Boot Barn Holdings, Inc. Announces First Quarter Fiscal Year 2022 Financial Results

Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the first fiscal quarter ended June 26, 2021.

Due to the impact of COVID-19 on the Company’s results in its first fiscal quarter ended June 27, 2020, it has provided the below quarterly highlights in comparison to its first fiscal quarter ended June 29, 2019, two years ago.

For the quarter ended June 26, 2021:

• Net sales increased 64.9% to $306.3 million, compared to June 29, 2019, two years ago.
• Compared to June 29, 2019, same store sales increased 52.3%, comprised of an increase in retail store same store sales of 51.7% and an increase in e-commerce same store sales of 55.8%.
• Net income was $40.6 million, or $1.35 per diluted share, compared to $9.7 million, or $0.33 per diluted share in the two-year ago period. Net income per diluted share in the current-year and two-year ago periods includes an approximately $0.09 and $0.01 per share benefit, respectively, due to income tax accounting for share-based compensation. Excluding the tax benefit in both periods, net income per diluted share in the current-year period was $1.26, compared to $0.32 in the two-year ago period.
• The Company opened 3 new stores during the thirteen weeks ended June 26, 2021.

The Company has also provided the below table which includes year-over-year comparisons of retail store sales, e-commerce sales, and total net sales for each of the periods indicated below. In addition, the following table includes retail store sales and e-commerce sales as a percentage of total net sales for the periods indicated below:

Jim Conroy, President and Chief Executive Officer, commented, “It has been a fantastic start to fiscal 2022 with sales and profitability up significantly on a two-year basis. While we believe there are macro tailwinds at play, our strategy to expand our addressable market, coupled with superb execution by the entire team in securing merchandise and staffing the stores to meet the additional demand, has resulted in another exceptional quarter. We believe that our sharp focus on our merchandise, marketing and omni-channel initiatives over the past several years combined with the expansion of our store base has increased our market share and strengthened our foundation for outsized growth. We have maintained our strong momentum thus far in the second quarter as the team continues to perform extremely well managing the ongoing strength in demand.”

Operating Results for the First Quarter Ended June 26, 2021 Compared to the First Quarter Ended June 27, 2020

• Net sales increased 107.3% to $306.3 million from $147.8 million in the prior-year period. Consolidated same store sales increased 78.9% with retail store same store sales up 104.5% and e-commerce same store sales up 9.8%. The increase in net sales was the result of an increase of 78.9% in consolidated same store sales, the sales contribution from temporarily closed stores that were excluded from the comp base, and the incremental sales from new stores opened over the past twelve months. Net sales in the prior-year period were adversely impacted by decreases in retail store sales resulting from decreased traffic in our stores from customers staying at home in response to the COVID-19 crisis and temporary store closures.

• Gross profit was $116.4 million, or 38.0% of net sales, compared to $40.2 million, or 27.2% of net sales, in the prior-year period. Gross profit increased primarily due to higher sales. The increase in gross profit rate of 1,080 basis points was driven by 660 basis points of leverage in buying and occupancy costs as a result of expense leverage on higher sales and a 420-basis point increase in merchandise margin rate. Merchandise margin rate increased 420 basis points primarily as a result of the increased penetration of store sales, which generate higher merchandise margins than e-commerce, when compared to the prior year, in addition to better full-price selling and growth in exclusive brand penetration.

• Selling, general and administrative expenses were $62.8 million, or 20.5% of net sales, compared to $38.4 million, or 26.0% of net sales, in the prior-year period. The increase in selling, general and administrative expenses was primarily a result of higher store payroll, higher overhead and increased marketing expenses in the current-year period compared to the prior-year period which was impacted by COVID-19. Selling, general and administrative expenses as a percentage of net sales decreased by 550 basis points primarily as a result of expense leverage on higher sales.

• Income from operations increased $51.8 million to $53.6 million, or 17.5% of net sales, compared to $1.8 million, or 1.2% of net sales, in the prior-year period. This increase represents 1,630 basis points of improvement in operating profit margin.

• Net income was $40.6 million, or $1.35 per diluted share, compared to a net loss of $0.5 million, or $0.02 per diluted share in the prior-year period. Net income per diluted share in the current-year period includes an approximately $0.09 per share benefit due to income tax accounting for share-based compensation. Excluding the tax benefit in the current-year period, net income per diluted share in the current-year period was $1.26, compared to a net loss per diluted share of $0.02 in the prior-year period.

Current Business

The following table includes retail store sales, e-commerce sales, and total net sales for the periods indicated below. It also includes the year-over-year change in retail store sales, e-commerce sales, and total net sales for each of the periods indicated below:

Balance Sheet Highlights as of June 26, 2021

• Cash of $49.6 million.
• Average inventory per store was flat on a same store basis compared to June 29, 2020.
• The Company prepaid $61.5 million of its term loan facility, reducing total debt to $50.0 million, including a zero balance drawn under the $165 million revolving credit facility.

Subsequent to June 26, 2021, the Company expanded its revolving credit facility to $180.0 million.

Fiscal Year 2022 Outlook

The Company is providing the following full-year fiscal 2022 guidance:

• New unit growth of 10%.
• Exclusive brand penetration growth of 350 basis points, which represents an increase from the Company’s prior outlook of 250 basis points.
• Effective tax rate of 26.0%.
• Capital expenditures between $33.0 to $36.0 million.

Conference Call Information

A conference call to discuss the financial results for the first quarter of fiscal year 2022 is scheduled for today, August 4, 2021, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to (800) 263-0877. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the “Events and Presentations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until September 4, 2021, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 1539926. Please note participants must enter the conference identification number in order to access the replay.

About Boot Barn

Boot Barn is the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 276 stores in 36 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation’s leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.

Forward Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan“, "intend", "believe", “may”, “might”, “will”, “could”, “should”, “can have”, “likely”, “outlook” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company’s management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: the effect of COVID-19 on our business operations, growth strategies, store traffic, employee availability, financial condition, liquidity and cash flow; decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the Company’s ability to effectively execute on its growth strategy; and the Company’s failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading “Risk factors” in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.

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