Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective [1] - The approach does not prioritize market-driven dynamics or future price action, instead emphasizing long-term earnings power and competitive dynamics [1] - Most recommendations will be holds, indicating a cautious approach to market conditions, with only a small fraction of companies deemed suitable for purchase at any time [1] Group 2 - The articles aim to provide important information for future investors and introduce skepticism in a generally bullish market [1]

Core Insights - Boot Barn reported strong operational gains with a 19.1% sales growth for Q1 FY2026 and a 38.1% increase in diluted earnings per share (GAAP) compared to Q1 FY2025, despite falling short of analyst expectations for revenue and net income [1][2] Financial Performance - Revenue for Q1 FY2026 was $504.1 million, below the consensus estimate of $561.8 million, while earnings per share (GAAP) were $1.74, slightly under the $1.77 estimate [1][2] - Gross profit increased to $197.2 million, reflecting a gross margin of 39.1%, up from 37.0% in Q1 FY2025, driven by better buying power and a growing share of exclusive brand sales [6] - Same-store sales growth was 9.4%, significantly higher than the previous year's 1.4% [2][5] Business Operations - Boot Barn operates 473 locations nationwide, focusing on western and work-related footwear, apparel, and accessories [3] - The company opened 14 new stores during the quarter, contributing to top-line growth [5] - E-commerce accounted for 8.7% of net sales, with both brick-and-mortar and online platforms showing strong performance [5] Strategic Focus - Recent strategies include building brand identity, expanding the store base, developing exclusive brands, growing e-commerce, and fostering customer loyalty through a rewards program [4] - Exclusive brands accounted for 38.6% of consolidated sales in FY2025, with a goal to reduce sourcing risk from China to just 5% in the second half of FY2026 [7] Market Outlook - Boot Barn raised its full-year FY2026 sales outlook to between $2.10 billion and $2.18 billion, projecting a 10% to 14% increase over the prior year [10] - For Q2 FY2026, revenue guidance is set at $487 million to $495 million, with same-store sales growth projected at 4.5% to 6.5% [11]

Company Performance - Boot Barn Holdings, Inc. reported strong fiscal Q1 results with significant sales momentum and rapid earnings growth [1] - The company raised its fiscal year guidance, indicating confidence in continued performance [1] Industry Insights - The western footwear and apparel retail sector is experiencing robust demand, contributing to the positive financial results of companies like Boot Barn [1]

Core Insights - BAD BEAT Investing, led by Quad 7 Capital, has been providing investment opportunities for nearly 12 years, focusing on both long and short trades [1] - The team is recognized for their February 2020 recommendation to sell everything and go short, maintaining an average position of 95% long and 5% short since May 2020 [1] - The investment strategy emphasizes short- and medium-term investments, income generation, special situations, and momentum trades [1] Group 1 - The company comprises a team of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences [1] - BAD BEAT Investing aims to educate investors to become proficient traders through a comprehensive playbook, providing in-depth research with clear entry and exit targets [1] - The firm has a proven track record of success in its investment strategies [1] Group 2 - Benefits of BAD BEAT Investing include understanding market dynamics, executing well-researched trade ideas weekly, and access to multiple chat rooms [2] - Subscribers receive daily summaries of key analyst upgrades and downgrades, along with learning opportunities in basic options trading and extensive trading tools [2]

Financial Performance - Boot Barn Holdings Inc reported quarterly earnings of $1.74 per share, exceeding the analyst consensus estimate of $1.52 per share [1] - The company reported quarterly sales of $504.067 million, surpassing the analyst consensus estimate of $492.339 million [1] Guidance Update - Boot Barn raised its FY2026 GAAP EPS guidance from $5.50-$6.40 to $5.80-$6.70 [2] - The sales guidance was boosted from $2.070 billion-$2.150 billion to $2.100 billion-$2.180 billion [2] Growth Highlights - CEO John Hazen noted a strong start to fiscal 2026, with high-single digit consolidated same-store sales growth and 19% overall revenue growth [3] - Demand was broad-based, showing strength across all major merchandise categories and geographies [3] Stock Performance - Boot Barn shares gained 0.2% to trade at $172.16 following the earnings announcement [3] Analyst Ratings - Piper Sandler analyst Peter Keith maintained an Overweight rating and raised the price target from $185 to $218 [5] - Keybanc analyst Ashley Owens also maintained an Overweight rating, increasing the price target from $195 to $210 [5] - BTIG analyst Janine Stichter maintained a Buy rating and raised the price target from $200 to $218 [5]

Boot Barn (BOOT) reported $504.07 million in revenue for the quarter ended June 2025, representing a year- over-year increase of 19.1%. EPS of $1.74 for the same period compares to $1.20 a year ago. The reported revenue represents a surprise of +1.68% over the Zacks Consensus Estimate of $495.72 million. With the consensus EPS estimate being $1.55, the EPS surprise was +12.26%. Here is how Boot Barn performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall St ...

Company Performance - Boot Barn reported quarterly earnings of $1.74 per share, exceeding the Zacks Consensus Estimate of $1.55 per share, and up from $1.20 per share a year ago, representing an earnings surprise of +12.26% [1] - The company posted revenues of $504.07 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.68%, compared to year-ago revenues of $423.39 million [2] - Over the last four quarters, Boot Barn has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Boot Barn shares have increased approximately 16.5% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.18 on revenues of $483.33 million, and for the current fiscal year, it is $6.29 on revenues of $2.15 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Boot Barn belongs, is currently ranked in the bottom 17% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Boot Barn's stock may be influenced by the overall outlook for the industry [8]

Financial Data and Key Metrics Changes - First quarter revenue increased by 19% to $504 million, with consolidated same store sales rising by 9.4% [5][17] - Earnings per diluted share grew by 38% to $1.74 compared to $1.26 in the prior year [5][19] - Merchandise margin rate increased by 180 basis points year-over-year, contributing to a gross profit increase of 26% to $197 million [5][17][18] Business Line Data and Key Metrics Changes - New store growth: 14 new stores opened in Q1, bringing the total to 473 stores across 49 states [5][6] - Same store sales: Brick and mortar same store sales increased by 9.5%, driven by an 8.5% increase in transactions [7][8] - Ecommerce same store sales grew by 9.3%, with bootbarn.com accounting for approximately 75% of online sales [10][17] Market Data and Key Metrics Changes - The denim business showed strong performance, with double-digit growth in both men's and women's categories [8][31] - The work boots business experienced low single-digit positive comp growth, indicating a steady recovery [12][62] Company Strategy and Development Direction - The company is focused on four strategic initiatives: new store growth, same store sales, omnichannel expansion, and merchandise margin expansion [5][12] - Plans to double the store count in the U.S. over the next several years, with a target of opening 65 to 70 new stores in fiscal 2026 [6][23] - Exclusive brand penetration increased to 40.6% of sales, with a goal to reach 50% over the next five to six years [12][49] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding overall consumer sentiment and macroeconomic uncertainty, particularly in the second half of the year [15][21] - Despite challenges, the company remains confident in its ability to execute its strategic initiatives and drive growth [26][78] - The company raised its full-year guidance due to strong Q1 results and positive momentum into Q2 [20][21] Other Important Information - Inventory increased by 23% year-over-year to $774 million, with markdowns as a percentage of inventory below historical levels [19][20] - The company repurchased approximately 78,000 shares for $12.5 million as part of its $200 million share repurchase program [20] Q&A Session Summary Question: Drivers of demand strength in Q1 and July acceleration - Management noted that transaction growth was a key driver, with broad-based strength across all regions and categories, particularly in denim [30][31] Question: Markdown levels relative to last year - Markdowns remained low compared to last year and historical levels, with expectations for this trend to continue [34][36] Question: Exclusive brand marketing initiatives - The company is focusing on marketing its exclusive brands, with successful campaigns for Hawx and Cody James, targeting blue-collar customers [38][40] Question: Tariff-related price increases - Price increases from suppliers remain at mid-single digit levels, with reticketing expected to be completed by August [42][43] Question: Competitive landscape and share gain opportunities - Management believes the company is well-positioned relative to competitors, especially with exclusive brands and inventory management [68][70] Question: Inventory management and buying plans - The company feels confident in its inventory flow and believes it has enough inventory to meet guidance and potential upside [76][77] Question: Future strategic initiatives - Management is focused on current strategic priorities and is not considering new initiatives at this time [78][79]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations for the company [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, cash flows, and accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 28, 2025, shows an increase in total assets to $2.09 billion, driven by higher cash and inventories, with total liabilities and stockholders' equity also increasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $95,319 | $69,770 | | Inventories | $774,060 | $747,191 | | Total current assets | $908,744 | $863,960 | | Total assets | $2,093,826 | $2,018,021 | | **Liabilities & Equity** | | | | Total current liabilities | $358,654 | $353,349 | | Total liabilities | $922,420 | $886,964 | | Total stockholders' equity | $1,171,406 | $1,131,057 | | Total liabilities and stockholders' equity | $2,093,826 | $2,018,021 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the thirteen weeks ended June 28, 2025, net sales grew 19.1% to $504.1 million, leading to a 25.8% increase in gross profit and a rise in net income to $53.4 million Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Thirteen Weeks Ended June 28, 2025 | Thirteen Weeks Ended June 29, 2024 | | :--- | :--- | :--- | | Net sales | $504,067 | $423,386 | | Gross profit | $197,221 | $156,749 | | Income from operations | $70,720 | $50,222 | | Net income | $53,408 | $38,909 | | Diluted EPS | $1.74 | $1.26 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $1.171 billion at June 28, 2025, primarily due to net income, partially offset by common stock repurchases - Stockholders' equity increased to **$1,171.4 million** at June 28, 2025, up from **$1,131.1 million** at March 29, 2025[15](index=15&type=chunk) - The increase in equity was primarily due to **$53.4 million** in net income, offset by **$12.6 million** in common stock repurchases and **$4.2 million** for tax withholding on net share settlements[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $73.9 million for the thirteen-week period, while cash was used in investing and financing activities, resulting in a $25.5 million increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Thirteen Weeks Ended June 28, 2025 | Thirteen Weeks Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $73,850 | $41,311 | | Net cash used in investing activities | $(31,462) | $(27,066) | | Net cash used in financing activities | $(16,839) | $(6,705) | | Net increase in cash and cash equivalents | $25,549 | $7,540 | | Cash and cash equivalents, end of period | $95,319 | $83,387 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business operations, accounting policies, and financial matters, including an increase in store count, a new stock repurchase program, and a higher effective tax rate - The company operated **473 stores** in 49 states as of June 28, 2025, an increase from **459 stores** at the end of the previous fiscal year[20](index=20&type=chunk) - In May 2025, the Board of Directors authorized a new stock repurchase program for up to **$200 million** of its common stock, with **77,959 shares** repurchased for **$12.5 million** during the quarter[37](index=37&type=chunk)[40](index=40&type=chunk) - The company operates as a single operating and reportable segment, with **91% of net sales** from stores and **9% from e-commerce** for the quarter[47](index=47&type=chunk)[54](index=54&type=chunk) - The effective income tax rate was **25.1%** for the quarter, up from **22.9%** in the prior-year period, primarily due to a lower tax benefit from stock-based compensation[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong first-quarter fiscal 2026 financial performance, highlighting increased net sales, expanded gross profit margin, and a robust liquidity position [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net sales for the thirteen weeks ended June 28, 2025, increased 19.1% to $504.1 million, driven by same-store sales growth and new stores, while gross profit margin improved to 39.1% - Net sales increased by **$80.7 million (19.1%)** year-over-year, driven by a **9.4%** increase in consolidated same-store sales and incremental sales from new stores[137](index=137&type=chunk) - Gross profit rate increased by **210 basis points** to **39.1%**, primarily due to a **180 basis-point** improvement in merchandise margin rate and **30 basis points** of leverage in buying, occupancy, and distribution costs[138](index=138&type=chunk) - SG&A expenses increased by **$20.0 million (18.8%)** due to operating more stores, but decreased by **10 basis points** as a percentage of sales to **25.1%**[139](index=139&type=chunk)[140](index=140&type=chunk) Store Operating Data | Metric | Thirteen Weeks Ended June 28, 2025 | Thirteen Weeks Ended June 29, 2024 | | :--- | :--- | :--- | | Same Store Sales growth | 9.4% | 1.4% | | Stores operating at end of period | 473 | 411 | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $95.3 million in cash and no outstanding debt on its $250.0 million revolving credit facility, while estimating $115.0 million to $120.0 million in capital expenditures for fiscal 2026 - Primary liquidity sources are cash flows from operating activities and the **$250.0 million** Wells Fargo Revolver, which had no borrowings outstanding as of June 28, 2025[147](index=147&type=chunk)[154](index=154&type=chunk) - Estimated total capital expenditures for fiscal 2026 are between **$115.0 million** and **$120.0 million**, net of **$35.5 million** in landlord allowances[150](index=150&type=chunk) Summary Cash Flow (in thousands) | Cash Flow Activity | Thirteen Weeks Ended June 28, 2025 | Thirteen Weeks Ended June 29, 2024 | | :--- | :--- | :--- | | Operating activities | $73,850 | $41,311 | | Investing activities | $(31,462) | $(27,066) | | Financing activities | $(16,839) | $(6,705) | [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company is exposed to interest rate risk from its variable-rate credit facility, but this risk is mitigated by having no outstanding borrowings as of June 28, 2025 - The company is exposed to interest rate risk from its variable-rate credit facility, but had no amounts outstanding as of June 28, 2025[168](index=168&type=chunk) - There were no material changes in the market risks described in the Fiscal 2025 10-K[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 28, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 28, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[173](index=173&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 28, 2025[174](index=174&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, unregistered sales of equity securities, and other disclosures [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in incidental litigation, but management believes none of the pending legal matters will materially affect its financial position or results - The company states that none of its current legal proceedings are expected to have a material effect on its financial condition or results[85](index=85&type=chunk)[178](index=178&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 29, 2025 - As of June 28, 2025, there were no material changes to the risks described in the company's Fiscal 2025 10-K[179](index=179&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board authorized a new $200 million stock repurchase program in May 2025, under which the company repurchased 77,959 shares for $12.5 million during the first quarter - On May 8, 2025, the Board authorized a **$200 million** stock repurchase program with no expiration date[180](index=180&type=chunk) Share Repurchases for Thirteen Weeks Ended June 28, 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Approx. Dollar Value Remaining ($000) | | :--- | :--- | :--- | :--- | :--- | | May 2025 | 44,359 | $152.50 | 16,200 | $197,466 | | June 2025 | 61,759 | $161.37 | 61,759 | $187,500 | | **Total** | **106,118** | **$157.66** | **77,959** | **$187,500** | [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter ended June 28, 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[186](index=186&type=chunk)

Q1 Fiscal 2026 Results - Q1 Total Sales reached $504 million, showing a 19% growth compared to the previous year[6] - Q1 Consolidated Same Store Sales (SSS) increased by 9.4%[7] - Q1 Merchandise Margin increased by 180 basis points[8] - Q1 Earnings Per Share (EPS) reached $1.74[9] Strategic Initiatives - The company aims for profitable new units with a 15% annual growth, targeting ~$3.2 million in Year 1 Net Sales per store with a ~$1.7 million total net investment and a ~53% Year 1 Cash on Cash Return[13, 15] - The company is planning to open new stores, targeting a total of 524 to 529 stores by the end of FY26[14] - The high-end guidance for Consolidated SSS% in FY26 is 3.5%[19] - Exclusive Brands account for approximately 35% of sales volume[28] FY26 Guidance - Full Year Fiscal 2026 Total Net Sales are projected to be between $2,100 million and $2,180 million, representing a growth of 10% to 14%[34] - Q2 Fiscal 2026 Total Net Sales are guided between $487 million and $495 million, a 14% to 16% increase year-over-year[35] - Full Year Fiscal 2026 Merchandise Margin is guided between 49.9% and 50.3%[34]