Boot Barn(BOOT) - 2021 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) Presents Boot Barn Holdings, Inc.'s unaudited condensed consolidated financial statements and notes for the periods ended December 26, 2020 Condensed Consolidated Balance Sheets Total assets decreased to $892.2 million, liabilities fell to $529.6 million, and equity rose to $362.6 million Condensed Consolidated Balance Sheet Highlights (in thousands of USD) | Account | Dec 26, 2020 | Mar 28, 2020 | | :--- | :--- | :--- | | Total Assets | $892,172 | $924,711 | | Cash and cash equivalents | $76,342 | $69,563 | | Inventories | $246,008 | $288,717 | | Total Liabilities | $529,564 | $603,018 | | Line of credit | $— | $129,900 | | Total current liabilities | $234,722 | $312,625 | | Total stockholders' equity | $362,608 | $321,693 | Condensed Consolidated Statements of Operations Net sales increased to $302.3 million for the quarter, but decreased to $634.6 million year-to-date, reflecting COVID-19 impacts Statement of Operations Summary (in thousands of USD, except per share data) | Metric | Thirteen Weeks Ended Dec 26, 2020 | Thirteen Weeks Ended Dec 28, 2019 | Thirty-Nine Weeks Ended Dec 26, 2020 | Thirty-Nine Weeks Ended Dec 28, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $302,338 | $283,997 | $634,619 | $656,947 | | Gross profit | $106,809 | $97,036 | $202,500 | $218,530 | | Income from operations | $41,626 | $34,977 | $53,466 | $63,972 | | Net income | $29,566 | $24,819 | $34,834 | $42,220 | | Diluted EPS | $1.00 | $0.85 | $1.19 | $1.45 | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $362.6 million, primarily driven by $34.8 million in net income - Total stockholders' equity grew to $362,608 thousand as of December 26, 2020, up from $321,693 thousand at March 28, 2020[16] - The growth in equity was mainly due to net income of $34,834 thousand generated during the thirty-nine weeks ended December 26, 2020[16] Condensed Consolidated Statements of Cash Flows Operating cash flow increased to $156.6 million, leading to a $6.8 million net increase in cash and cash equivalents Cash Flow Summary (in thousands of USD) | Activity | Thirty-Nine Weeks Ended Dec 26, 2020 | Thirty-Nine Weeks Ended Dec 28, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $156,604 | $76,801 | | Net cash used in investing activities | $(20,508) | $(30,521) | | Net cash used in financing activities | $(129,317) | $(17,448) | | Net increase in cash | $6,779 | $28,832 | Notes to Condensed Consolidated Financial Statements Provides detailed information on company operations, COVID-19 impact, accounting policies, and other financial disclosures - The company operates specialty retail stores and e-commerce websites, with 266 stores in 36 states as of December 26, 2020[24] - The COVID-19 pandemic has had and is expected to continue to have a significant impact on economic conditions, consumer confidence, and business performance[25] - The company's retail stores and e-commerce websites are aggregated into a single reporting segment due to similar qualitative and economic characteristics[35] Disaggregated Revenue by Channel (% of Net Sales) | Channel | Thirteen Weeks Ended Dec 26, 2020 | Thirteen Weeks Ended Dec 28, 2019 | | :--- | :--- | :--- | | Stores | 80% | 82% | | E-commerce | 20% | 18% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, highlighting Q3 sales growth and YTD sales decline, along with liquidity and capital resources Overview Boot Barn is the largest U.S. western and work-related lifestyle retail chain, operating 266 stores and e-commerce sites - As of December 26, 2020, the company operated 266 stores in 36 states, along with e-commerce sites including bootbarn.com, sheplers.com, and countryoutfitter.com[133] - The company's product offering is centered on western and work boots, complemented by apparel and accessories, targeting a broad customer base[133][134] Results of Operations Q3 net sales grew 6.5% to $302.3 million with improved gross margin, while YTD net sales decreased 3.4% to $634.6 million Thirteen Weeks Ended Dec 26, 2020 vs. Dec 28, 2019 (in millions of USD) | Metric | Q3 FY2021 | Q3 FY2020 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $302.3 | $284.0 | +6.5% | | Gross Profit | $106.8 | $97.0 | +10.1% | | Income from Operations | $41.6 | $35.0 | +19.0% | | Net Income | $29.6 | $24.8 | +19.4% | Thirty-Nine Weeks Ended Dec 26, 2020 vs. Dec 28, 2019 (in millions of USD) | Metric | YTD FY2021 | YTD FY2020 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $634.6 | $656.9 | -3.4% | | Gross Profit | $202.5 | $218.5 | -7.3% | | Income from Operations | $53.5 | $64.0 | -16.4% | | Net Income | $34.8 | $42.2 | -17.5% | - For the thirteen weeks ended Dec 26, 2020, consolidated same-store sales increased 4.6%, driven by a 16.3% increase in e-commerce same-store sales and a 1.9% increase in retail store same-store sales[168] - For the thirty-nine weeks ended Dec 26, 2020, consolidated same-store sales decreased 3.2%, as a 24.9% increase in e-commerce was offset by an 8.9% decrease in retail store sales due to COVID-19 impacts[177] Liquidity and Capital Resources Primary liquidity sources are cash from operations and credit facilities, with $76.3 million cash and no revolver borrowings - As of December 26, 2020, the company had $76.3 million in cash and cash equivalents[200] - There were no outstanding borrowings under the $165.0 million June 2015 Wells Fargo Revolver, and $111.5 million was outstanding under the 2015 Golub Term Loan[192][193] - Net cash provided by operating activities for the thirty-nine weeks ended December 26, 2020 was $156.6 million[201] - Fiscal 2021 capital expenditures are projected to be between $17.0 million and $19.0 million, net of landlord allowances[190] Item 3. Quantitative and Qualitative Disclosure of Market Risk The company is exposed to interest rate risk on its $111.5 million variable-rate term loan, with a 1.0% change impacting annual interest expense by $1.1 million - The company's primary market risk is interest rate fluctuations on its variable-rate debt[214] - As of December 26, 2020, a 1.0% change in interest rates would impact annual interest expense by approximately $1.1 million based on the $111.5 million outstanding term loan balance[214] Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of December 26, 2020, with no material changes to internal controls - The CEO and CFO concluded that as of December 26, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[219] - There were no changes in internal control over financial reporting during the quarter ended December 26, 2020, that materially affected, or are reasonably likely to materially affect, internal controls[220] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in a class-action complaint against Sheplers, Inc. regarding alleged deceptive e-commerce pricing, with costs accrued - A class-action complaint was filed against subsidiary Sheplers, Inc. on May 8, 2019, concerning alleged deceptive e-commerce pricing. The company has accrued for the estimated cost of this matter[106][224] Item 1A. Risk Factors No new risk factors are presented in this report, referring readers to the Fiscal 2020 10-K for detailed information - The report states there are no new risk factors and directs readers to the "Item 1A—Risk Factors" section in the Fiscal 2020 10-K[225] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None reported[226] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Interactive Data Files (iXBRL) - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and iXBRL data files (Exhibits 101, 104)[228]