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Bull of the Day: Boot Barn (BOOT)

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Boot Barn Holdings, Inc. (BOOT - Free Report) stock is down roughly 1% over the last year after it suffered a massive three-month downturn despite a positive fiscal second quarter. With that said, the western and work-related boot and clothing retailer’s current growth projections appear impressive and analysts have become much more positive about Boot Barn’s future earnings recently.

Overview

Boot Barn was founded in 1978. Today, the company is one of the largest and fastest-growing lifestyle retail chains focused on western and work-related footwear, apparel, and accessories in the U.S. Investors can think of Boot Barn as a cowboy boot powerhouse that boasts 208 stores across 29 states.

Last quarter, Boot Barn saw its revenues surged 17.5% to reach $168.1 million. Maybe more importantly, the company’s same-store sales jumped 11.3%. On top of growth in this vital retail metric, Boot Barn expanded its store count by three.

Price Movement

As we briefly touched on at the top, shares of BOOT have tumbled 44% since the company reported its fiscal Q2 2019 earnings results on October 25. We should mention that its industry has fallen 11% during this same stretch and the S&P 500 is down 7%. Still, Boot Barn’s selloff pushed its stock price down 1% on the year.

BOOT stock currently sits at roughly $16 a share. This marks a 50% downturn from its 52-week high of $31.61 per share and marks what could be a solid buying opportunity for those high on Boot Barn.


Valuation

Boot Barn’s recent downturn has helped its valuation picture appear much more attractive. BOOT is currently trading near its 12-month low at 12.2X forward 12-month Zacks Consensus EPS estimates, which marks a discount compared to its industry’s 22.1X average and the S&P’s 15.1X.

Better yet, Boot Barn has traded as high as 26.3X over the last year, with a one-year median of 20.8X. The chart below also helps us see that BOOT’s valuation is hardly stretched at the moment, and actually looks somewhat attractive—especially considering its growth prospects.

 

 

Outlook

Moving on, Boot Barn’s current quarter revenues are projected to surge 12% to hit $251.62 million, based on our current Zacks Consensus Estimate. Meanwhile, the retailer’s current full-year revenues are projected to pop 13.5% to reach $769.2 million.

Looking ahead to the following fiscal year, Boot Barn’s full-year revenues are projected to climb 12.3% above our current year estimate.

Earnings Trends

Boot Barn’s bottom-line projections appear even stronger. The firm’s adjusted quarterly earnings are expected to climb 32.6% from the year-ago quarter to hit $0.61 per share.

More importantly and impressively, its full-year earnings are projected to skyrocket 78.6% to touch $1.25 a share. Our estimates also call for Boot Barn’s fiscal 2020 EPS figure to expand 15.5% above our current year projection.  

Investors should also note that the company’s longer-term earnings revisions have trended unanimously in the right direction recently. This means that at least some analysts are more positive about the company’s future earnings than they were in the recent past.

Bottom Line

Boot Barn is currently a Zacks Rank #1 (Strong Buy) based, for the most part, on its recent earnings estimate revision trends. The company also boasts an “A” grade for Value in our Style Score system. Plus, Boot Barn has crushed our quarterly earnings estimates in the trailing four periods.

Investors interested in the broader footwear and apparel industry might also consider Abercrombie & Fitch (ANF - Free Report) , Shoe Carnival (SCVL - Free Report) , and Fossil Group (FOSL - Free Report) , which are all also currently Zacks Rank #1 (Strong Buy) stocks.

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