Core Insights - Boot Barn (BOOT) reported quarterly earnings of $2.43 per share, exceeding the Zacks Consensus Estimate of $2.38 per share, and up from $1.81 per share a year ago, representing an earnings surprise of 2.10% [1] - The company posted revenues of $608.17 million for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.01%, but up from $520.4 million year-over-year [2] - Boot Barn has surpassed consensus EPS estimates in all four of the last quarters and has topped revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of Boot Barn's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.26 on revenues of $456.32 million, and for the current fiscal year, it is $5.84 on revenues of $1.91 billion [7] Industry Context - The Retail - Apparel and Shoes industry, to which Boot Barn belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Boot Barn's stock performance [5][6]

Company Overview - Boot Barn operates 438 stores across 46 states and has a strong e-commerce presence through multiple websites and an app[102]. - Boot Barn's product offerings include western and work-related footwear, apparel, and accessories, targeting a broad demographic[102]. Financial Performance - Net sales increased by $87.8 million, or 16.9%, to $608.2 million for the thirteen weeks ended December 28, 2024, compared to $520.4 million for the same period in 2023[126]. - Gross profit rose by $39.8 million, or 20.0%, to $238.9 million, with a gross profit margin of 39.3%, up from 38.3%[127]. - Income from operations increased by $24.3 million, or 32.4%, to $99.5 million, representing 16.4% of net sales, up from 14.4%[131]. - Net income for the thirteen weeks ended December 28, 2024, was $75.1 million, compared to $55.6 million for the same period in 2023[134]. - For the thirty-nine weeks ended December 28, 2024, net sales increased by $178.8 million, or 14.0%, to $1.457 billion[135]. - Gross profit for the thirty-nine weeks increased by $73.5 million, or 15.5%, to $548.5 million, with a gross profit margin of 37.6%[136]. Expenses - Selling, general and administrative (SG&A) expenses increased by $15.4 million, or 12.5%, to $139.4 million, with SG&A as a percentage of net sales decreasing to 22.9% from 23.8%[128][130]. - SG&A expenses for the thirty-nine weeks rose by $43.8 million, or 13.9%, to $358.8 million, maintaining a percentage of 24.6% of net sales[137][138]. - Selling, general and administrative (SG&A) expenses are anticipated to rise due to stock-based compensation and increased store count[119]. Cash Flow and Investments - Net cash provided by operating activities for the thirty-nine weeks ended December 28, 2024, was $190.7 million, compared to $240.5 million for the same period in 2023[160][161]. - Net cash used in investing activities was $108.3 million for the thirty-nine weeks ended December 28, 2024, compared to $91.3 million for the same period in 2023[162][163]. - Net cash used in financing activities was $5.3 million for the thirty-nine weeks ended December 28, 2024, down from $60.2 million for the same period in 2023[164][165]. - The company plans to invest between $115.0 million and $120.0 million in capital expenditures for fiscal 2025, including a new distribution center in Kansas City[148]. Debt and Credit Facilities - The company has a $250.0 million revolving credit facility with Wells Fargo, maturing on July 11, 2027[149]. - The borrowing base of the Wells Fargo Revolver is calculated monthly based on eligible credit card receivables, commercial accounts, inventory, and available reserves[151]. - As of December 28, 2024, the Company was in compliance with the Wells Fargo Revolver debt covenants[156]. - The Company pays a commitment fee of 0.25% per annum on the actual daily amount of unutilized revolving loans[150]. - The applicable margin for Term SOFR loans ranges from 1.00% to 1.25%[150]. - Total interest expense incurred on the Wells Fargo Revolver during the thirty-nine weeks ended December 28, 2024, was $0.6 million, with a weighted average interest rate of 7.8%[152]. - The Company incurred a total interest expense of $0.4 million and $1.5 million for the thirteen and thirty-nine weeks ended December 30, 2023, respectively, with a weighted average interest rate of 8.5%[152]. Operational Metrics - The company focuses on net sales and gross profit as key performance indicators, with additional metrics including same store sales and new store openings[106]. - Same store sales are calculated from stores open for at least 13 months, and include e-commerce sales, with new store openings contributing to overall growth[109][111]. - Gross profit is calculated as net sales minus cost of goods sold, which includes various operational costs and is expected to increase as the company grows[115]. - The fiscal year ends on the last Saturday of March, with both fiscal 2025 and fiscal 2024 consisting of 52 weeks[124]. - The company emphasizes the importance of consumer discretionary spending and is sensitive to economic conditions and consumer confidence[100]. - The company aims to provide a one-stop shopping experience, leveraging its extensive store network for economies of scale and enhanced supplier relationships[103].

Financial Data and Key Metrics Changes - Revenue increased by 17% in Q3 fiscal 2025, with consolidated same store sales growth of 8.6% [6][15] - Earnings per diluted share reached $2.43, up from $1.81 in the prior year period, exceeding guidance by $0.36 [7][19] - Gross profit increased by 20% to $239 million, with a gross profit rate of 39.3%, reflecting a 100 basis point increase [15][16] Business Line Data and Key Metrics Changes - Same store sales in brick-and-mortar increased by 8.2%, while e-commerce sales grew by 11.1% [6][15] - Merchandise margin expanded by 130 basis points, driven by supply chain efficiencies and better buying economies [7][13] - Exclusive brand penetration increased by 180 basis points, contributing to merchandise margin expansion [13][19] Market Data and Key Metrics Changes - The company opened 13 new stores in Q3, bringing the total to 438 stores across 46 states [8][9] - The company plans to open 21 additional stores in Q4, aiming for a total of 60 new stores for the fiscal year [9][20] - Active customers in loyalty programs increased to 9.4 million, a 15% increase year-over-year [12] Company Strategy and Development Direction - The company is focused on expanding its store base, driving same store sales, strengthening omnichannel leadership, and expanding merchandise margins [8][10][12] - The company believes it has the potential to double its store count in the U.S. over the next several years [9] - The new Chief Digital Officer is expected to enhance the company's digital strategy and e-commerce performance [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current business tone and the start of Q4, with same store sales growth continuing [14] - The company raised its full-year guidance, expecting total sales to reach $1.92 billion, representing a 15% growth over fiscal 2024 [19] - Management noted that inventory levels are healthy, with no significant markdown risks anticipated [37] Other Important Information - The company experienced a $0.22 benefit related to the CEO transition included in Q3 earnings per diluted share [8] - SG&A expenses decreased as a percentage of sales due to the forfeiture of incentive-based compensation related to the CEO transition [16][90] Q&A Session Summary Question: Can you elaborate on traffic and demand in January? - Management noted an acceleration in both men's and women's Western categories, with a strong start to Q4 expected to continue [26][27] Question: What are the drivers of merchandise margin? - Management expects Q4 merchandise margin to increase by 120 basis points, driven by supply chain efficiencies and exclusive brand penetration [29][30] Question: How is inventory positioned for future sales? - Management expressed confidence in inventory levels, stating markdown inventory is lower than previous years and pre-COVID times [37][38] Question: What is the company's exposure to tariffs? - The company has 30% of orders from China and 25% from Mexico, with plans to negotiate pricing with vendors if tariffs increase [51][53] Question: How does the company view store density and cannibalization? - Management indicated that store placement depends on market density, with successful openings within close proximity in urban areas [59][60] Question: What are the opportunities in private label? - The company sees potential in its exclusive brands, particularly in work boots, with plans to expand offerings [70][71] Question: What are the expectations for SG&A expenses next year? - Management anticipates a flat lease expense and potential benefits from reduced incentive-based compensation next year [73][74]

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]

Company Overview - Boot Barn (BOOT) currently holds a Momentum Style Score of B, indicating a positive outlook based on its recent performance metrics [2][11] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Price Performance - Over the past week, Boot Barn shares have increased by 2.92%, while the Zacks Retail - Apparel and Shoes industry remained flat [5] - In a longer timeframe, Boot Barn's shares have risen by 9.05% over the past month, significantly outperforming the industry's 1.08% [5] - Over the last quarter, Boot Barn shares have surged by 25.02%, and they have increased by 119.8% over the past year, compared to the S&P 500's gains of 3.62% and 26.55%, respectively [6] Trading Volume - The average 20-day trading volume for Boot Barn is 633,237 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Estimates - In the past two months, 6 earnings estimates for Boot Barn have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $5.48 to $5.77 [9] - For the next fiscal year, 4 estimates have also moved upwards with no downward revisions during the same period [9] Conclusion - Considering the positive price trends, strong earnings outlook, and favorable trading volume, Boot Barn is positioned as a solid momentum pick with a Momentum Score of B and a Zacks Rank of 2 (Buy) [11]

Core Viewpoint - Boot Barn (BOOT) is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended December 2024, with a consensus outlook suggesting a positive earnings picture that could influence its near-term stock price [1][3]. Earnings Expectations - The consensus estimate for Boot Barn's quarterly earnings is $2.32 per share, reflecting a year-over-year increase of +28.2%, while revenues are projected to reach $608.22 million, up 16.9% from the previous year [3]. - The earnings report could lead to a stock price increase if the actual results exceed expectations, whereas a miss could result in a decline [2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial estimates during this period [4]. - The Most Accurate Estimate for Boot Barn is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.05%, suggesting a bullish outlook from analysts [10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Boot Barn currently holds a Zacks Rank of 2, indicating a high likelihood of beating the consensus EPS estimate [11]. Historical Performance - Boot Barn has consistently beaten consensus EPS estimates, achieving this in the last four quarters, including a +2.15% surprise in the most recent quarter [12][13]. Conclusion - Boot Barn is positioned as a compelling candidate for an earnings beat, but investors should consider other factors that may influence stock performance beyond just earnings results [14][16].

Core Insights - The article compares Gap (GAP) and Boot Barn (BOOT) to determine which stock offers better value opportunities for investors [1] Valuation Metrics - GAP has a Zacks Rank of 1 (Strong Buy), indicating a more favorable earnings estimate revision trend compared to BOOT, which has a Zacks Rank of 2 (Buy) [3] - GAP's forward P/E ratio is 11.20, significantly lower than BOOT's forward P/E of 26.99, suggesting that GAP may be undervalued [5] - GAP's PEG ratio is 1.01, while BOOT's PEG ratio is 1.51, indicating that GAP has a better balance between its price and expected earnings growth [5] - GAP's P/B ratio is 2.72, compared to BOOT's P/B of 4.51, further supporting the notion that GAP is more undervalued [6] - Based on these valuation metrics, GAP has a Value grade of A, while BOOT has a Value grade of C, highlighting GAP's superior value proposition [6]

Core Insights - Boot Barn Holdings, Inc. reported strong preliminary third-quarter fiscal 2025 results, with broad-based growth in same-store sales exceeding expectations [1][7] Financial Performance - The company's projected net sales for the third quarter are approximately $608.2 million, reflecting a 16.9% year-over-year increase [2] - Same-store sales growth is expected to be 8.6%, with retail store same-store sales increasing by 8.2% and e-commerce same-store sales rising by 11.1% [3] - Merchandise margin expanded by approximately 130 basis points, with income from operations estimated at $99.5 million, up from $75.1 million in the same period last year [4] - Earnings per share are projected to be $2.43, an increase from $1.81 per share in the previous year, including a benefit of 22 cents per share related to the CEO transition [5] Expansion Strategy - The company opened 13 new stores in the third quarter, bringing the year-to-date total to 39 new locations, with a total of 438 stores in operation [6] - Boot Barn is focused on increasing its market presence and driving revenue growth through strategic expansion in high-demand markets for western and work apparel [7]

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]