Boot barn holdings, inc. announces third quarter fiscal year 2023 financial results
Irvine, calif.--(business wire)--boot barn holdings, inc. (nyse: boot) today announced its financial results for the third fiscal quarter ended december 24, 2022. a supplemental financial presentation is available at investor.bootbarn.com. for the quarter ended december 24, 2022: net sales increased 5.9% over the prior-year period to $514.6 million, cycling 60.7% net sales growth in the prior-year period. same store sales decreased 3.6% compared to the prior-year period, cycling 54.2% same store sales growth in the prior-year period. the 3.6% decrease in consolidated same store sales is comprised of a decrease in retail store same store sales of 0.8% and a decrease in e-commerce same store sales of 15.2%. net income was $52.8 million, or $1.74 per diluted share, compared to $69.2 million, or $2.27 per diluted share in the prior-year period. excluding a $0.04 per share tax benefit related primarily to income tax accounting for share-based compensation, net income per diluted share was $2.23 in the prior-year period. the company opened 12 new stores, or 33 stores year-to-date, bringing its total store count to 333. jim conroy, president and chief executive officer, commented “i would like to thank the entire boot barn team for continuing to achieve solid sales and margin performance on top of a record-setting holiday season last year. over the past few years, our annual average store volume has grown by more than 55%, with the elevated level proving sustainable through yet another holiday quarter. this growth, coupled with a very successful new store roll-out program has us on track to nearly double our annual sales this year as compared to pre-pandemic levels. looking forward, our growth opportunities remain as strong as ever, with very successful recent store openings combined with a robust new store pipeline. we feel good about our level of store inventory with weeks of supply back to pre-pandemic levels and are pleased that our retail store same store sales remain positive on a year-to-date basis. as we head into fiscal 2024, we have multiple levers of earnings growth from same store sales, new store openings, and margin accretion from exclusive brands and lower freight charges.” operating results for the third quarter ended december 24, 2022 compared to the third quarter ended december 25, 2021 net sales increased 5.9% to $514.6 million from $485.9 million in the prior-year period. consolidated same store sales decreased 3.6% with retail store same store sales decreasing 0.8% and e-commerce same store sales decreasing 15.2%. the increase in net sales was the result of the incremental sales from new stores opened over the past twelve months, partially offset by the decrease in consolidated same store sales. higher average unit retail prices, driven in part by inflation, further contributed to the increase in net sales. gross profit was $187.8 million, or 36.5% of net sales, compared to $191.7 million, or 39.4% of net sales, in the prior-year period. gross profit decreased primarily due to higher freight expense and cost of merchandise. the decrease in gross profit rate of 290 basis points was driven primarily by a 190 basis-point decrease in merchandise margin and 100 basis points of deleverage in buying, occupancy and distribution center costs. the decline in merchandise margin rate was driven primarily by a 180 basis-point headwind from higher freight expense. selling, general and administrative expenses were $115.3 million, or 22.4% of net sales, compared to $99.5 million, or 20.5% of net sales, in the prior-year period. the increase in selling, general and administrative expenses was primarily a result of higher store-related expenses, store payroll, and marketing expenses compared to the prior-year period. selling, general and administrative expenses as a percentage of net sales increased by 190 basis points primarily as a result of higher store-related expenses and store payroll. income from operations decreased $19.7 million to $72.5 million, or 14.1% of net sales, compared to $92.2 million, or 19.0% of net sales, in the prior-year period, primarily due to the factors noted above. net income was $52.8 million, or $1.74 per diluted share, compared to net income of $69.2 million, or $2.27 per diluted share in the prior-year period. excluding a $0.04 per share tax benefit related primarily to income tax accounting for share-based compensation, net income per diluted share was $2.23 in the prior-year period. operating results for the nine months ended december 24, 2022 compared to the nine months ended december 25, 2021 net sales increased 11.5% to $1.232 billion from $1.105 billion in the prior-year period. consolidated same store sales increased 1.8% with retail store same store sales increasing 3.6% and e-commerce same store sales decreasing 7.5%. the increase in net sales was the result of the incremental sales from new stores opened over the past twelve months and an increase of 1.8% in consolidated same store sales, which saw an increase in average unit retail prices, driven in part by inflation. gross profit was $454.7 million, or 36.9% of net sales, compared to $426.2 million, or 38.6% of net sales, in the prior-year period. gross profit increased primarily due to increased sales. the decrease in gross profit rate of 170 basis points was driven by 120 basis points of deleverage in buying, occupancy and distribution center costs and a 50 basis-point decrease in merchandise margin. the decline in merchandise margin rate was driven primarily by a 90 basis-point headwind from higher freight expense, partially offset by growth in exclusive brand penetration. selling, general and administrative expenses were $285.7 million, or 23.2% of net sales, compared to $230.3 million, or 20.8% of net sales, in the prior-year period. the increase in selling, general and administrative expenses was primarily a result of higher store payroll, store-related expenses, and marketing expenses compared to the prior-year period. selling, general and administrative expenses as a percentage of net sales increased by 230 basis points primarily as a result of an increase in store-related expenses, store payroll, and marketing expenses. income from operations decreased $26.9 million to $169.1 million, or 13.7% of net sales, compared to $195.9 million, or 17.7% of net sales, in the prior-year period, primarily due to the factors noted above. net income was $124.1 million, or $4.09 per diluted share, compared to net income of $147.7 million, or $4.86 per diluted share in the prior-year period. net income per diluted share in the current-year and prior-year periods includes an approximately $0.03 and $0.17 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. excluding the tax benefits, net income per diluted share in the current-year period was $4.06, compared to $4.69 in the prior-year period. current business our preliminary consolidated same store sales in fiscal january have declined 1.5% compared to the prior-year period, driven by a 16.0% decrease in e-commerce sales, partially offset by growth in retail store same store sales of 1.2%. balance sheet highlights as of december 24, 2022 cash of $50.4 million. $59.1 million drawn under our $250 million revolving credit facility. fiscal year 2023 outlook the company is providing updated guidance for the fiscal year ending april 1, 2023, superseding in its entirety the previous guidance issued in its second quarter earnings report on october 26, 2022. as a result, for the fiscal year ending april 1, 2023, the company now expects: to open 43 new stores (33 stores opened q3 year-to-date). total sales of $1.67 billion to $1.68 billion, representing growth of 12.2% to 12.9% over the prior year. same store sales range of approximately 0.5% to 1.0%, with retail store same store sales of approximately 2.5% to 3.0% and e-commerce same store sales of (10.5)% to (9.5)%. gross profit between $611 million and $615 million, or approximately 36.6% of sales. gross profit includes an estimated 140 basis point decline from freight expense, partially offset by 40 basis points of product margin expansion. income from operations between $228 million and $232 million. this represents approximately 13.7% to 13.8% of sales. interest expense of $6.0 million. effective tax rate of 25.1% for the remaining three months of the year. net income of $167.2 million to $170.0 million. net income per diluted share of $5.51 to $5.60 based on 30.4 million weighted average diluted shares outstanding. capital expenditures between $90 million and $95 million. fiscal year 2023 is a 53-week year and the company expects to generate approximately $34.0 million of sales and earn approximately $0.19 per diluted share in the 53rd week, which is included in the above guidance range. for the fiscal fourth quarter ending april 1, 2023, the company expects: total sales of $438 million to $448 million, representing growth of 14.4% to 17.0% over the prior year. same store sales range of approximately (3.0)% to (0.5)%, with retail store same store sales of flat to 2.0% growth and e-commerce same store sales of (20.0)% to (16.0)%. gross profit between $156 million and $160 million, or approximately 35.7% of sales. gross profit includes an estimated 290 basis point decline from freight expense, partially offset by 40 basis points of product margin expansion. income from operations between $59 million and $63 million. this represents approximately 13.5% to 14.0% of sales. net income per diluted share of $1.42 to $1.51 based on 30.4 million weighted average diluted shares outstanding. conference call information a conference call to discuss the financial results for the third quarter of fiscal year 2023 is scheduled for today, january 25, 2023, at 4:30 p.m. et (1:30 p.m. pt). investors and analysts interested in participating in the call are invited to dial (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 supplemental financial presentation is also available on the investor relations section of the company’s website. a telephone replay of the call will be available until february 25, 2023, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13735762. 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 336 stores in 41 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) december 24, march 26, 2022 2022 50,392 20,674 14,811 9,662 592,151 474,300 51,524 37,195 708,878 541,831 231,651 155,247 307,146 241,147 197,502 197,502 60,766 60,813 6,509 3,315 1,512,452 1,199,855 59,071 28,549 153,934 131,394 182,790 133,408 49,226 43,117 445,021 336,468 27,401 26,895 308,165 234,584 2,655 2,232 783,242 600,179 3 3 — — 208,945 199,054 529,621 405,477 (9,359 ) (4,858 ) 729,210 599,676 1,512,452 1,199,855 boot barn holdings, inc. consolidated statements of operations (in thousands, except per share data) (unaudited) thirteen weeks ended thirty-nine weeks ended december 24, december 25, december 24, december 25, 2022 2021 2022 2021 514,553 485,904 1,231,954 1,104,948 326,739 294,245 777,214 678,711 187,814 191,659 454,740 426,237 115,318 99,467 285,669 230,288 72,496 92,192 169,071 195,949 2,258 1,667 4,345 5,392 63 43 (210 ) 161 70,301 90,568 164,516 190,718 17,529 21,337 40,372 42,981 52,772 69,231 124,144 147,737 1.77 2.34 4.17 5.01 1.74 2.27 4.09 4.86 29,813 29,637 29,790 29,518 30,294 30,443 30,340 30,382 boot barn holdings, inc. consolidated statements of cash flows (in thousands) (unaudited) thirty-nine weeks ended december 24, december 25, 2022 2021 124,144 147,737 25,968 19,800 9,562 7,807 47 54 35,203 28,701 101 1,834 250 150 — (258 ) 506 689 (4,571 ) 5,797 (117,851 ) (109,882 ) (14,430 ) (41,596 ) (3,194 ) (608 ) 19,571 84,411 32,785 73,490 423 1,306 (21,464 ) (28,876 ) 87,050 190,556 (83,056 ) (39,749 ) (83,056 ) (39,749 ) 30,522 — (626 ) (112,085 ) (4,501 ) (2,710 ) 329 5,554 25,724 (109,241 ) 29,718 41,566 20,674 73,148 50,392 114,714 58,324 41,694 4,002 3,497 27,474 9,620 boot barn holdings, inc. store count quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended quarter ended december 24, september 24, june 25, march 26, december 25, september 25, june 26, march 27, 2022 2022 2022 2022 2021 2021 2021 2021 321 311 300 289 278 276 273 266 12 10 11 11 11 3 3 8 — — — — — (1 ) — (1 ) 333 321 311 300 289 278 276 273 boot barn holdings, inc. selected store data december 24, september 24, june 25, march 26, december 25, september 25, june 26, march 27, 2022 2022 2022 2022 2021 2021 2021 2021 (3.6 ) % 2.3 % 10.0 % 33.3 % 54.2 % 61.7 % 78.9 % 26.9 % 333 321 311 300 289 278 276 273 3,598 3,451 3,333 3,194 3,063 2,940 2,915 2,854 10,806 10,751 10,717 10,648 10,597 10,575 10,563 10,455 1,320 966 1,031 1,094 1,372 965 942 792
