Boot Barn (BOOT 21.86, +2.47, +12.74%) is trading nicely higher today after guiding Q3
(Dec) EPS above market expectations after the close on Friday. This came as a
nice surprise to investors as the stock has been struggling of late, going from
$31 in early September to $16 in mid-December before bouncing back the past few
Boot Barn has a pretty unique space in the retail industry as the largest retail chain devoted to western and work-related footwear, apparel and accessories. With 234 stores in 31 states, BOOT has 3 times as many stores as its nearest direct competitor that sells primarily western and work wear.
The company expects DecQ EPS to come in around $0.66 while revenue is expected in the $254 mln area. Both results are ahead of market expectations. Perhaps more impressive is that DecQ same store comps are expected to be a robust +9.2%, with double digit growth in ecommerce and high single digit growth in retail stores. That +9.2% comp number was down a bit from the +11.3% comps in SepQ, but it was still very good.
BOOT saw sales growth in virtually all major product categories and geographic regions while generating strong merchandise margin expansion. BOOT is showing good sales momentum in its retail stores as the company has now reported seven consecutive quarters of same store sales growth in its stores.
While BOOT does not provide a lot of detail in their press release, it's a good sign that the company has posted back-to-back strong comps soon after it launched a new brand. Specifically, in mid-September BOOT successfully launched its new exclusive brand, Idyllwind, Fueled by Miranda Lambert.
One thing investors like about BOOT is that the vast majority of its merchandise is sold at full price, without inventory markdowns. This can hurt during downturns in consumer spending, but demand for these products are pretty steady. Also, selling at full price helps keep its merchandise margins healthy. It also sells an assortment of denim, western shirts, cowboy hats, belts and belt buckles, western-style jewelry and accessories.
BOOT has been investing in merchandising, marketing, and omni-channel initiatives. The recent results show that those investments are bearing some fruit. Looking ahead, BOOT believes it still has a lot of growth ahead and the potential to double its store base.
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