SPWH - Earnings call transcript Q1 2020 | Sportsman's Warehouse Holdings, Inc.

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Operator

Greetings and welcome to the Sportsman’s Warehouse First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Caitlin Howe of Investor Relations. you. Thank begin. Please

Caitlin Howe

me Chief With Officer call is today Sportsman’s Thank Officer on and Barker, Executive Financial Robert Jon Warehouse. you. the Julian, of Chief

growth for the like Before which make we includes industry. from future products a filings other may those XXXX of expectations Private XX-K contain our uncertainties, the the results suggested risks our the remind I Securities get company’s within with the will Harbor about would to made statements the statements of under of we including for you of The X, of regarding and due caption started, year Actual the our today operations, of in February SEC. future differ XXXX, meaning company’s Risk forward-looking statements Litigation Safe those described company’s language. Act in demand materially such to number Factors and and results statements ended the Reform

sportsmans.com earnings the an section conference to the today’s call like the also which presentation, at Relations in financial today’s are release provided to Exhibit financial non-GAAP available sportsmans.com. comparable the as would measures Investor the include Investor the financial disclose website. reconciliations also we PowerPoint to also in X-K our of GAAP furnished is on today, SEC information measures Form is most Relations as XX.X of I will call. website such as measures well during section included that We at directly available our to as materials of non-GAAP which press Definitions supplemental note

call Officer to like with Warehouse. today’s of to Jon follow Barker, You can turn remarks. prepared along Executive utilize I the Sportsman’s Jon? Chief to would over the steps

Jon Barker

from my families thank of a safe year financial begin metrics as Caitlin. you provide you, times. for by omni-channel your QX situation will discuss as to the healthy I provide today. also joining first our Sportsman’s quarter addressing then full strategy. updates everyone well pertains hope commentary will it summary I key XXXX on our COVID-XX and on during you XXXX. then will and I Warehouse. remarks growth will some challenging and the and us as results these Robert are afternoon, Thank Good

call we open X and am questions. I will Finally, situation. address up of the on for the investor Slide now COVID-XX will presentation the

our could both Warehouse crisis. last months the few While been search to the retailers, for navigating fortunate many been business prouder the of we pandemic team challenging this not in stores global our and Sportsman’s the throughout I have keep the of time. the have be open majority during in

face open, and many help remaining we for have registers, and associates, sanitizing, protect safety and plastic their and the barriers of to at families, steps including While our cleaning additional taken health associates. customers masks

with products our capabilities we and contact. recently chain, on curbside BOPUS leveraged serve in also which allows sourced person and respect pickup, impact our to some e-commerce customers like to QX ship-to-home launched interruption China, our to see related limiting have person and using while COVID-XX’s did camping supply We own to primarily With from platform us fishing.

firearms of surging interruption demand continued has related has quarter shortages into to ammunition COVID-XX the China due chain disruption fishing. As to certain within largely compounded by the our been and subsided, however, supply has pockets second business. disruption creating our in This

of continue vendors demand exceptional to with do job disruption. working limit help and merchandising teams planning an Our our the

the and have variability there is we Therefore, in tremendous not increases forward providing sales today. uncertainty significant seen in be we environment. economic will to-date, guidance While

and invest safety. our in we their associates Given surrounding COVID-XX, the to uncertainty will continue frontline

of The I discretionary disciplined and effectively preserve surge Slide these load our resulted liquidity uncertain in financially will as times. X. demand we very we navigate the favorable reduce financial in to results now debt remain expenses, sales of election demand limit exit Additionally, our to-date We the in $XXX year-over-year. on am multiple of categories XX% the is our exceptional Net been situation, the believe core and competitors first an XXXX. factors, and cycle. increase current million, the including were COVID-XX quarter driven by

However, parsing exact NICS respectively, XX% possible. the XX% not of QX each for factor for out is were and up and increased ammunition up quarter. XX% Same-store XX.X%. Firearms the contribution while sales were checks

only NICS growing in our continuing significantly take checks, confidence we Our are are we categories. increased which exceeded gives core to the market sales, sales us share that but not

our offering. for this and ammunition, apparel bodes and and customers expose customer growing categories, during loyalty We repeat reengaging the building and stores new newcomers in materially quarter. our or the for firearms In time. by first across program Sportsman’s ultimately business. believe developing our product to well website were contrast brand demand, extensive first our This database to very our Additionally, the QX down footwear gives Warehouse surge many to customers the ordered us to entered in from and opportunity

materially detail across our in the less browse ammunition discuss not were what result prepared QX, will categories. during Robert to demand The height greater and questing, his for in we remarks. experience sales combination and traditional the COVID-XX mix QX, surging for far and gross likely to soft they the of and in footwear During which store crisis sales impacted apparel in firearms as did referred of customers a I margins as

Turning now along last built us with increased enabled and we online the assortment, traffic X, over capitalize X.X on QX. have to Slide to years, the during capabilities the extensive our tools

platform, including ship-to-home. of Before and the crisis, we our seeing adoption were BOPUS already e-commerce robust

As to sales demand even e-commerce and Sportsmans.com massive a services our accelerating people saw stay-at-home, for more, the during require surge year-over-year. distancing online these the embrace with quarter XXX% in penetration. growing social our crisis over customers the need created channel

now quarter, During stores our also as are first completed nodes placed we ship-from-store of rollout orders and the or we online. fulfillment the utilizing

stores our respect our Michigan. environment. store & physical on continue We capabilities located have we invest stores year-to-date, new Stream footprint, progress, but Warehouse Sportsman’s to Springs, relevant e-commerce in X opened retail increasingly great to and the Crescent Kentucky Kalamazoo, remain have to With made including X in prior must driven Field we

Additionally, fiscal we We Milpitas, open XXXX. our X a year are a QX. to new not this expansion will strategy new With open X X as recent been store total year, In all closed XX aware typical. to during in and we delays, is to California stores warehouse Sportsman’s impacted. year stores store construction permitting in expect has now typical

Turning in a our potential to to business. view and Furthermore, we people motivating for In more cycle we excited be in coming the of upcoming consumer election believe the catalyst we is as changing out more near-term, time momentum outdoors. couldn’t QX. Slide with business our core COVID-XX summary, spend X, behavior the

well environment fishing, spending in exceptionally did camping, Our hunting. and an which are products more consumers hiking in time

this more customers will stores evolving the We products monitoring we on are believe uncertainty our profitable and with to continue our closely. very we are larger we capitalize work have stocked behavior to and with vendors positioned In medium-term, we to long-term, company. In market becoming websites and uniquely economic situation significant changing there opportunities and the our is the consumer demand. share ensure environment the in

report you enhancing online when over will results. we backdrop, including store look to Robert results. continue our in With at We we expanding second our I initiatives, With and factors speaking again discuss platform our the to early to our forward footprint. that, progress our the turn September these quarter to growth on make to financial call

Robert Julian

Thank results. you, John. I review with will remarks XXXX QX a today financial begin my of our

at this forward mentioned guidance earlier, providing are time. not we John As

However, I will provide thinking a for results. about few full expected our financial parameters XXXX year

over increasing also XXXX, the X Same-store quarter, in margin the of points quarter was respectively XXXX. sales XX and or and gross which was gross QX partially net million. by $XXX.X an respectively. compared and to an year. gross the channel. led basis rebounded SG&A nicely to quarter points increase and quarter factors. by first XX.X% increased basis basis. million Slide from a or to million Turning profit fishing million $XXX.X and a was million XXXX, basis of period decline several firearms decline Product $XX.X increase and channel caused our Starting and points XX $XX.X prior presentation, XXXX $XX.X compared ammunition $XX.X improved of margin XX.X% XX.X% first million in XX.X% XX.X%. year of XXX a on due attributed first compared offset sales X.X% basis camping April, ammunition. e-commerce product for to Gross revenue firearms and were by now of in This by million the volume an for the in higher first the sales to million for coming a proportion XXXX vendor prior quarter to expense in from quarter $XX.X the the $XX.X of QX of same-store was margin quarter XXX decline can point be mix of more This of positively versus XXXX increase margins, incentives higher coming impacted of

XX.X% As a points the sales, decreased to XXX for percentage approximately basis net quarter. of SG&A

of was $X.X $X.X expenses improved for with X Store Field $X.X compared recorded openings million to approximately of incurred and security, $X.X million approximately new due situation. QX to benefit million result our of Loss utilities, diluted non-cash increased versus due was increase QX million & new we to pay prior of This $X.X the wage XXXX. of in in year. our a of $X.X insurance expense interest improvement additional in The costs new $X.X a growth. or is the million lower tax of incremental increased to was expense per $X.X increased versus million $X.X million. of in over and pre-opening quarter, stores. minimum the including due $X.X to for of We Stream million that reduction Net charge million. We operations $X.X primarily by Interest associated a primarily benefit income million The in hero of Credit $X.X year, the year. XXXX rates. acquisition $X.X performance to and closed QX performed million the incurred resulted volume to During janitorial We $X operating $X.X XXXX. expenses Rent marketing in due additional million associates. million and $X.X prior card of million million XXXX including expense result year loss year share. X store and loss reduction primarily total XXXX store for operating period. compared QX of the expense $X.X expense prior Other in openings. COVID-XX is this increase million frontline is $X.X benefit cleaning a transaction million quarter lower an expenses, increases store increased $X.X and million to due in sales financial QX increased $X.X payroll compared impairment a in approximately of QX We fees store borrowings incurred remaining million. XXXX, in the

share net $X.X adjusted diluted As XXXX improvement year $X.XX loss million per to an year share. diluted net adjusted compared improvement share diluted of XXXX $X.X share of or Adjusted of to million this loss over of share year year XXXXX represents EBITDA was compared $X.X diluted adjusted over $X.X in income QX $X.XX per million prior prior million per basis for this a period. QX a compared year the represents negative was on a net per the $X.XX or in to positive million per X.X or in $X.XX year in $X.X diluted

Slide XXXX million a to of $XXX I ending QX our million XXXX and $XX inventory compared will now QX the sheet liquidity. Turning $XXX was comment at increase. end balance to million on XX

in compared million and store XXXX on was the $X.X and increase to of of stores one construction XXXX an X.X% period. due time this during basis closed capital QX new prior in a This of XX year. quarter to incurred our added have net $X.X new down maintenance on compared Inventory We store million. expenditures store first increase is to stores. We $X.X per existing million

operating This $XX.X First accounts flow $X.X quarter sales XXXX. due improvement versus in for operating volume. cash is with to $XX.X increased year million primarily cash full million associated year over million XXXX was payable QX higher

was net was provide in our outstanding $XX.X maximum compared flexibility balance liquidity to QX Our QX the holding XXXX an a revolving end reduction availability at $XXX.X our loan uncertain $XX borrowings of on $XX.X the $XXX.X line as in end credit strong we of times. of of million. of XXXX on the we XXXX to reduction at The quarter the QX had during on This while sheet cash million. of the the term million million of these $X.X of million remains ended end million $XX.X achieved approximately million incremental quarter with XXXX to reduction million first facility. balance on end outstanding credit At at the of the $XX.X compared order

including Our on end total compared cash XXXX the in QX $XX million hand was to million prior of liquidity year. at $XX.X the

XX time uncertainties current Slide providing to significant due I presentation, will previously this not now of Turning we the as be at surrounding forward economic guidance the mentioned situation. to the

through would a stores However conducted store higher Sportsman’s put a to our continued points platform on gross proportion are XXXX XXXX. of growth margin. opening of of like margin, a will come both thinking continue we new Warehouse I some firearms revenue to expected results. these and X of anticipate new full and e-commerce sales and we how X from to higher provide about to total be data ammunition factors commentary With to volume on Starting to pressure year in respect expect gross we with

fiscal We rate XXXX million our approximately . year XX%.fiscal be to expect expense year is to million XXXX estimated effective $X.X $X.X to approximately interest be tax

I situation XXXX capital we expenditures is approach a It change very be economic million. to million during approximately beyond. turn September. liquidity questions. take earnings will the XXXX our updating continue $XX is next our could Finally, full that, the in over inventory to for therefore rapidly in that the financial and business now look expenses forward to important anticipated conservative call $XX to to and early note fluid year on to you and relatively to With call back and managing We will operator are results our current

Operator

Our questions. come Hofkin with Instructions] Blair. line first of [Operator your the Daniel questions William Please you. from Thank of proceed

Daniel Hofkin

folks. Good afternoon,

trends by of some versus recently strengthened over sort the much. in – categories Just of ask has since bit that sales of that’s have – maybe then we anything – of about maybe you market can have that some trends demand what may course well expect might how Thanks additional a types over something wanted representative is suggests the of color And going just demand the share maybe as end of just you differences been and trends the increase anything developed. that if about trends more there the little forward? whether and to very said pent-up or and as the quarter

Jon Barker

Jon. Happy to all Hope it’s do Hey, well. it. is Dan,

the Let saw on trend a exited. nice what that uptick had of a were me we of give in little bit We curve. seeing just where on and track off color others basis we a right was the February, in some categories QX with Started business expected. from

we in And the categories see Following in around with to surge Super Tuesday, customer. SKUs ammunition, a we firearms core that our to and fact normal. actual primarily or personal country heavy, core the in of see dehydrated and issue major that started the the were I demand we filtration, as right were started saw attribute needs water selling ASP the COVID-XX a storage, in business. water change heavy across types the generators, products become We foods. on mid-March, When to such to started

checks to of purchased out increasing saw start the that core. customer, with we keep slightly firearms place. again well did On sell having market stimulus protection a lot new assortment to buyers a next and products were When component, There different firearms able came side, price and in the the firearm the in the core serve core transition point them firearms our being firearm lower we to personal extensive type the were we see we a returning the full as to for mid-month. of ASPs

seen not surge first lot update hiking are can or providing hunting, are and on quarter industry. and as fishing But we performance gives into activities has new the May’s with share performance. you, participants post shooting not a it I long-term camping, We the us what about significant any of outdoor and seeing but just across a confidence

new haven’t on decades I sudden think that of stores this are a coming play lot believe is great of are seeing to that, we for The folks of make social the fished to their that are money, and lot families. their spend time outdoor how a memories cost about then are back all getting that’s customers how an manner maybe with stay indicator to we the educating in as to a into effective and to from folks spend a it. We products distancing. a seeing safe

are that we upbeat long very about So can the us for what bring run. in

Daniel Hofkin

with see maybe the recently of areas very obviously additional just anything time factor less even follow-up in or can that’s more that That’s think wanting last additional quick weeks, in trends unrest spend great. X.X to And civil been of some terms before? you people the whether of crowded one in in just terms an you than

Jon Barker

Yes. I personal Dan, we about an protection a certainly than equipment few trend a seen of again a whether a to days. only protection user callout. increase or of days, been good entry but it’s a returning kind being core needed more have in personal firearms, for I but think and that few how to don’t again of think not, level it’s a back that’s know

be long-term a opportunity might that at I Sportsman's be Warehouse. industry So the for indicating would uncomfortable

Daniel Hofkin

Thanks much. Understood. luck. very Best of

Jon Barker

Thanks Dan.

Operator

question next line with proceed from Seth Sigman of question. is Credit Thank you our your Please the of Suisse.

Seth Sigman

so should up for the around on of of that if to new points firearm we interpret look could sure was want quarter question assume the navigating margin the thanks. a and you performance late more related thanks are would dynamic job the a up last on May different taking coming nice second non I'm home April little customers if outside active just into a sort we and be true more category appreciate seeing also I trends that helpful those activities favorable what comment just that of you maybe I some pick bit that guys of very bit Hey follow and my and environment in then some from that through into the to the can categories in in of things one that's little

Jon Barker

COVID thinking late May I pickup afternoon we be a see seeking April categories Seth Yes outside to masses restrictions is vacation camping the and less are likely more outdoors I hit uptick in just shooting hit the let and the early large and on the more people hiking clear parts effect in their fishing be good expect across and happened their distancing one to to investing throughout economic will saw country approval may did multiple Robert outdoor about from have to participation in sports start the situation of categories is started to uncertainty will where time and year and margin the reduced people think we with in away I there in be some activities we in significant the you and spending as has social groups further a in family the way country be may will traveling people across the that on think also continue I is try that's

Robert Julian

much QX and revenue. proportion our greatly pressure impacted mix So due Seth margin margins our in your and of we about total firearms talked by in points higher ammunition in about the sales of basis XXX question our to it certainly

mix the overall margin if to is more on typical normal our gross mix see or alone. you our would just improvement levels return in it would aired equivalent true So

Seth Sigman

year defer of know I maybe one let was in seeing stores part that view exit way in next we think promotional and can on of to expected okay the think you that follow through had are it the does into impact industry thanks. the any significant you number me year I that on they in then you and that competitor fully category a just up got Got this to related competitively that the your have activity but what comment

Jon Barker

activity has been pre and happy have even but activity I the on helped and limited planned QX standpoint some by and certainly per been competition margins per activities into department Yes some limited May do were margin our Sportsman's to very maintained a promotional we already am category cadence so basis. has during that promotional from Warehouse a and

Seth Sigman

is I the The other about you're question competitor think probably

Jon Barker

announced whether helped time right COVID might that opening opportunities activity it the on of more and from but that and inventory still more before goods announced the in would so standpoint down its inventory sporting Probably they March interested through of those on exit the they February we take hunting navigate happen to after just in delayed suspect this situation mentioned certainly XXX of it happen amount as into because or lead place for XXX may there sports. and they re Sportsman's for an they promotional have hunting make hunting to of how that some went late weeks we going the that were that are that when to earnings I representing a call of within will I the immediately think believe to shut for are Dick's they a lounges they time again even a some was to expect and stores Warehouse market we early a had we shooting be which provide knew to they see announced execute few lounges exit we plan week their which reduction is that COVID transition out I may move potential to still they

Seth Sigman

Got good thanks guys luck. it alright

Jon Barker

Thanks.

Operator

line next with our from Ryan of Craig-Hallum. the is Please questions. question you Sigdahl of your proceed Thank

Ryan Sigdahl

quarter. Good the afternoon congrats and on guys strong

Jon Barker

Ryan Thanks

Ryan Sigdahl

it higher incentives categories particular driven mentioned with what was quarter volume curious this you I in different benefited guess start the gross just was vendor margin etcetera. to quarter just Maybe their

Jon Barker

ahead. Yes go

Robert Julian

sales some are in function vendor most volume activity. it of incentives just a of is our While sent tied to on orders purchase

be work and seen do this to in alone benefit vendors on we that in support and certainly we closely a and So just would permanent so able to very marketing is to in activities so. and there It relationships you benefit a on. advertising basis the about is in volume our

and them our together is businesses incentive. team the with vendors and that we for dollars growth can working Our of purchasing driven marketing and more closely both the partner of team just volume these work absolute

Ryan Sigdahl

e-commerce just quarter needed margin there less strong then EBITDA with it, margin, Got kind headwind of or really mentioned the can it e-commerce? more the I differently for sales gross on in-store e-commence OpEx guess versus to compare of is said

Jon Barker

Yes, me let Ryan, I can provide some that. color on

about require is think work content mall full the chain delivery you order content work e-come parcel carrier t order USPS. If work store any that’s of on is fill throughout content difference on to falls supply the the versus last the more some there the required,

when in unit the a e-come white we situation. about order but cost it’s economics not versus and a thing the black structure and order store So

effectively that shipping to is home store start gross that you a If inherent to that order. store there pick the pick you that same packing think and in online line directly of economics. for in the shift because an when about or economics store of pressure transportation to a difference as not store order buy unit that related any is unite on margin e-come the item, The does

at of and shipped to home stores. thousand an as in that customers introduced across e-comm put the uptick of of in few we shopping will months new during continue significant the that a percentage to suspect not side we next home regions. see store we that percentage pressure margins, time are home have over shipped are country a So on the our that the see sportsmen’s over will are that been to our the staying uptick orders COVID I we pandemic as gross customers did

So the it’s expense. and as nice pressure new it’s to it engage margin opportunity grow some transportation related consumers will to a for us but business have

Ryan Sigdahl

there? One turn ammo store guns noted you good down more me which primarily of you constrains or by you You basis, one that other over. guess function category and other? said Inventory strength it it’s luck. categories certain XX% there demand a it. I last and feel supply per Got you out other for had chain how just any or do are on Thanks

Jon Barker

we good we in mix, you put execute absolutely during in share to and we Ryan, imagine our see gain ability firearm significant period. can the and and Ryan. feel very place checks that increasing our you the market can I demand think Yes, quickly against as our that with March, forecasting compares in

that so. categories. related largest merchandizing is camping type back some expect we have in now However, it’s start sure in expect not is that get these right to firearms up have is specific categories serve supply and and Sportsman’s And with the seen ammunition and the and some demand team the our and a of keep most growth been competitors make then of in planning we of the to in single major chain focus of unable Warehouse we just and can of to we customers where –

calls the in per expecting were to store per as declines in today. inventory. bit last better not per about think that – as you we our If mentioned cut would year store down and a spot in we this additional previous inventory slight setup is year, like XX% we not system a We Plan, than inventory plan. be are we my

to So significant that overall related a seeing product is category products supply our right one in to focus outdoor just down we this vendor. getting that one are fall our But or now back is the the press. is This specific stores. line chain and getting is in

Robert Julian

of did job nice add a our – year we will revolve last actually just I really reducing improving in-stock inventory Yes, performance.

We are in a little bit different of situation now. the

and we of while improving doing little trying in in now that what’s while we are staying to frankly chase supply it are front is a we probably reducing demand were just but bit stock. now inventory it's of bit a a year than have different situation but We outstripping most little last better than in

Ryan Sigdahl

inventory nicely constraints like If Good. you more as two industry industry in guess guys or reason XX% you one that mentioned the line have May there why on is could with quarter actually and of any in them. perform plus can't I I sneak just think do outperformed the kind better was the or follow you you up a you

Robert Julian

in reason take term market in cannot firearms share no term why short Ryan. is the continue There we to and long

Ryan Sigdahl

Good. Thanks me. for guys. That’s it

Jon Barker

you. Thank

Operator

Thank you.

Sandler. Our Peter proceed of your line Keith the next from question. comes with question Piper Please of

Peter Keith

the great basis you is about positioning the great be like with demand good that talk how exits. this a of may but all basis Curious XXX first your year afternoon I to some are certainty benefit so intriguing finding second is guys picture evolved other may you was your job in margin incentive competitive the on you be or could those points of better big even competitor results line you hoping far getting Hi products. positioning may you vendor with competitors product feel and get be are

Jon Barker

continued think relationship and outdoor is vendor stores we've year been over base last that’s wins certainly that's have so a core the have a to that exited I always from collaboratively want have sure competitors market to around is the year this I that as they and sure helped grown improving sporting share conditions. in we we're tell last and everybody make to opposite that as have the want as certainly Yes would we dynamic relationship gross Peter merchandising we think want perspective you that we be principle we together relationships that I making department believe healthy profit sales great with us we with them stores profit them one have can grow that vendors in that pricing to our to that opened like of it's we XX possible XX opened as to exceptional no in in focused to vendors we market be the been are the our we the the of and approach think goods heavily and just changing there some would capabilities we I collaborative available the on and the

Peter Keith

the get flow is <XXXX> Robert going of it not QX rate get of of type and Okay if or points can collaboration for same that XXX sounds run continue type benefit. like sales the in lot driven to you're by basis that

Robert Julian

<> but part I be as those we as incentives Yes one true and what overall mix don't that given that would there's market think the normally but ways run QX it was the if. offset accomplished rate towards a think in marketing of again as the it I impact. would we activities that a own would would did ads go flow Sales as we that or impact QX I would testament multiple to incentives heavily help margin in they team impacts

Peter Keith

is guess some and like with it specifically the. demand good positive the with in finishing good now with is May footwear looks on fishing comment be may inflected but category hoping of Okay more I could and that continuing the little pretty there just trends positive is you looking Camping the quarter has with shopping April store. in is spike less clothing the questing more and I in was that something broader

Jon Barker

Yes to so more have seen return a we a normal.

with of tends think good the we it’s quickly and feel that that possible item some and couple we showing what we showing long with an and in side, they about also coming starting just not inventory when in footwear they're grabbing time the we reacted getting about week this to footwear we what was having to that you functional to are in, good to where a lived pretty really process on department hiking we and shopping believe cycle it’s retail and spot as one we trends improved apparel position, down very footwear the showing apparel departments and shut as shop end early, times apparel in through of areas are much nice retail started sourcing our trend getting we the be inventory quickly so or nice downturn potentially the about purchases the economic back and trends pull up a to improved <> good happen, likely back very COIVD-XX feel in out are all apparel cross consumer <> uptick year. footwear this on a Our to quickly started have well in with happening our pulled apparel you no that too we see and that started are

an feel summer into to I this <> more I opportunity think <> fall. this people leads that As mean out for boots about early into activities, and

Robert Julian

revenue be year, answer context, more in going likely total this lower more in <> SKU be though with revenue the basis improvement in I is you footwear financer whether one in forward a in margin. total some and full in in should on at <> our year might expect our year. ammunition thing think the the all tough It will apparel proportion appear of firearms gross and apparel, will heavily It and and even footwear the throughout

Peter Keith

be total basis? That’s and for last at good. how any give question of the loyalty might us new me with customers quarter that looks the Thank you way members and year-on-year the you. ended getting is all One <> on treat

Jon Barker

me. I have don’t of in that number front

one. circle Let me back finish on that

Peter Keith

luck. enough. guys, Okay. Fair a lot Thanks good

Jon Barker

you. Thank

Operator

you. Thank

with the Our questions of Smith from next of Mark Street. proceed questions. your line come Lake Please

Mark Smith

supply to specifically circle wanted bit as ammo during and maybe gun or quarter flowed about know periods maybe then the of chain we seeing April was that talk I are just can, guys. and what in inventory the there you the and where Hi, and the how come in quarter back can little to you what or ended in you from kind March lower it vendors May? any then

Jon Barker

same let’s this base XX% period. on a lets are again and were So during and – respectively in XX% we just firearms saw start store is ammunition to go what and volume this the just back <>

intimately is about been issues forecast think any see it’s and March It’s overall the situation to challenged. put vendors. not <> have the what and XX% anybody flow new kind and inflow to same to including of think business to some been year perfect I store are keep forecasting that challenged we we have it a been others anyone specific expect our but situation into optimistic flow trying been in week XX% been overall not very where third, on where has here with our and <> so, from we at don’t you an fourth stores were the vendors start been So perfect others coming we vendor moving, the have of situation and working been one vendor an has

way our with bumps We etcetera have attendance own the products. had in along moving in the road

it it think as more you So customers the hiking. out of week March camping of and kind fourth time I spending of March, though I week now will is third started fishing, and are tell it continued. branched

are looking I our of tackle thin. is industry specific just that in lures other combos, very you both And noticed am the internally business to seeing are and store hard shelves sure those restock you the not reel the have and are some with And Sportsman’s categories Mark, in We terminal our thin. been and probably have working and vendors. it we very the rod and the

Mark Smith

to we customer? you paying very as look that any ammunition then at pricing as of ability far you are the on and are price those And some we what picked for to pass your over in Okay. firearms seeing specifically increases as at categories, as look

Jon Barker

Yes.

the increase year communication ammunition. have we We early vendor the see price the each base a firearms year. in and really had with again, So good on historically

had for related their with increases. business increases to doing as industry additional time. some that within I They And that to our have we to are do over our the factories. business to margins a customers. we those extra – And situation extra for some have are think pay providing and kept I those believe COVID. are They fair maintained working up in as are prices factories the ensure fact work seen across have or and our changes. We us it’s improved an important pay

the to cost not is the manufactures product materials elasticity if of on costs sure will this consumers the in increasing but or balance of in the gauge outstripping need that cost with we situation pricing. other make our We labor demand are supply of where far hand we

Mark Smith

you Okay, into higher of but at kind did And saw the you the was it pretty market when this little through in firearms where gains competitors else delta can sales job share want where that your doors saw an where market expansion then than give or different quarter in the insight to during you just maybe really there just a you look anything you what a saw to next you really that closed some maybe throughout flat walking quarter. us led share I took of this was the any cadence quarter trended their data that good you

Jon Barker

need firearm new a again increase in think think process firearm was and would safest guns the personal cycle then of than the the little shot to my the where the higher I COVID personal more to in there when primary tended it's gun handguns the see in guns or little came bit first by level I you when we I more and level driver data what for I offset hand shot entry entry of in a the consumer protect around did consumer more of what's days protection it's a and shotguns the saw the don’t that do try been of the into that's personal protection the the tell shot that's meaning want process we myself underlying as to protection got because activity bit on shared the Mark in price gun gun point point we see industry last early that was check personal this mix nice categories and price it Yes heavier hand it's increase again the protection some would personal mix society as to a created been normal the uptick a of few the on a this to but you way than limit hand more stimulus to level protection I a a the have has not checks still few I a to certainly and prior shotgun. been working it's year guns we to last was return happening again are return I improved entry a trend hopefully handgun little days call that together

Mark Smith

more kind for you one of a me insight dollars and maybe that think us as maybe through Robert SG&A give higher SG&A some just maybe Okay can drove viewed rest give for then you time and of that year bit and one you that the into you of levels the insight of last little nature in into you what walk trends. any how kind us can as any

Robert Julian

store revenue the a I in stable see the the the $X.X was our a come environment those on you seasonality leverage pretty SG&A items one also in based lower as about so there's normal certainly expenses percent million about so of about of three time going situation one we sort the which million we of pay which is closure QX was up $X say also I for would backed probably usual will of sort one a a specific quarters incremental did items other other saw COVID expense. have and incremental <XXXX> that to supplies the line should incur worth in expense associates there's unique so $X a our and react between front $X.X mentioned as of time unusual million tremendous we extraordinary incremental forward the you Yes the see items to earlier million the about revenue are the type revenue higher excluding related in of QX. cleaning as for year. on and to of

Mark Smith

helpful. that's Thank Okay you.

Jon Barker

Mark. Thanks

Operator

proceed Thank you Peter question from Benedict the our and questions. Please Company. with next in is of line your Baird of

Peter Benedict

was a channel of Alright basis versus on been more pretty couple first the but or just the gross on have that two of most mix XXX material. one mine points of margin within those just the between a shift was the here taken equal guys categories

Jon Barker

roughly ammunition XX Yes it about basis to we're us higher points. XXX points points e-commerce by firearms was the makes the mix to channel estimating basis the XX the XX and that channel basis created

Peter Benedict

how margin anymore? inventory guys going that on have are Stream not then you us the is a and Robert the what XX that and Field product was XX impact and from been it that you was you that really the basically through. Hi of is of point much got sole the factor what is thank behind basis Was just or

Robert Julian

across had category. continuation been talked completely that not trend margins before factor is at quarter behind every we improved in a is a all. about as have that we seeing It No, of and last us product a really our

same has purchase And inventory Stream do & continuation at that the a a Field with to been the so of trend that’s discount. of nothing that

Peter Benedict

behavior them – are obviously to Got with just in these or to those of on? kind program then loyalty going been for, the are what’s the moving these then I your guess, maybe strategy you And strategy these the loyalty folks back what’s for but shopping forward. new Good. big customers, stats, I back? you are they surge, I know signing Jon had coming you getting just the that of mean, to it. coming And get said folks the firearm or up then communicating and

Jon Barker

It’s a been mix, Peter.

their For and a customers few coming of weeks and there these fairly out were quickly. situation, peak getting the item COVID in getting the at

fishing, on they and now program. that a to seen camping new, signing normalcy where the up of consumers loyalty either the for have more are We are or reengaging hiking categories

time the reengage are in is our program but We our the us and with to first needs whatever engage opportunity through e-mail help to our that’s and using their only store expertise need starting an program. outdoors the fulfill database, the to for them not loyalty that providing

to spend and I of the are haven’t now. that or So, in in to interacting consumers that and bass we couple been at been new reengagement it are maybe years, COVID as people seeing again, around literally, consumers stores the while. unique fishing. I interesting return couple going fished of I a weeks from needed much watch watching say, I were a shopping more people ago in combos, XX come the somewhat way drought It’s am with of a And haven’t fishing time

that opportunity industry. for overall we and So, Sportsman’s as outdoor see Warehouse nice really the long-term

Peter Benedict

and Thanks – I where guys. now, Yes, good good hear. to luck. Thanks,

Jon Barker

Peter. Thanks

Operator

back call this There I to are management for closing at questions remarks. further will any the now no time. over pass

Jon Barker

and in appreciate and especially these we for our all call. you. thanks headquarters. our center, associates want We their thank conclude today center a to stores, the extraordinary distribution extra during and you perseverance and times. special corporate everyone Thank care our Thank to of I time your commitment will

Operator

conference. This today’s does conclude

a lines disconnect participation may you evening. Thank and this time. great have at You your your for

Sportsman's Warehouse (SPWH) 4 Jun 202020 Q1 Earnings call transcript