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BOOT Q2 Earnings Beat, Same-Store Sales Rise Y/Y, FY2025 Guidance Up

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Boot Barn Holdings, Inc. (BOOT - Free Report) reported impressive second-quarter fiscal 2025 results, wherein both revenues and earnings beat the Zacks Consensus Estimate. Also, the bottom and top lines increased year over year. Following the impressive performance, this Irvine, CA-based footwear company raised its fiscal 2025 guidance.

In the second quarter, Boot Barn focused on expanding its store base, strengthening its omnichannel capabilities and boosting merchandise margin through supply-chain efficiencies and exclusive brand penetration. 

Despite this impressive performance, BOOT’s stock fell sharply by 10.6% in after-hours trading yesterday following the announcement that Jim Conroy will step down as its CEO, effective Nov. 22, to take on the CEO role at Ross Stores (ROST - Free Report) .

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

Boot Barn’s Quarterly Performance: Key Insights

Boot Barn’s adjusted earnings of 95 cents per share increased 5.6% from 90 cents reported in the year-ago quarter. Also, the metric beat the Zacks Consensus Estimate of 93 cents per share.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales of $425.8 million jumped 13.7% year over year. Also, the metric surpassed the Zacks Consensus Estimate of $423 million. The growth in net sales was attributed to additional sales from new store openings and the rise in consolidated same-store sales. The company opened 15 new stores in the second quarter, bringing its total store count to 425.

Consolidated same-store sales rose 4.9% year over year, driven by a 4.3% increase in retail store sales and a 10.1% increase in e-commerce sales. The Zacks Consensus Estimate for same-store sales growth was pegged at 3.2%.

BOOT’s Margins & Costs Update

Gross profit increased 14.1% to $152.9 million. The metric increased mainly due to higher sales and improved merchandise margins, partially offset by occupancy costs from new store openings.

The gross margin increased 10 basis points (bps) to 35.9% due to a 70-bps improvement in the merchandise margin, partially offset by a 60-bps deleverage in buying, occupancy, and distribution center costs. The rise in the merchandise margin was largely due to supply-chain efficiencies, while the deleverage in costs resulted from occupancy expenses associated with new stores.

Selling, general and administrative (SG&A) expenses were $112.9 million, up 18.4% year over year. The increase was mainly due to higher store payroll and store-related costs from operating more locations, along with increased incentive-based compensation, marketing and legal expenses in the current year. 

As a percentage of net sales, SG&A expense rose 100 bps year over year to 26.5%. The increase reflected higher incentive-based compensation, legal and marketing expenses this year, partially offset by a decrease in store payroll expenses.

Operating income increased 3.6% to $40 million. The operating margin of 9.4% contracted 90 bps from 10.3% last year.

Boot Barn’s Financial Health Snapshot

BOOT ended the quarter with $37.4 million in cash and cash equivalents. Notably, the company did not draw any funds from its $250 million revolving credit facility during the quarter. Average inventory per store increased approximately 10.5% on a same-store basis from Sept. 30, 2023.

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Image Source: Zacks Investment Research

BOOT’s Fiscal 2025 Outlook

For the fiscal third quarter, Boot Barn estimates net sales to be in the band of $582-$595 million, indicating growth of 11.8-14.3% from the year-ago level.

The company expects same-store sales to increase in the range of 3.5-6%. Retail store same-store sales are anticipated to increase in the 3-5% band and e-commerce same-store sales are likely to increase in the range of 7.5-10%. Operating income is estimated to be between $82.7 million and $87.3 million, or about 14.2-14.7% of sales. Earnings are projected to be in the range of $1.96-$2.07 per share.

During fiscal 2025, management expects to open 60 stores. It foresees total revenues to be between $1.87 billion and $1.91 billion, up from the previous estimated range of $1.82-$1.85 billion, indicating growth of 12.4-14.4% from the year-ago level.

BOOT anticipates same-store sales to increase in the band of 3-5%. Retail store same-store sales are anticipated to grow 2.5-4.5% and e-commerce same-store sales are expected to improve in the band of 7.5- 9.5%.

Gross profit is envisioned to be between $696.9 million and $713.4 million, representing approximately 37.2-37.4% of sales. SG&A expenses are expected to be between $476.5 million and $480.4 million. The metric is likely to be about 25.4-25.2% of sales. 

Income from operations is projected to be between $220.4 million and $233 million, or about 11.8-12.2% of sales. Net income is estimated to be in the range of $164.4-$173.7 million.  Earnings are projected to be in the range of $5.30-$5.60 per share compared with the previous estimated band of $5.05-$5.35. 

Capital expenditures are predicted to be between $115 million and $120 million, net of estimated landlord tenant allowances of $30.2 million.

Shares of this Zacks Rank #2 (Buy) company have gained 24% as compared with the industry’s 0.9% growth in the past three months.

Other Key Picks

Other top-ranked stocks in the same space are The Gap, Inc. (GAP - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .

The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It 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 The Gap’s fiscal 2024 earnings and sales indicates growth of 31.5% and 0.5%, respectively, from the year-ago actuals. GAP has a trailing four-quarter average earnings surprise of 142.8%.

Abercrombie is a specialty retailer of premium, high-quality casual apparel. It carries a Zacks Rank of 2 at present. ANF delivered a 16.8% earnings surprise in the last reported quarter. 

The consensus estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 63.4% and 13%, respectively, from the fiscal 2024 levels. ANF has a trailing four-quarter average earnings surprise of 28%.

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