Sportsman’s Warehouse(US:SPWH)2023-12-07 13:35Financial Performance - Net sales for the thirteen weeks ended October 28, 2023, were $340.569 million, a decrease of 5.3% compared to $359.720 million for the same period in 2022[20] - Gross profit for the thirty-nine weeks ended October 28, 2023, was $284.046 million, down 15.8% from $337.452 million in the prior year[20] - The company reported a net loss of $1.331 million for the thirteen weeks ended October 28, 2023, compared to a net income of $12.877 million for the same period in 2022[20] - For the thirty-nine weeks ended October 28, 2023, the company reported a net loss of $20.26 million compared to a net income of $29.49 million for the same period in 2022[28] - Basic loss per share for the 13 weeks ended October 28, 2023, was $(0.04), while for the 39 weeks it was $(0.54), compared to earnings per share of $0.34 and $0.71 for the same periods in 2022[70] Assets and Liabilities - Total assets increased to $980.304 million as of October 28, 2023, up from $858.960 million as of January 28, 2023[18] - Total liabilities rose to $708.048 million as of October 28, 2023, compared to $565.847 million as of January 28, 2023, reflecting an increase of 25.1%[18] - The operating lease liability, current, was $48.254 million as of October 28, 2023, compared to $45.465 million as of January 28, 2023, indicating a 6.2% increase[18] - Cash and cash equivalents increased to $2.915 million from $2.389 million, representing a growth of 22.0%[18] - Accounts receivable, net, increased to $3.105 million from $2.053 million, a rise of 51.1%[18] Cash Flow and Investments - The company experienced a significant decrease in merchandise inventories, with a net cash used in operating activities of $16.64 million in 2023 compared to a net cash provided of $14.51 million in 2022[28] - Cash flows from investing activities showed a net cash outflow of $71.17 million in 2023, up from $38.48 million in 2022, indicating increased capital expenditures[28] - The company’s cash paid for interest increased significantly to $8.55 million in 2023 from $2.35 million in 2022, reflecting higher borrowing costs[28] Stock and Shareholder Information - The company had a weighted average of 37,393 basic shares outstanding for the thirteen weeks ended October 28, 2023, compared to 38,414 for the same period in 2022[20] - The Company repurchased approximately 0.5 million shares of its common stock for $2.7 million during the 39 weeks ended October 28, 2023[71] - As of October 28, 2023, the number of shares available for awards under the 2019 Performance Incentive Plan was 1,391, with 901 unvested stock awards outstanding[73] Expenses - Selling, general, and administrative expenses for the thirty-nine weeks ended October 28, 2023, were $301.450 million, up 2.4% from $295.430 million in the previous year[20] - Depreciation of property and equipment increased to $28.37 million in 2023 from $22.96 million in 2022, reflecting a 23.5% increase year-over-year[28] - Stock-based compensation expenses were $3.34 million in 2023, slightly down from $3.53 million in 2022, indicating a reduction in equity compensation costs[28] Credit and Financing - Net borrowings on the line of credit amounted to $97.89 million in 2023, compared to $39.01 million in 2022, highlighting a substantial increase in financing activities[28] - The company had $202,047 million in outstanding revolving loans under the Revolving Line of Credit, up from $96,892 million as of January 28, 2023[58] - The company had $110,985 million available for borrowing under the Revolving Line of Credit as of October 28, 2023[58] - Gross borrowings under the Revolving Line of Credit for the 39 weeks ended October 28, 2023, totaled $1,104,501, a decrease from $1,161,959 for the same period in 2022[65] Contract Liabilities - As of October 28, 2023, the estimated gift card contract liability, net of breakage, was $25,738 million, a decrease from $29,174 million as of January 28, 2023[44] - The estimated loyalty contract liability, net of breakage, was $4,271 million as of October 28, 2023, down from $5,383 million as of January 28, 2023[44] - During the 39 weeks ended October 28, 2023, the company recognized approximately $2,513 million in loyalty reward breakage, compared to $2,425 million during the same period in 2022[44] - The company recognized revenue of $17,187 million relating to contract liabilities that existed at January 28, 2023, during the 39 weeks ended October 28, 2023[44] - The company expects revenue associated with gift card and loyalty reward program liabilities to be recognized over the next two years based on customer redemption patterns[45] Lease and Operating Expenses - The company recorded total lease expense of $65,861 million for the 39 weeks ended October 28, 2023, compared to $58,292 million for the same period in 2022[54] - The company recorded a non-cash increase of $52,314 million to the right of use assets and operating lease liabilities during the 39 weeks ended October 28, 2023, due to lease remeasurements[52] - The company reported a noncash change in operating lease liabilities of $52.31 million in 2023, compared to $46.05 million in 2022, reflecting ongoing lease adjustments[28] Market Risk - The company has principal exposure to market risk related to changes in interest rates[173] - Borrowings under the revolving credit facility carry a floating interest rate tied to Term SOFR, the federal funds rate, and the prime rate[173] - A sensitivity analysis indicates that a 100 basis point increase in interest rates would increase interest expense by $2.0 million[173] - The company has historically not used interest rate swap agreements to hedge variable cash flows associated with interest on credit facilities[173] - There are no current derivative financial instruments used for speculative or trading purposes[173] - The company may consider adopting specific hedging strategies in the future[173]