Joseph Gonzalez

Joseph Gonzalez asked if promotions in the hunt and shoot category were the sole strategy for returning to positive comps, initially misinterpreting the Q3 comp performance. He also sought preliminary insights into potential margin expansion for fiscal year 2026, considering the sustained tough demand environment.

Answer

Jennifer Fall Jung, CFO, clarified that Q3 comps were positive 2% and that while firearms and ammo are a key layer, holiday promotions are broad across the store. Paul Stone, CEO, reiterated that hunting and shooting sports were up over 5% in Q3, serving as traffic drivers that enable attachment sales. Jennifer Fall Jung stated that while 2026 guidance isn't provided, the focus will be on efficiency, profitable growth, inventory management for margin accretion, and cost structure optimization.

Asked about tariff mitigation efforts beyond pricing, such as vendor negotiations, and inquired about capital allocation plans for the cash infusion from the PIEPS divestiture.

Answer

The company is pursuing all tariff mitigation efforts, including vendor negotiations and accelerating the move of manufacturing out of China, in addition to the pricing actions already taken. Regarding capital allocation, due to the uncertain business environment from trade policies, the company plans to hold the cash from the divestiture, invest it in treasuries, and reassess its strategy at a later date.