BOOT - Earnings call 2 2024 | Boot Barn Holdings, Inc.

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Operator

Good day everyone, and welcome to the Boot Barn Holdings' Second Quarter 2024 Earnings Call.

As a reminder, this call is being recorded.Now I would like to turn the conference over to your host, Mr. Mark Dedovesh, Senior Vice President of Investment Relations and Financial Planning. Please go ahead.

Mark Dedovesh

Thank you. everyone. afternoon, Good joining quarter for to Boot discuss Thank XXXX us earnings second fiscal results. Barn's you today With me Officer. on Chief today's call are Jim and Watkins, Executive Conroy, Jim Chief Financial Officer; President and with A today's available the at Relations copy Investor website financial of Barn's press along on Boot of section bootbarn.com. presentation, a release, is supplemental to available Investor we for like XX replay end recording you Relations Shortly website.I a of remind call, after company's of the statements make on the certain as a this call section the are will we be this in that days forward-looking would will statements. presentation forward-looking Barn's results and analysis may business. These of based only actual from Barn's materially number and expectations current today, reflect statements differ on Boot Boot as affecting judgment a of factors should that conference forward-looking undue statements discussion and you associated not thorough more and this the these forward-looking as webcast, in with the our the a during to well call in on of made we reliance the quarter refer filings statements.For as our risks that to you forward-looking be uncertainties with disclaimer SEC place is Accordingly, XXXX release, second referenced included fiscal earnings disclaimer. statements regarding as update information, now not Chief Officer. obligation do any Boot President statements, of Conroy, call Barn's over alter the future and turn Executive result to undertake forward-looking any whether events, We or will a new or otherwise.I to Jim Jim?

James Conroy

and this us. made provide 'XX initiatives, you, current I Thank results, Thank joining have our progress everyone, review On the we on of update across X call, afternoon. our Mark, and business. quarter discuss Good will an for each second strategic fiscal you

expansion are in for the will and brand's footprint. review my open we with results, the second detail, national Following more quarter questions.We our the continued reflect then call which Jim our financial of will Watkins performance up pleased remarks,

guidance quarter.New store driven opened the months, in range. X% sales decline year, XX business this X.X% mid-single-digit in consolidated was a considering stores second performance, XX comp our by offset that XX period. plus a during including over same-store about year of top stores prior the good increased partially feel total sales XX% within plus new on the a During We the the sales, the quarter, of which the by last was X.X%, added last were cycling

we of achieved Additionally, quarter, more points range. by margin solid which points high earnings quarter, than of and the primarily was with combined merchandise our drove XX growth sales XXX $X.XX basis basis brand during exclusive of during expansion expense of in strength control, diluted at share driven the in margin, per earnings penetration.The the end

X of Our our result of X initiatives. is of execution team's some future and a of time potential spend discussing consistent underscores our each the brand.I initiatives the the now will success strategic growth strategic

The store leader. Let's portfolio begin store to tenet growth our market key out is the for solidify with our across country position expanding as Boot build our Barn base. to the

in we the With years. units new second XX the stores and opening the have stores last quarter, now months last the XX of in new in XX XX opened X

opportunities basis, secure continuing on stores, we to store we than a individual of rollout, lever pay to We a in have to is continue are to within opening of the or in will store with over United earnings.In in better program. for or for the and either remodel less months, our States, as which place. sales stores estate to and back remodel in opened potential provide years. relocation for looking in with XXX XX group X years projected We past be pay the success with the stores quite more store X our every expected the portfolio pleased new future continual store We our growth addition real evaluate significant each to back the store believe

X.X%, Given in same-store the second financial growth, at XX%. are years, remain payback declining to to cases, XX are but ensures in we growth keeping driving our This same-store many the retail over be our sales transformation of brand.Moving sales remain Average stores X-year more a same-store only refreshed initiative, quarter that not about consolidated sales sales sales elevated that with with sales store a declined encouraged ongoing XX.X%. pace the retail Boot few same-store same-store stores second recent store provides store X.X%, stack e-commerce Barn of than focus past declining with level and only progress the or moved.

Our west to X-year experienced are more worth less more functional in change consumer merchandise, apparel outperforming in decline driven such ladies' but growth boots the western than believe macro a categories, was and XXX%.Geographically, have than also in merchandise the more trend a trajectory broad-based our decline more August, was categories, and that and was that sales trend in we average, our chain. work in our north business decline merchandise. than pressures by of spending.The greater boots across and with western comp a has is cycling men's our comp in businesses, western chain regions softening same-store of discretionary weaker softer experienced It results. and Texas categories, a through our like were sales geographies seen discretionary women's while than September noting us we in leading line expected both with The expectations as

same-store transitory, pressure believe inventory are sales we earnings we the closely and our pressures markdown While are managing levels, plans, macro despite structure expense growth. maximize that in to

additional positioning has It the fueling the building of the and brand growth X% inventory.From of is inventory down enter rigor margin At in by a is season. team softening the quarter, to our assortment total we through in comp-store on down the was holiday count. markdown as nationally good the merchandise and levels the partly marketing basis despite and in basis. job we and moving and very XX inventory end perspective, that ongoing fact, were to this quarter, year-over-year the XX% our able done discipline due In expand customer a points a second sales team

the we years, new professional and created have artists, with rodeos, additional Over athletes. music country several teams, few partnerships NASCAR past

have have X this partnership season. that entered into collaborations We particularly Cowboys about.First, NFL for are excited the a the new sponsor we Dallas with we as official

X weeks countries in which team, connection X we as that across the tour, at evidenced album, as XX tour upon continents. any will the a his XX very shows spanning the his Boot locally America's appeal consumer Dallas a an in country his for As partner artist Barn over world, years, a One artist. position to solo be longest-running us latest headline is by strong country, important across our record, the topped the connect Time, album, tremendous for broad Top XX double the XX Morgan Cowboys with has with prior history as release, chart in is Dangerous, market.Second, sponsor fans believe the album the for consumers and Thing most the Wallen, XXXX strengthen Organization consecutive to across well megastar music the undeniable for a has country Morgan His and Billboard for Billboard market. recent XXX is

use marketing, our at merchandise. One the of have product chance Time will opportunities, in to of tour, and him sponsorship world tour Night placement a in-arena we his our As bus part exposure,

the revenue, of continue partnerships, In third these brand our Boot us we leadership. for to new strengthening omnichannel reach excited e-commerce which the approximately We are nationally, declined of our customer new enable total expand expect segments.Moving sales, both initiative, second represent Barn as XX% they and will to XX.X%. to quarter,

customer.The also Our demand while our we site is sales any much any grow digital and the maintaining posted enables namesake facility. single to our to our to strategic Boot the is Barn would bootbarn.com, One decline, is contributed fulfill a the main and its in-store led from a over few strategic or the team low sites, volume, store omnichannel that modest, to a greatly improvement of site, less more our years. center. single-digit us broader other capabilities balance through omnichannel ability to better team encouraging everything distribution It business, they fourth shipping business. and numerous quickly has purpose, e-commerce It move more cater to faring like efficiently price.Now adding serve us from quicker, in brands. erosion past exclusive than with than a different fulfill initiative, significant the and orders allows consumer markdowns by to e-commerce fulfillment This price-sensitive

XXX quarter continued down basis and the continues design points growth, share, is basis product October XXX over business, to X.X%, have same-store brand with On sales continue goal to fourth generate quarter, annual X.X%, points brands of and our to double-digit e-commerce and XX.X%. business exclusive consolidated into is our significantly than our revenue.Turning basis more penetration of seen million current growth. year-over-year find points increasing sales exclusive in of $XXX business same-store softness growth, in outstripping opportunities our This XXX October. September sales to XX.X%. our stated store historical the build same-store team greater to demonstrate During development with we declining to alone second on by market sales in a than basis, track points XXX basis of consecutive strong to The our declined retail

perform. drivers Fortunately, we that have to growth continue other

of quarters which to stores XX and year, expect We approximately in will the top-line the share. final our sales X build build market drive

a the the to balance our expansion remainder in year.I'd quarter to which summary, staffing We rate and is over merchandising and maximize merchandise the by margin of in the positioned turn call like a we entire testament also to year, profitability holiday believe team.In of see the sales expect for to nimble now and we to execution the have same-store our decline levels sales, plans Jim. despite ongoing inventory the for

Jim Watkins

sales the to net In Jim. you, second quarter, $XXX Thank million. X.X% increased

for prior sales when payroll in compared to and expenses in year the stores from primarily XX.X% of occupancy, XX.X% was The of million basis from the basis an expansion, sales SG&A prior decrease same-store rate The in rate per expense share benefited by general diluted in million from $X.XX improvement XX.X% current from decline compared year.Income to decreased quarter, $XXX sales XX Net for sheet. Our credit.Turning in on e-commerce the rate. prior stores cash period, costs, by million and in drawn million were balance from or On consolidated store general, penetration of decrease driven million, to or a and expenses prior product in with the of zero to $XXX costs margin compared prior period.Turning was sales higher $XX buying, resulted the X% We XX primarily XX.X%. administrative sales Gross new in share margin $XXX the gross in as period. year 'XX. to million sales inventory diluted our or to line in XX million. of XX a or XX point $XX a a $X.XX outlook from profit profit XX.X% million, year opened in offset merchandise gross finished of the points profit point same-store quarter or $XX to XX or and point and $XX million store quarter increased the year basis, XX.X% partially per increase sales, distribution year months, during freight decrease of and the with comprised year X.X% result retail compared period. past million $XXX in a basis partially or sales and The same-store expenses $XX of remainder of income XX.X% administrative was of in the of compared basis sales, a to of prior sales of of X% the the fiscal or basis X.X%, merchandise $XX increase of and basis period lower operations of prior operating by points additional year compared a of period offset increase performance resulting a sales.Selling, store-related deleverage percentage our $XX associated the increase the revolving in a period. XXX brand exclusive million to in to was XXX margin point

As financial outlined the guidance and presentation, are year. our both for in quarter full third we lowering supplemental our

range my guidance As I the high and the the for end our out presentation laid of low will high speak to periods, following the remarks. both end range of only in

sales we the As million. we look be $XXX quarter, expect to third total to

declining a sales expense sales. in estimated in deleverage merchandise We gross basis basis XXX store XX decline store point an retail same with declining occupancy, to the X.X%, of point be XXX increase of We distribution and margin, million improvement expect expect approximately points XXX and XX.X% $XXX freight improvement e-commerce in profit Gross a basis X%, XX.X%.We or year-over-year same-store costs. sales including of basis reflects sales same-store and in margin. buying, point anticipate product center profit

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

expect a result our year be We to our and the the updated of we $X.XX.As year-to-date share per lowering estimates year, diluted of earnings for full are our rest guidance. performance

to now expect $X.XX was 'XX, sales guidance billion, as a of previous total For billion. This which XX-week be the full X.X% reminder our representing fiscal over $X.XX to year, we of year. a compares growth fiscal

XX e-commerce same-store decline sales a compares X%.We decline of our XX.X% to basis point estimated be Gross retail reflects with XX.X% increase of basis an now We and an We improvement of of point deleverage to same-store of update margin. decline expect XXX to from buying, or of in This be and profit freight sales costs.Our center $XXX anticipate XX%. same-store a a a is basis of and X%, sales million sales. from occupancy, previous million points same-store expect sales. gross XXX in margin, approximately income improvement to store XXX operations basis distribution or X%, $XXX including merchandise decline sales guidance profit from expected expense product point

to 'XX earnings be diluted fiscal million and be per for $XXX share income net $X. expect We to

I back expect interest our call be expenditures expense like $XXX also turn $X.X and the closing remarks. for million.Now capital to million, to would Jim be to We to some

James Conroy

Thank you, Jim.

It of be across looking third-party acknowledge the We sectors, growth the execution, to briefly by that call retailing. second recognized and during want top the are and a strong your in Barn returns. shareholder It family.Now one included was was team X-year world's evaluated some humbling country across pleased I companies the forward quarter would by Last businesses with take great questions. the fastest-growing to and solid Magazine Ranju? well-deserved Fortune entire the includes Boot the Barn congratulations entire XXX teamwork all are do and balance hard list of Boot our the month, their Barn for performance to not open thank of year. demonstration was sales, global to financial as recognition. I Boot earnings, on just to a the to like and work

Operator

the [Operator Instructions] of The Boss line first Matthew JPMorgan. question comes from with

Matthew Boss

think how about what's comfort And we half have the worsened comp as lastly, you help about in macro macro. Maybe or elaborate or of negative year, Jim, backdrop back it at for category by think believe your the So you that the I consumer? region, seeing? you factors just today know volatility cited could high maybe on the and single-digit the What the core as you're from you looked dissect trends on by half? the you your we maybe guide back do monthly if did

James Conroy

I contribute very and Watkins end basis, to Jim can we strong will question. had start, tail the On your a of July. maybe a monthly

August sort things #X, Our expectations. in see was broad-based. line in And then it business X right with there started we happened. And different a of was was slowing our that September. to

year, balance complete in we versus that terms Jim and response. boots college down, October.So roll board. step and world, there see though, was about more for to step in the businesses the when which we at businesses the same sense and more geopolitical discretionary the out essentially, And of let ladies' does repayment The consumer look in every feel of businesses.In ladies' makes more pullback the pullback across the dynamic functional a more would loans, news seen the think consumer the that spend more potentially discretionary businesses. spending, a tend forward we've into inflation our the down. apparel, tensions outlook there saw believe I all category we of functional than And risk, that and a like are of market bit it significant across in So western the spending western more I'll

Jim Watkins

Yes.

the the end high we've got before, So it X comfort year got X year, for similar X and, be recent look the X QX quarter using of projected the provided of then guide minus as sales at months the our mentioned, the nicely business as minus frankly, in similar And to through stores the curves. historical range perspective.As of in September, X the period at minus second how that. weekly a go In the same-store played sales out for we X at that minus at balance equates which we below back where the a the the year, our to weeks X.X. we that consolidated we were this methodology, the the to range of in and the guided far to if if full the for to most we had X, we were we half sales we September Jim softened to level, August the of looked contributed quarter pretty guided using trend end and minus as consolidated. last last the be sales July and high from volume and we a August, guidance and And sales for that those

It if range. above which things projecting then soften of our reflected low If toughest the here, October, in that. not good probably be the -- our end reflected the and improve, in that So range. year end forward. is high And obviously things then the we of that's from the was we'd further feel using month of

Matthew Boss

in the remaining follow-up, you the both how drivers, today? Are And back updated half beyond break inventories maybe markdown could of the runway maybe margin any think the half? then across as there are gross just managing we you just this light of And and in outlook softening, exposure as Great. proactively about back a categories the down year? areas

James Conroy

Maybe this Sure. team we'll tag as well.

piece, and the categories performing think, slower-moving we've what in of part the And most the risk aren't continuing western businesses on I down well. ladies' work those apparel, very western to in it, about boots are merchandise On inventory as the most. margin that vigilant is through ladies' been, of fashion our first and

a basis in inventory down those our is we've down. As categories, and our we've we on you managed chain-wide the inventory the that timeshare out, are otherwise managed XX%, categories riskier, more called actually than inventory down inventory those think might

we on is think markdowns, we margin outlook in erosion when that still grow already the in a expect balance quarter. increase the So markdowns, pretty we've that able top Watkins Jim profit the in of to that on from were would let like you line of fact terms about take the one. proud the I'll of of same-store we're we gross And an slowing margin feel been and that embedded and sales quarter.In the the merchandise year, for

Jim Watkins

QX going to improvement, year, we update coming as next for increase points. improvement, margin planning we're merch is it's something year. more to points into that. drive about previously XXX a like and to XXX expecting you and XXX not get thinking of continue drive is from It early our brand a of the as margin as few in the bit up volume expect to We're XXX drive of and We'll next so of getting basis but we're the in product expansion, it basis looks XX continuing product points. it, of into that, the then rate.As XXX Yes, expect to basis be little our And our from brand it's points discounts few saw, doubled to of refocus that planning more the growth and we to and business improvement guided, which really the makeup years, with basis penetration from probably margin vendors then of maybe historically still size that's exclusive freight last of expecting in we inventory which call points penetration we into primarily the to and includes full next margin And to year, points margin get basis get more we're we exclusive growth the freight continue months. the we of we had We're improvement basis points see over basis go guided, what some we've as IMU what we on exclusive on merchandise top continuing we've brands. would improving work the XXX year.

Operator

the with from line comes Citi. question Zaccone of Steven Next

Steven Zaccone

about you've going wanted category weaker past seen I issue? price been softness taken dig into has take what the less or of been conversion if think forward, see you the you've that trends Has customer it from price. more Can couple the opportunity traffic just pricing to to months. up of in behavior? And has going seen about the you Do of forward? good amount you talk a

James Conroy

Sure.

On the that I up that's tells in maintaining essentially in quarter.In you on our retail think database, or being total any don't able look into still discounts a have to perspective, same-store for them our from we're opportunities, store. an be both the me just neutral. decline seeing costs, environment line, seeing I Helped be consumer will repeat bit sales through bit There counters. converting. merchandise in frequently, at our to store's and pricing the legacy in of been opportunities, basket margin pass same-store it's lower people store think in which modestly foot store. for inflationary the intuition average the if is fewer newly we've that per why to where we customer start transactions tell going My traffic of traffic are We they're forward pricing rate. likely negotiate adding little When an a costs lighter little I or decent terms of prices come may our coming we vendors are shopping our if less as is customers, by for can't down. a if as fewer from just frequency the either customers while, customer transactions a erosion all we'll input sales we better down size

So I don't think do as do there's want that inflation forward. there's don't to going everyday good essentially see position grow value. But from same-store price forward. inflation product, think in nor expect our of I we forward, going low-price our market I of sales an going opportunities to price significant to uphold provider high-quality sort the

Steven Zaccone

Texhoma. Just a your about ranch brief follow-up has choppy, of then. and competitors weather, in weather I been talked mean, choppy especially one farm

So as have changed? has you seen anything weather

James Conroy

So And quarter, and to minus better back slightly have an summer, the a in Texas were pretty not for the significantly business for tend Texas, out our still or was we or play XX-ish. weather as big the if you like it was to been in refer reason cooler, the if excuse depressed. soft our weather over to business, weather change would

seem be going to a to want But Texas. last all So traditional thinking blame days, at reaction I been improvement. in to of a us some business the temperatures less been there time. of I does cooled it weather. That it's it's extrapolate across this quarter. specious only balance the least for few seen don't worth fall-like very has short in that to Texas would certainly off, week's as than think for it our more and have said, on window, a It's nice the

Operator

with Next question comes from line Maks of Cowen. TD Rakhlenko the

Maksim Rakhlenko

discretionary? the if are the functional thinking So can trend you first, business remind us view that how be how part could about of more backdrop the consumer versus then of you you to much And softens portfolio your part?

James Conroy

work balance of Sure. ladies' XX% work that's all XX% roughly less, boots And say boots of tend apparel, Ladies' are I men's total they the the of many business, of fluctuate sales. variability and are are functional less categories and ladies' and also much western than apparel, apparel fashionable of just western much our boots is it. And that to boots and men's XX% think sort more and nature. down, but to discretionary sales. we about be in each more while apparel. businesses tend how discretionary, those categories would of between of much Not

Maksim Rakhlenko

And how Can year, your the last you holiday you us launched just December, by comparison sale then heavy versus period. very days look right last some month? remind just around

So just any days you're changes up comps? how to looking in some of make to attack those the maybe

James Conroy

December, were last a to From Sure. store's we then we and plus October were we perspective. X.X% as November. in a got X% look store's And basis, X% at a year, into we about negative from

snowstorm. weather talk As about did, $X to December X minutes a and sales X the or after excuse, at million I pronounced about, in use some into as say a erosion point, reminder, an we we X Christmas days pretty year, that. And leading don't last as Day last due there a was

than balance that little point, you million, guide about point the So bridge and of if the our which think now running is, $X a a more is comp. bit part of what quarter of about is a the where we're on

Jim Watkins

we've Slide reference. by same-store That's on Maks, sales laid month XX got And, easier the out to too.

Operator

America. the line from comes question Bank of Haas Jason Next with of

Jason Haas

I'm macro starting pre-pandemic Conroy, to per not curious, it's levels? a revert that that Jim are back slowdown to gives and what you store issue confidence this sales is

James Conroy

more per that Well, X% and from bit the our the to $X.X comp $X.X in about roughly the quarter a end million than is down -- store, of towards X.X% sales we've quarter. them million. the And grown

pullback would back we have give You $X.X of up get million, to of more the across to to Tractor up spending that number. think sales pronounced your Floor think when much to to right? consumer have look XX% in people there's So & been are pretty call-out and what widespread back Target I give or of a and retail a just reporting, And I that to get Decor. you to pretty XX% other to from

kind of all they're same the through thing. You the saying growth retailers go and sort of can

Jason Haas

believe I that's was I then Barn, Schaeffler's curious the And business. e-commerce about non-Boot and the

think start continuing declines, an like we there. expectation to of but was some I there those it's lap it be sounds soft would to that

I'm show some that So just curious of why there hasn't changed signs improvement? business and started what's to

James Conroy

good see that we candidly, cycled that a surprised softer little question, did that's So as expect some there. and we bit. us would a business relief We

One where get not of same-store our fortunately had less do of But AdWords we sales. to that or we with our again, where managed be search. the spend what hurdle, we we traffic and relatively can not part softness if effective. that business they've of expensive have below searches paid if least to we we And unique is, But we a back a driven been. a just have sheplers.com back. perhaps drag hope on I bootbarn.com, spend.So how changes Bootbarn.com, spend we'd aspects when did we certainly bit different than less drive biggest, the become us put manage that's their it transparency, of spirit in of it overspend think, that that all of to is that more relatively that together, shopping, more better on business a that decision outside we certain the the expect to paid is. prefer business a been But that's towards et the in hurdle fall for found pull made has to Google that druthers, get of surprise, cetera. is at than and the just back by shift of algorithmically, of If we've number And And and return on business been there's almost to, full meet. business that traffic to growth, we so ad

Operator

comes question from Stichter line BTIG. Next Janine the with of

Janine Hoffman Stichter

the wondering They're paybacks. store did just you through of it in investment and super new if us but notice the embedded could lower I'm for store I some there's changes per walk build-outs, looks expectation that still store. sales slightly your slightly like strong, a in higher

cost the you're Just what's the to walk and how open store, about us through paybacks, thinking changed. new a

James Conroy

essentially we're $X.X change and a at And year sales, first half. now first-year went double model paying used positive, right? is payback Sure. Well, a since the we and we a that quite and X-year and million public back a to

we when earnings So quite out ever original better our and good than it's been sort laid anticipated we of much algorithm.

going probably strongly to couple as as given were years, so stores tone of and that we've and sales, a still back excited think our forward top, first-year blanket just ability pretty comping XX% layer our States on the last little return for XX% United we're it's to about that flowed but the the a new I a was the positive, extremely at phenomenal new foreseeable capital, to invested the of we $X.X of at use up and well, and of future. business units over add continue million Over bit capital,

Janine Hoffman Stichter

markets you've just then terms the broader new opened in, differences maybe stores in And between the of seeing fleet? that you're there any anything

James Conroy

market-by-market We're a Nothing performing essentially significant new that on quite our basis. pleased all are stores extremely of well.

And hit I the as think achieved months. every talked XX store either payback we is basket about payback a a about a payback. script has stores, the projected X-year new or to is least of X-year in at

So the very think XX-plus guide, call sales, contribute stores year, beta payback next about it investment when growth number $XXX continued over low of couple you and we'll us. XX as million this in stores the it's give several a year we will and years, a and next our that high we specific for

that. continue stores, the add can we to business. build we and more going We to we're think XXX the about team that's great feel So doing

Operator

Dylan Next Blair. the line question with comes from Carden William of

Dylan Carden

I there. point, take through, the business of been standpoint, above right, Just historically And and stability, of but oil of wage not of now? that. I strong somewhat end you're seeing some from that discretionary if do happening trying in that about construction, some expense your you're a your at kind to look headwinds gas, general sort markets, viewed bigger as growth sort has broad-based sort are of you How thinking right if think your macro square there what's think and you

James Conroy

good any we portfolio, and have our across and Board I puts solid businesses. business some has think takes like the

ladies slightly, Our western much than more kind work of fashionable boots business our apparel more business. down was so stable

as So our grown much, businesses. we a so know, of against think comparisons XX% piece much comping so go right, spread of is, mean, second every and And against, business, think that business than X more solid a do part frankly we're or comp have the that even has we're XX%, up other the bit I you I I well risk across as our we numbers. simply retailer, up X-year a in

So if if of back I we that, I'm honest. X% give view as that success, a

doesn't that happening. to back that's all appear I think and most us of expected give people have it it,

Dylan Carden

continued a of function own that business? monster kind the And part then, I broader that is on a risk box other if guess, is XXX that sort back of in or of just of growth in decline your the some And a the brands, the recovers? give there of of then parts you

James Conroy

it do wouldn't I way. that No,

math expanded and we've we year growth, at we've I to brands X, last worked that least big has brands struggling some added brands of Most us. had then over the was of the have ship sales some penetration to legacy and time now our with are nice new third-party our and came growth. and keep There and their up the where ability some think them a us our given past brands or down. against that

we've So the developed between have a brands of and I think brands. we race horse fair now third-party sort that

need to think outperformed doesn't planned so increased I'm done just half well percent over sustainable. But quarters, slowdown basis that businesses launches walk-through Jim that. well of anyway, that that.So last of your I penetration. we've would So points of have way. sort have out. points. expect exclusive and I to continue think that's I XXX was on or the would that basis going forward. X basis have XXX total brands growth that to really forever points, It's the never not XXX was do points to the as going this It expect I don't that's don't But or expect see sure I fine just out, though, expectations. basis We gone XXX XXX so X our of brand of basis concern points points do a or quarter called with our concern think, with model, we do play in based Watkins composition sort

Operator

line from Next Baird. Jonathan question comes of Komp with the

Jonathan Komp

margin. to merchandise I follow-up the on want

any What ways seeing? the levers you move may would excellent discounting. ask, the separate incremental you you trend trying just have of and want discounting maybe You're needle to of are competitive and Just holding you're to offset an any not if some growing job need to I pressure you seeing can to or to? that doing choose respond pull to think to are of that. you through the

James Conroy

follow calendar. So or a there's, drive discount that's more, cycle for and themselves cycle but one running that There's to of to wanted We has as up retailer make less it doing and people really discounting. to in. then really we we year things next sure, sort you wanted I found If don't store to other could against other of and sales We know, we every advertise money a wind sales, competitor essentially operator. we down compete industry about in vicious size. typically respond don't fourth their promotional single a regional the our or have

the coming most incent nice grew comps, just our do in though, So the do job things, don't sales. in of sales are we're really How is doing of try quarter we If stores. we to We different size do that. same-store them the The the X.X% to we to build intend per traffic boost really that artificially to do that trying other basket. of ways the that try just like DNA.We transaction. have increase happy in field of to we that to to and how units team we make do do more trying a into the have don't drive to

as e-commerce the of mix. can. and basket best-selling showcase possibly marketing as also site, trying perspective, number items it, are We to doing things an trying from We're our sort to continually re-sorting of we more prominently, really a re-merchandising much the tweaking build media

sales can. everything if the also doing are we'll the that we that think pretty inventory much a can same-store I healthy managing to which to we're position is a sales our So fact the into we've good why around, same-store we accretion we and in feel as that, be way try the trend we about downside, get gotten But don't that I if for in And fine out year. think merchandise turns Jim we it called of significant expect the margin doesn't, can have any margin the see erosion. the balance to for third and maximize merchandise quarter, our I expect as we'll business. And quarter

Jonathan Komp

just are change, on how any to piece again how units right about you growth think on -- macro not unit do would differently, you about impactful? slow have encouraging are scenarios But today. how maybe Yes, way became new unit and would year to there the other if think follow-up even that? XX or the just that's plus where think without set the the Jim, And is mentioned I growth you you to you Or more ask committing really hear. trying what are or next to to one

James Conroy

unit of with true stores think us. model new if they growth feel tend execute And more broken slow are anymore. underlying or Or is existing don't they One those think new either X, their expected. can't are stores their or I to is retailers cannibalizing things than X X I different like happen. they

So when and of look up and we at on look month multi-year sort business or we're a at or same-store laser-focused massively. can at our look say we we at line, a we're quarter sales we very look and a down, say can period

don't outsized and see see any in also we We cannibalization, any competition. changes don't significant

year. is could because good right to likely roughly no would that should, down do Many XX% for we more, at So I fiscal planned we we And to argue certainly growth. no if our this reason reason now, point, could about -- year. the slow next But the new store so strong. payback for this see feel we -- our XX%

Jim Watkins

that. just to chose would situation, to balance a with the we a chain store years to in maybe positive really every contributing wasn't really slow EBITDA. compared that sheet, that or bit And comp slow nice add, particularly the strong I John, We're debt, is case that little X ago when a and in did no have

Operator

of line the from comes Jefferies. Tarlowe Corey with question Next

Corey Tarlowe

ask just I So marketing. to wanted about

sponsor me correct that an wrong, I'm has I think for but if the Barn first the Boot is So this team. NFL time been

which with seemingly well, a grow, just sales marketing marketing headline have the to for to believe, has or the the being mid-single-digit like unlocked I percentage and with to marketing machine grown as tour sponsor the I'm things sales of Morgan consistent opportunity or XXXX fed grow, Cowboys has Wallen. curious, that's partnerships continuing sales. relatively obviously do with, So at your as continued budget Dallas

think the how a perspective. sales Boot what curious awareness as have grow means opportunity brand budget Barn's of and continued sales and to from about just you So that and scale marketing

James Conroy

a question. great that's question, very strategic Corey,

X years sale right? marketing right, in as last essentially and doubled, roughly has as revenue Our the is ago. our was You're it X the a years exactly total rate of same

term, awareness.We do in of Cowboys reaching else course, that which leader. Dallas specifically. in It, a customer, or marketing in stars spent, the That and legacy virtuous that country our So of have have is Maybe narrow-minded. will little but a doubled have And have of is markets top of the drum after will industry, us They're sort ability phenomenon. brand to that gone it's that is beat will of to X specifically, than that brand, shouldn't expanding play our in dollars with sort And just in there give to the customer. bit And professional of much competitive does out, broader build essentially build a market player the leading going has continue to we as -- twice largest that consumers, country. the continue more leagues, nobody we advantage an marketing brand to getting national our core reach Western the music to well. cycle athletes that But go industry dollars is also opportunistic of be that. brand. hope a sort we're of sort outside as major pure as of there overused a reach sort of we the the national the

expect from it's to regional a recognize as more our of continued to pretty a gone a to big we call-out go I'd has we've as small insightful And player player ago forward. that marketing very So national evolve that years today. XX

Corey Tarlowe

I And then structural merchandise had longer-term question a strategic margin. just around or

brand opportunity exclusive as slight And still freight, to and substantial it merchandise the for benefit well continued has clearly grow, margins. as penetration So a was quarter. if pretty there's like, seems seems in also it

merchandise component you've could do of you for So or margin just opportunity curious, margin, given that and be longer-term do the within how that high time? the seen gross the momentum gross think think you margin what over

Jim Watkins

Yes, take I'll that, Corey.

seen great penetration nice and growth that's third-party who right. really some We've from helped partners also whether benefits, You're brand exclusive better our some us. have vendors, IMU from

better rate margin year XX.X%. XX%. are down those able then growth some we As we've that's range, the we've been a our as think vendors buying and of get seen guiding size get last to back be of center into that drive can headwinds term.As freight of will forward. occupancy and at volume more of gross optimistic how look I that the whole the to expect the but at at the couple times This And loads over distribution as years, above concerned, continue means grown that we with helpful, able have pretty to costs, that freight long get in end return as something leverage to continue what some this rates driver has we're been discounts to high to we've and and far that year, through purchasing we and we container recouped the comp head we going is we're we're our as at up we continuing of and to will

bring down we expense fighting So and relates I it as plenty some term. inflationary there at of those and some we opportunity some think look and of years, get would have service these feel long in like through been we providers and also throw costs just drivers there's SG&A there are we've we we the ahead, the as that focus into we the move few to last of costs of to as

all to margin EBIT So those drive up. back obviously things helping

Operator

Jay line the from with comes UBS. Sole question Next of

Jay Sole

and marketing I how you accomplish to the you that Are or measure talk some return you own -- can on want that Morgan of has? the like what using With you just the of Boot want maybe what to about brands you discussion. specifically, some the the looking of the private to for to bit investment? the promote you're little can the Can brand bit are Wallen, just of someone Barn follow help the to KPIs awareness company? just about on talk the what Boot for him sort little more he elevate Are Barn up maybe looking that him company a some raise more a brand? company of

James Conroy

That's question. Sure. a great

base, it's industry. he brand think He in awareness. uniquely also is And fan just megastar has younger our younger I absolute an follower. a

have look doesn't you if customer age ensure he's got out. he partnership. will him, objectives at We Boot Barn some think much do I and and to on of last So really implied one to is that. use age, ability we've we view it And our great had average And the the a well. years continue do ideas several very demographics we've progress the to help of as lowering as our us a customer, for made that the some

of spokesperson with really existing -- or exclusive be our or describe as way for do Barn already someone line potentially just brands we've behind specifically him. get of too a may to So using it, spokesperson contemplated a in general trite Boot a but him to one

his have on marketing, agreement the and of cetera. buses, we'll the he's lot actual we'll media. ability a right So on use tour social all be and in table arenas, the much have When focuses really to but likeness of now.The those and out our et performing, image his prominence in of him moment, do -- on things tour at his are his on we

side. a a purpose following on younger, the the in think female I biggest number that it's and he's bring those age strategic got to So of customers strong things, but very is more

kind solid of sort back ground. help business that might that get on So of more

Operator

of Next with the Williams question Trading. Sam comes Poser line from

Samuel Poser

what to you going X. One, performance, done are you I'm stores to to stores, quarter? that through hopefully from work, and Two, just got traffic conversion? in you is? is benefit bring something? how any gap the drive macro, -- or I've And of anything to to what's using omnichannel and your being understand the -- how seen differential if the have online I Three, but traffic wonder from of store what people store between, getting buy and Cowboys? and activities whatever to that I So other to the variance brands, doing then outperformed read are outside or them. exclusive categories the the the gap been what that had more closing big between there sort actively with a

James Conroy

Okay.

are men's and of On business of boots tightly western of fall your functional the boots question, and western outside apparel western better does than ladies' first outperforming, the part men's western somewhat what's and work, boots apparel. into doing it ladies' work

driving into early lack to is store in So a terms we've are our traffic bit done the a of We've just the to one.What's or we've drive business is from the had -- volatile was not might X little being for right? I ago, customers out of as specific expect.In Cowboys, And traffic, you less the stores? playbook businesses it's store on a traffic ability store. functional so notion playing don't good our a what twice it you answer if change to add have drive see traffic. great to it's for pretty that them got years of

changes the kind We on or modifications are some making of some fringe.

less little on how times marketing, mentioned brand the intention branding more do and more aesthetic.I build or sales-driven field commercial bit bit a of But on a decision mentioned we've once store. got have the have there to call, becoming comes this basket the into markdown-focused. a we really our somebody we or more So more earlier, earlier promotional we've focused pure marketing or are feel no I a when as little made

We trying digital an build to customer a constantly from are omnichannel customer.

bit your Well, customer near do if are them what and digital So and customer? that we alluded customer build that, doing penetration if are a in with has digital they e-commerce within we we online, the time is bit than XX%. business market exclusive brand shopped approaching a isn't Stores north total bootbarn.com, of bigger to a that roughly customer that to we're radius how a a a little store.And are and drive on know but stores is higher to a a them question then into and little store Boot terms between digital our we Barn differently of of than a XX%, X%. in

that So our our brand substantially. that has gap changed what drove to And ship out customers. exclusive ability our digital is mostly of our stores to

helped bit, So the margin while going same-store basis are penetration our up. being sales a rate our e-commerce sales down brand on exclusive a is by

Operator

question with on Craig-Hallum. Hamblin Next the Jeremy line comes of

Jeremy Hamblin

with to just margin wanted I first, And returning visibility. to start the gross

year. in here comp impressive So also the quarter both margins, it's are, expectations but where gross on the December trends the for given pretty your

kind getting maybe build-out you a for like produce to AUV of you've can you to the say, give estate achieve, In you get terms had back to on fiscal an think plus to, the baseline, back XX% to might side. comps the be the given about costs you need like for level the think the to sense that Or us feel you need another year? what just full real it of way might either let's is

James Conroy

Yes, sure.

up So we I was fiscal peak to to from setting, that if else, and to was fiscal And years up XX.X%, kind back but our just 'XX XX%. profit was you 'XX, grow guess you a Jeremy, for XX% above rate able that go X guess, everyone level know and were I of later. this, of gross

opportunity, I really we'll this continue mentioned So as marching we're we find year, and about towards to XX%. fiscal earlier, the I think XX.X% that towards feel to good that march that

and of from X leveraging As as going those stores to rise, last we'll opened maturity the stores stores profitability I getting new the got average with the the as stores. that open, march those drivers help drive over think, we've occupancy and that's We've volume there, unit in far to that costs the just of merchandise towards and things And and and years rate one that we've some the those this continue the continuing then talked center There's distribution Center Distribution online. a go City costs get and some will and duplicative margin Kansas new product year the the the more those margin about. we've drive operations. we to efficient had between legacy new brought in away we'll

that So years I sustainable, XX%. think as particularly provides with of over seeing we're this back environment little growth us. regular we've full a growth the the it's And in return not bit our far we a away to and growth, We're short when seen thrilled that the from year. that what few on we're opportunity

Jeremy Hamblin

then follow-up here. And a

further. have discretionary X% end we flows up that In to terms about, spend to recessionary play of environment, were the of could in your think we've ability and kind What track unemployment control, back thinking would of this all, you to overall? a X%, been that's kind delivering if to is, consumer If have of about how out question up of macro potentially out got rates. low spend type on? that then think this plan do connected of you you unit mid-teens you growth changing, SG&A the at how level And reduce guys

James Conroy

earlier, to were imagine us, of expect at alluded fact slow those to public, to for scenario we've where years, which that half. the pay strong and we to roughly even had I the back we continue X any unit in position, a question variable those in slip It's would nature. back hard a model rate. growth stores in years Yes, or answer Even we year a that half of got degree.As such kind is stores to the SG&A these Jim financial when to is our X would reducing the we pay open on significant I about new went think and if a guess, that spend, far stores as spend

labor as stores over time. the some of expenses, fixed so able And of store-related to we're tougher. reduce in a costs the bit sales come it down, And little and the the level gets

and and One is, this been very needs the we keeping the and as the in been And months on look pace up really balance of and those that last the the meeting we've of just few on the on customers business. and up last the we've growth seen down the the with forward we've we've sheet. explosive focused focused things over seen that growth P&L and earnings X years improvement of

driving those focus down. we able haven't been However, much to as on expenses

departments starting the And are and to down so our procurement we've in where months to a as we're up can. at as over in SG&A drive start those and in earnest get we expenses all looking department really hired tight few last

we're the something to with macro And some from. what of benefit so happens that's that we'll to overall forward regardless see start looking

Operator

comes question the Mitch from Next of line Kummetz Research. Seaport with

Mitchel Kummetz

apparel? Can X-year? for were those can quarter you on us the and then in also you XQ ladies' the businesses a And tell boots comp ladies' how give us

James Conroy

but On quarter, they they XX% the look on up, or it XXX%. approximately minus were, something. X-year, And like, a we'll were

throughout how So did a happened the and the September business October. Let's the In you're just It didn't much quarter give keep the the quarter, those I number. and to QX, all that mind asking in second specifically, from quarter? you quarter first businesses really in in think is change quarter. real the evolve all what

ladies' and So boots minus for were the apparel around quarter, minus X%, X%. ladies'

we that As and into September got October, minus a became, like, XX%.

the end into into it page So really third or turned meaningfully October, of the those sort the was quarter businesses and of worse. as the we got more where quarter,

a business, in stand. bit as the backwards the look that now. play And runs now years, to they've business we it to doubled your point, that defense at sort skate But of and that a a few where ability their that's business so that of they're we back And team and and bit. demonstrated giving they've

through more they've their in we been vigilant that fact able inventory feel working and markdowns. to levels the of good very been with take very, down about sales So kind in line

Mitchel Kummetz

portion regard from you with how in speak to that 'XX. guys came to How you 'XX metrics a positive early you from any new are late well customers retain acquiring thinking that into retention? comps some added period kind over those If that correctly, I been Can new you particular? double-digit of then, of to about customers. you've customer able of recall of And kind healthy Jim, ran

James Conroy

So it's a very good question.

of or will. us, growth years, of they've If look from and much that roughly that proven new growth, sort loyal sticky, over was picture, you was be X XX%-ish And right. You're sort was transaction-based, X the we if our big of to from customers. -- to last half of

going the than were and seems, down a open digit. to shop that snapback get of is the lost and a we same they're at we coming to are -- an in and be with frequency those difficult would slightly during data COVID those product see our we we it we coupon to â€“- cetera. us. chain customers, that seems times customers influx negative have either double what bit were significant customers, all were other continue were did, while due sort roughly now, we else So that legacy a shopping out we'd or And worried closed, or customers now But now people more customers nobody of a with supply had of if were we topic us we're et

pretty growth in feel frequently. we the B the in they're customer count. shopping good program, the think, Rewarded So less about I customer our file, just general,

Operator

John Next with Benchmark Lawrence question comes Company. the from line of

John Lawrence

front off the of face last or, your store. surprised look XXs, a strong and XXs was speak the was private you Jim, I'm XX that to some Rank in names ago couple a of bit, of Cody back it you you really sorry, the the XX% label. and to That's private when obviously, we're were at few softness were getting number the when right label there. one in you with you traction? and stronger speak and taking presented of of little which now quarters Cheyenne the to, names stores for that some I just at Can Can or weeks really of newer these? in threw out the the only overall, James,

James Conroy

the I all very see. be in of right? Cody brand prominently #X brands store, our featured James Good to tends in Well, company. It's question. the

front. to lead tend we So with that in the

some really there. Brothers share take In they'll X and their few back we've been partnership your X to ago, to we We in years are build terms now a which pockets nice market growth really over well X runaway And the seen in enable to and XXXX, we've Cheyenne. And to launched, for brands, as & within a success just X great new XX, will brands us. or of and they're historical XX% and nice years, next Blue success call of Cody that we James our about XX% most years. Ranchwear, of added expect Sons, the that's we've Idyllwind it, have emerging, up us the which seen broadening in, and question, store Rank kind continue that some to EB

feel just team product features great the and partnership and of the we field product brands development team, buyers, gets the that So and with functions understands behind their design about exclusive the our of to cetera. et Justin, the important still that space, the Western a showcase in top for brands do we customers. the that our really Wrangler, to in Carhartt, context customer Ariat, being our And

in we the composition general brands there's some opportunities exclusive think feel us for I still So growth good really our for believe ahead about of and brands.

John Lawrence

retail the any shops from at placement agreement And the include question last Cowboys or Cowboys at the does AT&T? me,

James Conroy

all. really agreement. significant brand there, see It's do activations product marketing but a no. selling No, can We won't we at

John Lawrence

Congrats.

Operator

would time. comments. to questions Conroy floor now this like turn over for There to Jim further closing the I are no at

James Conroy

Well, earnings and call you to thank forward quarter call. speaking care. the third you, today, for look with joining Take our everybody, on we

Operator

today's Thank you. concludes This teleconference.

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

Boot Barn (BOOT) 2 Nov 232024 Q2 Earnings call transcript