BOOT - Earnings call transcript Q1 2023 | Boot Barn Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone. And welcome to the Boot Barn Holdings First Quarter Fiscal Year 2023 Earnings Call.

As a reminder, this call is being recorded.

Now I'd like to turn the conference over to your host, Mark Dedovesh, Vice President, Investor Relations and Financial Planning. Please go ahead, sir.

Mark Dedovesh

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

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

Jim Conroy

XXXX update progress initiatives of made review today's business. strategic our and each afternoon. results. everyone fiscal on joining current call, you for our provide I'll Thank On Thank and quarter continued across call. an we the Discuss good on you, Mark, have us first this

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

our fiscal the start extremely XXXX results. strength We first our to quarter with and are pleased of

months. period year XX% driven an the over transactions existing in Consolidated sales from grew increase comprised retail store, with total stores was an from same-store both nearly net quarters, XX of prior the XX% stores same-store sales sales quarter, XX% and primarily past increase strong grew sales growth During the growth Consistent a opened prior in over new sales the new by growth sales large same-store portion in X%. with with and customers. coming e-commerce of of

continued expansion also by stores XX a unit our new opening new for straight third We quarter.

strong The top than rate merchandise exclusive strong margin headwinds the and basis top to addition above to line prior line our of as again resulted of freight expansion a supply year brand In penetration navigate once full margin challenges and XX.X%. result in selling, We versus price which saw further of guidance growth more our growth freight was in performance. period. chain points XX.X%, and drive an which team's ability XXX EBIT offset

were compared per in now our better the of period, the We a we able with showcases earnings flat each recent highlighting prior was leverage. success share reflects or EPS I to our benefit share from tax growth expense spend initiative. compensation, sustained progress and and $X.XX and to than benefited outsized and time our execution sales the future a potential revenue our diluted year on the some which in when a believe adjusted tax adjusting significant of growth per strategic Our the $X.XX from brand. four $X.XX earnings the On for guidance. share-based achieve first when basis, quarter will initiatives

Let's begin sales driving with growth. same-store

in XX% on the sales First off, growth same-store top period. of to double I year achieving digit for sales want prior team entire congratulate a the comp

double on top digits sales to is of be base last testament by the organization. able a Barn levels record our reached Boot the grow have to the Over few to execution and new level years, across of

and we most merchandise major quarter, based first apparel and categories, ladies apparel, across saw performing our the cowboy growth work belts hats, boots, categories. were During strongest broad ball caps

legacy healthy and geographic saw exceeded quarter Texas western accessories. western and men’s in flame headwind Southern growth while regions, during positive be strategy resistant region, new lagged our were our a and growth. we saw the of encouraged we to sales the to growth apparel year remaining kids of new has which includes apparel apparel, segments West we strength From From prior period. Sales customer. continue of average by while relevant customer North sales continue of the also versus comps boots posted chain expand a average, the we balance our The to comp the Additionally, customers, but negative marketing priorities with in men’s into database. proven active the Western chain a also to perspective, the attracting brand the successful standpoint,

our frequency such perspective, and also operational staffed were feel are to service omnichannel We From the core the about level good strong customers demand. as to We’re provide continue team staffing I an all our our strong ability that to customers. similar pleased growth, shopping consumer stores very managing they sales the customer sufficiently with new while excellent in market. flow and initiatives. field associates a labor entire to hire merchandise service multiple commend want to

our to initiative, Moving omnichannel leadership. our strengthening second

over solid a growing sales prior had the first quarter channel X% with period. comp year e-commerce Our

years had are of the we our As growth. with multiple digital ongoing out COVID, of pleased business growth outsized coming has

in-store summer. in implementation to in continued fulfilment rate the since our our driven increased margin we by e-commerce Additionally, part business the merchandise the of brands last penetration expand of exclusive

We of helped have business. fulfilment the omnichannel of they consumer the all percentage our success improved are drive and customers in-store experience, as with initiatives our in and increased of online very omnichannel profitability the pleased

exclusive Now to our third strategic initiative, brands.

to period. quarter, than higher year approximately first penetration prior exclusive the During basis XX.X%, XXX our grew the brand points

the two the brands selling have three quarter. in years. We last exclusive among percentage are our the of top with XX again, which five growth Once in the ongoing extremely pleased our approximately brands, of exclusive were brands grown points

initial very initial are I strong pleased Additionally, the we commend year four by to team at the expanding product, consumers. the of on and feedback last has chain environment. has exclusive new and and remarkable see business compelling would our over managing supply our the brand with of last we our launched in brands end like designing years. been complicated It portfolio the brand been innovative portion to successfully a several for growth this the adoption incredible

business $X has perspective, For over revenue years exclusive annual million brand ago $XXX from million in XX grown last year. to our

store base. Finally, our our initiative, fourth expanding

XX our across we bringing states. During opened total XXX stores quarter, the new stores first count XX to

and stated our with to perform in expectations a continue million goal. line with much sales our in in open existing on new faster both stores our three-year payback markets investment than $X.X New results

We to this planned new store and York, openings New are New including with continue in about ability our confident excited new our and momentum year the Maryland. are markets, store Jersey for in pipeline

Turning slightly first our compared to four quarter, sales prior positive to consolidated period. second store current year the through business, the were our same weeks of fiscal

top businesses While have in encouraging fiscal we been business we've growth seen purchases, strong. grow functional discretionary XXXX. to in able that our the in the on tremendous of remain a is It deceleration more

the been last began Boot reminder, step Barn first delivering quarter the a in function has in As growth sales year. change that

over pre-pandemic While has that and Jim transitory there revenue this store to that a to been to growth we turn a the going sustainable now call sorry Watkins. been revert was I'd concern sales. AUV that level forward. and new there while has back It concern would of store this trajectory, average – this like appears is

Jim Watkins

and was Thank Gross decrease past you, XX.X% resulted by Jim. net occupancy merchandise The price increased profit margin freight the of $XXX growth result buying increase XX% increase months. of in by of rate. store Sales consolidated basis brand partially or new the XX.X% XX% XX costs, compared $XXX sales primarily to or period. general during headwind rate the XX.X% first of to million sales million quarter added were prior growth distribution or of and stores in increased sales XX% in year and sales partially $XX million was $XXX compared of XX basis profit In prior in driven sales gross higher margin million million. or expenses profit offset rate quarter, XX The Selling, and sales from same in points XX by $XX basis period. in for XX to sales from from a full better a year increased basis XX% the point and gross deleverage center to expense. merchandise point penetration point offset administrative selling, exclusive a of the

points Income Net cost income the basis to compared $XX from period. XXX XX.X% of expected was or as a diluted XX.X% per million store $XX or prior structure higher we of first $X.XX to per of diluted $X.XX expense was fiscal quarter in year million $XX sales share XXXX. labor decreasing to share our the compared the or the compared million as deleveraged of $XX in year million As period. prior sales primarily quarter, in result and or expense operations marketing SG&A normalize

share tax the $X.XX periods. each Excluding per in was in compensation both primarily benefits year, a resulting net income from diluted share-based

to our comp XX% in evaluating primarily our in-store in inventory inventory have our a to projection, XX% Turning increase line approximately million. is of the to basis turn updated with on support When period driven a sheet, in average we over consistent twice with a to the prior by in forward against the unit average inventory volume. XX increased was This required balance which supply, sales consolidated sales the weeks inventory increase year year average. historical $XXX order increase store levels

on on we to in credit our freshness couple feel securing added the and job capacity as our is continue the our three million $XX million $XXX brand the has centers $XX of years inventory months, and the hand. our stock over past inventory be growth, to opened million, stores will new exclusive to increase distribution total amendment of the inventory line continues can stores XX finished million the the amended XXXX. credit from This million of order drawn the needed in which the our stores, that inventory over date our composition merchandise line additional open to final XX both with growth. The the we month, this next tremendous revolving increased to the The to maturity team in our new $XXX by needed Earlier on to done healthy. pipeline as of quarter of that extended Additionally, fuel cash to And have credit the of exceed we facility. our a $XX quarters. and attributed by well of support expectations. portion revolving We to

with coupled the uncertainty, outlook our business, deceleration of our a XXXX. to Turning for macroeconomic guidance In fiscal year. updated for have in light our recent we

For billion we the total prior over the of fiscal expect XX.X% $X.XX year, growth and $X.XX now XX.X% year. representing between to be sales to billion,

sales to earnings We expect $X to be in and same per be of the and store to diluted share X% approximately range $X.XX. between positive flat

expected XX.X% million be operations to between of XX.X% Our is from $XXX sales. million to $XXX income or and

net expect fiscal million. income million for We and be $XXX.X to between $XXX.X XXXX

expenditures expect capital be and also expense interest $XX We million. and $XX our between to million $X million be to

balance we XX.X%. of effective be tax rate the the For to our expect year,

further be are including the fiscal financial already the releasing XX have presentation pages will during refer on new for year, we that XX we year-to-date. opened track We guidance. of stores on Please XXXX shortly supplemental open our XX the revised to and to information stores XX

to we flat. of total and expect sales we $XXX $XXX and sales to As million be the between store same quarter, approximately second look million

per diluted share be $X.XX between earnings to expect and We $X.XX.

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

Jim Conroy

Thank Jim. you,

to We our strong are pleased very with start fiscal XXXX.

term. confident execute this dedication. four like in and year our distribution the work also thousands to my of drive Irvine hard our long office over I centers, for on the and are gratitude to their ability in the stores, to strategic initiatives extend call our centers associates and would We growth and

Now open the I Kevin? questions. take to to would call your like

Operator

coming is from you. Instructions] Boss from first JPMorgan. Our Matthew Thank today [Operator question

now is line Your live.

Matthew Boss

Thanks. Great.

broke sales, you maybe performance help by to we you sequential between the frequency, So or July how moderation purchase any composition Jim, in drivers it basket off down maybe of same to if could the in notable did store down, region? to kick relative see size, differences on June? your breaks speak view And

Jim Conroy

Sure.

first growth our sales total was XX. quarter So

transactions a positive. July from at comp quarter our delta Our second quarter, And in plus From based. the now least in XX. first XX. is that plus Most sort store we're growth of was same of standpoint sales went slightly

a – were they So the for down about about our X.X% X% something quarter, were that. over or little July first like X%. transactions And in up

transactions. little of slightly the been second made that in a the So bigger got a our due ground a quarter-to-date getting to basket deceleration the up the quarter, has We in slightly with most follow-up size of positive in stores. growth versus which first bit

would In a had The terms way the negative of numbers. has gone is think quarter strong West there and second very the up strong the about is first quarter. it I the regional West differences, the is against in incredibly slightly complication

So or as West up feel we business, business or look On basis, at on a going like in XX% at to the it’s it strong. was we try quite last and our that. actually two-year we something year, look still XX% what’s

comp back, basis. of two gives points on a it that kind isn’t a bad three-year so So of

South slightly our are doing and positive quarter. in in that turned well. they’re second the our both business. And The other East other two the the regions, That’s was North second And quarter negative. the business negative

So and of versus composition between in that’s basket kind transactions of what’s of QX changed the by QX region. terms and

try The remind cut, way in is other our investors look nature. of question. that wasn’t continue is business to Matt, to functional other which at still to But the it we most your

So work in businesses look solid. work at when functional were boots, those July of many pretty our all hats, men’s apparel, Western we categories, of apparel,

off a about fall ladies apparel in talking perhaps has So given and boots. the purchases of what discretionary ladies in expectedly everybody’s and terms slowdown been

merchandise of decelerated that’s the the So has perspective. kind where business from category

Matthew Boss

gross to margin. then helpful. on That’s just up, follow Jim maybe And

to the and you’re about terms freight to second about the what just by of quarter So margin maybe seeing half back top quarter the of category of year? if thinking how walked the and the about line. think as you sales through categories now and drivers half components second some on merchandise in gross back versus in think occupancy, how some we’re of incorporating margin and best But best

Jim Conroy

some I thing Matt, the the is site site. group having on – Yes, difficulties the presentation we with then technical the it our our to one post did would and posting we’re say supplemental SEC on that

now, that’s We’ve more detail if not got there. will shortly. some up So it up be

to to great where the it updated slide guidance. financial access got you’ve If refer we’ve fiscal at XX, I’ll XXXX

As be margin. margin by we XXX far And points expect generate of [ph]. product would as that’s going to to the drivers, XX driven basis

full piece. And so year again, this is for the

that’s will as freight margin a our bit So selling full balance of by headwind to the well basis XXX what full around, the XX the this offsetting to more less full in basis year year points the previous in last will points seen be XX going than be driven we’ve similar of we’ve product for be the a And points. quarter quarters, little there guidance price to what updated as improvement be year. got that for in we’ve basis

was quarter this what XX found basis we last So points.

the expect continue We that to expenses elevated. be freight will

half the for we’ve of what baked year. that’s the last in so And got

deleverage the the we as As when pretty outlined granular we year, expense, of we has line guided at had down. far top on beginning SG&A there as and our the the what guidance were come occupancy

the worse we to We’re it different before, bit before. occupancy as down, a to was around did not be SG&A line like and but expect the guiding comes than continue little top buying deleverage we’ll to probably what an parts

Matthew Boss

Best of That’s luck. helpful.

Jim Conroy

you. Thank

Greg Hackman

Thanks, Matt.

Jim Watkins

Matt. Thanks,

Operator

your. Thank

from Zaccone Citi. Steven from coming is question next Our

Your line is now live.

Steven Zaccone

elaborate were you focus pretty have pull little taking could specific everybody. inventory sales more, the to bit but if It Great. I’d high. inventories? is I you curious, to manage Good like trends what Thanks on guess, little afternoon, Jim on too from that are are sounds my positioning. wanted a the deteriorate for question. comfortable, specifically to – going to a levers here, appropriately the because I it looks question you’re

Greg Hackman

line Greg take merchandise I’m this direct side the planning going given, it’s and to inventories. question, Steven, have over I of and

look I’ll build, the broken But As there. feel your part, to position, little Jim increase, spoke store is about question. Jim of three comp we XX% a the increase, and really go the understand if into do more bit good inventory inventory mentioned, we point parts. it’s really depth the into first the our which at

built piece buys. new our related container XX distribution the over directly is brands center added second piece to inventory exclusive we’ve And is up months. in and Fontana then the The supports last stores third that

over that to continued last that inventory take year XX% inventory is up well. we chunk very chasing we per the first were So XX% XX% as year. inventory the if So may half. increase, our prior growth remember, the And about average in store, our average And that’s store do business as you of per the right? almost

you inventory pre period, this the up meaning If quarter, were XX%. to QX that are three-year our over but timeframe XX%, sales a up is compared at COVID inventory our look in to growth our

of supply then ago. the year, again, our last we a to Page favorably it three had weeks of forward show years two spend we deck, where very I’ll sales have more actually of were new weeks the we’re guidance, we if we’ve X, bit. So a compares, strong XX QX inventory. years supply QX supply, on positioned supplemental in we say turn And historic kind trend and and about than have you of given weeks of light little now, available of but ago, and bit And inventory a it’s that on

Fontana. The we DC last to And about we second That’s of space. XX% the lease growth. amendment doubled of piece there in March our where year, an the is signed

again, as stores. We square get to really square the from into in last position we inventory first during in to year, XXX,XXX were additional went XXX,XXX trying we So that a square feet XXX,XXX to grow weren’t inventory feet quarter feet. the

of the new growth. stores XX% past then over added finally, And of the XX the months. because that growth is a XX that’s we of XX% So the piece

So in that few commented That’s we Jim what of the what basic disclosed sell a Conroy ago. sell we on is functional nature. and XX% we months most replenishment. right XX-K what of our is in

So risk we feel markdown significant like here. there’s not

continuing we be at As and we cautious look to sales, push receipts. are

good we about really feel appropriate, our We’re and but content inventory quantity.

Steven Zaccone

just all little drought California of Texas, questioning guess Appreciate guess Matt’s impact. I in to around in much Okay. an South And the quarter-to-date, the the up follow a is high I to a bit here gas like detail it’s drought there. seen how it trying we’re assess down as impacting customers? because feeling some there and some consumer just and are of it or farm slowing it you’ve of they’re the prices ranch maybe maybe and is your on bit

Greg Hackman

I those think all pressure a things combination about impacting of might inflationary things. demand. concerns there’s that be economy, the Drought

For quarter We pleased doesn’t year. last be fiscal continue we customers Had top this that and year, we business I’m we been of and out that make gotten year, candidly thrilled. coming we’re us, But cycled to and quite we on we honest over as of built very of were years first quarter large we base growth, influx to us COVID we’re that put couple able current strong year disappointed happy had the that business from the have together add seems to sticky. would’ve the to that really holding we if to grow were a that on second in last the that that into whole we the growth we’re quite to of right? the plus last

particularly There’s we’d happy low of for get the drought, the a et of But balance in hot. to in We’ve help that flat small potentially, with. balance comp we for July digit got drive right? even the the been us, things might the will pretty it’s year. month some year single be So was for cetera. business tailwinds some future

Steven Zaccone

the for guys. detail Thanks Great.

Operator

you. Thank

is and from from question Next Rakhlenko Max Company. Cowen coming

Your line live. is now

Max Rakhlenko

guys. lot, Thanks a

divergences? So on over are compared the is bit, maybe to behaved a index those July elaborate maybe or shoppers a new little discretionary Are think little core first, I more. guess probably in to core little leaning that can slow is your how more and I the shoppers? a most new starting would of bit delta where there you your transaction bit to you noted have shoppers any they similarly which towards based that

helpful. So any be commentary would

Greg Hackman

Sure. a hypothesis. a question It’s very good good and probably

quarter. quarter, kind or better both customers of behaving analysis of have our do for data quarter, second similarly. hard the weekly the And and we – first on on first basis. kind We were monthly legacy it’s In a us that our new to

guess don't If stores we coming guess, potentially you’re are categories we that's I'm now that I hypothesizing new the can't into and fair that fashionable honest. really if they're more disprove shopping or prove – a less. but

over other getting less much able when we're be I mean, more the customer frequent balance But over at the or So years, months last this new said, pretty opine as get last pleased so. growing two of quarter, business if to to be onto think been of business sliver a of base, over able look has how I we on information to hold you it. we'll the that grown shopping we're the XX% even XX slightly our the from that's the

Max Rakhlenko

can Got then discuss seeing That's environment, the your maintaining environment And competitive you're just very in obviously secondary are picking helpful. what about up. discipline? peers promo and primary what then And tertiary, it. is pricing the we

impact how pricing your own on several then there, curious thinking So next is having quarters? structure about just you're any that and the over

Jim Conroy

retailer. be matter, second inventory like but course price typical year, a change periods don't of on the piece, have and we typical markdown strong the balance We at have selling our to of we're to We'll expect posture all, honest. On promotional position. Sure. feel a very our our handle for business, full a promotional we our

number competitive mom is the The of two groups In operators, retailers hundred single out compete one set terms store pop and set, three competitive of industry. the we against of or there.

of promotional. those more some And become folks may

those operator much. single will We change standpoint. of we regardless promotion from honestly maintain take they're what and customers with not sales any just and stance a price. them very wouldn't chase our and do they hold is a store share may not typically sort stickiness of we promotional Some don't with trade We customers

of led, tractor other is And way one we to farm have We Cavender's they out guess, what have of we continue be prices, supply. competitor and called And which to is by players Western then full things extremely modest strategy. occasional similar stores very price on their operates of inflation. that's ranch And called last based promotions to of that chain tend in we group pure a sales mostly and one to the I thanks hold Texas operate, Cavender's. big rational. selling, call operate, raise sort their continued to I EDLP a was right. the they mean, frankly, growth they've gotten the

I mass expect candidly, promotional as become promotional, retailers don't they And believe going our based mall more do big retailers So environment a nor we don't us that's just really customer. to and we core and that shops and impact think on who industry. boxes, to within our market see if with

Max Rakhlenko

Great. Best luck. Thanks lot. helpful. of That's a

Jim Conroy

Max. Thanks

Jim Watkins

Max. Thanks

Operator

you. Thank

Peter from from Sandler. coming Next Piper is question Keith

now Your line live. is

Peter Keith

my taking guys. for thanks Hey, question,

are for the looking and Just guidance of or or – the is to reduced any outlook just margin a a just other EBIT year, it at taking sales revision expenses? with the puts function takes gross margin there regard to purely

Jim Watkins

line the it's Peter, Yes, the driven. driver, that main top is

comes before be expansion, XX margin was we're The basis points we that seeing when being QX even into is about impacted and product strength of in to margin, XXX would product that I it to product points. going we the originally that, puts July, had had by freight. What guided margin other basis takes is say expansion and

that basis of raised And for so year. the to points we've expansion XX

as So again. freight a headwinds that points to lowered for had that called XXX initially basis XXX the being out we year, points basis we've

are seeing of those we're down. down still seeing headwind, freight off seeing a quite containers So come cost but down we come elevated we're We're highs. or highs the the costs, coming of

the coming headwind, some And probably the by some at then encouraged we've quarter surcharges year. the seems and or seen in come down what whether more reverse, freight still as next year, see that's at fiscal increase hundred quarter. that a And to next good at reasonable. basis point while some saw there'll our of encouraged we'll fuel that will hopefully, point, so that rates points per we continue point spot the rest we're those future we're some beyond, be news but way But this last year a

updated and basis had XXX of called both to deleverage, updated two XX so And provide of kind deleverage worse we basis guidance guided and around OpEx be we buying those deleverage in areas, points were points there. an bit to from points OpEx, Those to So in get basis deleverage. occupancy, will We And driver the previously that the the categories. guide those rate. respectively that out. then an of didn't drivers that's [indiscernible] or that from a little sorry, XX

Peter Keith

on more Okay. then the Helpful. And consumer going understand what's just question set. maybe of competitive and the with near-term the is everyone trying to

any and in this the and disparity into seeing have east, to north hear thoughts, trends those top is of at if in the you competitive continued me to you're that less the little anything love interesting I'd segments a south maybe positive geographic for it's read but So west, versus mind

Jim Conroy

to relative of of hard we weakness. when narrative. cogent If I'm and pockets look pockets the a strength It's at sort honest, create of

a example, For had Texas perspective, strength standpoint. weakness a in we've in West drilling but Houston from from had refining we

competitive. bunch Texas more hard So it's is to of definitely up. again, dots that line find a

a out down We but XX player by strongest have think Were I we've for very grown the years. been in west, strong there a competitor the here up We've here. lot. here? Cavender's, in

their core really due markets for of inflation against and can't cetera, slowdown competitive the to up ag in years west place sort multiple plus on raw numbers in Candidly, the I row. California, a on some pressures. going of in I is partly So the materials, monster experiencing et drought think just west the

of led it's possibly always you pressures probably on last hard several you growth back that with to they'll a quarters growth last modest west west. for of slowdown the on parse And kind or to year, So the other of finally in we team. to perhaps almost some they're years our it region, pretty to growth the the that earnings Can grow were through gigantic if and blame months calls, of a over get with top to have now, facing transitory, business. anything couple the that of sky next knowing than them

of view organized right. and nice those kind and some less In competition, really north we two that's we've in mom the regions. So there's seen it's you're the but it perhaps and east, growth pops more in how

Peter Keith

Okay. All right.

Sounds so good. much. Thanks

Jim Conroy

Peter. Thanks

Jim Watkins

Peter. Thanks

Operator

you. Thank

Baird. is coming from Next Jonathan from Komp question

now is live. line Your

Jonathan Komp

Yes. back Hi, question implied thank half the you. to just a Good afternoon. outlook. I on ask want

like I guidance in to is back half. something think flat low single-digits the comps the down

considered, you maybe the a picture, would you've a terms maybe your react recessionary could guidance just what thoughts talk bigger business in and scenario? how then that of through So today in formulating in are the just factors

Jim Conroy

Sure.

we looked really July we the and on So X.X% did the from what the back year the of at half same-store we're current in sales up Jon is, standpoint. trend

reaccelerate back that sales where or QX XX% for more think year, in goes. best to thing balance And are to and guidance sales for I as, to looked based five seemed deteriorates flat two XX% of guiding, to weeks mean, estimate that or we half, with as off that to saw business, we XX% like I so like XX% a prudent year to around total of our bit and and we as of reducing four and or total seems But here. nice little scenario growth of the the if plus backdrop. where flat really we There's be do a given just the range the a hold be of the maybe trend the okay, as flat hold minus that it from rest on said, the we where growth. we business growth comp well in were

Jim Watkins

And then recession. you the was I on on have the your question recession, What apologize. question the Jon?

Jonathan Komp

or Yes, I on on that recessionary customer would perspective how would core just scenario, in up. to hold your how your you business the love hear if broader any views have would a react

thoughts any there? Just

Jim Watkins

right. merchandise They're needs still and Many core still big when Look, of in the through had from Western economy, ago, as product, if down our was product the massive denim we'd customers and maybe change most they Sure. discretionary nature. those customer employment, use purpose. functional in we oil real had and we've isn't including our a categories, see in that slow certainly business wearing boots patch years in And work really but jackets. work the some in when our crunch well our several for of turn down our there

we down was worst comp in turned our that the in of XXXX, had to So a barrel annual XXXX ever fly. oil when the price and got of even

the and us it in the of our offset sort diversification market and think the model further base I and So helps consumer one strength stores speaks of another. of now, to with to in our resiliency area weakness

or immune customers in part, economy, for us for a fashionable we're and look, discretionary downturn completely to to turning our resilient not functional product the to, So for or most the but purchases. not

Jonathan Komp

you that maybe Yes. other some could That’s thought really Jim, plans helpful. no know mentioned one I year. mentioned you to the And stance. you drivers during your follow-up, then change promotional pursue I just

So drivers have other drive mind color traffic? you any specific using of outside in to promotions on

Jim Conroy

Yes.

a and we areas brand continues brand job our or haven’t to the entered that’s and elevate into been in Baseball marketing we’ve the League is and think nice really team reach I fantastic some that before, whether Major into sponsorships doing some NASCAR. extended

driver that’s sales so standpoint. And nice a a from

on to see expect selling. price have markdowns penetration full to clear that and and we and core. basic about standpoint, growth, I use have next the our to many And think too markdowns. we asked year those better more we’d from call part But again, through is we be talked some areas the in last that. whether need that seasonal work some markdowns again can believe our doing brand when And work if we’ll continue most boots, out if we we a we’ll we’ll exclusive for And have margin inventory. product some goods, that have way we and

product markdown views online without this ability markdowns, talked what summer, don’t sizes, the product that be a with live that that the fulfillment as in was on to we and website we used about also we last expect on deep what went customer in-store having have. to So to get put sell that store, that’s of we the the and the need do take markdowns that one maybe broken maybe those have we the extent And call last significant. to our to

And from standpoint. margin or so, thing will margin that again, merchandise help us a another standpoint

and So the merchandise of increasing far we’re margin for guidance margin that as not out of year. the that ideas as that’s around reflected the in what we have balance product

Jonathan Komp

Thank Great. very you Yes. much.

Jim Conroy

Thanks, Jon.

Jim Watkins

Jon. Thanks,

Operator

coming Corey Tarlowe is Thank you. from question The Jefferies. from next

is now live. line Your

Corey Tarlowe

for question. thanks and my Good Hi. afternoon taking

could passing initiatives through you’re how The that talk to wanted with do about have much. Or are inflation, that and to currently taking dealt us as you higher mitigate you first place look costs in ask if witnessing? a you you’re men’s business expect we of as is? trends that bit how just dealing seeing and trend Thank some remind just customer? Are certain to to just you and how you’re – little that. maybe looking also, price it the where sizable that with ahead very western then you the curious western I And boots, in question you

Jim Conroy

price Sure. we the little temporary maintaining approach, our brands But and to what inflation seen, the of bit And piece, a these to we’re scale of have dissipate. about similar product our partners increases that consistent, the have and inflation you seeing while and some a exclusive which rate. eventually Corey, our, economies is that’s talked and customers manufacturers growing our and the onto pass input modest that inflationary those have guess, cost with same we’ve been – our And working been headwind has merchants vendor seen and and costs. I will using hustling teams on to others margin offset pressures on pressures. merchandise freight as stated, some

And into rate. margin and so continue to use that we’re But inflation we’ll approach that maintain that’s that cost and product been some and of for do we yes, seeing are our approach. so going come working far that us to

Jim Watkins

And add that. relatively been driver then that it’s gone western would there’s of a that been If to credit small so downside from merchants to relatively – managing it. I The men’s have boots well I’ll of come for us, the actually it’s back cost piece the who inflation to our getting to up small That’s raising sort of assortment. not amount. prices a you price, piece comp a the that more. in artificial get we’re

the it’s sold it’s the not That are sold And difficulty and boots. some and in us. leather mean It’s get sales. candidly, performance nature. online. big functional western product but about some boots more splits listening, – everybody It to may coming that men’s lot On stock performance in back business, trying a into about sold business to for had we’ve a now boots of it’s XX% pretty of boots

going that that we’re hopeful some sees So life business forward.

Now the the the we’re sold characterize I strong in side with inventory part bigger men’s almost That’s and Notably western how would guess business. in position business business. men’s better performance was western of a which the in – of boots the equally business, QX. is the I QX strong apparel

shirt. little a in AUR they’re pair And customer perhaps product, getting just versus waiting a door. bit boot a we’re a or on a So jeans higher that of the cowboy still like longer

we’ll stay tuned. So see,

Corey Tarlowe

obviously sort you different of you cash And then if they’re trading a by the any see little of from bit to will. do any brands have changes where you maybe you’ve are sort carry. for it. dynamics because starting down people interesting transactions seen And decline you’ve if in brands, more Got scrapped pricing seen July, seen the you’re – curious tier that but within just interesting

Jim Conroy

really sell skin not western that example, boots down, example men’s first we’re business was the most an the the that. men’s seeing category actually for we up. on was in boots slightly Using western men’s exotic boots but quarter, our Honestly, boots, expensive of western

et be, wisdom trading explanation seen basis, performing income natural relative that the or are customers seeing One while than actually higher down, haven’t cetera, better a customers. is that. on lower would So our we are possible we income people conventional of our

that we recognize we’re We were affluent down. more than anticipated call. customers honestly maybe are our trade our the have for still less other shopping seen haven’t that We out. why kind looked So frequent because way We not companies of calling that But affluent down trade that’s seeing it. are customers. more that slight

We haven’t here that seen though.

Corey Tarlowe

Great. Very you very best Thank of much helpful. luck. and

Jim Conroy

you. Thank

Operator

Thank you.

is Our coming William Carden from next Blair. from Dylan question

Your now line live. is

Dylan Carden

a Thanks lot.

ones Just here. two quick

can headwind? you a similarly, Thanks. And historic you freight where to that margin in And of just the most or marketing a sense when you start side, that some lap sense on and rates, ranges? costs kind increase of costs me lower higher might cadence fully? maybe of merch the offset when If promotion lapping us are could give penetration regards more kind maybe in the when significant of

Jim Watkins

Yes.

of year. and of on and what guided costs going marketing we’ve a year, were marketing the the costs, lower full So QX QX last for percent as sales the

QX, So marketing of as sales. again, lower sales we’re QX a rate the accelerated a expenses where the a the in year marketing marketing QX timeframe and that had right? reminder, planned of we in to percent increased lower in as X% of So tend and sales QX target spend just sales, a we were spend up of ago in kind against

pretty should was freight headwinds. a And headwind as freight QX. better get standpoint, far in consistent that year prior so then bit from year’s a little And QX and the as last

XX XX quarter, going saw XX QX basis So freight back think kind QX at at was points, headwinds was I some look ago, right? I about was we the if freight of six we container QX really, third elevated. getting was the back peak basis QX points costs basis the the you really basis look and of had, did points, guess in that I XX in if points, and things it months

the nuance it of way higher how freight takes move the we guess the freight the ease the as little – as year, for expense. of this think Again, a that I bit a its I So through bit. work accounting little charges months we’ll with P&L freight see back half into six there’s to compare

freight headwind. year XXX to relief basis And as we so when would headwind comes out of why year we there points guide that got really some seeing might of start the we’ve expect this is for it that’s and the rest that of next

Dylan Carden

lot. Thanks Excellent. a

Operator

Our Trading. is from from next Poser coming question Williams Sam

Your now is live. line

Sam Poser

margin we looking XX% taking straightforward? year? total half? like improve think should for can about question, number high? questions. I my at How is that Thanks the a Can back in mean, the it should range? we too good as we the margin ask mid for afternoon. just I gross the Or are gross that Good Is –

Jim Watkins

I think that’s a pretty Sam. good number,

I yes, that’s XX%, great. think think the – I

Sam Poser

work I how have they might category, the missed were then And but in your sales your in it, quarter?

Jim Watkins

and nicely. grew first both quarter, the apparel and work work grew boots In

only that quarter. of Our business apparel is work was our comp, year big of the so positive this but the quarter. digit part in sales, also digit double a single Work help a In first overall boots was just that of X% first apparel comps growth to it’s not solid about the work in business. were high

ladies As boots we solidly and They quarter, QX decelerated going are but slowed second bit, positive. July got massively. still a the ladies between little both really businesses sequentially what both to is saw into we apparel

second lost the Ladies of but very a strongly were trend. negative, Ladies with boots is positive QX. western still apparel started came double pieces points slightly slightly they positive. digit XX western in they’ve their but they comp. in Now quarter, trend, strong in down almost They

Sam Poser

blip to just a some that be much off to now fall program or back, school and the potentially it my follow question gross down as so guess or to dealing I on, costs going I not Is that to promotional given omnichannel going come do you operations what's up through prices to that'll loyalty fair? getting gas what's maybe to we come and help mean, what encourage on can happening that of and that freight have a a for some customers guiding, large. six-week there's and expanding you're that slowed back your starts woman to is improvement And with without and except and are sounds assuming down your like

Jim Conroy

very No, that's fair.

we with weeks and to really extremely at and we to July. into the give of time strong which to and part last I four July factors versus in year. part an Wall We impactful if trying think That nine had you said at microscope, a highly an a is management I guide wanted our right extremely the quarter think first latter strong Street month the now, view of not the better look their of slightly same try different, that's business. had outguess first every less of business, all team number had it strong macroeconomic

I at the we're So outlook thinking is current holds with our up business, is. also looking factors think and trying even all of our the what scenario, conservative still extrapolating we're be strongly. macro part part pretty of And business in it and to this was

up right? pretty market holds strongly. mean, least worse, much earnings At multiple. Our is certainly I it at seems expecting looking that our the

with nice earnings of which or conservative guide, for three rate going worth this years it's even generate on So growth years. back four we the few a $X.XX a year, over last

but of about candidly, pessimistic, be to looking month it overly way not to at very and time happen of thinking to trying balance for the the small a intended volume or what's project low is the going and sales So that's a It's it. year. period short we very were

Sam Poser

very appreciate Thanks info. much and the

Jim Conroy

Sam. Thanks

Greg Hackman

Thanks Sam.

Operator

Thank you.

question from Hamblin with coming Jeremy next Our is Craig-Hallum.

line Your now live. is

Jeremy Hamblin

do as, exclusive of for up other in one, or brand share you follow price of mix penetration about to just you some of and terms in of wanted points you versus view kind quarter do on in and of that points price penetration growth extraordinary brands I that thinking Thanks. closing brands, your XX%, for that, years. new another launched on get some year, those see had of et incredible the an brands James, Hawx, how bunch, mix brands whole of those a with four you've sense Idyllwind to had the cetera like so get sense And Shyanne, are a this exclusive area success you've a wanted and forth? to then Cody or or sales tracking versus high secondly, over how

Jim Conroy

Sure.

in line four second the better. tracking tracking different there. piece expectations On they're with are they're trajectories There's slightly well,

the good business about not expect over all, to but time. feel to all the and same, we build they're very additions them So we their exactly

with launched and to much risk we ability to see mitigated a dollars going somewhat of We it back when relatively more and quarters we most the of them. but of really to are we point quickly the what's brand product Idyllwind a If That's home want the fantastic. we runaway somewhat a decent got bring beginning, on where commit to we forward. pull that penetration also two little balanced of accelerate run of I approach. Hawx launches, was sort out get businesses workwear at. how it recent a then pretty then very have look from a the the We one not out gate and analogous line And operates splash, a we think to were those the of in selling, in. and better it's the working we then push a was of more to And exclusive to have what's couple working. on brands probably is expanded nicely

Miranda with partner Lambert partnership and et Our push, was just a great marketing cetera.

following of artificially to. new kind launch bar four So they're and to large unfairly an But that's more hold is appropriate ourselves that line the brands or a like extent. trend to all think the Hawx I high feel

Most brands more very brands the is exclusive other best-in-breed high of bring oriented that boots the to But of want as to as line and today, make value portfolio to that our brands new for sure weakening assortment to brand we other there. apparel different example. business strategy exclusive I out business. to in great we vendors in more one the should brands our or be exclusive have with the we when of quality, within or we exclusive of be a get we or brand diminished both mean, forward. is in helped our gets make tertiary should brands variety in will has that products, well and of growth in partner. extremely with, own They're our out They terms room us build happens a Ariat our bring always do much a response while actual excluded relative strong are brands. anticipation that continue In with brand, continue best nice brands, the some space. our to Ariat looking our us to of companies going inflation national Typically stick product economy what portfolio, different to to an

Jeremy Hamblin

Okay.

points don't potentially feel a points than than on of are perspective trade – So other from was holding lower you the like benefit interpretation trade slightly points firm brands brands kind could and a your price you there by price of the margin national down if exclusive is, price down? maybe some

Jim Conroy

they're Correct. Right. I mean, line national well, yeah, the it's, in with brand.

customer's that it going people people, part but future feel make to we really we're rate, So in to to our our so think much we're that comfortable of as rate disingenuous they with them, is up don't exclusive brand. because and margin again, about business to our of they're we've wind we on and speak say our not it in inventory – to be margin price. I – our price equal. we for margin which worried that even tried brands course trading to more extent If would trade exclusive really make be help over, We if a with ongoing trade the down match markdowns, down starting have us markdowns, would we retail higher future too we build

not have downside a on to of a take down. of really them lower pricing the we're but bit – care that's customer trading hedge we So it's a anyway,

have in able many cases. from been price the We to increasing keep

in than but third-party had may we third-party our lower default cases up that's wind slightly for by we've brands. So some some prices because brands, more to raise

Jeremy Hamblin

if So just and one thumb that in kind guided the points million? sales get a Got ways little rule little thumb, of speak you here get, margin. clarifying of that's it's than to guidance kind at $XX by or if thinking XX the about Is that to is it. equated And $XX about $XX about so million, change, rates, by a point basis going kind of million the going a might end fair point down about here? fair XX to $XX too, every you're points million that better both to back XX softer of you're conversely, EBIT a than margin it basis basis let's another of midpoint pretty thinking up incremental you your rule say

Jim Conroy

Yeah.

narrow that's I the think within okay. range

and look see on where guidance had if you think – the what our think if kind I you're and or downside we upside I for you re-guide the you provided out we build before, falls we think there of we've like the that looking range, how at And was what model to some of would that's apart, low again, what the metrics off we to scenario, what and can on current point I guidance too do, margin kind kind got of range could high but provided the of a get then you. the look and between next. at too that

Jeremy Hamblin

for the thanks taking best wishes. Well, questions and it. Got

Jim Conroy

Jeremy. Thanks

Greg Hackman

Thanks Jeremy.

Operator

you. Thank

John Next from question is Benchmark. Lawrence coming from

live. now is line Your

John Lawrence

anything would Good cost, alter maybe afternoon these that's cetera, guys. you contracts surprising construction as the move at et forward about a all? permitting rate delays, you inflation growth talk to with just Jim, you bit little

Jim Conroy

into it's cost payback our assumption, baked into staked our and our our model well. stores and on performing question capital kind the separating of been some Well inflation, into there's side, baked are certainly the Sure. model so but just

has generating. it strong performing so Our sales there, even overwhelmed capital new stores the slightly are if the by expenditures have well that are up the gone been payback stores gets just that that our so

the quarter. I In very by They've each stores terms the standard of XX We're feel opening bit of about quarter. phasing ourselves each we to within would a kind say of of stores flipped quarter. good timing, holding little

anticipated. are the view because we noise. get we We first you ourselves in can't, permitted. I quarter as things slightly a an quarter, quarter, they even – can't about. were talked little electric is We it we it in get whatever. initially In the can't that fact opened like box, later the than bit in But off

real or to just the hustling country our jobs a has of that phenomenal the through estate done across countless area. construction minimize think mitigate I team job delays in

Jim Watkins

guidance would that slippage that sure just make in construction cognizant And of that. to just being modeled we've John that then we're timing, of updated a little our I bit add into

John Lawrence

guys Good Thanks appreciate Right. luck. it.

Operator

floor back you. session, over I'd of Thank question-and-answer end turn comments. We further for any management to or closing our the to reached like

Jim Conroy

forward you earnings all Very for on today. our good, joining Look call second the to with Take thank you everyone quarter speaking care. call.

Operator

Thank today's you. That does and webcast. conclude teleconference

for at wonderful You thank participation you time this your day. We and today. may have your disconnect a line

Boot Barn (BOOT) 28 Jul 222023 Q1 Earnings call transcript