Financial Results Announcement - Boot Barn Holdings, Inc. announced preliminary financial results for Q3 ended December 28, 2024, to be discussed at the 2025 ICR Conference on January 13, 2025 [5] - The investor presentation and press release dated January 10, 2025, are attached as Exhibits 99.1 and 99.2 [10] ICR Conference Participation - The company will host a fireside chat at the 2025 ICR Conference on January 13, 2025, at 10:30 a.m. Eastern Time, which will be webcast live [7] Presentation and Information Disclaimer - The company disclaims any obligation to update or revise the information in the presentation [9] - The presentation is available on the company's investor relations website, but the company reserves the right to discontinue its availability [9]

January Effect and Seasonal Trends - The January Effect, a seasonal trend where stocks, especially small-cap equities, tend to outperform, is approaching [1] - The S&P 500 Small-Cap Stock Index (SML) underperformed the S&P 500 Large-Cap Index (SPX) by -2.49% in December, making it an opportune time to invest in stocks poised for a January rally [2] - Stocks like Intel (INTC), Etsy (ETSY), and MarineMax (HZO) are highlighted as potential beneficiaries of the January Effect due to their recent pullbacks [2][5] Top Stocks to Consider - Six stocks recommended by industry experts for potential January rallies: Intel (INTC), Walgreens Boots Alliance (WBA), Etsy (ETSY), Boot Barn Holdings (BOOT), Photronics (PLAB), and MarineMax (HZO) [4] - Intel (INTC) is down 58% in 2024, making it a contrarian play, while Walgreens Boots Alliance (WBA) is down 57% but saw a stock price surge on Dec 10 due to acquisition talks [5][6] - Etsy (ETSY) is down 34% over the past three years but up 14% over the past three months, with its marketplace thriving post-holiday [7][8] - Boot Barn Holdings (BOOT) has a year-to-date return of 93.97%, driven by its lifestyle branding [9] - Photronics (PLAB) is down 15.52% year-to-date but up 13.59% over the past three months, positioned at the heart of the semiconductor supply chain [10][11] - MarineMax (HZO) has a negative total return of 17.58% year-to-date but is up 9.08% over the past month, dominating the recreational boating market [11][12] Small-Cap and Mid-Cap Opportunities - Small-cap stocks, typically with market capitalizations of $250 million to $2 billion, are not the only equities worth considering, as mid-cap stocks like Etsy (ETSY) and Boot Barn Holdings (BOOT) also show potential [4][7][9] - Etsy (ETSY) is a mid-cap e-commerce marketplace operator with a market capitalization of $6.9 billion, showing signs of recovery from a slump [7][8] - Boot Barn Holdings (BOOT) has jumped 10.27% in the past month, driven by its lifestyle branding and resonance with country music trends [9] Semiconductor Industry Insights - Photronics (PLAB), a small-cap semiconductor equipment maker, is critical to the semiconductor supply chain, with global demand for semiconductors driving its potential growth [10][11] - Intel (INTC), despite being down 58% in 2024, remains a key player in the semiconductor industry, with potential for a rebound [5] Tax-Loss Harvesting and Stock Selection - Tax-loss harvesting in December, followed by repurchasing in January, may contribute to the January Effect by boosting stock prices [13] - Key financial metrics for selecting stocks with potential January rallies include year-to-date total return (down 40% or more), market capitalization, dividend payments, EPS growth (above 10%), return on equity (over 15%), and a debt-to-equity ratio below 1 [14][15] Online Brokers and Stock Screeners - Top online brokers like Fidelity Investments, Charles Schwab, and Interactive Brokers offer tools for tax-loss harvesting and stock screening [13][16] - Stock screeners like Trade Ideas, FINVIZ, and Zacks provide advanced filtering options for identifying stocks with potential January rallies [17]

BOOT Stock Performance - BOOT stocks gained 26 5% in the past six months outperforming the broader retail industry which declined by 2 7% and the S&P 500 which gained 14 9% [1][3] - BOOT closed at $135 14 below its 52-week high of $169 83 reached on Oct 17 2024 potentially due to profit-taking or market uncertainties [3] Strategic Expansion and Growth - Boot Barn plans to open 60 new stores in fiscal 2025 with 15 opened in Q2 bringing the total to 425 stores as of Sept 28 [6] - The company aims to reach nearly 1 000 locations over time targeting markets with high demand for western and work apparel [6] Financial Performance - Q2 fiscal 2025 revenues increased by 13 7% with retail store same-store sales up 4 3% and e-commerce same-store sales up 10 1% [5] - The company raised its full-year revenue growth guidance to 12 4%-14 4% from 8 9%-11% and expects same-store sales to increase 3%-5% [9][10] - Earnings per share are projected to be $5 30-$5 60 up from the prior guidance of $5 05-$5 35 [10] Digital and Omnichannel Initiatives - E-commerce sales grew driven by the Boot Barn app and AI-powered "Cassidy" tool with 10% of online sales coming through the app [7] - E-commerce now accounts for 9 5% of net sales showcasing the company's investment in digital channels [7] Margin and Profitability - Boot Barn improved its merchandise margin by 70 basis points last quarter highlighting efficient cost management and exclusive brand strategy [8] - The company's margin resilience supports profitability even as it invests in growth [8] Analyst Confidence and Valuation - Wall Street analysts raised earnings per share estimates with the Zacks Consensus Estimate for the current fiscal year up 2 2% to $5 48 and next fiscal year up 2 8% to $6 56 [11] - BOOT's forward P/E ratio of 22 is above the industry's 16 04 reflecting strong market confidence in its future potential [13] Long-Term Investment Case - Boot Barn's strategic expansion digital transformation and strong margin control position it as a compelling long-term investment despite its elevated valuation [14][16] - The company's solid fundamentals and positive outlook suggest further upside potential [16]

Market Sentiment and Options Activity - Investors should closely monitor Boot Barn Holdings, Inc (BOOT) due to significant activity in the options market, particularly the Nov 15, 2024 $50 00 Call, which exhibited some of the highest implied volatility among equity options [1] - High implied volatility indicates that the market anticipates a substantial future price movement for Boot Barn shares, potentially driven by an upcoming event that could trigger a significant rally or sell-off [2] Analyst Sentiment and Fundamental Outlook - Boot Barn holds a Zacks Rank 1 (Strong Buy) in the Retail-Apparel and Shoes industry, which ranks in the Bottom 40% of the Zacks Industry Rank [3] - Over the past 60 days, five analysts have raised their estimates for the current quarter, with no downward revisions, leading to an increase in the Zacks Consensus Estimate from $2 02 to $2 04 per share [3] Trading Strategy Implications - The high implied volatility suggests a potential trading opportunity, as options traders often seek such conditions to sell premium and capitalize on time decay, aiming for the underlying stock to move less than expected by expiration [4]

Company Performance - Boot Barn's shares dropped 25 5% in October, with the largest decline occurring on October 28 after the company reported its fiscal Q2 2025 results [1] - Despite the stock decline, the company's Q2 financial results were strong, with revenue reaching $426 million, exceeding the expected $412 million, driven by a 5% increase in same-store sales [4] - The company raised its full-year EPS guidance from $5 05-$5 35 to $5 30-$5 60, reflecting stronger-than-expected performance [5] Leadership Change - CEO Jim Conroy, who led Boot Barn for 12 years and oversaw its IPO in 2014, announced his departure to join Ross Stores, causing investor concern [2] - Chief Digital Officer John Hazen was appointed as interim CEO, but the leadership transition overshadowed the strong Q2 results [3] - The apparel retail business is considered straightforward, and Boot Barn has a history of success, suggesting that fears about the leadership change may be premature [7] Growth Prospects - Boot Barn ended Q2 with nearly 430 locations and aims to expand to 900 locations by fiscal 2030, indicating significant growth potential [8] - The company's exclusive brands are growing as a percentage of sales, enhancing profitability, and new locations have a short payback period of about 1 5 years [8] - Despite the leadership change, the company's long-term ambitions and economic fundamentals remain unchanged, with potential to create long-term shareholder value [9] Market Reaction - Prior to the 26% drop in October, Boot Barn's shares had more than doubled year-to-date, despite the company expecting only 13% growth in fiscal 2025 [6] - The stock pullback was seen as healthy, even though the financial results exceeded expectations [6]

Tech Giants and Earnings Influence - Tech giants' earnings results significantly influence the stock market, but a single quarter's performance should not form the basis for long-term investment decisions [1] Top Wall Street Analysts' Approach - Top Wall Street analysts focus on a company's ability to navigate short-term challenges and deliver long-term returns through strong execution [2] - Three stocks favored by top analysts are highlighted based on their past performance and current market conditions [2] Fiserv (FI) - Fiserv reported a 17% year-over-year increase in adjusted earnings per share and 15% organic revenue growth in Q3 [3] - Tigress Financial analyst Ivan Feinseth raised the price target for FI stock to $244 from $190, citing the company's strong position in digital payments and transaction solutions [4] - Fiserv's Q3 revenue growth was driven by integrated financial services solutions and strong customer relationships, with the company expanding its customer base and market share [5] - Strategic initiatives include expanding the Clover portfolio, offering services to enterprise merchants, extending real-time payments, and entering new markets [6] Boot Barn (BOOT) - Boot Barn reported better-than-expected Q2 fiscal 2025 results and raised its full-year guidance, but the stock dropped due to the planned departure of CEO Jim Conroy [7] - Baird analyst Jonathan Komp upgraded BOOT stock to buy, citing a compelling risk/reward setup post-earnings pullback and confidence in the remaining management team [8] - Boot Barn plans to open 60 new stores in fiscal 2025, maintaining over 15% annual growth in store count for the third consecutive year [9] - The company shows robust momentum in comparable store sales across all regions and categories [9] Chipotle Mexican Grill (CMG) - Chipotle reported better-than-expected Q3 adjusted earnings but lagged in sales despite a 3.3% rise in traffic [10] - Stifel analyst Chris O'Cull reaffirmed a buy rating with a $70 price target, noting Chipotle's 6% comparable restaurant sales growth, close to Wall Street's 6.2% estimate [11] - Q4 comps are expected to be around 5.5%, with full-year comps in the 7.5% range, driven by the smoked brisket offering [12] - Chipotle is focusing on improving throughput, aiming to increase from mid-20s to mid-30s entrées per 15 minutes through equipment upgrades, operational improvements, and technology [13]

Company Performance - Boot Barn's fiscal second-quarter total net sales increased by 12% to over $849 million, driven by a nearly 5% rise in same-store sales [2] - GAAP net income rose to more than $29 million ($0.95 per share) from the year-ago profit of almost $28 million [2] - The top-line result slightly exceeded the consensus analyst estimate, while profitability fell just short of the average projection [3] Leadership Change - Boot Barn's long-serving CEO Jim Conroy announced his departure, effective Nov 24, to join Ross Stores as co-CEO and later sole CEO [4] - The CEO's sudden departure led to a significant 21% drop in Boot Barn's share price over the week [1] Analyst Sentiment - Despite the CEO's resignation, several analysts maintained or upgraded their buy ratings on Boot Barn's stock following the earnings release [5][6] - Baird upgraded its recommendation to outperform (buy) from neutral, reflecting increased bullishness on the company [6]

Store Operations and Growth Strategy - Boot Barn operates 425 stores across 46 states as of September 28, 2024, with a strong e-commerce presence including websites like bootbarn.com and the Boot Barn app[102] - New store openings are a key growth strategy, with pre-opening costs expensed as incurred and initial sales typically higher before normalizing[114][115] - The company operated 425 stores at the end of September 2024, compared to 371 stores in the prior-year period[142] Revenue and Sales Performance - The company's net sales include revenue from retail locations, e-commerce, and shipping fees, with revenue recognized upon purchase or delivery[105] - Net sales increased by $51.3 million (13.7%) to $425.8 million for the thirteen weeks ended September 28, 2024, driven by new store sales and a 4.9% increase in consolidated same-store sales[126] - Net sales increased by $91.0 million (12.0%) to $849.2 million for the twenty-six weeks ended September 28, 2024, with a 3.1% increase in consolidated same-store sales[133] - Same-store sales growth was 4.9% for the thirteen weeks ended September 28, 2024, and 3.1% for the twenty-six weeks ended September 28, 2024[142] Gross Profit and Cost of Goods Sold - Gross profit is derived from net sales minus cost of goods sold, which includes merchandise costs, occupancy, freight, and other inventory-related expenses[116][118] - Gross profit increased by $18.9 million (14.1%) to $152.9 million for the thirteen weeks ended September 28, 2024, with a 10 basis-point increase in gross profit rate to 35.9%[127] - Gross profit increased by $33.7 million (12.2%) to $309.6 million for the twenty-six weeks ended September 28, 2024, with a 10 basis-point increase in gross profit rate to 36.5%[134] Selling, General, and Administrative (SG&A) Expenses - Selling, general, and administrative (SG&A) expenses include labor, operating costs, and corporate expenses, expected to increase with store growth[120][121] - SG&A expenses increased by $17.6 million (18.4%) to $112.9 million for the thirteen weeks ended September 28, 2024, primarily due to higher store payroll, marketing, and legal expenses[128][129] - SG&A expenses increased by $28.3 million (14.8%) to $219.4 million for the twenty-six weeks ended September 28, 2024, driven by higher store payroll, marketing, and incentive-based compensation[135] Net Income and Financial Performance - Net income increased by $1.7 million to $29.4 million for the thirteen weeks ended September 28, 2024, compared to $27.7 million in the prior-year period[133] - Net income increased by $6.4 million to $68.3 million for the twenty-six weeks ended September 28, 2024, compared to $61.9 million in the prior-year period[139] Capital Expenditures and Investments - The company plans to invest between $115.0 million and $120.0 million in capital expenditures for fiscal 2025, including investments in a new distribution center in Kansas City, Missouri, and improvements to e-commerce and IT infrastructure[145] - Net cash used in investing activities was $65.4 million for the twenty-six weeks ended September 28, 2024, primarily due to capital expenditures for store construction and distribution center investments[158] Credit Facility and Debt Management - The company has a $250.0 million syndicated senior secured asset-based revolving credit facility (Wells Fargo Revolver) with a sublimit for letters of credit of $10.0 million, maturing on July 11, 2027[146] - Interest rates for the Wells Fargo Revolver range from 1.00% to 1.25% for Term SOFR loans and from 0.00% to 0.25% for base rate loans, with a commitment fee of 0.25% per annum on unutilized revolving loans[147] - The borrowing base of the Wells Fargo Revolver is calculated monthly based on eligible credit card receivables, commercial accounts, inventory, and available reserves[148] - The company was in compliance with the Wells Fargo Revolver debt covenants as of September 28, 2024[154] - The company is subject to interest rate risk due to variable-rate borrowings under its credit facility, with no amounts outstanding under the Wells Fargo Revolver as of September 28, 2024[162] Cash Flow and Liquidity - As of September 28, 2024, the company had $37.4 million in cash and cash equivalents, a decrease from $75.8 million as of March 30, 2024[155] - Net cash provided by operating activities was $33.5 million for the twenty-six weeks ended September 28, 2024, driven by net income of $68.3 million and non-cash lease expense of $32.2 million[156] - Net cash used in financing activities was $6.6 million for the twenty-six weeks ended September 28, 2024, including $7.6 million paid in taxes related to restricted stock vesting[160] Fiscal Year and Reporting Periods - The company's fiscal year consists of 52 or 53 weeks, with fiscal 2025 and fiscal 2024 both being 52-week years[124] - Same store sales are calculated for stores open at least 13 full fiscal months, with specific criteria for temporary closures, relocations, and acquisitions[107][108]

Stock Performance and Technical Analysis - Boot Barn (BOOT) has experienced a significant decline of 22.3% over the past four weeks, indicating strong selling pressure [1] - The stock is currently in oversold territory with an RSI reading of 20.16, suggesting a potential trend reversal [3] - RSI is a momentum oscillator that measures price movements, with readings below 30 indicating oversold conditions [2] - Oversold stocks may present entry opportunities for investors anticipating a rebound [2] Fundamental Analysis and Earnings Estimates - Wall Street analysts have shown strong agreement in raising earnings estimates for BOOT [1] - The consensus EPS estimate for BOOT has increased by 4.2% over the last 30 days [4] - An upward trend in earnings estimate revisions typically leads to price appreciation in the near term [4] - BOOT currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [4] Market Sentiment and Potential Reversal - The heavy selling of BOOT shares appears to be exhausting itself, potentially leading to a trend reversal [3] - The combination of technical indicators (RSI) and fundamental improvements (earnings estimates) suggests a potential turnaround for BOOT in the near term [3][4]

Investment Strategy - The investment approach focuses on long-only investments, evaluating companies from an operational, buy-and-hold perspective [1] - The strategy does not prioritize market-driven dynamics or future price actions but emphasizes understanding long-term earnings power and competitive industry dynamics [1] - Most recommendations are holds, with only a small fraction of companies considered as buys at any given time [1] Article Focus - Articles provide insights into operational aspects of companies and industries, offering valuable information for future investors [1] - The content aims to introduce a healthy dose of skepticism in a market that tends to be bullish-biased [1] Disclosure - The author has no stock, option, or derivative positions in the mentioned companies and no plans to initiate such positions within the next 72 hours [2] - The article represents the author's personal opinions and is not influenced by compensation or business relationships with the mentioned companies [2]