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Sportsman's Warehouse (SPWH) Earnings Beat in Q4, Sales Down
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Sportsman's Warehouse (SPWH - Free Report) posted better-than-expected earnings in the fourth quarter of fiscal 2022 wherein the bottom line beat the Zacks Consensus Estimate but declined year over year.
This presently Zacks Rank #3 (Hold) company posted adjusted earnings of 33 cents a share, outshining the Zacks Consensus Estimate of 27 cents. However, the bottom line decreased from 49 cents a share earned in the year-ago quarter. This marked the company’s fifth straight earnings beat.
Consolidated net sales of $379.3 million dropped 8.9% year over year and came below the Zacks Consensus Estimate of $380 million, owing to reduced sales demand from consumer inflationary pressures and recessions, somewhat offset by the store openings in the last year. Same-store sales also fell 12.5% year over year during the fiscal fourth quarter.
Sportsman's Warehouse Holdings, Inc. Price, Consensus and EPS Surprise
Gross profit fell 10.1% year over year to $122.8 million. Also, the gross margin contracted 40 basis points (bps) to 32.4% on reduced overall product margins on promotional activity. This was somewhat offset by lower transportation and freight expenses.
Selling, general and administrative (SG&A) expenses were $106.7 million, down from $113.4 million, mainly owing to lower payroll and bonus expenses, partly offset by increased rent and depreciation expenses from the addition of new stores in 2022. As a rate of sales, SG&A came in at 28.1% versus 27.2% seen in the fourth quarter of fiscal 2021. Adjusted EBITDA plunged 24.9% to $28.9 million.
Other Financials
Sportsman's Warehouse ended the quarter with cash and cash equivalents of $2.4 million, net debt of $85.1 million and total shareholders’ equity of $293.1 million. It had $87.5 million of borrowings outstanding under its revolving credit facility. Inventory was $399.1 million, up from $386.6 million at the end of the year-earlier period.
Cash generated from operating activities was $46.8 million during the fiscal year that ended Jan 28, 2023.
In the fourth quarter, management repurchased nearly 0.3 million shares of its common stock and returned $2.3 million to the shareholders. During fiscal 2022, the company made repurchases of 6.8 million shares, returning capital of $64.7 million. At the end of the fourth quarter, it had $10.3 million remaining under the authorized repurchase program.
Outlook
For the first quarter of fiscal 2023, net sales are likely to be in the bracket of $265-$270 million, with same-store sales to decline 17-19%.
Adjusted loss per share for the impending quarter is envisioned to be 35-40 cents. We note that the macroeconomic backdrop and inflationary pressures are concerning. Also, the unusual wet and cold weather in the western U.S. is further hurting the company’s performance.
Nonetheless, management is on track to open 15 stores in 2023 and remains focused on boosting its merchandising and omnichannel capabilities. Although results in the first half of fiscal 2023 are likely to be pressured, management expects improvements in the back half.
Price Performance
This grocery retailer’s stock movement shows that its shares have increased 1.3% in the past six months compared with the industry’s 15.6% growth.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings per share (EPS) suggests growth of 4.3% and 41.7%, respectively, from the year-ago reported figures. URBN delivered a negative earnings surprise of 7.1% in the trailing four quarters.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO delivered an earnings surprise of 23.3% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 1.3% and 15.5%, respectively, from the year-ago reported figures.
Stitch Fix, an online personal styling retailer, currently carries a Zacks Rank of 2. The company has a trailing four-quarter negative earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Stitch Fix’s current financial-year EPS suggests growth of 1.2% from the year-ago reported figure.
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Sportsman's Warehouse (SPWH) Earnings Beat in Q4, Sales Down
Sportsman's Warehouse (SPWH - Free Report) posted better-than-expected earnings in the fourth quarter of fiscal 2022 wherein the bottom line beat the Zacks Consensus Estimate but declined year over year.
This presently Zacks Rank #3 (Hold) company posted adjusted earnings of 33 cents a share, outshining the Zacks Consensus Estimate of 27 cents. However, the bottom line decreased from 49 cents a share earned in the year-ago quarter. This marked the company’s fifth straight earnings beat.
Consolidated net sales of $379.3 million dropped 8.9% year over year and came below the Zacks Consensus Estimate of $380 million, owing to reduced sales demand from consumer inflationary pressures and recessions, somewhat offset by the store openings in the last year. Same-store sales also fell 12.5% year over year during the fiscal fourth quarter.
Sportsman's Warehouse Holdings, Inc. Price, Consensus and EPS Surprise
Sportsman's Warehouse Holdings, Inc. price-consensus-eps-surprise-chart | Sportsman's Warehouse Holdings, Inc. Quote
Gross profit fell 10.1% year over year to $122.8 million. Also, the gross margin contracted 40 basis points (bps) to 32.4% on reduced overall product margins on promotional activity. This was somewhat offset by lower transportation and freight expenses.
Selling, general and administrative (SG&A) expenses were $106.7 million, down from $113.4 million, mainly owing to lower payroll and bonus expenses, partly offset by increased rent and depreciation expenses from the addition of new stores in 2022. As a rate of sales, SG&A came in at 28.1% versus 27.2% seen in the fourth quarter of fiscal 2021. Adjusted EBITDA plunged 24.9% to $28.9 million.
Other Financials
Sportsman's Warehouse ended the quarter with cash and cash equivalents of $2.4 million, net debt of $85.1 million and total shareholders’ equity of $293.1 million. It had $87.5 million of borrowings outstanding under its revolving credit facility. Inventory was $399.1 million, up from $386.6 million at the end of the year-earlier period.
Cash generated from operating activities was $46.8 million during the fiscal year that ended Jan 28, 2023.
In the fourth quarter, management repurchased nearly 0.3 million shares of its common stock and returned $2.3 million to the shareholders. During fiscal 2022, the company made repurchases of 6.8 million shares, returning capital of $64.7 million. At the end of the fourth quarter, it had $10.3 million remaining under the authorized repurchase program.
Outlook
For the first quarter of fiscal 2023, net sales are likely to be in the bracket of $265-$270 million, with same-store sales to decline 17-19%.
Adjusted loss per share for the impending quarter is envisioned to be 35-40 cents. We note that the macroeconomic backdrop and inflationary pressures are concerning. Also, the unusual wet and cold weather in the western U.S. is further hurting the company’s performance.
Nonetheless, management is on track to open 15 stores in 2023 and remains focused on boosting its merchandising and omnichannel capabilities. Although results in the first half of fiscal 2023 are likely to be pressured, management expects improvements in the back half.
Price Performance
This grocery retailer’s stock movement shows that its shares have increased 1.3% in the past six months compared with the industry’s 15.6% growth.
Solid Picks in Retail
We have highlighted three top-ranked stocks, namely Urban Outfitters (URBN - Free Report) , American Eagle Outfitters (AEO - Free Report) and Stitch Fix (SFIX - Free Report) .
Urban Outfitters, a leading apparel and accessories retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings per share (EPS) suggests growth of 4.3% and 41.7%, respectively, from the year-ago reported figures. URBN delivered a negative earnings surprise of 7.1% in the trailing four quarters.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO delivered an earnings surprise of 23.3% in the last reported quarter.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and EPS suggests growth of 1.3% and 15.5%, respectively, from the year-ago reported figures.
Stitch Fix, an online personal styling retailer, currently carries a Zacks Rank of 2. The company has a trailing four-quarter negative earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Stitch Fix’s current financial-year EPS suggests growth of 1.2% from the year-ago reported figure.