SPWH - Earnings call transcript Q2 2020 | Sportsman's Warehouse Holdings, Inc.

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Operator

Greetings and welcome to the Sportsman's Warehouse Second Quarter and First Half 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. It is now my pleasure to introduce your host, Caitlin Howe, Vice President, Corporate Development and Investor Relations. Ms. you, Thank Howe.

begin. You may

Caitlin Howe

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

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

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

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

Jon Barker

begin and Warehouse. the to everyone. you, discuss will also And for second quarter. I you and remarks comment us on update on it Good continued results Caitlin. afternoon, and pertains by Sportsman's industry today. as families COVID-XX from healthy. an have to I I safe my trends providing hope thank your stay joining `Thank you will high-level

specifics first QX XXXX updated and Following comments, financial commentary Robert as will provide as my results, on some on full-year expectations. well our half

we utilizing part was quarter, to ammunition, crucial on safe. contact. Finally, we demand of Quite us we on customers, associates, firearms, serve the to In health to overstate all to how our of proud associates will business. in cleaning, person prioritize going in categories, X am to increases Sportsman's markets. sustained of to stay our surge ecommerce second focus we sanitizing of simply, questions. start families During continued all elevated slide fishing person for limiting while customers, continued the camping. to the and many strategy, be and also presentation outstripped They and cannot In the to second supply across our safety while I I'm demand Warehouse our of their continue significant products. navigated the our ensure an retail face open I masks up in for major allowing the continued while increasingly open with call and quarter, safely the serve remaining team. a of customers stores,

than inventory we our testament cases, most levels, market based a are is to in competition, are satisfied processes our we planning, relationships. vendor and with not current our share our that, team's Although positioned gains we on which believe better

in to QX, the environment. will uncertainty As be the guidance was not forward the today case in due we economic providing

X, Turning across highly by significant activities the encouraged in US. to increase slide we're participants outdoor in the

towards customers resources and and of historic Across XXXX. hiking their are has with firearm and new the away prior national fishing, family Americans The a country, activities, most the friends is outdoors. in industry entertainment increase surge attendance the year. in seen up many in to time and addition park camping state spending from transitioning In travel hunting, versus

During within customer drive for friends, note participation family of product value a the the value nearly those significant first first seven across is business. any our months times. firearm the of purchased this our other resilience, and have History particularly done has to recessionary that important It firearm time. that outdoor customer with remarkable during categories people has calendar shown especially highest base and X in year, activities, million typically lifetime segment a

Sportsman's retail are in optimistic including in participants hunting fishing, for general particular. that and Warehouse outdoor activities, We in specialty the and well outdoor new bodes

loyalty During innings overall grew engage early of are email best-in-class year-over-year. our expanded million database We on with database and XX% better by our nearly customers we X.X to in program the capitalizing program our to we QX, loyalty and our increased customers. believe

financial XXXX. share Turning market for by of to in favorable firearm XX% and were increased year-over-year. were slide factors combination for XXX%. sales during quarter, the outdoor NICS the an X, participation results XXX% XX% increase unit and XXX% the second store of QX, the of sales Same ammunition resulted up Total firearms adjusted increased were Net respectively. while $XXX sales in store multiple gains, million, XX%. led quarter Same checks up QX very and in social unrest, in sales surge Sportsman's Warehouse

gross we in win proportion to of have serve continued higher assortment prepared quarter, during particular and we evolve market our which sales functional as gain We apparel, exceeded footwear saw The to and strength the materially and such our we waders recovered QX. remarks. customers. firearms during new revenue and second subcategories quarter. discuss and mix in also to ammunition greater materially his confirms the checks margin apparel to We in for and will implications impact a share to boots, and our better nicely continued right customers. that will unit hunting the detail in believe margin our Robert these Our increase NICS Footwear continue product camouflage.

COVID-XX strategy. new ecommerce on our Turning results omni X. XXXX, platform adoption to now social to including will further. accelerated In channel behaviors. XXXX, late launching the especially growth our team, even in build capabilities adapt to events I continued to home. comment ship to slide and we've accelerated sales Since platform, and our and changing tools consumer QX, and BOPIS ecommerce ecommerce ecommerce of unrest, The of

exceeded and to the total to During timeline. grew of quarter, growth enable versus first the prior expectations ecommerce Therefore, sales, driven sales driven of the ecommerce in than we which future for over Through will more now year. capabilities invest platform our channel. and XXXX, account XXX% XX% this half in has continue our net sales

store and We in first our store format roughly perform. small this footprint. opened August. competitors smallest X,XXX At currently further continue approach feet, in Wyoming small is ideal Laramie, to cannot in also our store an markets portfolio national penetrate We to expand mid-size where our the early to our square

we the highly store's continue far, and believe as advantage so serve moving to results our are format forward. encouraged store We by will flexible a competitive

for four and Chambersburg, stores open QX and located Sportsman's of open in Warehouse will stores a late Brentwood, to or is have California plans Corona, Warehouse three for XXXX. open early total another year-to-date in in be have set planned Pennsylvania, to later seven The which new three We which QX. new Sportsman's are stores California, September, in new

this first and year In of expectations. addition, our March is shooting performing in legacy of center ahead opened

assessing XXXX. will concept be we a expansion opportunities As for in this result,

like the our last would improvement and year. in Finally, highlight position I financial to over sheet astonishing balance the

nearly net with $XXX We year. a free reduced debt million by We have liquidity than debt QX our last by this time million ended ratio improved less EBITDA $XXX debt net and of compared reflecting position. to X.X, to

X. QX. increase participants, Turning in coming summary, in slide to there's the of with momentum In recent significant we out business core our outdoor believe

number exponentially gained grown over and customers our last new of a the quarters. database tremendous have have We two email

the As term, our increase new across to categories, two grow we customer value. and influence reengage factors election uncertainty sales upcoming further we these cycle with could lifetime In business. there's opportunity the as substantial view customers that economic near and

significant for and quarter remain the December call store With believe expansion. financial when laser look and and over there results. share third execution over and the factors report run, We results. gains, turn with optimistic growth Warehouse discuss these physical focus However, for operational that, an to both continued we Robert strategic again market ecommerce long speaking long-term our from profitability. in We we is growth on opportunity our I'll early Sportsman's that, you our to forward positions to perspective

Robert Julian

of Jon. Thanks, QX remarks first XXXX I'll with begin results. and financial a today half my review our

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

However, I will financial the XXXX full-year on expectations call for earnings regarding the commentary key provided some metrics. last update

of now slide XX Turning presentation. to the

prior-year XX% XXXX, the period. an were $XXX.X million prior-year sales period which increased XX% and to net sales by XX.X% quarter fishing XX% over the store or the Camping respectively. firearms XXXX and strong $XXX.X quarter in second had of increased and million of the also led increase over XXX.X quarter Second quarters, respectively. ammunition, Same in increasing XXX% compared XX%, and by

and Finally, an $XX.X to of compared gross million All which footwear was a of respectively. to quarter ammunition on QX by adjustments second a of partially year, XX% basis. quarter $XX.X margins, expenses revenue XX%, and increased profit more same also gross the by sales compared margin over in apparel and million the second XXXX, points. our prior up to nicely other platform. product XXXX store coming SG&A $XX.X $XXX.X XXX or higher from gross XX.X% decline impacted headwind and $XX.X attributed of point million was of higher of offset prior several channel for ecommerce XXXX. factors. QX and a of a Product margin XX XXX versus increase basis or to positively the basis caused This points coming and firearms This Gross due margin XX.X%. XX% through million increase proportion for incentives, to be was quarter, XXXX decline an can was year. gross margin basis volume decline mix million

of of an higher was of $X.X sales expense prior-year points, credit a to to XXX XXXX a QX approximately remaining increased sales $X.X million our store incurred reduction fees of $X.X primarily net in office additional primarily This to growth. primarily year, Rent card due of increase QX and XXXX Income of expense in Interest $XX.X due XXXX of year, or period, versus XXXX. expense the XXXX, prior the of This share basis. QX the diluted We per hero lower $XX.X store compared due $XX.X result pay XX.X% the in expense in for was prior-year openings. increases new for income improved result minimum of to operating approximately associates. in $X.XX was share rates. $XX.X million. per prior-year the quarter in lower million. This to of QX $XX.X to net also period, QX of improved million $X.X income increased million diluted compared is in Net Other income was $X.XX prior from improvement $XX.X compared profitability volume. XXXX million in result as million operations $XX.X the including period. improvement for is borrowings an diluted tax diluted $X.XX the $X.X to million leverage frontline $X.X non-executive to million, EBITDA share per versus which increase per million compared $X.X or was SG&A back QX million year-over-year The We increased $X.X or represents adjusted is expense QX with year-over-year on coming quarter. and recorded $XX.X for at of million share. payroll SG&A basis year-over-year. in diluted million $XX.X $X.XX However, wage approximately increase million compared new of million $X.X million to in expense or This improvement diluted million interest $X.XX Adjusted XXXX. income $X.XX total a million net compared Adjusted net and of adjusted the per share income represents QX in an share increase million. of $X.X XXXX was per a

slide the to presentation. Turning of XX now

store million first $XXX XXXX. million $XXX.X the million first half $XXX.X XXXX in XX.X%. half were Same increased compared XXXX, of the XX% in sales of an increase net half or sales of First to

million. first First was half $XX.X million a compared of decline profit for margin SG&A XXXX million of XX.X% Gross the compared increase of XXXX first half of half of an was or $XXX.X XX the the for basis in first period. versus the the of to prior-year XXXX. gross points of $XXX.X half XXXX, million first $XXX.X half XXXX, was $XX.X XX% an million of increase to expense

million $XX.X from for period. net of $X.X to the net a of share million half was half in per $X.X first $XX.X the in operations diluted to of first compared million to XXXX. $X.XX per first in the sales million income XXXX. the the in half $X.X was $X.X As income XXX sales, first compared of in SG&A diluted prior-year $XX.X tax improved per cents or million the million of first period. expense was half compared for percentage of compared in zero of XXXX. tax Interest half XXXX of to income of $X.X the compared an net first benefit XXXX the or leverage million Income XXXX share dollars half the approximately basis in adjusted zero $XX.X or the recorded of of diluted points XX.X% to XXXX $X.XX XXXX. was net of $X.XX Net in half prior-year to half diluted Adjusted income first half net in We per of expense or income first the in of share first million XXXX income million share

First million XXXX adjusted half million in $XX.X period. EBITDA the was compared to prior-year $XX.X

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

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

First operating prior $XX.X accounts higher cash flow income due sales year-over-year versus volume, $XXX XXXX. million half million increased improvement balances QX with higher This year. in $XXX.X higher primarily associated flow XXXX was accrued versus million net for operating cash is expenses and to payable

outstanding to our metric flat balance prior increased remained relatively days accounts our payable payable While year-over-year, has year.

$XXX million $XX to of improve of end QX of million the reduction early million an prior end the of to ended loan in to XXXX. revolving the At million facility. at during compared This XXXX, quarter our QX of as million. QX achieved term flexibility of times. balance on accelerated Our with holding we million net these our $XX line payment incremental continues the term uncertain while $XX our credit borrowings QX. liquidity end we year $XX to QX outstanding maximum had on cash XXXX includes our $X in at outstanding $XXX provide an in versus approximately in availability The was on was on order balances of compared credit reduction second a loan $XX million This of end made XXXX, million at

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

presentation. now Turning slide of to the XX

time mentioned current be surrounding providing the I we at due guidance the As previously, significant uncertainty will not economic this forward environment. to

year new store to XXXX as full expected However, would some starting to relates growth. results, updated I points data like provide it with

and Warehouse on ammunition factors to in a gross and and pressure on a Both shooting our to in back one expect firearms higher track half will conducted of of platform be volume from through gross to put respect we proportion open higher-the-normal XXXX. come these the the With ecommerce revenue total of year. margin. continued Sportsman's continue to to legacy sales center the new stores are seven of We of margin,

expansion However, and expect volume we higher continue as margin to also product well. incentives

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

updating QX to call are earnings forward full-year results now We the million anticipated With million. in turn December. call to questions. the and will be over $XX our I that, our financial approximately on back you expenditures during for business early look XXXX to Finally, capital operator $XX to

Operator

[Operator Instructions]. you. Thank

Sigman comes first Our Seth with Suisse. question from of the Credit line

Seth Sigman

quarter. Congrats very across I'm regions. consistency on in Obviously, strong about the the curious results your results.

You obviously have footprint. very a diverse

adjusted August, did NICS US? in the strong, then, it you it And like but decelerate. was what across see did the still So, looked

you're the third So, quarter. helpful. would in be seeing curious what That early Thanks.

Jon Barker

demand by categories. well, with the to And travel, the level, just in hunting saw fishing all season. It's the we Alaska. strong, and Good perform one not But and it same consistent not lack Maybe Jon. at that business, the impacted Recently, entire those to very was certainly across you. partially was the the rest just speaking stores continued down outlier which slowed the of country. of very the rate of was

is NICS in seeing, or change not As And, necessarily think and what that you testament due supply down the to think in to was yesterday, performed slow What we demand. extremely change announced the we relationships of which firearms. you're adjusted has categories what is in team and seeing been about you're well the the NICS NICS, the continue QX, in demand Seth, the forecasting a adjusted and growth do again, planning against their certain with I that is forward. to going to able a outstripping vendors, expect

Seth Sigman

on point, inventory of phases the You're for business. of Just half the into you here year? back is the what headed into seasonally a that bigger your how sense look as period

inventory for are you planning how So, your position?

Jon Barker

position the like a Actually, most going we're into back half the feel year. better we in of than

is from probably the be spots that vendors are Now attendance the has particular course, gaps. within some every a in and chain in to will The working location. might the working to going to think have you and things are impact seen that general But some in COVID supply regulatory occurring as diligently. the can imagine, fill diligently related said, some that and with of chain The the that be day manufacturers, there's those team inventory.

year, spots be is be our back in to knowing feeling the each some there'll the ability good that will half the successful a be across one board about So, light. We're of little pretty of unique. those

Seth Sigman

Just gross on one seem did margin. impact. despite follow-up big mix stronger It the the

volume assume volume if Thank current is period. mentioned activity promotional of the that, offsets? sustainability or in of and Can you the you to on about you that the incentives think some talked more think incentives you also just I continuing. merchandise the of margin. And something I environment? positive of less nature What's talk unique the structural those I can more about elaborate some higher you. it's just that?

Robert Julian

We to some over sales. by a is This that Certainly, and headwinds our of ammunition high this be are the continue firearms mix proportion normalize. of the to Robert. – not mix should time expect created do total

And so, that time. after of abate should period some

the offsets vendor expect program of category Some variance – it how rate incentives volume. of continue. that where within in we've structural it's category. a the And are about structural some to improvement the we affected would seen more designed, incremental improvement, but and just every product by also terms is in is is we The see but

dollars to time. That regard. structural incentive and of But higher-than-normal volume. so that higher-than-normal in the back also we're is It will is So, program abate place, in seeing due over that period go some normal. will to

Jon Barker

may, the on firearms, parts all and QX, that little very camping. fishing the even promotional business, as there's promotional through market stuff, some and you of in side throughout of activity the of If Robert, the end I and add to to imagine, around QX can been ammunition

competition. lack So, the given our our of by we've category activity to margins good able been the really level, spot in keep promotional at

Operator

of the Our line with Company. & question from next Blair Daniel Hofkin comes William

Daniel Hofkin

what do is, and firearms of not – demand, degree – would and That's is, hearing NICS. ammo forward To look first factor? sounds like, degree for far To that's pull are to year? especially say, expectations you a what have to what future question. to continued it consumable can my Is think which I outperforming you sort could Just like it of thus degree you current tell that next correctly that? the anything let's there if way trends historically one demand we're strong from product question about

Jon Barker

Jon. It's

new demand in time estimating time And first forward seen is we've number pull about year's buyers customers ever the say think million firearm X traditional of year. firearms industry. our customer. of to this unique in that's this means the reason of The specifically, first we we're As into I that industry, the it's not anything a that a

to going firearm. Some of are third customers shooting to their second, going That's activities. participating lead them fourth to those or start in

of happen is where she counts we've But cycle on second may one. some about help we're to that traditional concerned he course, any might to time political election about due actually is more what the Of customer firearm that an a them buyer one not the buying optimistic forward pull first decide offset our in seen that or process. buy can that

Daniel Hofkin

standout, I categories more just of other categories, talked variance And little were you – that just could and but a relative then, maybe overall be about know kind better firearms being any region. regionally, kind by or by worse and you categories performed than but the weaker performance color of helpful. Alaska among would color give other about including different maybe obviously, of region on ammo any each a to

Jon Barker

and Dan, we've for some when give participation, on and to is been level. go late the weeks early location you're I inside were this at you're I'll some long weeks again, think in you a outdoors. having try – again, assessing April, What physical you specific how high is people the inside lockdown I May, started to think starting seen to to under COVID just of actually

fishing. resources. time, isn't started And travel this people that for a the think because to year. spend how fit maybe they're going of saw to assess outdoors Maybe I an have resources the travel immediate uptick economic money great going their and concerns. their financial doesn't concerns, We in is the to somebody to

XX, you're I combo, we of customer coming haven't time reel XX, look The this of for heard It they looking if exceeded across we decades. fishing, in rod combination and in seen at license anything a buyers. a wanted in their our was the to the And back fishing about and reel first is country, lead for hooked say a XX year. think that kids start stores. year. and rod folks intended, in, fished you you're reel we've exciting sales combo. they maybe need $XXX pun combo, once it you activity, lot a the a I saw no times, you take $X,XXX years, And I an a it, What's for new do on few of that's that $XX instead to that buying can next looking rod get to

for we're lots number in park camping. So, excited national on true what of summer, outdoors. same saw future if to And saw a state seen to we going The it. We is decide fishing. that years. the participants. again, customers, park about see And those return new holds out of will family. I the in believe And this are time like a activity those we're their many and with you camp you've of this spent go And a any folks folks that not or one-time them, they in them

I'm now, of across the – early part the everything, apparel the seasons hiking going has customer. us for camouflage uptick in camouflage trekking turkey the sorry, meaning camping see nice poles, seeing And really shone the very season. well archery and certainly those, we're we So, the footwear, and functional into with the boots,

Operator

Our Benedict of Robert next question the with from W. comes line Peter Baird.

Peter Benedict

for year that can hearing the What and there even Is activities product supply beyond are and here. supply anything going are tell ammo, being reflects sustain on you us you help supply that? But On next your short-term for there's stuff chain assuming ability that? of products, chain, firearms, you to fishing, the bit, from can for the on the kind added? us camping, these is demand vendor going a partners? these I capacity What know to there with

Jon Barker

the of to it up ramp ramp insights to sales ability reflection public Peter, companies what but that's – and and of firearms in a of depends certainly are with meet the direct and some their doing you manufacturing the up certainly production most demand. seeing think US ammunition the sector, on are the get the we all I of their

I forecasting will the industry Some activity. that winter an and that factory's overseas. in working time critical lead to fall demand are as for fall outdoor the the to production of ramp next categories, the spring, and ability And this through longer the primarily we're summer up think meet the be

and is shape about future because meet everybody certainly, ramping of up in supply stretched as So, think demand, in the but good we're now demand. right the we to chain pretty the

Peter Benedict

one more you. for Jon,

comment is Just on trending, the store, and how demand. of differs ecommerce in utilization of on and fulfillment how Just this the ecommerce? it from your partners? you that of kind right compares, that's elevated during see that sales, now maybe third-party time mix how the of of what looking How's it the curious how looking

Jon Barker

I understand Peter, want to question. I sure make your

As performing demand, or…? ecom's it far as how's

Peter Benedict

a stores are lot maybe those on categories. sales, fulfilled, And but of how the country that's third-party have fulfill how mix out. the going category you've orders got in Just the fulfilling can you stores? around ecommerce mixing for does How your firearm being across those also then, the are Just you? that mix of your vendors channel compare curious of orders, now that what

Jon Barker

is consistent with pretty see across can you we business ecom materially is different, imagine. the in mode store. The products of mix delivery the what as The

ecommerce. you about of each, on think trend So, the X% being total if and in seeing we're of the a similar percentage footwear ecommerce a as et apparel percentage this cetera, quarter,

that curbside delivered the think vendor to we you or seeing the are of up stores distribution store the the delivery, in are dropship centers store, product from to and or fulfillment, the continue. our to through the either than seeing integrations delivered However, home the we store home, expect or own store when picked meaning larger a the percentage about transacted through still

demand, – for take first The care the third-party of to the of to our program that that expand on geographic evaluate our time we've third-party firearm We'll paused to serving reengage continue you mentioned sales. use to due coming our core are website to partnership reach elevated Peter, that our program to customers firearms. and right stores our

Peter Benedict

Two you. for maybe questions. Robert, quick

between color the to maybe mix? can you what's basis XXX. I headwind point then, outlook of product the or here what future the here First, you in are magnitude mentioned terms versus curious year gross the margin margin, hero But pay? any for us in pay. that And channel mix the just thoughts half of if second earlier. hero apologize give your Thanks.

Robert Julian

question, say product in three first quarter mix. is round mix about would your is quarters a numbers, On issue channel and of of it that, mix sort the of about I

numbers. quarter. first quarter pretty that's to second in And round Just stayed consistent

quarter. that As something it pay, relates that's we evaluated each have to hero

pay. we've rule further on, circumstances, made But it circumstances the again, to wouldn't the I also Given the no out commitments hero to continue depending and do situation.

that's hero a I guess, TBD, on pay. So,

Operator

of question line Ryan next Capital from Our comes Craig-Hallum with Sigdahl Group. the

Ryan Sigdahl

Congrats strong on results. the

want sales then I also August? cadence you directionally what you've if quantify, the and say First in within or ask, the quarter can to seen but

Jon Barker

And material consistent Jon. to wasn't consistent demand in sales It first store. month and cadence by QX. demand, And question on change. in a store, consistent the very saw previous traffic QX a within It's year's QX. the We was your online pretty and pretty curve it was demand in both

into or to QX, guidance might As Ryan, at any providing this QX far how as be point, August be performing. not going we're or insight

Ryan Sigdahl

exiting today? similar? feel to similar we exiting a down – were I at QX QX But you store relative guys within inventory to do months inventory, are guess, percent Better, as or on maybe per a your where on three basis worse, that just QX. how kind Then you ago positioning about where of

Jon Barker

category in Ryan. be category The where Overall, category, as some little has today we though, changed far consistent. this like in being trend to point. been go categories as it's to the at to with similar, Very about from bit a as stocks would same place we're compared –

Ryan Sigdahl

change Any accelerated sheets openings in sheet any new accelerating strategy? improved. medium-term the kind in better thoughts near and Balance store opportunity, participation, of store Big balance on place, on thoughts expansion significantly there?

Jon Barker

think that in year. that mentioned, continue done a you don't I opportunistic. We the We're queue. balance variety look for the over which opportunities expansion, ways as to we've in for And us last position sheet a of different to going puts our to the openings. we accelerate would that store plan about talked is are continue the to new in be say to ones

we call sort as how a And presented opportunities That's similar business advantage in been usual. change so, if but kind would wouldn't that in of we've take I of operating strategy. to themselves, of it,

Operator

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

Peter Keith

the great years would don't ramping Obviously, growth. two you able that you ecom quarter. ago, capabilities. will to ecom I I guys maximize think for be Jon, up compliment

So, nice and being looking on by that picture work. being is breaking demand thought just you general driven From any have perspective, a the big amount XX% is driven given what share growth what between at down market by amount gains? comp,

Robert Julian

and but to, share weigh – There do sure so We'd We know Jon difficult. gaining that are to say some is and moving it's we are from. Robert. is I know that This trying how to now to that like many from in. in and events. factors and bifurcate that much out hard precise sure for for extraneous growth to are categorize really, math. break just pieces we coming benefit really from I'll occurring is let And where it's that we're be each getting trying hard there very coming many so that would right is are the

Jon Barker

we for we've is Warehouse, is really sportsmans.com Jon. them to how loyalty large But to and opportunity continue That and new to of and grow important. They're over from our share last This reengaging organization hard the that Sportsman's customers us became is database. those continue category. is email that an through and the us. incredibly We've amount we're the in stores I customers market retaining across gained purchase parse customers. thinking to They out. two And grow about what this really many what's new how important customers question introduced and to quarters, can is see the that's think

them us to to while think outdoors new and it's share for for reengage take So, exactly market lifetime is on build I of what run. we those this the say hard focus versus activities, those participants value new extraordinary how customers we want how much to long really is continue growth to and the in

Peter Keith

customers year-to-date, now a maybe Maybe the you. at behavior? observations made behaving I is, as are you with are rate? new at any the that by you've that Curious Jon, acquired rate similar follow-on, here repeat as a around seeing on new have stepped-up with visits a the before, customers purchasing how mean you What already

Jon Barker

card. exact and more speak to of that basket people quantity I saw generalization. out. return in the a what customers started credit loyalty, online. to And up to analysis. up is the was a were see That's get normal our quantity shopping where more the for of for QX, that a the normal store have seen can't QX, questing really signing you saw it in get to tell I and behavior inside to as department. the And new to great in from would customers give what their we've And signing we of question. We the But shopping last mean summer. they probably you we point. customers analysis actually, that, I department rate are need by Peter, customers looking what behavior similar repeat I'll store data basket new In moving inside some can

our more be to some credit think normal activity. all to things give retention that growth, improvement the our And perspective, that at email optimism to behavior, new increasing at great the we're component in us stores. together loyalty allow the and getting will shopping repeat I in We're from better we're growth which those sportsmans.com So, website. our and a a and that growth, us card seeing excited see file customer our in on new normalization

Peter Keith

one Maybe one for last me.

with you also, of particularly any to Ryan's signs don't QX, say but early fair on question purchase cadence. And Just on large as the canceled, started? any follow-up activity the I football on that know quarter college there? on kind finished to to chunks comment want as it hunting then of Is early season, it strong

Robert Julian

very and single of was Every QX, the total months very, consistency. the and we part two your you're correctly, our what said same-store thinking quarter QX of Peter, sort I in then first probably month the how normal, next of saw changed month we had the the first hit growth the I'll it In growth take And is about cadence these similar the quarter. If second. real reported Jon question. QX let I'll throughout understand results. when we levels. answer elevated

pretty was at ended it same the QX we at in there total that up throughout trend, started change store. we both or no much and quarter And level and growth, way and So, that in stayed a down. level terms of

Jon Barker

many that I the and greater licenses have hunting hunting one June data. July. is this have This this state seen a at data side, licenses all. to may had is past some that, out sold never and – far sold could, think thing in so fishing growth Peter, I year that's And licenses worth both applies weeks in many, in this on we've and rate mentioning if This better many, Sportsman's not a or minutes in we taken that participation years. than cases, the out we've –

I the for overall be to participating. field that people more good hunting the So, indicate would season year, industry. again, early going the that more think be data people there's I in this And will think

Operator

Markets. line of from Mark Our next Street the question Lake comes Capital with Smith

Mark Smith

Hey, guys.

at clear-out apparel maybe that see for you just things talk margins that? off Did in board all was the sales about of you and some First businesses? have the during really those spring the some strength impeded in impressed quarter. me, Can you did across those in Or footwear I with categories?

Robert Julian

Those progress And say, saw really firearms than, higher-margin product and in I We This are is you. categories. categories traditionally nice much with ammunition. categories agree Robert. those

margin some those to the was rate, product and would refer there what rate. gross within I pressure categories, However, on

where so see technical really within apparel of As are on. and category. increase to rates want assortments same to – on thinking sort focus at that we and right saw the and win about have a didn't of in looking we our we the sort We

However, that at a margin continue sales be than to category average. higher much our within

Mark Smith

then, in off – as we'll saw you it, change higher July? rates or maybe And as at, stimulus wound checks broadly call stimulus any as changes rolled spending, unemployment any behavior that maybe look we down consumer in

Jon Barker

This that Mark. summer, our holidays I bit is I of apparel thing summer side, probably add really, add think big Jon. which the I but vendors more than to Not see. that there put were from will on these of little brands. that unique. into a And we a mean apparel mapped key color, this are were this And the rate a One lot don't variance traditionally

go line apparel, come and our probably to bottom over with on were see retailers right margin. inventoried I think mapped we the did they some pullback again, some which, and from holidays through,

Mark Smith

me. last I think for one the

have talk of as QX. traditional a as we more archery, looking within changes looking kind a positioned what you've maybe maybe look at caliber, inventory trends and you're in that we historical that in during shift of a hunting kind maybe you seeing of as you of hunting about this category you at bit, those Are at well bump into within And any move for instead X-millimeter, those well and look more rounds but quarter as we seen and inventory? as talked then a as As winter into kind ammunition First, that also ammunition at the how firearms firearms rounds yourselves? far trends on sales hunting categories? you and we just season, how look about then on into can two at little has as trended

Robert Julian

Let me color you first. some try and give

crossbow Let's talk weapons, compound about primitive the both and muzzleloaders. combination of

all, of buying last we've new while really better a the in the that in of in got those First few talents, little been has we for now, primitive and positioning have years. job some us a nice done categories team organization than

started right, and just started seeing And positioning few in half kind hunting strategy. ago, field We summer weeks. in of it have seeing started a sales is the new are not we've a last brands and And in ago, strong three and getting Those market really, two demand. been have fall. the as in the we started archery. Inventory the early got about people fantastic. into and weeks thinking we good shape, really the really So, weeks last we and

participation crossbows rate. primitive again, a So, nice a legal. they're are seeing think for perspective, were we're from And archery, Warehouse and well-positioned we muzzleloader we well-positioned Sportsman's I where for

we summer, centerfire had with we've partnered spotty. Ammunition with be performance We've bolt-action are certain be four bought we for fair, boxes, good in hunting season this built hunting ammunition, are with the season firearm a this exclusive rifles two some the we're firearms into that going shape. normally in and just year, key really about they and core to hunting on happy there of very They can and boxes. kind sure. and in maybe somebody think the be exceptional of rifles, that's those. was vendors I business, buys on shape. were Again that we're To little in how As calibers

nothing on seen we've some but So, handgun centerfire ammo. thin rifle, NATO in extent or ammo the to spots we've seen

Operator

are like further to to management in questions for There I'd queue. the hand remarks. no back closing the call

Jon Barker

thank our time This A at of is distribution thank Jon. And center, in today. you care associates office. this to the very their I I'm entire for that, want stores, the our and special And year. thanks very team's contributions center, want dedication and we all our everyone proud to corporate but I during second of to will with only quarter, close say call. not again.

Operator

participation. conclude today's you this does for teleconference. and Thank Ladies gentlemen, your

this lines a at day. have And wonderful your disconnect time. may You

Sportsman's Warehouse (SPWH) 2 Sep 202020 Q2 Earnings call transcript