BOOT - Earnings call transcript Q2 2021 | Boot Barn Holdings, Inc.

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Operator

Good day, everyone, and welcome to the Boot Barn Holdings Second Quarter Fiscal Year 2021 Earnings Call.

As a reminder, this call is being recorded.

Now, I'd like to turn the conference over to your host, Mr. Jim Watkins, Vice President, Investor Relations. Please go ahead, sir.

Jim Watkins

you. Thank everyone. afternoon, Good joining XXXX to earnings for second Boot quarter fiscal results. us you discuss today Barn's Thank With me Operating on and Financial Chief today's call are Officer; Officer. Greg Jim and Hackman, Chief Officer Chief Executive and Conroy, President copy the Relations on site bootbarn.com. section is Web Investor Barn's of today's Boot A release at available press of the be a replay site. for after this a call, company's as Shortly section recording of the days available on Investor we end the Relations of call will XX Web that you this remind statements we statements. to in like would certain will make presentation I forward-looking are only reflect of differ These Barn's based factors forward-looking statements Boot current Barn's from and judgment on may and results Boot analysis number of affecting as actual a expectations today, business. materially statements. Accordingly, place you these should not undue reliance forward-looking on

of associated XXXX quarter we webcast, statements regarding our thorough filings and be that risks in to statements is more disclaimer with second as forward-looking you during a this fiscal call uncertainties made included forward-looking earnings as to release the For discussion well conference otherwise. the the SEC refer and the Jim We Boot of any or will Barn's do update and to statements, not any Executive the events referenced turn to Jim? disclaimer. forward-looking obligation future or as information, Officer. now alter a Chief in new call whether result over undertake with I that President Conroy, our

Jim Conroy

update second through results, you four joining walk On us. our initiatives. quarter I on deployments for review afternoon. everyone you, strategic Jim, and our Thank of good Thank today's call, our each will and you current

then we up the review our financial Following in for my detail call performance will open remarks, and more will questions. Greg

the through Boot we nature like for of pandemic to Before work continued current the company our by has I and this team quickly environment. environment. organization organization. of on of the we focusing Barn The be to navigate macro be and the to continue adapted a humbled to their execution has begin, acknowledge the job grateful a ever-changing tremendous intensely hard while part and would entire as the safe culture done wonderful customers, serving I maintaining shopping I'm

are from sales exceeded our We X.X% ago top results pleased expectations. with a down line, quarter Beginning X.X%. our sales year second net were same-store our very with decreasing which with

many Given our the the increased our XX.X%. environment declined and accomplishment. maintain channel, was on same-store to same-store volume e-commerce nearly retail X.X% sales quite our business, the year-over-year in pressures By ability sales and an stores sales

positive sequentially to in X.X% The during sales sales Following was October. X.X% cases September in August, a same-store acceleration Consolidated slow our due driven same-store to improvement X.X%. start of key the retail sales increase quarter has in before and in stores. in states, turning consolidated quarter growth in July, sequential declined same-store the each improved COVID an increase in of month our to several by increasing continued

As margin call, correlation stores seen merchandise retail second we online. in mentioned on both a our store was we strong perspective, margin From and a and quarter have around sentiment between sales. our COVID-XX last quarter's consumer

an accounting and of mix. promotions, navigating markdowns great has has again a merchandising in inventory to diluted offset $X.X per to us expense margin tax included retail challenges for prior share efforts done benefit to higher recent without expectations a was margin million cost our share or We and second The the per Once reduction due and in channel than partially the $X.XX incurring which well diluted income environment standpoint helped headwinds have full $X.XX resulted which resulting and freight combined due the team income to in costs, job to the through year buying minimal from share-based better many compares positioned million selling $X.X in strong This philosophy in $X.XX price maintained growth selling full occupancy with markdowns. with margin product our product per deleverage pressure of quarter our net due in or compensation. price and period, share.

are in now macroeconomic remains provide our the flat continuing Given sales year bottom encouraged environment, like particularly stores sales We on retail to very performance our improvement fiscal I'd line October we quarter. by an strong. business. last our current and during in to as the online same-store challenging saw update were

broad-based work our growth momentum be comping positive growth. in driving same-store to and four now performing provide boots, update would initiatives, category, strategic Western categories also with quarter-to-date. see to we our to strongest continue building on across denim, of are While I boots hats are encouraged like an beginning sales now other all of which more each with

we business, quarter, and same-store saw slightly retail the flat stores sales negative July XX% sequential September the comps improvement of declined in October. from in improving further of to in significant in to During improving month comps

during While COVID-XX restrictions underlying that oil tourism. employment solid. notably prices Low from some some the slowed experienced West quarter, headwinds COVID-related to business markets, in our travel while our in of of benefit transactions Texas, our we that have several remains impacted sales impacted most related in markets

challenges, get Additionally, concerts continued same-store provide for purchase in resistant same-store the quarter of sales our our and boots have our quarter, From needs. customers were in working ending events sales of for unemployment first improve month in a apparel into improvement products experience. preparation our be a FR the pressured with Sales high event. for our rodeos from was perspective, canceled model comps. September Texas, customer These boots been our flat X% essentially our and purchased of store the to quarter attending a in-store work as of retail across functional affinity work The showcases to typically for shopping and decline gas strength merchandise In strongest business and COVID-related of country. some the category. customers’ XX% work the these a demand the in in oil able second markets. catalyst to the such store of decline to in our Barn the up we customers and stores Despite for apparel events the soft for to in performing were at our our business contrast, other Boot stores oil-dependent the industries, apparel which core their work as due and non-flame

adjusted sales direct COVID and mail spots. apparel ladies and Western of the on In both the quarter. addition, mix and our emphasis while upon pay-per-click the back of radio spring, during digital media men's boots From pulling marketing advertising by onset declined placing on perspective, a more in we and

and Western addition stores that of more refocusing customers, a From have core radio, we than on in more We've a our and our our more penetration especially normalized program, those opportunities our perspective, we outdoor, country extends the country. to expand don't holiday marketing lifestyle, recently XX%, into direct had just to fashion with targeted Inventory line fit footwear a customer assortment a includes team mail, reverted Western Recognizing adventure started which This season. living during returning to just rugged and enthusiast back an boots, to a more Now those to with we live the in product category. segmentation and our new reach customer our in also work business broadened outerwear digital returning have our to a marketing marketing hiking to segmentation, increasingly in giving and lifestyle has offering the product to our but recreational expanded are of television addition outdoor segment composition these core in segments, outdoor new and place. who to with categories apparel. at merchandising build. have into segment called and expanded the in spots gift traditional

the and normal with draw existing of are today expand our this customers From new of hours stores offering We customers. operational wallet share perspective, operation. brand open our with essentially to expect to an all of

shopping promote we holiday with social to hiring in and seasonal the use made partitions terrific that Plexiglas much face We of of in continue build progress staff coverings, at recruiting will and registers need the environment for safe also We've business. the the distancing. a

As handle challenges external and to presented forward are holiday whatever we environment. we great our from staffing our how feel merchandising, holiday we the the to positioned and to react surge to are standpoint by look quarter, about marketing

second our our strengthening to Moving leadership. omni-channel initiative,

e-commerce than XXX% quarter, more increased will XX.X% in income. second increase same-store the sales our During and be profitability e-commerce continued on operating focus

Our driven increase was customers. by in sales both and new existing

sales our The more up healthy of with majority on a customers BootBarn.com We across and in than platforms. online of are stepping business. BootBarn.com driven increase on increase of Sales was both by year-over-year XX% e-commerce traffic now of the new make up saw growth conversion in more conversion. quarter optimize XX% each a our during efforts we online our focused the to add and

digits a result rest year-over-year, our between as e-commerce were the our have line, While significant model. online changes margin the only more and greatly partly focus on not business to in stores promotional changes channel. we the we low-single seen and have ongoing we in to profitability differential online improvement associated sales Sheplers.com made reflect of a posture in bottom e-commerce price the made the e-commerce down full profitability, have site the our our selling of continued and increasing narrow rebranding The but improved of have

unusual enhanced pick aisle capabilities meet to omni-channel shopping our believe endless our us curbside improvements buy We during WHIP tool; the these Rangefinder offer including and our customer to store of variety pickup. times. tablets; up We in a now omni-channel making are needs to capabilities and will continue enable options, online,

buy business, up from recently have of in season shopping we success with purchased habits. our our e-commerce our believe as gifts the their with sites, additional including including holiday to capabilities We online than longer competitive added seen our days weeks pleased enhancements players. stores traditional us are advantage, of pick consumer in We additional stores. extend store our online, performance adjusted delivery from several these orders same-day provide our which e-commerce delivery our with recent direct We on shopping will sales have customers of and some same-day

and coming conferencing our the virtual with an customers or shopper. in-store launch in home video shop virtual plan as to to Additionally, their weeks, clienteling expert allow we from stylist to

years of order any holiday along online season. last to our from us demand fulfillment potentially we season. perspective, in the to provide platforms still system incremental them shopping and While customer and as From added enhanced into fulfillment an distribution these and fulfill center center has been automation satisfaction, has capacity at especially over and the the each that shortened recently the encouraged performance times are holiday early prepared the management changes, reduced by busy to expect few type we well the time to These expanded warehouse e-commerce of across delivery. picking the upgraded the during enhanced added, have head sales days, with

Now strategic third to brands. initiative, our exclusive

second During overall testament high-quality an customers. grew basis product the XX.X%, quarter, is offering and the of the the with compared brand more brand year period. increase XXX This prior than points our to a exclusive penetration seen have to we receptivity growth to

believe exclusive We offer with site store. third drive As This a brands third-party Cody e-commerce to Shyanne reminder, from exclusive traffic stores the continue alternatives and in our customers. inexpensive the our our nurtured as from in and has brand as will loyalty our further on and assortment number number James develop development and partners four positioned are we to and true party combination two as our created brands to selling brands not our and brands. vendor brands focus top

brand to to fiscal see points expect in XXX the current continued during the our year. exclusive We basis in range growth XXX penetration of

fiscal to the our October, our We in store new stores. existing plan one opened expanding new and to to continue XXX bringing in quarter our the store total Finally, We including an and of openings year-to-date. initiative, new both seven opened in store total base. second target count stores a store store additional XX and markets fourth open during XXXX,

continue business forward. markets. We underscores performance of encouraged of going the the those the further stores challenging open are environment, strong to particularly the in the and significant model opportunity attractive returns very to newly by stores, us with new strength macro open validates for This the new performance, despite

our new normalized over environment. have to fiscal by this expand slowed like in to Hackman. each call to While intentionally the base a we now in more of store long-term COVID-XX, we year unit more remain or Greg turn year I'd as a growth external XX% confident result our ability

Greg Hackman

or to decrease in merchandise in a resulting XX.X% $XX.X buying from $XX.X and and result sales XX.X% to $XXX.X decrease to deleverage crisis. was or of decreased Merchandise declining stores Good increasing of in primarily buying you, second in X.X% result in that point sales staying in a and The sales with everyone. million basis decline retail Jim. e-commerce COVID-XX at period, and Thank the in million. X.X% from a net driven the margin X.X% The costs margin stores occupancy increase of in was to or occupancy In year of and X.X% basis retail points home XX prior in million declined the XX.X%. Gross XX quarter, the afternoon, decline profit costs by gross store decreased same-store net decrease sales The was COVID-XX points sales sales is response gross of the basis in partially result XXX higher compared of an resulted rate to product of a profit rate resulting point XX sales traffic $XX.X basis quarter prior in income sales same-store XXX profit the due crisis. was of decreased compared tax sales million sales in in our rate. prior our of lower marketing customers same-store primarily million or points, sales XX.X% or balance expense better expenses. the per penetration of or a XX.X% operations compared a or X.X% to income million expense period. offset $X.XX result Net million X.X% to freight, Income million $XX.X of and period, quarter from was margins. million higher was in year year for of million the quarter primarily million which sales $X.X $XX the of the period. $X period. per to in income Operating was decreased to compared e-commerce the basis $X.X Operating expense by in XX.X% sales prior in pay-per-click of net share year as $X.X $XX.X lower diluted tax compared the second $X.XX result in prior effective a the quarter. diluted Income of from share the or year and

Turning to basis reduction the our a in comp The last store decrease inventory by and in to in XX% Fontana a both in compared offset basis. inventory was total company and distribution stores comp in by XX the the company inventory approximately growth in for on inventory balance driven added sheet. total decreased partially new center, months. Inventory year, last on a decrease primarily store

during team's to We continue ability to be pleased environment. current with the levels manage inventory the

total As XX, outstanding outstanding, our of loan $XXX.X including on XXXX, of of of September million line million a debt million a had we term $XXX million credit. and revolving $XX $XXX

our end During the we hand ratio million of the quarter quarter cash the at credit net of million availability. resulting remaining end our in million, had of borrowings quarter, leverage $XX on $XX in was at $XX.X second reduced line debt of by We the X.X. and approximately the

COVID-XX, this the visibility of guidance lack result continued not quarter of third providing a at the business Given company into time. the as is

to back for the to some turn like call I'd Jim remarks. Now, closing

Jim Conroy

Greg. you, Thank

quarter positive season current the and about challenging, pleased maintaining half the holiday back we momentum optimistic through remains second are Although with of are our our results year. the environment and

initiatives model through strength and We commitment, Boot that the continue a of lie the would hard opportunities backdrop. organization their ahead. executing our like of to believe Once to and again, care on thank customers and forward work look the for the our I taking in difficult Barn to

like take would your call I questions. to to Now, the open up Stacy?

Operator

Thank you.

be a [Operator session. will conducting We now Instructions]. question-and-answer

first with question Please from go ahead. comes Boss Our JPMorgan. Matthew

Matthew Boss

Great. the momentum. congrats on Thanks business and

Jim Conroy

Thank you.

Greg Hackman

Thanks.

Matthew Boss

core the XX% as to year? and California top markets? in to line impediment what performance oil Texas And any comp X% So Jim, such your growth relative you positive is of maybe unit seeing maybe some in are given returning there new your stabilization, next first to as gas markets early on October, as

Jim Conroy

the been turn has think question. story a those other rest department month see regions. between after is includes emerging Okay, ago, so performed business North the due of organization that's pretty we et in – states, West month then boots pressure, we From oil some then regional the think most that's or two. started into a good California the Texas. of improve three is and includes few months month, the somewhere that's been four as largely But selling overall essentially and three sort which apparel. way Texas we region, different Texas, best. we one, and by to we work sequentially progressing which country perspective, some the after region the the some split markets The I each and the of work West were then in region, The one cetera. of And softness positive, And to the encouraging in field includes has under South and

So all improvement we've not a boots, steady sort nice than a broader positive, And great but seen through of a single apparel, men's in positive, in just have see work turned boots them departments of many men's to many apparel. now steady and cowboy growth improvement in ladies cowboy business. is steady those of nice improvement being are nice which base a work of them, the threaded ladies

more that pay Will kind The online, around height again, back in brand that. up And the that here a of new for – the this stores in stores might stores are great. our are when Boot of really And we've even doing Barn to question the felt involved There's in Boot opened are the than Barn and in truth right new environments the the is at stores and stores. new shifting hold opening second we we store curtailing reasons at couple these than are a of seem about pandemic, this middle people hours back of of brand like worst expectations. a part totality didn't know even your markets opening exceeding One, new and for they ever we will faster in pay probably have the development. of pandemic up paradox ourselves. was group three-year benchmark of are is, least while

can continue we is we to we thought. have we're as conservative, more store second stores open markets The existing assumptions been reason existing even may density in than stores probably originally our too and actually had markets, that in realizing open

a together, we'll get put you somewhat of to to will all environment, XX%. return normal happen, not think we that we’re back I that So to think XX% absolutely be able and to sure I returning when once

I we’ll And we're store think least to to and more more grow to able double absolutely across count. opportunities for be the country. at look our Barn the brand Boot continuing

Matthew Boss

if follow the Great. for a maybe to as the third in a in there's to what takes, what's gross about reminder costs and back And that half year in of half to the puts you basis you up think relative back point margin? XX On And contraction for gross margin, merchandise any year the maybe comp just within the the best margin Greg. the way just second occupancy then the the think maybe need quarter? quarter but of buying the is in leverage

Greg Hackman

haven't today. of Yes, on. at course, from probably nothing the the kinds those is true pressure going given past we of about There's on Having things than I top year. that line, the leverage points said really think other hold we've that, given year abnormal all this guidance this in

a revert guide. to the So I think said back pretty probably we past, what that's good you if in

year-over-year. related e-commerce what about think that would I see the And October the in think end points merchandise was QX, the in line margin in we with in margin, last was you basis more merchandise of is points October of which the penetration year, penetration As basis example. XX XX%, growing for e-comm at to of XX probably decline

the But we'll pressure QX. bps that know know percentage XX of extent e-comm margin the – the to sales composition X the cost line. on that don't I of that same grows I merchandise is by So don't have about point, in penetration

was we QX, and X that points in basis penetration XX So for us. of headwind increased had year-over-year of points

product call some our headwinds piece the store, other from The in but The And we I’ll have retailers. seen have that's in that you had freight. expansion sale was we related what margin. of some of may this product other to

terms things a in to Coast I it are out little a QX. of of freight ports be QX, differently But bit margin. to pressure down product think significant our there's you West in. what merchandise to the So a will composition don't backups and having in affected some us do little really sales that there, in be the so to headwind but expect of we bit in in about get that how comes QX

Matthew Boss

great color. again. That’s Congrats

Greg Hackman

Thanks very much.

Jim Conroy

Thank you.

Operator

from comes question Please with and Rakhlenko next Our Max Company. Cowen ahead. go

Max Rakhlenko

lot. quarter. Thanks Hi, a Congrats nice on a guys.

talk much on your e-comm you how can share can So have from And new came shoppers? baskets or we different look maybe And the those typical how one about comps, similar shoppers? then more? of from that you then

Jim Conroy

in online, on BootBarn.com and business, Sure. improvement healthy Well, there's line combination that the very stories conversion. two traffic and strong bottom right, of is a different very strong healthy performance the line line, top top

is and On not the the that away and and promotional aspect completely as We've it’s it's little pleased has we're improve. a And this really over the price But Sheplers versus posture entirely given the trying site. rebranded and nearly come But fact promotional conversion higher down. really up of we've promotional are of to traffic all that e-commerce And profitability our that points taken XXX% that changed the continued it. unexpected. the called sales side, legacy we've brand Western year. that's together, last XXX-year-old has put underscore that to the fact Sheplers, given not the of

a So, in that growth view despite as it's XXX% a of fact e-comm, and margin. the comp of essentially that combination sales we

frequently versus new little of think new And question that about are over. – others of a existing about In shifting shopping if is customers existing customers. more traffic, just stores bit maybe third the about or than terms either Barn, of Boot a customers more increased you customers, your customers specific the

question something that ask, are the is to bit a you is your Boots little does not other There The a differ? $XXX basket bit than higher, the huge in that. on store, and of at different was roughly question on store, you higher versus other $XXX But the $XX differences. that, like business composition one all average so around or channels the $XXX the different the bit You in as Sheplers.com. higher look which were the penetrated is and brands some before additional about of work would and the BootBarn.com. Denim you that each little little large, the by boots in basket be sort is with line – higher had selling how there's going a new merchants penetrated online we're than other, basket apparel. and have nuances and denim, hats

Max Rakhlenko

mind some Understood. in the quarter, maybe of to earlier season, moving December for them holiday risks supply from how sales those are hear thinking the shifting And about various into of we’d the you just some love with chain that? about

Jim Conroy

every that do and a how is that try something earlier shift been I lot There's of sales and each to think retailers discussion year. about

year. sort have cadence a of We last similar promotional to

don't sales the a little know, et and of or intention have breaking have year. of to during But holiday We've year, you terms be doing the little marketing that our during cetera, anytime adjusted As bit price a massive period. points we in we massive price, including earlier. promotions no this planned

make done try to people prior spend year. late And mitigate we think either differently to than that have Just we've to that last bit little I a marketing of develop like the last capability out Thanksgiving overemphasized year, shopping flavor thing last manner shop that shop omni-channel of can is want. in to or they imagine easy time for online it to every that people any you customers to us to with running

with And going current some our think it’s would pricing that's we are a be not that promotional other probably out just to early us. retailers strategy. and for know strategy So I more work

Max Rakhlenko

it. Congratulations Got again. Thanks lot. a

Jim Conroy

Max. Thanks,

Operator

question next Stichter ahead. Janine from Jefferies. comes Please with go Our

Janine Stichter

what you. performance profitability divergence profitability for versus kind Thanks think slow sense stands the any have gap my to Similar you essentially questions between room in the and there, has growth little banners? been a think on e-comm, consider performance how question. the seen and Then there Naturally you would as that Maybe of just of gap? also. wanted store other understanding Thank store improving. in channel bit there's of at BootBarn.com perspective a the month-over-month that has improved. on normalized noted e-commerce it Do a the taking you ask Hi. maybe bridging rate in I also some give that profitability us about much where more you've is we've

Greg Hackman

take I'll versus is your on Janine, profile of So part second question, the of which the stores. e-comm margin

Our stores Jim the in on performance to earnings the doubled But reasonable quarter. we e-comm our mentioned, plus channel. channel the a as continue in outperform comp e-comm of XX

expensive we’ve place or of in an a freight So order that disadvantage be the freight stores in The from inexpensive a that that basis. to and on rapidly progress. disadvantage rate more that's the places is able store where But initiatives New pair e-commerce significant piece. York to And make the boots to sending – freight line. freight customer we help the fulfill continue is e-comm to the will is City Jim piece, the lot going made right. most on that to But is significant talked a our on about of most line a some

Beyond that, penetration. e-commerce exclusive of there's in channel a little to relates bit disadvantage it as the brand

recognize quality online. do exclusive that's know, and in-stores, the feel to brands you see the of our can As and harder and customer

are the the penetration catch first exclusive can the helps Those make biggest profitability So course the question that it business up stores’ which difficult I stores a to or profile. rate. probably overcome has of brands cover margin two things of penetration bigger -- or the heavier to

Jim Conroy

it. I No, got that’s okay.

on would I going thinking we're sense perspective? maybe a And think Boot little Barn double The margin it rest solid nice. solid Sheplers, we our will which expect we digits what digits, like easily a weren't give something could our provided, The we probably focused to focused slight XX% on Boot while drags asked a driven quite it the be on into imagine – pretty falls XX probably will which call, is in had because bit double we on how be would to business will even or continues I on comp can business, for but about overly a consolidated growth we this think grower. was eroding. comp be forward be continue that our haven't You on been would tried business have probably Barn. e-commerce from online I look line the is but we of have improving if you rebranding high “guidance” e-comm XX plus quarter same-store we an we'll our amplify that the have e-commerce the to weren't XX quarter. watermark, top businesses we a of it to in and the And really higher, had sales profile was

the So, least I enhancing a it's top our would absolutely it’s or and restraining that conscious to tactic just very everybody slowing been performance we've an that line that remind decision fact kind at line the EBIT growth. on strategic bottom we're focus It's of making business, of taken. despite e-commerce

Janine Stichter

you. Thank Okay.

Jim Conroy

Janine. Thanks,

Operator

Komp with is ahead. Baird. Next Please Jonathan question from go

Jonathan Komp

be hear rebound positively. a going a performance their on chance the with ask to back Any on driving question here? forward understanding I but to more to might Jim, maybe category have? there's businesses you. the trending most of comps guiding you're to and Yes, what's thoughts well trajectory great. back sustainably – your wanted they categories the Thank up not thoughts about positive want that non-work and the and of And like broader I

Jim Conroy

Sure.

work like was right, side, started but improving Western to think it's And boots. to right, on as base, not needs of somewhat men's from storyline, men's needs I and much see flat discretionary which business denim, is trend Western which something next got sort positive great the on turned base it's perhaps about a the and as somewhat an somewhat but base, just spend. needs that now, we then followed So in natural oftentimes to pure is boots,

to for shop I starting clothing their for or how now it's see just and boots as are playing in out more them customers So family. apparel traditional can

merchant team the some to quickly we adjustments, store's right. credit and little a giving team, the perhaps thing, is other the made have think pretty I

have the So business trends you to casual. examples, tended few to in the be give more a now

buttoned more they they're wear just t-shirts more that sort they're things buying than down rather casually. and So woven might shirts, buying of

safety lace-up sales of using things to the been our because of toe selling for them some nature. without weekend we pieces work believe right. people example, are a boot have For also some hikes and added assortment, We've that

trees we're stores. booth that trying So comp care out boot a our really kind the masks have seeing is have out, manufacture per admittedly transaction of And sales not credit our consumer good sanitizer, our if boot where we've a units a I or taking performance per of well. units adjusted split transaction. had we're in selling in helped Embedded us. is stores there. some of the face give the in even our but to as socks, a some expanded focusing stores. booth all to we see we Part thing, nice but to hiking then adding the stores, of the on increase to number We've and hand And purchases. assortment what of pair that last you adding And

it's starting that particularly encouraging. we see a together, to positive same-store that’s across in while think put really momentum the – nice gain I and stores, we battle multiple departments all So to sales, still are some

Jonathan Komp

adding, how more categories across channel mixed you great. Yes, that's one holiday. in play the then question out just the potential any like and business does the what your contribution Can for new economics those business? delivery looking the initiatives lines store? of selling, And there sales of thoughts we talked changes the forward same-day a on Maybe across some remind And from for virtual client look just the the to and so us perspective? about

Jim Conroy

Sure.

So apparel how the a not we're those exactly bit play on the holiday our work a FR work weak. business quarter, just third slightly will business. in of business as and sure The than quarter little if versus is Western becomes that decreased gifted work think we Western is of very out, total And and The strong. mix, work, more our the very work boots right. percent

maybe a think from same-store sales, headwind almost a are pushing we but could perspective. be slight the that other although offset, maybe it mix to things some So tailwind might quite, I have not

pretty a very or terms of that to now, And Greg or earlier. traffic possible people could we omni-channel We capability that hours, margin have the the during have In be accretive down shut going that number take portion we are with and hours the in business. of save that they them additional we COVID the regular product local possible or significant built, to the can it's curtailing a other it surges store that's scenario we up, reason we small it tremendously really every to period. it did fees have we out the spoke customer is to if can right help the about sort our sale, of were that store can holiday business already bolster a in in against the did or and built built significant wanted store be to of hedge in store, and curtail out wanted store have new to e-commerce state market governments curtail capabilities was freight sales, where because the action pick every versus a a downside

your delivery built day it the directly from delivered service. by we And you ability house house that have so to buy to and store directly your can local to or the shipped

working off speed have and IT and quickly a e-comm the to and the process. little very it hats store came the for have the local delivered up very, the and running across team them. all country from the And to You together and to to ability those with for them somebody bumps order gift in getting extremely them capabilities

Jonathan Komp

luck Good you. up holiday. great. Thank that's gearing for Yes,

Jim Conroy

you. Thank

Operator

question Next ahead. comes Citigroup. from Paul with Please Lejuez go

Paul Lejuez

Hi. guys. Thanks,

mentioned positive, could AUR, that's I And talk in but I size? if overall about little was UPT driven by store traffic could then if more October. marketing. transaction talk seeing bit Sorry curious more about your comps if or being missed turn you you a this, actually you curious if

think little I you back a pulled bit. you said

You're expense in second maybe to Thanks. quarter? there how XQ? about normal. start should your as Were any we shifts thinking going that marketing going to impacted Just back well be timing

Greg Hackman

QX So but we little little we're higher do playing Jim on contributors. as millions the offense a the then out a of of I'll did We improvement a that we September a the of QX. as and of a the marketing in of play we’re open trying QX basis see called talked year in expect into a we And given little spin in save fact and hiring We're one businesses our to the we’re did It's than bit start year-over-year with just to October this August we bit marketing spend. dollars, not that bit marketing invest do job a normal hours. and seasonals. in to shows sales trajectory bit, little good into offense. about our from doing September expect

we're to the in investing offense. bit So play business prepared little and a of

last we're marketing than year. QX, is which investing higher bit in also in So a little

Jim Conroy

encouraged traffic is flat world, around with energized, our were try October. or that slightly. people to store a so call has XX October's to overly basis your least get question, intent of comp. last on plus said business, in offset Traffic, roughly of slightly, comp the bit. year, down become a pretty business consolidated we per little has to we we one flat. are stores Paul, up we month we that at strong had October our the average other last But for no cycling a year encouraging as on are of a terms transactions The improved roughly In is a proxy and in things, is ADT sequentially business the and too

able this about on good a pretty feel that. we environment plus plus X be XX to a post to So in

Paul Lejuez

Got one just And it. you. follow up. Thank

On very port that an the too if you inventory terms your the every from your You Curious mention you inventory a about would categories maybe bit lower Are light Thanks. difference private well little year goods? seems running branded talk some anywhere, in did change in a label be perspective. inventory, like? of there's it controlled than may delays. versus

Jim Conroy

Yes.

we and store to Paul, But we'd targeting little inventory average minus in So, have in get a XX% reduction that. inventory not We improved September. more we were sales have XX. the be our than thought

And a brand in and so the There's bit also our receipt heard you've a bit that of I'm are see sure. West Coast little about we delaying that of disruption backups little ports exclusive product.

in middle and as back reacted COVID of their vendors well. And some of cut on commitments the our

than had And little think of I a opportunities. we're exposed lots in targeted. categories. we're have we So But meaningful any substitution wider we don't

ladies denim certainly store. denim in got in light a brand, were we the we’ve other if So of in plenty

categories major opportunities. substitution are the So covered by

think we fine. we're So

transcript, from was if turn As see average that a prior a our reminder, the Xx look we year. last you about store were And at XX% inventory year's to up you'd about per year.

point. our So when all put pretty inventory at this about position good things we those you together, feel

Paul Lejuez

you, Good Got you. guys. luck. Thank

Jim Conroy

Thanks, Paul.

Greg Hackman

Paul. Thanks,

Operator

Peter please go question, Sandler, with ahead. Keith Next Piper

Peter Keith

follow to Hi. guys. Thanks up business, the to the Maybe Nice the improvement a lot. in see on question. inventory

holiday somewhat guys, store, one ship of vendor model, but out So the might right, that's FedEx some drop for And with is to everyone delays what with season? heard the the about planning store would sort to about advance? impact unique anything thinking industry the dynamic impacts in around the UPS all of you're there industry? or you in cause stocks we've that and Is

Jim Conroy

managing it we're it UPS Yes, is is. like And everybody and news the managing else it.

done something We have it. help mitigate to

tried receipts earlier we we've holiday season normally to in So accelerate inventory than would. the

being force countervailing fairness, receipts in in just we're there's were Now overseas. from coming also where – late some a there

inventory build the to in a stores weeks trying the early. couple are of we So

ourselves. that into distribution a UPS, to is something own to safety but very asked would away watching. is can center quick bring couple to the ship we'll late, bit It And the taken replenishment in We've in. brought stock. We've more Perhaps we stores augmented we're least of ensure a little models at that be beholden rather we control fine. put little a still a product it. distributing We've brands behest, when still be we're at do describing. of brought that their those if you're we're of exactly our what vendors So some and than we

of a done things. we’ve So number

the this or that, like weeks us able is, luxury help of things of called to vast the we does risk. of out, XX have and the of being no we supply something because carry that majority One have relative to retailers Greg markdown

even some product through have and getting as we delayed replenish we to holiday the little if do in, So we're January. in bit season into a get get

Peter Keith

done guys that's that’s have bolting segment totally feels something customer different certainly on topic, I good hear. a new than the about different a what country potential interesting to wanted opportunity. you ask you're in Okay, where the and almost On to past like

customer or of for just Do flush bit think like little will more be anywhere think the sales us? over So, it frame a where the hope and there a their lot base with of new TAM, land you existing could overlap out might be as to or customers you you of that Jim, majority sales you a time? percent up will do

Jim Conroy

another step process. the in is Yes, that's a question. great It

hats. we've X look years, all the fashion around let's one the bit in larger Wonder And and at contemporary said, for will this addressable for big cowboy not customer then customer. you of this lifestyle woven sort If long we is pure added Western only; wears really Western we sort of Barn right. And wears Western segment. quite baseball you're the concentric right, then follow boots customers very person and is Boot XX a wears jeans added West market there which addressable but we than the work; our or market core and The t-shirts, circle not shirts, hats, now

I think think that customers. to share our back existing of concept In terms portion wallet coming come, of will the where sales with it will of be we a

more now I think we've built assortment has particularly walk around apparel, stores the the ladies a If And core on bit quite some and casual side, a or the even quarters, nicely. few there you expanded ladies customer last fashion. over quite brought our in Western is into

side I recently, the has same. men's think done the more

comp in single to sales least were customer same-store same-store you two growth our So little if to of years, buy changing every at at new count healthy on, COVID, how sales almost I was increase look prior tends think growth quarter, an our wallet for to we be on that somewhat last the It for course. customers. can media we really we customer, some it. anyway. but that store and to how we’re basis. market to ironically, bringing pay-per-click, stores the prospect time on new And And That strategy. We're And do move from customers. in when fortuitous customer it��s also part from bit to that go we're of of take this an customers. frankly, the mix this more standpoint, from after with extension we more a that to our stations And is of the contributor we the a longer, get a new at Adwords has expensive share direction casual a tends current do that that channels a the started assortment of to

but we say – this, fits while can't you And in where but planned pretty well really encouraged when the ago the so that we it once customer we by were think get months nine progress with I outlook with a lucky. because that the far, it's is. pleased started I So

Peter Keith

the well in it's step outdoor with Yes, timed remarkably up activities.

So much. that how look so forward to progresses. seeing Thanks

Jim Conroy

Thanks, Peter.

Greg Hackman

Thanks, Peter.

Operator

ahead. Nelson question with go Next Rick Please Stephens. comes from

Rick Nelson

a lot. Curious, growth. lead Jim, restart that XX% the Thanks about store times to

that December going 'XX? quarter you third think that If you that are XX% come to the for comps, is commit you momentum fiscal store point this is to growth sustained, October where through with positive fiscal

Jim Conroy

a, capital during actually think as capital, b, pandemic openings and, our in solid and more. We're really. work. to we more back could mentioned. about structure just that may deaf – pull the the But related it's bolsters we now, new right We're they because think tone holiday simply that more very were to related Greg pandemic, store even didn't go a macro preserving the it's not be position I through a to

of performing stores once we quite even was that ready there customer we get out, there market, they're these able new there. in a was these to open, of some markets, As realized it a And turns some were well. to shop

we a store a is new So to don't be necessarily stores opening confident that XX good plus investment. think comp up I need

growth I in stores. February January, get need reengage normal the over �� any think new for world on few kind we of to next once months we to to the

pretty or of from timeline, can finding quickly. terms In store built. It's a we process six-month getting to a five move location a

upcoming real macro a in found great XX% probably environment and but new about have has bit, our a fiscal think solid we some little estate could already and he particularly nine stabilized we very ago new So months have get locations. of we year, see if started we I head the to hustle stores

quickly, can So, I year. including pretty think we next get there

Rick Nelson

week-to-week, the is little bit customers and sales and for terms down interested that a color. drilling trend, Also possible [indiscernible] e-comm? October the and of stores in maybe your Thanks in the and sequential channel into

Jim Conroy

I’d the fiscal is thing encouraging and the were of say So, seven very nine specific them include detail, without encouraging over September – thing going which into our fiscal October, positive. the our last weeks,

and one sort great consistent, bunch of week been solid. lousy hasn't them masking pretty it pretty one a weeks been were they've of So was Most flat. of and

part parts the into business little of October our last in very cooler nice a been in very across once there's has in weather since difference got As very, more country the at time broke, uptick, helped weeks. happened. of November. we that the into bit little the And of But least amount weather that many October, a a going been the short frankly,

Rick Nelson

shift more on there’s legs toward trends guess go-forward basis? that [indiscernible] Do away you a plan mix to recent categories. them? have from work you the those fashionable Okay, How wear I think

Jim Conroy

go-forward business more of fashionable faster. of replenish a described think new without inventory work inventory on requiring We piece what business. you can a of I the So simply And as basis, the quickly the amount big just the side very business, we've appropriate Western grow got the commitments. on

I most that of apparel we natural parts certainly that – And we business, to pieces slightly some need because look a apparel, exclusive the basic lead-time of typically make and non-denim, of the to the we brands with in feed work work nature. But longer further replenish of the spinning inventory going portion have that to guess to need decisions two ability out business So it. only it, just have we to commitments. we're sort good is a boot of even business, faster ladies by around is just

to do the So over bleed that we'll a we growing we business, and with what down inventory if growing line. buy fall months kind of ability just nine And fuel short slightly did it the last having we'll without of the in margin the business. slowly feel to

Rick Nelson

Thanks luck. a good and lot

Jim Conroy

Thank you.

Operator

with Mitch Kummetz from Research. Next Pivotal question go ahead. Please comes

Mitch Kummetz

have COVID the change But Iowa, in there; if Michigan, of pace business Wisconsin. any in Yes, of thanks COVID. know about stores have my been follow questions. late. question Midwest a the up don't There have curious of guys I of on you Indiana, up again? upper seen comp markets just taking some up I'm store Rick's traffic you've those as A in gone spikes for rates lot

Greg Hackman

Greg. it’s Mitch, Yes.

seen in North a the really that's and we’ve what change trajectory We haven't meaningful of described. business regions

see that does. So we we're haven't to if But yet. certainly it not hope We seen it. prepared

Jim Conroy

Yes. quickly. And I’d add to that just

doesn't because has store, mall. Our to tons in in typically relatively And core have and in a concern as -- store is quite in much store There's not the of affinity customers an space. a we're small our shopping perhaps large. customer the not we're job

come pretty and they drive kind to continue with of socially can to in distance a environment us. over, So shop

that operate when to some us curtail regulations our So way. is there's ability more in what cost

Mitch Kummetz

– last two-year comp mentioned, so improvement. bit plus a But XX Greg year us a September two-year an September, or And did little XX. October was September Got October you comp a the remind you're it. then, last is on in Greg, you obviously what Could pretty of October October year, was the similar on stack is? stack in to as what

Greg Hackman

X. plus X Plus It was or X.

Mitch Kummetz

if I the the that little it. big particularly was markets It and wondering in but it's trend income leading wouldn't on those two-year has not doesn't I up. Western that’s or uptick that? behind consumer Is but that of some macro a up, sequentially hugely Western Southern maybe thing seeing died is bit, – as a down some as some fashion improvement that a Is there macro this Western a of on underlying And seeing, sound some of confidence just COVID your gone you're improving guys, I to last there's for if meaningful. bit, imagine little gone something you there think has business? question, really you just some like then was kind else has got disposable in wonder stack. you're there it big Okay, issue?

Jim Conroy

they think haven't hopefully we I more work. use precautions, from that people any I likely have. either standpoint, a environment all it's if you they're that confidence or confidence, still hypothesis they appropriate absolutely in comfortable Many comfortable I need just more et are therefore just and our out word that people just and or take more are safe It's essentially still right, business, particularly be there. concerts headwind. desensitized think Consumer they'll because canceled, about to this help cetera, or what think gotten the right. slightly get we rodeos, and is than drive factors of and crazy macro would buying the are shopping a the

Mitch Kummetz

Got it.

Okay. Thanks, guys.

Operator

Next Hamblin Craig-Hallum, with ahead. go question, please Jeremy

Jeremy Hamblin

Thanks I have the momentum. about. my I’ll on wanted two I congratulations add to questions ask and

we a back your in getting to we've change I quarter a to the we seen terms X quarter? think those to thinking PM. going AM into to hours, this as what basis there expenses year-over-year December that year terms more that over of, the four dollar and in it's to SG&A up And in here, normalized hours? that five like permanent a, you're made last back assume getting the Should nature? normalized just operating be of that are had this of think in you SG&A I does mostly are most is look in the kind of reduced you on give X changes markets, to this December First just in back your Can b, to more of sense having terms your factors months, started absolute September. in or going in me imply about hours, And,

Greg Hackman

question. that I'll It’s question. second of Great piece take the Greg.

in going in I say on seasonal invest SG&A. the impossible line, SG&A think providing look QX, I it's to more offense, we guidance is What top right. we're investing at a bit marketing. unless in are we in not We're playing as to hires. guide the We're the of call on did earlier

doing cetera. some our we're do things suggest sales didn't believe with come. to then still opposed bit So of we're they a will offense. defense sales the that as reduced able to that would come, But to playing going if be expenses the we're we where QX to come, we not you playing hours, don't et which And leverage were the if

can't I tell model other that you how to to leverage than we're trying that say So to not the QX. rate SG&A in

Jeremy Hamblin

your pop feel for forward. And some a environment promotional? out competitive think be some at what this still would opportunities fragmented? your is you that you deals? market Can more the if be us the moving a other indicated today M&A maybe give kind I at of you they've sense consider how then in related there looking and competition quite you’d gotten that about performing, is, given increased competition positioning is, of we're to deals, then mom your How just bit little opportunities, and better are and seeing the And question tuck-in some earliest, tuck-in the of continues it. some you to looking Got

Jim Conroy

capital the industry, the think that which first traditional of mom the industry, pop in this, mom I’m majority the or the and is that So competitor retailer the didn't through group -- safe is our to fight and piece, have on because to just they our the through necessarily unfortunately, biggest continue say struggled has to wherewithal honest, I it's structure it. if

weakness. seen were or had We've We’ve guys have in. markets that some business seen we we calls. So some out go of inbound leave

opportunity, channels that fairness, with little a to because the counterbalance a there's other have product. going there an farm trip of present strengthened with – competitively. ranch does consolidation that in selling that There a course, is So all of us bit channels, more and is

maybe environment. current So they offset in the

permanently. That in trips they there than the unlikely acquisition a most From elsewhere will get just some will the I mom other of chains to customer be be where the will get standpoint, going an one because meaningful can there come opportunities. their think benefit will and forward, assortment any products isn't of we really think basic think sell pop I back left think sort M&A an consolidate I weakened is be candidate. I that one Texas a group big likely we bit to stuff. said, down our or broader whittled that And rather than

word us So use the tuck-in. that to gets

or stores, at enter maybe So and base, that to a fits the better there market open just bit a those and frankly getting et is two their look that more buying versus or as one of guys have we some a new model we'll our as cetera, to open store. is store just buy they by a guys should advantage decide brand easier them and one we customer and quickly build store in moving

going on modeling that's store. model them, new would just to think massive whatever. So I them as I store or count impact were I the economics our a a or If be don't

Jeremy Hamblin

right. the All Thanks Good guys. questions. taking it. for luck, Got

Jim Conroy

Thank Jeremy. you,

Operator

Nikic Next question with ahead. Wells Please go comes from Tom Fargo.

Tom Nikic

Hi, questions. my Thanks taking for guys.

about up follow to e-commerce. earlier from wanted questions I So the

what know now So sales you – with for cetera? situation are feel sort sort and point a site in pretty profitability been quarters kind Sheplers grower, this impressive profitability business, Sheplers. you've few I to again, for that far does et contributor in to had I trading promos, retraining the of that rebasing Web in that channel or improvements like of of at And Like sort become not know the – of along it's look the you a line? how customer a top

Jim Conroy

April it, the call made between, and changes July. We

price the changed and around of So changed the aesthetic in then April a over July. weeks series

a have we'll we comparison. timeframes, So, – we'll those once be wrapped normalized [indiscernible] two more back

we we if grow should that helped? you where next that if year it's if work we July have probably just So of that, that a to – get Don’t be comparison I know I'm able where through guess from.

Tom Nikic

are what just Yes, us, core that’s of Barn the you the differences both the Outfitter like, customer, customer? Country customer, can sort And the Boot like Sheplers helpful. kind remind between of

Jim Conroy

of And sort little is brand Barn up, bit customer and balanced Sheplers Barn. is denim The that heavily focused just customer. It's Boot on Boot a little slightly between than female. male. has male more than more Sheplers younger way older, bit The a customer the given the grown more Sure.

with the the given then BootBarn.com Barn, Country business launched legacy, was apparel Boot used heavily than and they added business. to more boots Boot when two sort So big a Sheplers Barn candor, other only, boots Outfitters going fashionable, first job than customer. continues nice smaller site just that in all female, after do more the But brands. younger just it’s very much of

Tom Nikic

this Got luck it. best Thanks, helpful. season. of That's holiday guys. And

Jim Conroy

you. Thank

Greg Hackman

Tom. Thanks,

Operator

question Sam Please Poser with Next Susquehanna. ahead. from comes go

Sam Poser

have work quarter? the job Does And base on that but my have long taking a the sort create good the annual from question question. the turn over this of question. than second new this And And inventory. to say base great Thank you for is, term? a guess increasing I for would you time, your is I I a somebody asked, else enough, new

Greg Hackman

Greg. It’s commented the questions, I quite targeted that XX% had not one of answering in a we reduction. guess I

not would carries to write product got we inventory done of started the more news the replenishment the orders no to baseline. and risk, tell to disruptive. to think which in quarter. receipts I chain control We’ve expected a started been supply new more that we've then and markdown some you, than So managing closely it's to bring I We had in and the We be have trying inventory had.

to tried experienced in some we more and inventory delays. bring So we've

say it's level, issue. new would not last new the it's not year's base – base I not it's So the but

Sam Poser

on the a were just target but follow few a have aiming at? you questions, more I up was What that.

Greg Hackman

not we're disclose Yes, to going that.

Sam Poser

Okay.

of the your we country for should brands go that? initiative, just Web new if that’s part site On what looking be to we

Jim Conroy

Sure. them just but brands the Merrell nice to deeply a or the pretty have Western we that that side, places assortment certainly less apparel on we've boots. of just on their about the and And side. has boots added stores There traditional brands intently that different hiking I’ll are into online hiking of well. earlier of one we talked Western might brand you are like a assortment. in Keen many a then boots as number But also on example bit was we've give selection more focusing where be we're a little bought nature, broader a

Sam Poser

the and everything, there Thank and you even stores, are given stores constraints more you big see sales up QX you rate could your could you. via leading they're that e-commerce Holiday versus stores do to then now? growth open have – QX, be two quarter your foresee some And gift the capacity fact from off to third and COVID e-comm mall, the more. giving from e-commerce tick all though that having despite

Jim Conroy

it a will a spike e-comm every up, percent major it shift of to more the quarter. first growing than typical? It's nicely. year. so and year, right back a as very almost can us stores It tempers as will guarantee of even with think mix, Certainly like there's maybe places. if last surge is But into it it if kind us. be highest store comp that another be there, to was coming business we I problem pretty when back maybe and a QX spike e-comm So, going in the the lot and bit is outsized will you're than any it's have shutdown, up it's But the other more COVID throw of is in be will e-comm right just it flat, say. a is, even business you for if usual, quarters than for because little new asking did more hard the What you it

or capacity if terms you're In of asking of store about capacity, capacity, customers? care take store e-commerce to

Sam Poser

social Like, stores. in I for stores instance, to you're really so was requirements distancing on. still talking the and No. keep probably about having

more the So not into see of more you than move you're get seeing time traffic the stores in that you also holiday. say when let's year, in so during second people would e-commerce traffic to the over normally have could when that your highest quarter

Jim Conroy

get the store, But handful Black the saying Saturday the your see XXX model not the of intent in right? I just Friday or you're see on think we've it’s XX the It's it's going concerning you're model holiday, a of days. way true. It's the what that's been in out. works handful, in can we house. And Yes, But Sam, customers, customers to before so during we deliver you’d just when true to call And store. is sort way our the It’s a it's to Christmas. customers even busier works. store right it not reason XX

can store. pick You up in

in at doing. I manner to we're but feel shop with the up it pick not to can trying recognize You the retailer every opportunity us really whatever they we're fully them And curb. give best doing only that,

Sam Poser

lot sort to you to of to maybe great box doesn't by increase get as to ways offset even stores, higher it the though of margins your have push due rates stores. try you – the already of to to a But the are lastly, build add mix, and trying goes and you thought try the along so – you'd you don't you savings pay would promotion ticket you. a give instance, as than weight Thank but the increased down. off, enough than than is average aged free? your of ticket something much merchandise okay, with Have through be it size more of to bit do that as little but that XX promotion, small For And some we'll the the that higher a shipping it you well. a considered some but actually say, ship facemask more – basket could shipping this the get business, e-comm less rate the to entice people for and shipping a like costs or to it that goods

Greg Hackman

named been Sam, has Hazen, years. He's it’s e-commerce guy. our doing for of John Yes. a Greg. a And and learn e-commerce, XX test Head gentleman big

needle And to see so he's been doing if that the all. at it kind of moves testing

that. we're that to sure be do opportunities looking can you just for So

Sam Poser

much Thank and successful you very have season. holiday a

Jim Conroy

Thanks, Sam.

Operator

like Conroy comments. over would floor to Jim to the for turn I closing

Jim Conroy

you look We to care. Thank third you call Take call forward today. speaking joining earnings with everyone on the for our quarter

Operator

today's concludes This teleconference.

disconnect You lines for may Thank participation. your your you at time. this

Boot Barn (BOOT) 29 Oct 202021 Q2 Earnings call transcript