customer loyalty program. (c) represents loss/(gain) on disposal of assets. (d) represents (gain)/loss on adjustment of right-of-use assets and lease liabilities. (e) represents store impairment charges recorded in order to reduce the carrying amount of the assets to their estimated fair values. (f) adjustments to boot barn's adjusted ebitda as provided in the 2015 golub term loan and june 2015 wells fargo revolver include pre-opening costs, franchise and state taxes, and other miscellaneous adjustments.
