Yahoo Finance Boot Barn Holdings Inc (BOOT) (Q4 2024) Earnings Call Transcript Highlights: Navigating ...
Full Year Fiscal 2024 Revenue: Grew to approximately $1.7 billion, nearly 100% growth over pre-pandemic levels.
New Stores: Opened 55 new stores, exceeding original plans.
Exclusive Brands Penetration: Increased by 370 basis points for the year.
Earnings Per Diluted Share: Achieved $4.80, nearly triple pre-pandemic earnings.
Fourth Quarter Same-Store Sales: Declined 5.9% on a consolidated basis.
Fourth Quarter Merchandise Margin: Expanded by 160 basis points.
Fourth Quarter Net Sales: Decreased 8.7% to $388 million.
Fourth Quarter Gross Profit: Decreased 11% to $139 million or 35.9% of sales.
Fourth Quarter Net Income: Was $29 million or $0.96 per diluted share.
Inventory: Increased 2% over the prior year to $599 million.
Fiscal 2025 Sales Guidance: Expected to be $1.8 billion at the high end, representing 8% growth.
Fiscal 2025 Earnings Per Diluted Share Guidance: Expected to be $4.85.
New Store Openings Plan for Fiscal 2025: Anticipate adding 60 new stores.
Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Boot Barn Holdings Inc (NYSE:BOOT) reported record revenue levels and a significant expansion of exclusive brands by 370 basis points.
The company successfully opened 55 new stores, exceeding the initial plan, and demonstrated a strong cash-on-cash return of 60% in the first year for these new stores.
Merchandise margin increased by 160 basis points, driven by freight improvements and supply chain efficiencies.
Boot Barn Holdings Inc (NYSE:BOOT) has a solid foundation with multiple growth levers, including plans to open at least 500 more stores in the United States.
The B Rewarded customer database grew by 18% year over year, reaching 8.4 million total active customers, enhancing customer engagement and personalized marketing.
Negative Points
Same-store sales declined by 5.9% in the fourth quarter, indicating challenges in driving organic store growth.
E-commerce sales saw a decline of 7.6%, reflecting ongoing challenges in the digital segment despite improvements.
The company experienced a decrease in net sales by 8.7% in the fourth quarter, influenced by the decrease in consolidated same-store sales.
Gross profit decreased by 11% to $139 million, with a 70 basis point decrease in gross profit rate due to increased costs.
Income from operations and net income both saw significant declines in the fourth quarter, with income from operations at $38 million compared to $63 million in the prior year.
Q & A Highlights
Q: Can you elaborate on the drivers of the same-store sales acceleration in April and May, particularly across categories? A: James Conroy, CEO of Boot Barn, explained that the improvement was broad-based across all major product departments, from work boots to ladies' apparel. The improvement was consistent across both retail and e-commerce channels and all regions of the country. The increase was driven by a sequential improvement in transactions rather than higher average unit retail or ticket sizes.
Q: Could you help break down your EBIT margin forecast between the flat gross margin guide and the deleverage on SG&A embedded in the forecast? A: James Watkins, CFO of Boot Barn, noted that the plan includes 110 basis points of merchandise margin expansion, balanced by a similar amount of deleverage in buying, occupancy, and distribution center costs due to negative same-store sales. SG&A deleverage includes pressures from health insurance, other inflationary cost increases, and higher costs related to the new corporate headquarters.
Q: Are you experiencing a lift from Beyonce's influence in the market? A: CEO James Conroy indicated that while Beyonce's adoption of Western styles is positive, it has not had a meaningful impact on Boot Barn's business. The improvement in sales is attributed to broader factors rather than celebrity influence.
Q: What is the potential sustainability of the current momentum over the balance of the year relative to the macro backdrop? A: James Watkins, CFO, mentioned that while current trends are positive, the company is cautious about the macroeconomic uncertainties and upcoming events like the presidential election and a shorter holiday shopping period, which have been factored into their conservative guidance.
Q: How are the new exclusive brands performing, and are there any updates on their development? A: CEO James Conroy shared that the new exclusive brands have generally met or exceeded expectations, with no significant downside risks anticipated. The brands are expected to grow and continue to expand their presence in the market.
Q: What are you doing to improve customer retention and engagement, especially considering the growth in your loyalty file? A: James Conroy explained that Boot Barn tailors its customer communications based on the specific segments, ensuring relevant engagement whether the customer is more interested in work-related products or fashion items. This targeted approach helps in improving customer retention and engagement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
