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Boot Barn (BOOT - Free Report) is a Zacks Rank #5 (Strong Sell) that operates as a lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing.
Investors had been having a great year, with the stock taking off in January and accelerating higher after a solid earnings report that month. At its peak, the stock was up about over 40 % on the year.
But almost all of the gains have been erased after a very disappointing earnings report took the stock down 15% in one day.
About the Company
Boot Barn is headquartered in Irvine, CA.The company was founded in 1978 and employs over 4,000 people.
Boot Barn has 315 stores across 40 states and sells its products through e-commerce websites, including bootbarn.com; sheplers.com; and countryoutfitter.com.
BOOT is valued at $2 billion and has a Forward PE of 12. The stock holds Zacks Style Scores of “A” in Growth, “A” in Value, but “C” in Momentum. The stock pays no dividend.
Q4 Earnings
Boot Barn reported earnings for Q4 on May 17th, beating expectations by 5%. This was the eleventh straight EPS beat, which started back in 2020. During that stretch, the earnings momentum took the stock from $20 to $134 at its peak. However, the magnitude of the beats has gotten smaller and failed to impress investors.
Unfortunately for investors, the company guided Q1 and FY24 lower.
Boot Barn now expects Q1 at $0.79-0.85 v the $1.23 expected. Revenues are expected much lower and SSS are expected -9% to -7%.
For FY24, the company now expects $4.70-5.00 v the $6.07 previously. They see SSS at -6.5% to -4.5%
The guide lower took the stock down over 15%.
Estimates
The bad guide forced analysts to take their estimates lower.
Over the last 7 days, numbers for the current quarter plummeted from $1.23 to $0.87, or 28%.
For the current year, analysts lowered estimates from $5.93 to $5.24, or 12%.
Technical Take
The stock was holding up well last year and even saw a big rally to start the year. But after the earnings report, BOOT has fallen to the lower end of the 2022 trading range. The move also broke the 200-day moving average for the first time since January.
The bulls have lost the momentum and will need to get price back above the 200-day at $69 to take control back. Until then, investors should be cautious as the stock could trend lower.
The $60 level could off support, but if not, look for the 2022 low at $50 to be challenged.
In Summary
For the bulls to pull themselves up by the bootstraps, they will need some help in the coming quarters. Until there is a fundamental improvement in earnings estimates or a technical move back above the 200-day, the stock will struggle.
For those interested in the sector, a better option might be Hennes & Mauritz (HNNMY - Free Report) . The stock is a Zacks Rank #1 (Strong Buy) and is up over 25% on the year.
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Bear of the Day: Boot Barn Holdings (BOOT)
Boot Barn (BOOT - Free Report) is a Zacks Rank #5 (Strong Sell) that operates as a lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing.
Investors had been having a great year, with the stock taking off in January and accelerating higher after a solid earnings report that month. At its peak, the stock was up about over 40 % on the year.
But almost all of the gains have been erased after a very disappointing earnings report took the stock down 15% in one day.
About the Company
Boot Barn is headquartered in Irvine, CA.The company was founded in 1978 and employs over 4,000 people.
Boot Barn has 315 stores across 40 states and sells its products through e-commerce websites, including bootbarn.com; sheplers.com; and countryoutfitter.com.
BOOT is valued at $2 billion and has a Forward PE of 12. The stock holds Zacks Style Scores of “A” in Growth, “A” in Value, but “C” in Momentum. The stock pays no dividend.
Q4 Earnings
Boot Barn reported earnings for Q4 on May 17th, beating expectations by 5%. This was the eleventh straight EPS beat, which started back in 2020. During that stretch, the earnings momentum took the stock from $20 to $134 at its peak. However, the magnitude of the beats has gotten smaller and failed to impress investors.
Unfortunately for investors, the company guided Q1 and FY24 lower.
Boot Barn now expects Q1 at $0.79-0.85 v the $1.23 expected. Revenues are expected much lower and SSS are expected -9% to -7%.
For FY24, the company now expects $4.70-5.00 v the $6.07 previously. They see SSS at -6.5% to -4.5%
The guide lower took the stock down over 15%.
Estimates
The bad guide forced analysts to take their estimates lower.
Over the last 7 days, numbers for the current quarter plummeted from $1.23 to $0.87, or 28%.
For the current year, analysts lowered estimates from $5.93 to $5.24, or 12%.
Technical Take
The stock was holding up well last year and even saw a big rally to start the year. But after the earnings report, BOOT has fallen to the lower end of the 2022 trading range. The move also broke the 200-day moving average for the first time since January.
The bulls have lost the momentum and will need to get price back above the 200-day at $69 to take control back. Until then, investors should be cautious as the stock could trend lower.
The $60 level could off support, but if not, look for the 2022 low at $50 to be challenged.
In Summary
For the bulls to pull themselves up by the bootstraps, they will need some help in the coming quarters. Until there is a fundamental improvement in earnings estimates or a technical move back above the 200-day, the stock will struggle.
For those interested in the sector, a better option might be Hennes & Mauritz (HNNMY - Free Report) . The stock is a Zacks Rank #1 (Strong Buy) and is up over 25% on the year.