Sportsman’s Warehouse(US:SPWH)2019-05-30 19:03Financial Data and Key Metrics Changes - In Q1 2019, net sales declined 3.4% to $174 million compared to $180 million in Q1 2018, with comparable sales decreasing 5.7% [8][38] - Gross profit for Q1 2019 was $54.2 million, down from $55.6 million in the prior year, a decrease of 2.5% [39] - Adjusted diluted loss per share was $0.12, compared to an adjusted net loss of $3.6 million or $0.08 per diluted share in Q1 2018 [46] - Inventory at the end of Q1 2019 was $291 million, down from $306 million a year ago, representing a 9% reduction on a per store basis [47] Business Line Data and Key Metrics Changes - Firearm units decreased 8.1% in Q1 2019, while firearms and ammunition sales together decreased 14% [11][12] - Non-hunting categories, such as fishing and camping, saw a decline of 2.5% due to adverse weather conditions, while apparel and footwear categories increased by 3.5% and 10.3% respectively [12][39] Market Data and Key Metrics Changes - The company ended Q1 2019 with 92 stores operating in 23 states, reflecting a total square footage growth of 2.9% [39] - The e-commerce platform showed strong performance, with buy online, pick up in store orders increasing approximately 75% year-over-year [20] Company Strategy and Development Direction - The company is focused on leveraging omni-channel capabilities to gain market share and enhance customer engagement [13] - Plans to open three standard format stores in 2019 and test a small format concept shop in Q4 [14][15] - The company is expanding its exclusive product offerings, including kayaks and other categories, to strengthen its value proposition [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Q1 due to difficult comparisons from the previous year, particularly in firearms and ammunition sales [8][60] - The company is optimistic about the normalization of trends in the firearms category and expects slight increases in same-store sales for Q2 [81] - Management is closely monitoring the impact of tariffs and is negotiating with vendors to mitigate potential increases [32][76] Other Important Information - The company is investing in its e-commerce platform and expects to incur additional expenses related to being a public company [53] - The loyalty program continues to grow, with over 1.9 million members contributing 51.9% of revenue during Q1 [25] Q&A Session Summary Question: What is driving the revised down guidance outlook? - Management indicated that the revised guidance reflects Q1 performance and slower trends observed in Q2, along with margin headwinds and tariff uncertainties [60][62] Question: How is weather impacting business? - Management noted that adverse weather conditions have affected camping and fishing sales, but they are hopeful for normalization in temperatures to support these categories [64][65] Question: What is the impact of inventory management? - Management expressed confidence in continued improvements in inventory management, attributing success to new leadership and analytics [66] Question: What is the impact of tariffs? - Management stated that the 10% tariffs were factored into expectations, with no significant impact observed so far, but potential effects from future increases remain uncertain [75][76] Question: How are firearms and ammunition categories expected to perform? - Management anticipates slight increases in firearms sales and flat to slightly down trends in ammunition for Q2 and the second half of the year [81][82]