Boot and workwear retailer, Boot Barn, reported a strong second quarter, seeing net income growth as well as same-sore sales increase, despite repercussions from Hurricanes Harvey and Irma.
“Over the last few months, members of our Boot Barn family and the rest of the country have been tragically impacted by hurricanes, the massacre in Las Vegas and wildfires in the west,” said CEO Jim Conroy. “As our thoughts and prayers continue to go out to those suffering, I am thankful for our employees, customers and Americans everywhere who have come together in a spirit of unity and togetherness to help one another.”
Net income for the quarter grew 6.8% to $143.1 million. The company attributes net sales increase to a same-store sales increase of 1.8%, the new stores opened over the last 13 months, sales from the Country Outfitter site acquired in February and the stores acquired from the purchase of Wood’s Boots earlier this year.
Net income was $1.1 million, or $0.04 per diluted share, compared to a net income of $0.5 million, or $0.02 per diluted share during the same period last year.
Gross profit was $41.7 million, or 29.1% of net sales, compared to $36.4 million or 27.2% of net sales during the same period the year before. Boot Barn believes increased sales boosted its gross profit for the quarter. Breaking this down even further, consolidated gross margin increased due to a 140 basis point increase in merchandise margin rate and a 50 basis point drop in buying and occupying costs.
“We are pleased with the strength exhibited by our business during the second quarter, which allowed us to exceed our sales and earnings per share expectations,” said Conroy. “Despite the temporary disruption from Hurricanes Harvey and Irma, we achieved solid sales growth, driven primarily by the performance of our retail stores.
Conroy said the company saw a sequential growth in e-commerce sales trends as bootbarn.com announced another double-digit sales gain this quarter. Conroy also stated that the company continues to make progress improving sheplers.com.
“At the same time, we were able to expand merchandise margin 140 basis points through a reduction in our promotional cadence, an increase in exclusive brand penetration, and our continued commitment to full-price selling,” he said.
The company ended the quarter with 222 store locations in 31 states.
Updated Outlook 2018
Boot Barn now expects same store sales growth of low single digits, compared to the company’s prior anticipation of a flat to slightly positive same store sales growth. Income from operations is now expected to increase to between $40 million and $42.5 million, compared to previous expectations of $37.8 million to $40 million. Boot Barn expects net income to reach $15.4 million to $16.6 million, compared to its previous $14 million to $15.4 million. The company anticipates a net income per diluted share of $0.52 to $0.57.