Boot Barn’s Sales Climb 50 Percent In Q2, Net Loss Pressures Stock

Boot Barn’s Sales Climb 50 Percent
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Boot Barn Holdings Inc. saw accelerated revenues in the second quarter, however its net loss — to the tune of $3.3 million — may have driven down investor sentiment. The Western-footwear-and-apparel bootmaker’s share price had dropped nearly 13 percent at press time.

The Irvine, Calif.-based company — which acquired all 25 Sheplers Inc. stores and opened 6 new stores in the quarter — said it faced similar macroeconomic challenges as other brands and retailers in recent months.

A slowdown in the oil industry, CEO Jim Conroy said, was a particular hurdle in the quarter.

“The 15 stores that directly serve the oil-related industry have now turned to a negative comp. We have seen a spillover impact of the softness in oil to stores outside of those 15 stores,” Conroy explained during the firm’s Q2 conference call. “And finally, we have seen weakness in some states that rely on mining and certain types of agriculture to support the local economy.”

The states that have been hit hardest were North Dakota, Wyoming and rural parts of Colorado, the CEO noted.

Net Income: The company posted a net loss of $3.3 million, in the second quarter ending Sept. 26, 2015, compared to a profit of $944,000 in the comparable quarter.

EPS: Losses per diluted share were 13 cents, compared to diluted EPS of 5 cents in the same period last year.

Net Revenue: Revenue improved 50 percent year-over-year to $129.7 million, from the comparable quarter’s revenue of $86.4 million.

Adjustments: Pro forma adjusted net income was $1.2 million, or $4 cents per diluted share, compared to $2 million or 8 cents per diluted share in the prior-year period.

Executive Insights: “In the quarter, we faced some of the economic headwinds that many other retailers experienced, including the pressure in markets exposed to oil and gas and those markets that are experiencing declining prices in other commodities. Despite these headwinds, we were able to continue to grow the Boot Barn business within our range of same-store sales guidance without changing our promotional strategy.” — Conroy during Q2 conference call.