Boot Barn (BOOT) Q4 Earnings Beat, Revenues Increase Y/Y

Boot Barn Holdings, Inc. BOOT came up with fourth-quarter fiscal 2022 results wherein the top and the bottom line beat the Zacks Consensus Estimate, and both metrics improved year over year. Results were buoyed by gains from higher same-store sales and e-commerce sales. We note that the merchandise margin remained solid.

This presently Zacks Rank #3 (Hold) stock has increased 4.3% in the past six months against the industry’s decline of 19.1%.

Let’s Introspect

This lifestyle retailer of western and work-related footwear, apparel and accessories posted adjusted earnings of $1.47 per share for the fiscal fourth quarter, beating the Zacks Consensus Estimate of $1.35. The bottom line also improved from 75 cents reported in the year-ago period.

Boot Barn Holdings, Inc. Price, Consensus and EPS Surprise

Boot Barn Holdings, Inc. price-consensus-eps-surprise-chart | Boot Barn Holdings, Inc. Quote

Net sales of $383.3 million surpassed the Zacks Consensus Estimate of $352 million. The metric surged 48.1% year over year owing to same-store sales growth and sales contribution from new stores opened over the past 12 months.

Same-store sales rose 33.3% in the fiscal fourth quarter, following an increase of 54.2% in the fiscal third quarter. Retail store same-store sales climbed 30.7% in the quarter under review after increasing 66% in the preceding quarter. Again, e-commerce same-store sales soared 49.5% during the quarter under review following an increase of 48.4% in the preceding quarter.

How Margins Fare

Gross profit of $148.8 million soared 61% from the prior-year period’s level owing to higher sales. Gross margin expanded 310 basis points to 38.8% on account of 190 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 120 basis-point jump in merchandise margin. Merchandise margin increased on improved full-price selling and an expansion in exclusive brand penetration.

Income from operations of $62.4 million rose from $32.9 million in the year-ago quarter. Operating margin grew 360 basis points to 16.3%.

A Sneak Peek Into Other Metrics

During the fiscal fourth quarter, Boot Barn Holdings opened 11 stores, taking the total count to 300 stores as of Mar 26, 2022. For fiscal 2023, BOOT anticipates opening 40 stores.

We note that average inventory per store jumped 36% on a same-store basis from the level on Mar 27, 2021. For fiscal 2023, management envisions capital expenditures of $87 million.

Boot Barn Holdings ended the quarter with cash and cash equivalents of $20.7 million and a stockholders’ equity of $599.7 million. At the end of the quarter, BOOT had $28.5 million balance drawn on its $180-million revolving credit facility.

Outlook

Management projects total sales of $1.740 billion and a same-store sales increase of 4.8% in fiscal 2023. It anticipates a gross profit of $652 million or 37.5% of sales, selling, general and administrative expenses of $386 million or 22.2% of sales . Income from operations is forecast to be $266 million or 15.3% of sales, while interest expenses are likely to come in at $3 million. The effective tax rate is envisioned at 25.2%.

Boot Barn Holdings predicts delivering nearly $34 million of sales and earnings per share of 19 cents in the 53rd week.

For the fiscal first quarter, management expects same-store sales growth of 10% and total sales of $367 million. Income from operations is projected to be $47 million or 12.8% of sales.

Don’t Miss These Solid Bets

A few better-ranked stocks in the retail sector that investors can consider are Target TGT, Kohl’s KSS and Costco COST.

General merchandise retailer Target sports a Zacks Rank #1 (Strong Buy), currently. TGT has an expected earnings per share (EPS) growth rate of 16.5% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.7% and 7.3%, respectively, from the corresponding year-ago levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.

Kohl’s, an omnichannel retailer, currently carries a Zacks Rank #2 (Buy). KSS’s bottom line outperformed the Zacks Consensus Estimate by 4.8% in the last reported quarter.

The Zacks Consensus Estimate for Kohl’s current financial-year sales suggests growth of 0.8% from the year-ago reading. KSS has an expected EPS growth rate of 8% for three-five years.

Costco, which operates membership warehouses, carries a Zacks Rank of 2 at present. COST has a trailing four-quarter earnings surprise of 13.3%, on average.

The Zacks Consensus Estimate for Costco’s current financial-year sales and EPS suggests growth of 14% and 18%, respectively, from the corresponding year-ago actuals. COST has an expected EPS growth rate of 9.1% for three-five years.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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