Boot Barn (BOOT) Q3 Earnings Miss, Revenues Increase Y/Y

Boot Barn Holdings, Inc. BOOT came up with third-quarter fiscal 2022 results wherein the top line met the Zacks Consensus Estimate, while the bottom line missed the same. Markedly, both sales and earnings per share improved year over year, as the company successfully navigated the challenging environment, on the back of merchandising strategies and omni-channel capabilities. We note that merchandise margin remained solid.

Notably, this Zacks Rank #3 (Hold) stock has increased 11.3% in the past six months against the industry’s decline of 36.1%.

Let’s Introspect

This lifestyle retailer of western and work-related footwear, apparel and accessories posted third-quarter adjusted earnings of $2.23 per share that missed the Zacks Consensus Estimate of $2.26. Nonetheless, the bottom line improved substantially from 99 cents reported in the year-ago period. Including the benefit due to income tax accounting for share-based compensation, quarterly earnings came in at $2.27 per share, up meaningfully from $1.00 in the prior-year period.

Net sales of $485.9 million matched the Zacks Consensus Estimate. The metric surged 60.7% year over year owing to same-store sales growth and sales contribution from new stores opened over the past 12 months. Meanwhile, retail stores sales grew 64% year over year to $396.5 million, while e-commerce sales advanced 49% to $89.4 million.

Consolidated same store sales rose 54.2% in the third quarter, following an increase of 61.7% in the second quarter. Retail store same store sales climbed 55.7% for the quarter under discussion, after increasing 66% in the preceding quarter. Again, e-commerce same store sales surged 48.4% during the quarter under review. This followed an increase of 41.6% in the preceding quarter.

Boot Barn Holdings continued with its upbeat momentum into the fourth quarter, even as it cycled last year’s robust performance fueled by stimulus payments. For the fourth-quarter to date, retail stores sales jumped 49% year over year to $91.9 million, while e-commerce sales rose 62% to $18.3 million.

Boot Barn Holdings, Inc. Price, Consensus and EPS Surprise

Boot Barn Holdings, Inc. Price, Consensus and EPS Surprise

Boot Barn Holdings, Inc. price-consensus-eps-surprise-chart | Boot Barn Holdings, Inc. Quote

How Margins Fare?

Gross profit of $191.7 million soared 79.4% from the prior-year period owing to higher sales. Gross margin expanded 410 basis points to 39.4% on account of 140 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and 270 basis points jump in merchandise margin. Merchandise margin increased as a result of robust full-price selling and expansion in exclusive brand penetration. For fiscal 2022, Boot Barn Holdings projected exclusive brand penetration growth of 450 basis points compared with last fiscal.

Income from operations of $92.2 million rose significantly from $41.6 million in the year-ago quarter. Operating margin increased 520 basis points to 19%.

A Sneak Peek into Other Metrics

During the third quarter, Boot Barn Holdings opened 11 stores taking the total count to 289 stores as of Dec 25, 2021. For fiscal 2022, the company anticipates new unit growth of 10%.

We note that average inventory per store jumped 22% on a same store basis compared to Dec 26, 2020. For fiscal 2022, management envisions capital expenditures in the band of $41-$43 million.

Boot Barn Holdings ended the quarter with cash and cash equivalents of $114.7 million and stockholders’ equity of $553.3 million. During the quarter, the company repaid the remaining balance of the $50 million term loan and had zero drawn on its revolving credit facility.

Don’t Miss These Solid Bets

Here are three more favorably ranked stocks — Zumiez ZUMZ, Citi Trends CTRN and Capri Holdings CPRI.

Zumiez, a leading specialty retailer of apparel, footwear, accessories and hardgoods, flaunts a Zacks Rank #1 (Strong Buy). ZUMZ’s bottom line has outperformed the Zacks Consensus Estimate in the last reported quarter by a margin of 15.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Zumiez’s current financial year sales and EPS suggests growth of 20.2% and 63%, respectively, from the year-ago period.

Citi Trends, a specialty value retailer of apparel, accessories and home trends, sports a Zacks Rank #1. CTRN has a trailing four-quarter earnings surprise of 79.5%, on average.

The Zacks Consensus Estimate for Citi Trends’ current financial year sales and EPS suggests growth of 26.7% and 186.6%, respectively, from the year-ago period.

Capri Holdings, a global fashion luxury group, carries a Zacks Rank #2 (Buy). The company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters.

The Zacks Consensus Estimate for Capri Holdings’ current financial year sales and EPS suggests growth of 33.2% and 181.1%, respectively, from the year-ago period. CPRI has an expected EPS growth rate of 32.2% for three-five years.

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