Sportsman’s Warehouse(US:SPWH)2022-03-30 02:13Financial Data and Key Metrics Changes - The company reported net sales for the fourth quarter of fiscal 2021 at $416.3 million, a decrease of 5% compared to $438.2 million in the fourth quarter of 2020 [43] - Full-year 2021 net sales were $1.51 billion, an increase of 3.7% from $1.45 billion in 2020 [50] - Fourth quarter gross profit was $136.6 million, down from $142 million in the prior year, while gross margin improved to 32.8% [46] - Full-year net income was $108.5 million or $2.44 per diluted share, compared to $91.4 million or $2.06 per diluted share in the prior year [55] Business Line Data and Key Metrics Changes - Same store sales decreased by 10.8% in Q4 2021, primarily due to a 23.1% decline in firearms sales and a 26% decline in ammunition sales [44] - Full-year same store sales decreased by 2.2%, driven by declines in firearms and ammunition categories of 12.5% and 13.7%, respectively, but offset by increases in footwear (21.2%) and apparel (12.7%) [51] Market Data and Key Metrics Changes - The company experienced a significant increase in outdoor participation, with 53% of Americans engaging in outdoor activities [30] - The record attendance at national parks and hunting and fishing license sales contributed to a record 14 million first-time firearm buyers since early 2020 [31] Company Strategy and Development Direction - The company plans to open 10 new stores in 2022, targeting underserved geographic locations with flexible store formats [24][25] - The strategic growth drivers include expanding the store footprint, increasing sales from the e-commerce platform, and improving customer shopping experiences [17][26] - The company aims to leverage its omnichannel capabilities and enhance its digital marketing efforts to capture sales from outside traditional geographic areas [26][30] Management's Comments on Operating Environment and Future Outlook - Management noted that the current inflationary pressures, including freight costs, are expected to continue through Q2 2022, but anticipate easier comparisons in the latter half of the year [68][77] - The company remains confident in its ability to weather economic changes better than most retailers due to the nature of its business [70] Other Important Information - The company ended fiscal 2021 with $57 million in cash and $77 million available on its line of credit, indicating strong liquidity [59] - A $75 million share buyback program has been approved as part of the capital allocation plan [60] Q&A Session Summary Question: Thoughts on gross profit margin and sales mix - Management indicated a healthy return to a normalized sales mix, expecting a shift away from firearms and ammunition towards other categories [67] Question: Observations on inflationary pressures - Management acknowledged ongoing freight pressures and the return to a normal promotional environment for marketing [68] Question: Current sales trends amid inflation - Management noted that stimulus checks from the previous year significantly impacted consumer behavior, but the outdoor industry is expected to perform well despite inflation [70] Question: E-commerce sales distribution and future distribution center plans - Management stated that a significant portion of e-commerce sales is now coming from store inventory, with plans for a potential new distribution center in 2023 [75][76] Question: Performance of refurbished stores - Management reported encouraging trends in customer traffic and basket size in refurbished stores, with plans for further refurbishments [79][82] Question: Performance metrics for new stores - New stores are performing ahead of expectations, with a disciplined approach to financial returns [83]