Boot Barn: Still Watching Same-Store Sales Performance Closely (Rating Downgrade)

Core Viewpoint - Boot Barn is expected to report a stable same-store sales performance in Q1/FY2025, despite recent declines, with Wall Street analysts estimating revenues to reach $415.4 million, an 8.3$1.06, down $0.07 from the prior year's Q1 [8][10]. Financial Performance - In Q4, Boot Barn reported a -5.9$1,766 million and $1,800 million [14]. - Profitability is expected to take a moderate hit due to slower same-store sales, with an EPS forecast of$4.55 to $4.85, down from$4.80 in FY2024 [14]. Growth Projections - Revenue is estimated to grow by 6.5% in FY2025, with a total revenue CAGR of 8.3% from FY2024 to FY2034, followed by a 2.5% perpetual growth rate [3]. - Boot Barn's EBIT margin is projected to reach 12.5% with improved consumer sentiment and operating leverage from store openings [3]. Store Expansion - Boot Barn continues its store expansion, aiming for 900 stores by FY2030, having added 18 new stores in Q4, bringing the total to 400, with 60 new stores planned for FY2025 [15]. - The company expects capital expenditures of $115-120 million for FY2025, with an initial investment of approximately$1.5 million per new store [15]. Valuation Insights - The fair value estimate for Boot Barn is calculated at $103.21, indicating that the stock may be overvalued unless margins improve significantly [17]. - The weighted average cost of capital (WACC) is estimated at 10.21%, down from 12.47% previously, reflecting a lower cost of capital [18].