Boot Barn(BOOT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 10% to $423 million, with consolidated same-store sales growth of 1.4% [4][14] - Earnings per diluted share rose to$ 1.26 from $1.13 in the prior year [6][14] - Merchandise margin expanded by 100 basis points due to supply chain efficiencies [6][14] Business Line Data and Key Metrics Changes - Retail store same-store sales grew by 0.8%, while e-commerce same-store sales increased by 6.7% [4][14] - Men's Western boots and apparel led the merchandise category with mid-single-digit comp growth [9] - Ladies Western boots saw low single-digit comp growth, while Ladies Apparel experienced a low single-digit decline [9] Market Data and Key Metrics Changes - The company opened 11 new stores, bringing the total to 411 across 46 states [7] - The e-commerce channel showed strong performance, with bootbarn.com sales growing approximately 14% [10] Company Strategy and Development Direction - The company aims to open 60 new stores this fiscal year, maintaining a commitment to 15% square footage growth annually [7][19] - Focus on expanding exclusive brand penetration, which increased to 38.1% [11] - The company is enhancing its omnichannel strategy, with over half of online orders fulfilled by stores [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer sentiment and macroeconomic uncertainty [12][20] - The company raised its full-year sales guidance to$ 1.85 billion, reflecting an 11% growth over fiscal '24 [17][18] - Management noted challenges in mid-July due to external factors but reported a return to positive sales growth afterward [12] Other Important Information - Inventory increased by 11% year-over-year to $627 million, with a 6% increase on a same-store basis [15] - The company is focused on supply chain efficiencies and vendor direct purchasing to enhance margins [11][55] Q&A Session All Questions and Answers Question: Can you break down the drivers behind the return to positive same-store sales? - Management noted broad-based sequential improvement across merchandise categories, geographies, and channels, with positive growth in average transactions per store in May and June [22][23] Question: What are the puts and takes in the second quarter gross margin? - Management expects a 60 basis point improvement in merchandise margin driven by supply chain efficiencies, with a 90 basis point deleverage in buying and occupancy costs [26] Question: How are company-specific initiatives impacting sales? - Management highlighted efforts to balance pricing across product assortments and shift marketing focus to generate immediate demand, resulting in positive growth in units per transaction [28][31] Question: What is the impact of the Morgan Wallen sponsorship? - Management reported an uptick in customer capture, particularly among younger and female demographics, correlating with the sponsorship [32] Question: How is the workwear side of the business trending? - Management indicated that work boots saw slight sequential improvement, while work apparel remains negative but is being addressed through assortment changes [35] Question: How is the company managing sourcing exposure from China? - Management has reduced sourcing exposure from China to about 37-38% and continues to monitor risks associated with potential tariff increases [39] Question: What changes have been made in the online channel? - Management implemented assortment changes and improved online marketing strategies, resulting in a recovery in e-commerce sales [42][43]