[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]

First Quarter Fiscal Year 2026 Financial Results and Outlook [Q1 FY2026 Performance Highlights](index=1&type=section&id=Q1%20FY2026%20Performance%20Highlights) Boot Barn reported a strong start to fiscal year 2026, with a 19.1% increase in net sales driven by high-single-digit same-store sales growth and successful new store openings, leading to a 38% increase in earnings per diluted share and a raised full-year outlook - CEO John Hazen highlighted a strong start to fiscal 2026, driven by broad-based demand, robust merchandise margin expansion, and solid expense control, leading to a raised full-year outlook[2](index=2&type=chunk) Q1 FY2026 Key Performance Indicators (vs. Q1 FY2025) | Metric | Q1 FY2026 | Q1 FY2025 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $504.1M | $423.4M | +19.1% | | Consolidated Same Store Sales | +9.4% | N/A | N/A | | Net Income | $53.4M | $38.9M | +37.3% | | Diluted EPS | $1.74 | $1.26 | +38.1% | | New Stores Opened | 14 | N/A | N/A | [Detailed Q1 FY2026 Operating Results](index=1&type=section&id=Detailed%20Q1%20FY2026%20Operating%20Results) The company's operating results for the first quarter showed significant year-over-year improvement, with net sales growth fueled by new store openings and a 9.4% increase in consolidated same-store sales, leading to a 210 basis point gross profit margin expansion and a 40.8% increase in income from operations [Sales Performance Analysis](index=1&type=section&id=Sales%20Performance%20Analysis) Net sales grew 19.1% to $504.1 million, supported by strong performance across both physical and digital channels, with retail store same-store sales increasing by 9.5% and e-commerce same-store sales growing by 9.3% - The **19.1% increase in net sales** was a result of incremental sales from new stores and a **9.4% increase in consolidated same-store sales**[5](index=5&type=chunk) Q1 FY2026 Same Store Sales Growth | Channel | Same Store Sales Growth | | :--- | :--- | | Retail Stores | +9.5% | | E-commerce | +9.3% | | **Consolidated** | **+9.4%** | Sales Growth Trends by Month | Metric | Fiscal April | Fiscal May | Fiscal June | Preliminary Fiscal July | | :--- | :--- | :--- | :--- | :--- | | Total Net Sales Growth | 18.3% | 21.5% | 17.7% | 21.3% | | Consolidated SSS | 8.7% | 11.5% | 8.4% | 11.7% | [Profitability and Margin Analysis](index=1&type=section&id=Profitability%20and%20Margin%20Analysis) Gross profit rose to $197.2 million, with the gross margin rate expanding by 210 basis points to 39.1%, primarily due to a 180 basis-point increase in merchandise margin, leading to a significant increase in income from operations to $70.7 million - The **210 basis-point increase in gross profit rate** was driven by a **180 basis-point increase in merchandise margin rate** and **30 basis points of leverage** in buying, occupancy and distribution center costs[5](index=5&type=chunk) - Drivers for the merchandise margin rate increase included better buying economies of scale, lower freight expense, and growth in exclusive brand penetration[5](index=5&type=chunk) Q1 FY2026 Profitability Metrics (vs. Q1 FY2025) | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Gross Profit | $197.2M (39.1%) | $156.7M (37.0%) | | Income from Operations | $70.7M (14.0%) | $50.2M (11.9%) | | Net Income | $53.4M | $38.9M | [Expense Analysis](index=1&type=section&id=Expense%20Analysis) Selling, general and administrative (SG&A) expenses increased to $126.5 million, primarily due to costs associated with operating more stores, but as a percentage of net sales, SG&A expenses slightly decreased by 10 basis points to 25.1% - The increase in SG&A expenses was primarily due to higher store payroll, store-related expenses from operating more stores, marketing, and corporate G&A[5](index=5&type=chunk) - SG&A as a percentage of sales decreased by **10 basis points**, mainly from lower incentive-based compensation, which was partially offset by higher marketing expenses due to timing[5](index=5&type=chunk)[6](index=6&type=chunk) [Balance Sheet and Shareholder Activity](index=2&type=section&id=Balance%20Sheet%20and%20Shareholder%20Activity) As of June 28, 2025, the company maintained a healthy balance sheet with $95 million in cash and no outstanding debt on its $250 million revolving credit facility, while average inventory per store saw a modest increase of 2.7% and $12.5 million worth of common stock was repurchased - The company ended the quarter with **$95 million in cash** and **zero drawn** under its **$250 million revolving credit facility**[10](index=10&type=chunk) - Average inventory per store increased by approximately **2.7%** on a same-store basis compared to the prior year[10](index=10&type=chunk) - The company repurchased **77,959 shares** of its common stock for an aggregate price of **$12.5 million**[10](index=10&type=chunk) [Updated Fiscal Year 2026 Guidance](index=2&type=section&id=Updated%20Fiscal%20Year%202026%20Guidance) Following a strong first quarter, Boot Barn raised its guidance for the full fiscal year 2026, now expecting to open 65 to 70 new stores, achieve sales between $2.100 billion and $2.180 billion, and generate diluted EPS in the range of $5.80 to $6.70, with guidance for the second quarter also provided [Full Fiscal Year 2026 Outlook](index=2&type=section&id=Full%20Fiscal%20Year%202026%20Outlook) For the full fiscal year 2026, the company projects opening 65-70 new stores, with total sales growth of 10% to 14%, same-store sales ranging from a slight decline of 0.5% to growth of 3.5%, net income between $178.0 million and $205.8 million, and capital expenditures planned at $115.0 to $120.0 million Full Fiscal Year 2026 Guidance | Metric | Guidance Range | | :--- | :--- | | New Stores | 65 to 70 | | Total Sales | $2.100B - $2.180B (+10% to +14%) | | Same Store Sales | (0.5)% to +3.5% | | Gross Profit | $764M - $812M (36.4% - 37.2% of sales) | | Income from Operations | $239M - $277M (11.4% - 12.7% of sales) | | Net Income | $178.0M - $205.8M | | Net Income per Diluted Share | $5.80 - $6.70 | | Capital Expenditures | $115.0M - $120.0M | [Second Quarter Fiscal Year 2026 Outlook](index=3&type=section&id=Second%20Quarter%20Fiscal%20Year%202026%20Outlook) For the second fiscal quarter ending September 27, 2025, Boot Barn anticipates total sales between $487 million and $495 million, representing 14% to 16% growth, driven by same-store sales growth of 4.5% to 6.5%, with net income per diluted share projected to be in the range of $1.19 to $1.27 Q2 Fiscal Year 2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Sales | $487M - $495M (+14% to +16%) | | Same Store Sales Growth | +4.5% to +6.5% | | Income from Operations | $50M - $53M (10.3% - 10.7% of sales) | | Net Income per Diluted Share | $1.19 - $1.27 | [Store Operations Data](index=8&type=section&id=Store%20Operations%20Data) The company continued its aggressive store expansion, opening 14 new stores in the quarter to reach a total of 473 stores, representing a net addition of 62 stores over the past year, with same-store sales growth accelerating to 9.4% Store Count Growth | Period Ended | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :--- | :--- | :--- | :--- | | Stores Opened | 14 | 21 | 11 | | **Total Stores (EOP)** | **473** | **459** | **411** | Selected Store Data | Metric | Q1 FY2026 (ended Jun 28, 2025) | Q1 FY2025 (ended Jun 29, 2024) | | :--- | :--- | :--- | | Same Store Sales Growth | 9.4% | 1.4% | | Total Stores | 473 | 411 | | Avg. Sales per Comparable Store | $1,031 thousand | $980 thousand | Consolidated Financial Statements (Unaudited) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 28, 2025, reflects total assets of $2.09 billion, an increase from $2.02 billion at the end of fiscal 2025, with key changes including a rise in cash and inventories, balanced by increases in accounts payable and lease liabilities, and total stockholders' equity growing to $1.17 billion Selected Balance Sheet Items (in thousands) | Account | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $95,319 | $69,770 | | Inventories | $774,060 | $747,191 | | **Total Assets** | **$2,093,826** | **$2,018,021** | | Total current liabilities | $358,654 | $353,349 | | **Total Liabilities** | **$922,420** | **$886,964** | | **Total Stockholders' Equity** | **$1,171,406** | **$1,131,057** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the first quarter of fiscal 2026, the company reported net sales of $504.1 million, a 19.1% increase from the prior year, with gross profit growing by 25.8% to $197.2 million, resulting in a 37.3% increase in net income, which reached $53.4 million, or $1.74 per diluted share Consolidated Statement 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 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In the first quarter, net cash provided by operating activities significantly increased to $73.9 million from $41.3 million in the prior-year period, driven by higher net income, with the company investing $31.5 million in property and equipment and using $16.8 million in financing activities, ending the quarter with a net increase in cash of $25.5 million Consolidated Statement 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** | **$25,549** | **$7,540** | | Cash and cash equivalents, end of period | $95,319 | $83,387 | Company Information and Disclosures [About Boot Barn](index=3&type=section&id=About%20Boot%20Barn) Boot Barn is the leading lifestyle retailer in the United States for western and work-related footwear, apparel, and accessories, serving a loyal customer base through its 475 stores in 49 states and its e-commerce channels - Boot Barn is the nation's leading lifestyle retailer of western and work-related products for men, women, and children[12](index=12&type=chunk) - As of the release date, the company operates **475 stores** in **49 states**, in addition to its e-commerce websites www.bootbarn.com, www.sheplers.com, and www.countryoutfitter.com[12](index=12&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) The company announced it would host a conference call on July 31, 2025, at 4:30 p.m. ET to discuss its first-quarter fiscal 2026 financial results, with details for accessing the live call, webcast, and a telephone replay provided for investors and analysts - A conference call to discuss Q1 FY2026 financial results was scheduled for **July 31, 2025, at 4:30 p.m. ET**[11](index=11&type=chunk) - A live webcast and a supplemental financial presentation are available on the company's investor relations website[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a legal disclaimer, cautioning that the press release contains forward-looking statements regarding the company's future performance and plans, highlighting that these statements are not guarantees and are subject to significant risks and uncertainties that could cause actual results to differ - The press release contains forward-looking statements related to the company's financial condition, results of operations, plans, and future performance[13](index=13&type=chunk) - These statements involve risks and uncertainties, and investors are cautioned not to place undue reliance on them as they are not guarantees of future performance[15](index=15&type=chunk) - Key risks include decreases in consumer spending, impact of import tariffs, ability to execute growth strategy, and competition[15](index=15&type=chunk)

Financial Data and Key Metrics Changes - The company reported core FFO of $14.7 million for the quarter, an increase of $4.3 million compared to $10.3 million in the same quarter of the previous year [15] - Core FFO per share remained consistent at $0.45 despite the increase in total core FFO, primarily due to a reduction in leverage [15] - The company ended the quarter with net debt to EBITDA of 6.9 times, an improvement from 7.5 times a year ago, but an increase from 6.3 times at the beginning of the year [14] Business Line Data and Key Metrics Changes - The company signed approximately 227,000 square feet of new leases, renewals, and extensions during the quarter, with an average cash base rent of $25.43 per square foot [4] - Year to date, the company completed 339,000 square feet of leasing, including 299,000 square feet of comparable leasing at a 27% cash rent spread [4] - The property portfolio was 93.9% leased and 90.2% occupied at the end of the quarter [6] Market Data and Key Metrics Changes - The company is experiencing strong leasing momentum in business-friendly MSAs within the Southeast and Southwest [4] - The signed not open pipeline stands at $4.6 million, representing 4.6% of in-place cash rents, which is expected to provide earnings tailwinds going into 2026 [6] Company Strategy and Development Direction - The company remains disciplined in underwriting property acquisitions and has a healthy pipeline of potential acquisitions [7] - The company is considering recycling some of its stabilized assets to fund future acquisitions [7] - The company is focused on capturing upside in its properties by addressing below-market rents and enhancing tenant quality [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing lease negotiations and the potential for additional leases to be announced [5] - The company is not concerned about lease rollover risks, viewing them as opportunities due to low embedded lease rates [36] - Management reaffirmed full-year 2025 guidance for core FFO of $1.80 to $1.86 and AFFO of $1.93 to $1.98, indicating that earnings lift from the leasing pipeline will become more noticeable in the fourth quarter [16] Other Important Information - The company fully settled its 3.875% convertible notes, resulting in an extinguishment of debt charge of approximately $20.4 million [13] - The company ended the quarter with $606.8 million of debt, with only $74 million or 12% subject to floating interest rates [14] Q&A Session Summary Question: Can you provide more details on the Fidelity office property and the State of New Mexico lease? - Management explained that Fidelity is downsizing, and the State of New Mexico is moving in due to high demand for modern space, which is expected to monetize the asset effectively [18][19] Question: Will leverage increase if the shopping center acquisition goes through? - Management indicated that leverage may increase in the near term but plans to recycle some assets to mitigate this [20] Question: Are there any dispositions included in the guidance? - Management confirmed that there are no dispositions in the current guidance [21] Question: Are the Fidelity and State of New Mexico leases second or third quarter leases? - Management clarified that the State of New Mexico lease was signed in the second quarter, while the Fidelity downsizing is still being finalized [26][27] Question: What is the status of leasing activity in the third quarter? - Management stated that they are negotiating leases for the majority of remaining vacancies and expect significant activity in the next sixty days [29] Question: What are the risks associated with the 94% turnover expected next year? - Management expressed confidence in the embedded lease rates and did not foresee significant rollover risks [36] Question: Will there be a lease termination fee from Fidelity? - Management confirmed that Fidelity will make a payment for downsizing, which will be blended into their rent [48] Question: How will the rent change with the new tenants? - Management indicated that there will not be a roll down in rent, although there may be some downtime during the transition [49] Question: Will the term loan financing be related to the shopping center acquisition? - Management noted that the timing of the term loan may not align perfectly with the acquisition but does not foresee any concerns regarding financing [51]

Core Viewpoint - Wall Street analysts expect Boot Barn (BOOT) to report quarterly earnings of $1.53 per share, reflecting a year-over-year increase of 27.5%, with revenues projected at $490.77 million, a 15.9% increase compared to the previous year [1]. Group 1: Earnings and Revenue Estimates - Analysts forecast earnings per share (EPS) of $1.53 for Boot Barn, indicating a 27.5% increase year-over-year [1]. - Revenue is anticipated to reach $490.77 million, representing a 15.9% increase from the same quarter last year [1]. - There has been no revision in the consensus EPS estimate over the past 30 days, indicating stability in analysts' projections [2]. Group 2: Key Metrics and Store Performance - Analysts estimate that Boot Barn will open or acquire 14 stores, up from 11 stores in the previous year [5]. - The consensus estimate for average store square footage at the end of the period is projected to be 11,183 square feet, compared to 11,063 square feet a year ago [5]. - The average prediction for stores operating at the end of the period is 473, an increase from 411 stores in the previous year [5]. - Total retail store square footage is expected to reach 5.29 million square feet, up from 4.55 million square feet year-over-year [6]. Group 3: Stock Performance - Over the past month, Boot Barn shares have returned +12.9%, outperforming the Zacks S&P 500 composite, which saw a +4.9% change [6]. - Boot Barn currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [6].

Industry Overview - The Retail - Apparel and Shoes industry is facing challenges due to fluctuating consumer confidence and inflationary pressures, leading to weakened demand for apparel and footwear [1][4] - Retailers are experiencing rising operational costs, including increased wages and higher prices for goods, which are straining margins and impacting the industry's near-term outlook [1][5] - The industry requires continuous product innovation and effective marketing to attract customers, while also facing fierce competition and price sensitivity [3] Key Trends - Soft demand is expected to impact revenues, with consumer purchasing power being strained by rising prices, as indicated by a decline in the Consumer Confidence Index from 98.4 in May to 93.0 in June [4] - Pressure on margins is likely to persist as companies invest heavily in digital infrastructure and marketing, which increases operational costs [5] - Companies are focusing on brand enhancement and capital discipline by deepening consumer engagement through innovative products and improved operational efficiency [6] Growth Strategies - Diversification and digitization are crucial for growth, with companies integrating in-store and online operations, enhancing supply chains, and investing in digital technologies [7][8] - Retailers are developing omnichannel capabilities and implementing loyalty programs to adapt to evolving consumer shopping behaviors [7] Market Performance - The Zacks Retail - Apparel and Shoes industry ranks 212, placing it in the bottom 13% of over 250 Zacks industries, indicating bleak near-term prospects [9][10] - The industry's earnings estimate has declined by 14.1% since February 2025, reflecting a negative outlook for earnings growth [11] Stock Performance - The industry has underperformed compared to the broader Zacks Retail-Wholesale sector and the S&P 500, with an 11.6% increase over the past year compared to 17.3% for the S&P 500 and 23.7% for the broader sector [13] Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 18.26X, lower than the S&P 500's 22.74X and the sector's 25.50X [16] Notable Companies - **Levi Strauss & Co.** is focusing on direct-to-consumer strategies and has a Zacks Consensus Estimate suggesting a 4% growth in EPS from the previous year [19][20] - **Urban Outfitters, Inc.** is leveraging a diversified brand portfolio with an expected growth of 8.5% in sales and 22.2% in EPS [23][24] - **Stitch Fix, Inc.** is showing signs of a turnaround with a projected 71.7% growth in EPS [27][28] - **Boot Barn Holdings, Inc.** is experiencing strong performance with an expected growth of 11.8% in sales and 7.6% in EPS [31][32]

Core Viewpoint - The current tariff program under the Trump administration creates uncertainty for investors, particularly as inflation rises and a potential recession looms, impacting companies reliant on consumer spending [1]. Retail Industry Overview - The SPDR S&P Retail ETF (XRT) has partially recovered from the initial tariff shock but remains down over 1% year-to-date [2]. - Some retailers are struggling, while others may thrive due to unique business models [3]. Company-Specific Insights TJX Companies - TJX Companies, known for discount retailers like T.J. Maxx, has a 12-month stock price forecast of $141.06, indicating a 15.45% upside potential [4]. - The company has outperformed the XRT slightly and maintains brick-and-mortar strength through a unique model focusing on discounted finds [4][5]. - TJX reported over 5% year-over-year revenue growth and offers a dividend yield of 1.41%, with management recently increasing the dividend payout [5]. - Analysts are bullish on TJX, with 19 out of 20 rating it as a Buy, predicting a stock rise of over 17% [6]. Global-e Online - Global-e Online has a 12-month stock price forecast of $48.08, suggesting a 43.73% upside potential [7]. - The company facilitates international retail transactions for high-end brands and has seen a quarterly revenue growth of 30% year-over-year [9]. - Analysts are optimistic, with 12 out of 13 rating Global-e shares as a Buy, indicating a consensus price target of $48 per share [10]. Boot Barn - Boot Barn has a 12-month stock price forecast of $173.67, indicating a 1.68% upside potential [11]. - The company reported a 5% year-over-year same-store sales growth and plans to increase its store count by 14% [11]. - Despite tariff uncertainties, Boot Barn projects a 13% growth in total net sales and has seen its stock rise nearly 9% year-to-date [12]. - Analysts remain positive, with a consensus price target close to $174, suggesting over 5% upside potential [13].

Group 1: Small-Cap Market Outlook - Small-cap stocks are expected to break out in the second half of 2025 due to potential interest rate cuts, improving macroeconomic conditions, and attractive valuations [1] - Institutional investors are beginning to rotate into small-cap stocks after two years of underperformance compared to large-cap peers [1] Group 2: Boot Barn (BOOT) - Boot Barn reported a 5% year-over-year growth in consolidated same-store sales for FY 2025 and projects a 2% growth for the current year while planning to increase store count by 14% [2] - The company anticipates a total net sales growth of 13%, but this guidance is contingent on raising prices due to tariffs, particularly from China and Mexico [3][4] - Despite tariff concerns slowing institutional buying in Q2 2025, Boot Barn's stock has increased over 35% in the last 12 months and over 11% in 2025, with a market cap exceeding $5 billion [5][6] Group 3: Sterling Infrastructure (STRL) - Sterling Infrastructure has seen its stock rise over 2,300% in the past five years, leading to a market cap of over $7 billion [7] - The company serves large blue-chip clients in e-commerce and data centers and has announced plans to acquire CEC Facilities Group to expand its opportunities [8] - Institutional buying for STRL reached $46 million in the current quarter, significantly outpacing institutional selling of $1 million [9] Group 4: Tactile Systems Technology (TCMD) - Tactile Systems, with a market cap of $230 million, specializes in home therapy solutions for chronic edema and related conditions, targeting a $10 billion total addressable market [11][12] - The company has shown steady revenue growth but is not consistently profitable, with TCMD stock down 41% in 2025 due to skepticism about its market size [13] - Institutional buying has slowed, but notable support comes from Congresswoman Tina Smith, who has made two purchases of the stock [14]

Financial Performance & Growth - Full Year Fiscal 2025 total sales reached $1.911 billion, demonstrating an 18% five-year Compound Annual Growth Rate (CAGR)[13] - Full Year Fiscal 2025 Consolidated Same Store Sales (SSS) increased by 5.5%[14] - Full Year Fiscal 2025 Earnings Per Share (EPS) reached $5.88[16] - The company anticipates total sales of $2.15 billion for Fiscal Year 2026[24] Strategic Initiatives - The company is focused on four strategic initiatives: New Stores, Same Store Sales, Omni-Channel, and Merchandise Margin & Exclusive Brands[11] - The company aims for 15% annual growth in new stores[33, 34, 35] - New stores have strong economics, with an average payback period of approximately 1.8 years and approximately 53% cash on cash return in the first year of operation[40, 41] - The company is targeting marketing spend at 3% of sales, with incremental spending focused on more content distribution in Fiscal 2026[51] Merchandise & Tariffs - Exclusive brands account for approximately 35% of sales volume[61] - The company estimates an $8 million tariff impact on Exclusive Brands merchandise Cost of Goods Sold (COGS) for Fiscal Year 2026 due to tariffs[69] Market & Competition - The company operates within a total addressable market (TAM) of approximately $40 billion[6] - The company faces competition from national and regional retailers, independent retailers, farm & ranch competitors, and online/direct-to-consumer competitors[8]

Boot Barn (BOOT) FY Conference Summary Company Overview - **Company**: Boot Barn (BOOT) - **Conference Date**: June 04, 2025 - **Analyst Rating**: Buy rating with a price target of $185 [1] Key Points Business Performance - Boot Barn is experiencing broad-based growth across all major merchandise categories and geographies, with consistent customer transaction growth [5][10] - The company has historically been a mid-single-digit comp business, but current performance is exceeding that, indicating strong underlying momentum [6][19] - The first quarter guidance remains intact, with a high-end estimate of 6% same-store sales growth, while current performance is tracking at over 10% [19][20] Strategic Initiatives - Boot Barn's strategic focus includes same-store sales growth, new store openings, margin improvement, exclusive brands, and omni-channel strategies [13] - Exclusive brands accounted for 38.6% of sales last fiscal year, with a target for an additional 100 basis points growth this fiscal year [15] - The company plans to launch separate websites and marketing campaigns for exclusive brands to enhance storytelling and brand presence [14] Pricing and Elasticity - The company anticipates mid-single-digit price increases across third-party vendors due to tariffs, but expects to maintain competitive pricing through MAP policies [25][27] - Boot Barn is focused on holding prices lower for longer on exclusive brands to drive penetration growth [29] Market Trends and Industry Position - Boot Barn's performance contrasts with other public companies in the Western retail space, indicating strong execution and brand loyalty [8][40] - The company does not view current trends as a peak but rather as a stable mid-single-digit comp business, with a history of resilience [38][39] Marketing and Advertising - Boot Barn's marketing budget has grown significantly, now at over $60 million, with a focus on content distribution and storytelling for both the retailer and exclusive brands [42][43] - The company aims to leverage its marketing efforts to build brand awareness and drive sales [42] Margin and Cost Management - The company has achieved over 600 basis points of merchandise margin expansion over the last six years, with ongoing efforts to improve supply chain efficiencies [52] - Future margin drivers include exclusive brand penetration growth and better vendor discounts [52] - The company expects to maintain a full-price selling strategy, with markdowns primarily focused on moving through historic low inventory levels [46][47] Store Growth and Operations - Boot Barn plans to continue opening new stores, with a focus on finding the right locations and managing operational loads effectively [59][60] - New stores in regions like the Northeast are performing similarly to established markets, indicating strong brand acceptance [61] Future Outlook - The company remains optimistic about achieving a 15% EBIT margin over the next five to six years, despite current challenges [58] - Boot Barn is committed to maintaining its growth trajectory while ensuring operational efficiency and customer satisfaction [59][60] Additional Insights - The company is adapting its strategies in response to macroeconomic factors, including consumer spending and pricing pressures [20][21] - Boot Barn's approach to advertising and marketing is evolving to capitalize on digital opportunities and enhance customer engagement [42][43]