BOOT
$33.98
Boot Barn Holdings
$.09
.27%
Earnings Details
4th Quarter March 2019
Thursday, May 16, 2019 4:10:00 PM
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Summary

Boot Barn Holdings Beats but Guides Lower

Boot Barn Holdings (BOOT) reported 4th Quarter March 2019 earnings of $0.32 per share on revenue of $192.8 million. The consensus earnings estimate was $0.27 per share on revenue of $188.9 million. The Earnings Whisper number was $0.28 per share. Revenue grew 12.9% on a year-over-year basis.

The company said it expects first quarter earnings of $0.20 to $0.22 per share on revenue of $178.0 million to $180.0 million. The current consensus earnings estimate is $0.20 per share on revenue of $177.9 million for the quarter ending June 30, 2019. The company also said it expects fiscal 2020 earnings of $1.42 to $1.50 per share. The current consensus earnings estimate is $1.52 per share for the year ending March 31, 2020.

Boot Barn Holdings Inc operates specialty retail stores that sell western and work boots and related apparel and accessories. It operates retail locations throughout the U.S. and sells its merchandise via the Internet.

Results
Reported Earnings
$0.32
Earnings Whisper
$0.28
Consensus Estimate
$0.27
Reported Revenue
$192.8 Mil
Revenue Estimate
$188.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Boot Barn Holdings, Inc. Announces Fourth Quarter and Fiscal Year 2019 Financial Results

Fourth Quarter Results Exceeded Guidance

Fiscal Year Same Stores Sales Increased 10% and Operating Income Grew 39%

IRVINE, Calif.--(BUSINESS WIRE)-- Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the fourth fiscal quarter and fiscal year ended March 30, 2019.

Highlights for the quarter ended March 30, 2019, were as follows:

  • Net sales increased 12.9% to $192.8 million.
  • Same store sales increased 8.7%, including an increase in retail store same store sales of 9.8% and an increase in e-commerce sales of 3.3%.
  • Net income was $8.7 million, or $0.30 per diluted share, compared to $6.9 million, or $0.24 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes $0.02 per share of tax expense related to a return to provision adjustment. Net income per diluted share in the prior-year period includes $0.06 per share of tax benefit from the exercise of stock options.
  • The Company opened six new stores during the quarter.

Highlights for the fiscal year ended March 30, 2019, were as follows:

  • Net sales increased 14.6% to $776.9 million.
  • Same store sales increased 10.0%, including an increase in retail store same store sales of 9.5% and an increase in e-commerce sales of 12.2%.
  • Net income was $39.0 million, or $1.35 per diluted share, compared to $28.9 million, or $1.05 per diluted share in the prior-year period. Net income per diluted share in fiscal year 2019 includes $0.13 per share of tax benefit from the exercise of stock options and $0.02 per share of tax expense related to a return to provision adjustment. Net income per diluted share in fiscal year 2018 includes $0.25 per share of tax benefit from the revaluation of deferred tax liabilities and $0.06 per share of tax benefit from the exercise of stock options.
  • The Company added 17 stores during the year, including 12 new stores and 5 acquired stores.

Jim Conroy, Chief Executive Officer, commented, “We delivered outstanding financial results in fiscal 2019 with same store sales growth of 10%, including strong gains in both our retail stores and e-commerce channel. The combination of double digit top-line growth and meaningful merchandise margin expansion helped raise our operating margin 150 basis points to 8.3% of sales and drove a significant increase in profitability. We believe our enhanced merchandise assortments featuring a broader offering of exclusive brands, multiple omni-channel initiatives aimed at improving the shopping experience, and new marketing programs have combined to drive our strong performance.”

“We continued to experience strength across the business in the fourth quarter, highlighted by our eighth consecutive quarter of positive same store sales growth in our retail stores and further improvements in e-commerce profitability,” continued Conroy. “We completed another successful rodeo season in Texas, which along with solid results in each of our other geographies, allowed us to exceed expectations. Our recent performance reflects the progress we are making executing our strategic initiatives and underscores our ability to drive sustained growth even in the face of more challenging comparisons. We are now at the halfway point of the first fiscal quarter and our business continues to be very strong with consolidated same store sales growth of 7.5% along with solid merchandise margin performance. Overall, we have strong momentum as we head into fiscal 2020 and we remain very excited about our growth prospects for the current year and beyond.”

Operating Results for the Fourth Quarter Ended March 30, 2019

  • Net sales increased 12.9% to $192.8 million from $170.8 million in the prior-year period. Consolidated same store sales increased 8.7%. Excluding the impact of the 3.3% increase in e-commerce same store sales, same store sales increased by 9.8%. The increase in net sales was driven by the increase in same store sales, the sales contribution from acquired stores, and sales from new stores added over the past twelve months.
  • Gross profit was $63.4 million, or 32.9% of net sales, compared to $52.9 million, or 31.0% of net sales, in the prior-year period. Gross profit increased primarily due to increased sales and an increase in merchandise margin rate. Gross profit rate increased due to a 150 basis point increase in merchandise margin rate and 40 basis points of leverage in buying and occupancy costs. The higher merchandise margin was driven by better full-price selling, growth in exclusive brand penetration, and a benefit from lower shrink.
  • Selling, general and administrative expense was $46.9 million, or 24.3% of net sales, compared to $41.6 million, or 24.4% of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of additional costs to support higher sales and expenses for both new and acquired stores.
  • Income from operations grew 46.2% to $16.5 million, or 8.6% of net sales, compared to $11.3 million, or 6.6% of net sales, in the prior-year period. This increase represents approximately 200 basis points of improvement in operating profit margin.
  • Net income was $8.7 million, or $0.30 per diluted share, compared to $6.9 million, or $0.24 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes $0.02 per share of tax expense related to a return to provision adjustment. Net income per diluted share in the prior-year period includes $0.06 per share of tax benefit from the exercise of stock options.
  • Opened 6 new stores, bringing the total count at quarter-end to 240 stores in 33 states.

Operating Results for the Fiscal Year Ended March 30, 2019

  • Net sales increased 14.6% to $776.9 million from $677.9 million in the prior-year period. Consolidated same store sales increased 10.0%. Excluding the impact of the 12.2% increase in e-commerce same store sales, same store sales increased by 9.5%. The increase in net sales was driven by the increase in same store sales, the sales contribution from acquired stores, and sales from new stores added over the past twelve months.
  • Gross profit was $251.4 million, or 32.4% of net sales, compared to $207.9 million, or 30.7% of net sales, in the prior-year period. Gross profit increased primarily due to increased sales and an increase in merchandise margin rate. Gross profit rate increased due to a 110 basis point increase in merchandise margin rate and 60 basis points of leverage in buying and occupancy costs. The higher merchandise margin was driven by better full-price selling and growth in exclusive brand penetration.
  • Selling, general and administrative expense was $187.1 million, or 24.1% of net sales, compared to $161.7 million, or 23.8% of net sales, in the prior-year period. Selling, general and administrative expenses increased primarily as a result of additional costs to support higher sales and expenses for both new and acquired stores. As a percentage of net sales, selling, general and administrative expenses increased as a result of higher incentive compensation, the marketing launch of the Miranda Lambert product line, and an insurance gain in the prior-year period that did not occur in the current-year period.
  • Income from operations grew 39.1% to $64.3 million, or 8.3% of net sales, compared to $46.3 million, or 6.8% of net sales, in the prior-year period. This increase represents approximately 150 basis points of improvement in operating profit margin.
  • Net income was $39.0 million, or $1.35 per diluted share, compared to $28.9 million, or $1.05 per diluted share in the prior-year period. Net income per diluted share in fiscal year 2019 includes $0.13 per share of tax benefit from the exercise of stock options and $0.02 per share of tax expense related to a return to provision adjustment. Net income per diluted share in fiscal year 2018 includes $0.25 per share of tax benefit from the revaluation of deferred tax liabilities and $0.06 per share of tax benefit from the exercise of stock options.
  • Added 17 stores through new openings and acquisitions and closed three stores.

Balance Sheet Highlights as of March 30, 2019

  • Cash of $16.6 million.
  • Average inventory per store was up 3.0% on a same store basis compared to March 31, 2018.
  • Total net debt of $174.3 million, including a zero balance under the revolving credit facility.

Fiscal Year 2020 Outlook

For the fiscal year ending March 28, 2020 the Company expects:

  • To open or acquire 25 stores.
  • Same store sales growth of approximately 5.0%.
  • Income from operations between $71.5 million and $74.4 million.
  • Interest expense of approximately $15.5 million.
  • Net income of $41.7 million to $44.0 million.
  • Net income per diluted share of $1.42 to $1.50 based on 29.4 million weighted average diluted shares outstanding.

For the fiscal first quarter ending June 29, 2019, the Company expects:

  • Same store sales growth of approximately 6.0%.
  • Total sales of $178 million to $180 million.
  • Net income per diluted share of $0.20 to $0.22 based on 29.1 million weighted average diluted shares outstanding.

Conference Call Information

A conference call to discuss the financial results for the fourth quarter of fiscal year 2019 is scheduled for today, May 16, 2019, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (888) 394-8218. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the “Events and Presentations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until June 16, 2019, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 2167505. Please note participants must enter the conference identification number in order to access the replay.

About Boot Barn

Boot Barn is the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 239 stores in 33 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation’s leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.

Forward Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan“, "intend", "believe", “may”, “might”, “will”, “could”, “should”, “can have”, “likely”, “outlook” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company’s management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the Company’s ability to effectively execute on its growth strategy; and the Company’s failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading “Risk factors” in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.

         

Boot Barn Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 
March 30, March 31,
2019 2018
Assets
Current assets:
Cash and cash equivalents $ 16,614 $ 9,016
Accounts receivable, net 8,095 4,389
Inventories 240,734 211,472
Prepaid expenses and other current assets   11,900   16,250
Total current assets 277,343 241,127
Property and equipment, net 98,663 89,208
Goodwill 195,858 193,095
Intangible assets, net 62,845 63,383
Other assets   1,366   1,128
Total assets $ 636,075 $ 587,941
Liabilities and stockholders’ equity
Current liabilities:
Line of credit $ $ 21,006
Accounts payable 104,955 89,958
Accrued expenses and other current liabilities   46,988   40,034
Total current liabilities 151,943 150,998
Deferred taxes 17,202 13,030
Long-term portion of notes payable, net 174,264 183,200
Capital lease obligation 6,746 7,303
Other liabilities   21,756   18,804
Total liabilities   371,911   373,335
 
Stockholders’ equity:
Common stock, $0.0001 par value; March 30, 2019 - 100,000 shares authorized, 28,399 shares issued; March 31, 2018 - 100,000 shares authorized, 27,331 shares issued 3 3
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or outstanding
Additional paid-in capital 159,137 148,127
Retained earnings 105,692 66,670
Less: Common stock held in treasury, at cost, 51 and 31 shares at March 30, 2019 and March 31, 2018, respectively   (668)   (194)
Total stockholders’ equity   264,164   214,606
Total liabilities and stockholders’ equity $ 636,075 $ 587,941
 

               

Boot Barn Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

Thirteen
Weeks Ended

Thirteen
Weeks Ended

Fifty-Two
Weeks Ended

Fifty-Two
Weeks Ended

March 30,

2019

March 31,

2018

March 30,

2019

March 31,

2018

 
Net sales $ 192,755 $ 170,766 $ 776,854 $ 677,949
Cost of goods sold   129,349   117,870   525,420   470,034
Gross profit 63,406 52,896 251,434 207,915
Selling, general and administrative expenses   46,907   41,614   187,112   161,660
Income from operations 16,499 11,282 64,322 46,255
Interest expense, net 4,067 3,808 16,331 15,076
Other income, net   1   -   5   -
Income before income taxes 12,433 7,474 47,996 31,179
Income tax expense   3,736   619   8,974   2,300
Net income $ 8,697 $ 6,855 $ 39,022 $ 28,879
 
Earnings per share:
Basic shares $ 0.31 $ 0.25 $ 1.39 $ 1.08
Diluted shares $ 0.30 $ 0.24 $ 1.35 $ 1.05
Weighted average shares outstanding:
Basic shares 28,327 27,134 28,092 26,744
Diluted shares 28,922 28,245 28,813 27,528
 

           

Boot Barn Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Fiscal Year Ended
March 30,       March 31, April 1,
2019 2018 2017
Cash flows from operating activities
Net income $ 39,022 $ 28,879 $ 14,197
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 18,256 16,000 14,555
Stock-based compensation 2,873 2,248 3,023
Amortization of intangible assets 646 1,128 2,155
Amortization of debt issuance fees and debt discount 1,235 1,199 1,145
Loss on disposal of property and equipment 23 252 367
Damaged asset write-off 312 2,357
Store impairment charge 455 83 1,164
Accretion of above market leases (28) (2) (36)
Deferred taxes 4,172 1,860 6,175
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net (3,706) (35) (223)
Inventories (27,702) (24,598) (12,761)
Prepaid expenses and other current assets 4,179 (3,281) (3,805)
Other assets (254) (167) 5
Accounts payable 14,191 13,062 10,501
Accrued expenses and other current liabilities 6,882 3,977 (483)
Other liabilities   2,704   1,238   5,172
Net cash provided by operating activities $ 63,260 $ 44,200 $ 41,151
Cash flows from investing activities
Purchases of property and equipment $ (27,525) $ (24,418) $ (22,293)
Insurance recoveries for property and equipment 184 865
Acquisition of business or assets, net of cash acquired   (4,424)     (1,305)
Net cash used in investing activities $ (31,765) $ (23,553) $ (23,598)
Cash flows from financing activities
Payments on line of credit - net $ (21,006) $ (12,268) $ (15,541)
Repayments on debt and capital lease obligations (10,554) (10,448) (2,378)
Debt issuance fees paid (520)
Tax withholding payments for net share settlement (474) (125) (69)
Proceeds from the exercise of stock options   8,137   3,695   1,275
Net cash used in financing activities $ (23,897) $ (19,666) $ (16,713)
 
Net increase in cash and cash equivalents 7,598 981 840
Cash and cash equivalents, beginning of period   9,016   8,035   7,195
Cash and cash equivalents, end of period $ 16,614 $ 9,016 $ 8,035
 
Supplemental disclosures of cash flow information:
Cash paid for income taxes $ 649 $ 614 $ 4,192
Cash paid for interest $ 14,947 $ 13,743 $ 13,646
Supplemental disclosure of non-cash activities:
Unpaid purchases of property and equipment $ 1,877 $ 1,315 $ 2,421
Equipment acquired through capital lease $ 171 $ $
 

                             

Boot Barn Holdings, Inc.

Store Count

 
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
March 26, April 1, March 31, June 30, September 29, December 29, March 30,
2016 2017 2018 2018 2018 2018 2019
Store Count (BOP) 169 208 219 226 230 232 234
Opened/Acquired 47 12 9 6 3 2 6
Closed Boot Barn Stores (2) (1) (2) (2) (1)
Closed Sheplers Stores (6)
Store Count (EOP) 208 219 226 230 232 234 240
           
                 

Debt Covenant EBITDA Reconciliation

(Unaudited)

 
Thirteen Weeks Ended
March 30,     December 29, September 29, June 30, March 31,
2019 2018 2018 2018 2018
Boot Barn's Net Income $ 8,697 $ 19,030 $ 4,534 $ 6,761 $ 6,855
Income tax expense/(benefit) 3,736 6,260 10 (1,032 ) 619
Interest expense, net 4,067 4,011 4,153 4,100 3,808
Depreciation and intangible asset amortization   5,178     4,720     4,573   4,431     4,610  
Boot Barn's EBITDA $ 21,678 $ 34,021 $ 13,270 $ 14,260 $ 15,892
 
Non-cash stock-based compensation (a) $ 666 $ 791 $ 804 $ 612 $ 398
Non-cash accrual for future award redemptions (b) (73 ) 526 92 22 (120 )
Loss/(gain) on disposal of assets (c) - (4 ) 27 - 179
Store impairment charge (d) - 150 92 213 83
Secondary offering costs (e)   -     -     -   176     294  
Boot Barn's Adjusted EBITDA $ 22,271 $ 35,484 $ 14,285 $ 15,283 $ 16,726
 
Additional adjustments (f)   1,059     455     553   935     546  
Consolidated EBITDA per Loan Agreements $ 23,330   $ 35,939   $ 14,838 $ 16,218   $ 17,272  
 
  (a) Represents non-cash compensation expenses related to stock options, restricted stock awards and restricted stock units granted to certain of our employees and directors.
(b) Represents the non-cash accrual for future award redemptions in connection with our customer loyalty program.
(c) Represents loss/(gain) on disposal of assets from store closures.
(d) Represents store impairment charges recorded in order to reduce the carrying amount of the assets to their estimated fair values.
(e) Represents professional fees and expenses incurred in connection with the January 2018 and May 2018 secondary offerings.
(f) Adjustments to Boot Barn's Adjusted EBITDA as provided in the 2015 Golub Term Loan and June 2015 Wells Fargo Revolver include pre-opening costs, franchise and state taxes, and other miscellaneous adjustments.

Investor Contact:
ICR, Inc.
Brendon Frey, 203-682-8216
BootBarnIR@icrinc.com

or

Media Contact:
Boot Barn Holdings, Inc.
Jim Watkins, 949-453-4428
Vice President, Investor Relations
BootBarnIRMedia@bootbarn.com

Source: Boot Barn Holdings, Inc.