Boot Barn Holdings, Inc. (BOOT Quick QuoteBOOT - Free Report) reported second-quarter fiscal 2027 results, wherein net sales fell short of the Zacks Consensus Estimate, while earnings surpassed the same. Both metrics increased year over year. The western and workwear retailer benefited from new-store expansion, positive comparable sales and merchandise margin improvement, aided by lower freight costs and tariff refunds.

Quarterly earnings of $1.68 per share beat the Zacks Consensus Estimate of $1.63 and increased 22.6% year over year, excluding tariff refunds. Reported earnings were $1.73 per share, including a 5-cent benefit from tariff refunds. Net sales rose 15.1% to $581.8 million, missing the consensus estimate of $585 million.

BOOT Benefits From Store Expansion and Positive Comps

Consolidated same-store sales increased 1.4% compared with 8.4% growth in the year-ago quarter. Retail store comparable sales rose 1%, supported by a 2% increase in average unit retail, partly offset by lower transactions. E-commerce comparable sales advanced 5.2% compared with 14% growth in the prior-year period.

Boot Barn opened 19 stores during the quarter, bringing its total to 584 locations across 49 states. The company opened 46 stores in the first half of fiscal 2027. Management noted that its 126 newest stores are on track to generate approximately $3.4 million in average first-year sales, exceeding initial projections by $200,000.

Boot Barn Sees Mixed Merchandise Category Trends

Men's and women's apparel continued to perform well, with denim registering positive comparable sales despite challenging year-ago comparisons. Cowboy hats and ball hats also delivered strong growth. Work boots and work apparel maintained momentum, with sales trends improving for the sixth consecutive quarter.

However, men's western boot comparable sales were slightly negative, while women's western boots remained a drag on overall performance. Management attributed the weakness partly to difficult comparisons and pricing pressures. Boot Barn is refreshing its women's boot assortment with new styles and colors ahead of the holiday season.

Boot Barn Holdings, Inc. Price, Consensus and EPS Surprise

Boot Barn Holdings, Inc. price-consensus-eps-surprise-chart | Boot Barn Holdings, Inc. Quote

BOOT Expands Margins on Lower Freight Costs

Gross profit increased 17.6% year over year to $216.5 million, with the gross margin expanding 80 basis points to 37.2%. Merchandise margin improved 190 basis points, reflecting a 130-basis-point benefit from lower freight expenses, 40 basis points from tariff refunds and 20 basis points of product-margin expansion. These gains were partly offset by 110 basis points of deleverage in buying, occupancy and distribution costs.

Selling, general and administrative expenses rose 14.5% to $146.2 million, representing 25.1% of sales compared with 25.3% a year earlier. Operating income increased 24.5% to $70.2 million, while the operating margin expanded to 12.1% from 11.2%.

Boot Barn Strengthens Capital Allocation Flexibility

Boot Barn ended the quarter with $97.4 million in cash and no outstanding borrowings under its $500-million revolving credit facility. Inventory totaled $975.3 million, increasing approximately 14% year over year, reflecting investments in new stores, exclusive brands and volume purchases.

Operating cash flow for the first six months increased to $123.7 million from $99.6 million a year earlier. Capital expenditures totaled $97.7 million. The company repurchased 240,937 shares for $35 million during the quarter. Its board authorized an additional $400 million for share repurchases, bringing the remaining authorization to approximately $468 million.

BOOT Updates Fiscal 2027 Outlook

Boot Barn lowered its fiscal 2027 sales outlook to $2.565-$2.593 billion from the previous projection of $2.580-$2.625 billion. Earnings are now expected between $8.72 and $9.00 per share compared with the earlier guidance of $8.80-$9.23, including an estimated 45-cent benefit from tariff refunds.

Consolidated same-store sales are projected to grow 0.8-2%, with retail store same-store sales growth of 0.5-1.7% and e-commerce same-store sales growth of 3-4%. Merchandise margin is now expected between $1.343 billion and $1.357 billion, or approximately 52.3% of sales, up 140 basis points year over year. The expansion includes 70 basis points from tariff refunds, 50 basis points from product-margin improvement and 20 basis points from lower freight costs.

BOOT forecasts fiscal 2027 gross profit between $985 million and $999 million, or approximately 38.4-38.5% of sales. The company expects operating income between $351 million and $362 million, or approximately 13.7-14% of sales.

Management raised its fiscal 2027 store-opening target to 75-80 locations from 70, supported by strong new-store productivity and an expanding real estate pipeline. The company now expects capital expenditures, net of estimated landlord-tenant allowances of $54.4 million, between $135 million and $140 million for fiscal 2027.

Boot Barn Prepares for Holiday Demand

For the third quarter, Boot Barn expects sales of $785-$802 million, implying year-over-year growth of 11-14%. Consolidated same-store sales are projected to range from a 1% decline to 1% growth, with both retail store same-store sales and e-commerce same-store sales ranging from down 1% to up 1%. The company plans to open approximately 20 new stores during the third quarter. Earnings are anticipated between $3.03 and $3.19 per share, including an estimated 2-cent benefit from tariff refunds.

Boot Barn expects third-quarter merchandise margin between $404 million and $413 million, or approximately 51.5% of sales, up 90 basis points year over year. The expansion includes 10 basis points from tariff refunds, 50 basis points from product margin improvement and 30 basis points from lower freight costs.

Gross profit is projected between $311 million and $319 million, implying approximately 39.6-39.8% of sales. The company envisions operating income between $123 million and $130 million, or approximately 15.7-16.2% of sales.

Management noted that consolidated comparable sales increased just 0.4% during the first four weeks of October, reflecting challenging comparisons and unusually warm weather. Nevertheless, the company remains focused on its expanded national holiday marketing campaign, refreshed merchandise assortments and the relaunch of Boot Barn Workforce. The business-to-business initiative generated approximately $100 million in sales last fiscal year and offers additional opportunities to expand its workwear customer base.

Shares of this Zacks Rank #3 (Hold) company have fallen 17.2% over the past three months compared with the industry’s decline of 9.1%.

Stocks Looking Red Hot

Vince Holding Corp. (VNCE Quick QuoteVNCE - Free Report) , a leading global luxury apparel and accessories brand, sports a Zacks Rank of 1 (Strong Buy). VNCE delivered a trailing four-quarter earnings surprise of 561.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vince Holding’s current fiscal-year sales and EPS calls for growth of 14% and 175%, respectively, from the year-ago figures.

Designer Brands Inc. (DBI Quick QuoteDBI - Free Report) , one of the world's largest designers, producers and retailers of footwear and accessories, currently sports a Zacks Rank #1.

The Zacks Consensus Estimate for Designer Brands’ current fiscal-year sales and earnings calls for growth of 0.6% and 225%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 108.1%.

Abercrombie & Fitch Co. (ANF Quick QuoteANF - Free Report) , a global, digitally led, omnichannel specialty retailer of apparel and accessories, carries a Zacks Rank #2. ANF delivered a trailing four-quarter earnings surprise of 13.6%, on average.

The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and EPS implies growth of 4.8% and 15.8%, respectively, from the year-ago figures.