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    Boot Barn Holdings Inc (BOOT)

    BOOT Q4 2025: 6% Same-Store Sales Growth Despite $8M Tariff Headwind

    Reported on May 15, 2025 (After Market Close)
    Pre-Earnings Price$132.84Last close (May 14, 2025)
    Post-Earnings Price$153.85Open (May 15, 2025)
    Price Change
    $21.01(+15.82%)
    • Sustained Same-Store Sales Momentum: Management highlighted consistent 6% same‑store sales growth in Q1—with strong performance driven by increased transactions across multiple categories, underscoring robust organic demand.
    • Effective Tariff Mitigation & Pricing Strategy: The team is successfully lowering tariff exposure—diversifying sourcing away from China (targeting around 5% tariffed exclusive brand product)—while exercising strong pricing power through mid‑single‑digit price adjustments accepted by consumers.
    • Synergy Between Digital and Store Expansion: New store openings are not only driving brick‑and‑mortar revenue but also creating a halo effect for e‑commerce, as evidenced by digital channels (like bootbarn.com) delivering robust, double‑digit growth that enhances overall brand visibility and sales.
    • Persistent Tariff Impact: The company anticipates approximately $8 million in tariff expense for fiscal 2026, with indications that these costs could continue into fiscal '27. This prolonged tariff headwind may pressure margins and earnings over an extended period.
    • Potential Softening of Consumer Demand: The planned mid-single digit price increases—necessary to offset higher vendor costs—could lead to softer consumer demand in the second half of the year, which would undermine same-store sales growth and overall revenue.
    • Extended Inventory & Margin Pressure: With a rotation of inventory roughly 2x per year, tariff-impacted stock is expected to remain in the system into early next year. This delay in clearing higher-cost inventory may extend the margin pressure and delay recovery from the current headwinds.
    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Total Sales (High-end)

    Q1 2026

    no prior guidance

    $491 million

    no prior guidance

    Same-Store Sales (High-end)

    Q1 2026

    no prior guidance

    +6%

    no prior guidance

    Merchandise Margin (High-end)

    Q1 2026

    no prior guidance

    $254 million or 51.7% of sales (140 bp increase over prior year period)

    no prior guidance

    Gross Profit (High-end)

    Q1 2026

    no prior guidance

    $188 million or 38.2% of sales

    no prior guidance

    Income from Operations (High-end)

    Q1 2026

    no prior guidance

    $64 million or 13% of sales

    no prior guidance

    EPS (High-end)

    Q1 2026

    no prior guidance

    $1.52

    no prior guidance

    Total Sales (High-end)

    FY 2026

    no prior guidance

    $2.15 billion (13% growth over fiscal 2025)

    no prior guidance

    Total Sales (Low-end)

    FY 2026

    no prior guidance

    $2.07 billion (8% growth over fiscal 2025)

    no prior guidance

    Same-Store Sales (High-end)

    FY 2026

    no prior guidance

    +2% (Retail: +1.5%; E‑commerce: +7.5%)

    no prior guidance

    Same-Store Sales (Low-end)

    FY 2026

    no prior guidance

    -2%

    no prior guidance

    Merchandise Margin (High-end)

    FY 2026

    no prior guidance

    $1.08 billion or 50.1% of sales (flat vs fiscal 2025)

    no prior guidance

    Merchandise Margin (Low-end)

    FY 2026

    no prior guidance

    30 basis points decline

    no prior guidance

    Gross Profit (High-end)

    FY 2026

    no prior guidance

    $793 million or 36.9% of sales

    no prior guidance

    Gross Profit (Low-end)

    FY 2026

    no prior guidance

    140 basis points of gross profit deleverage

    no prior guidance

    Income from Operations (High-end)

    FY 2026

    no prior guidance

    $266 million or 12.4% of sales

    no prior guidance

    Income from Operations (Low-end)

    FY 2026

    no prior guidance

    $228 million or 11% of sales

    no prior guidance

    Net Income (High-end)

    FY 2026

    no prior guidance

    $197 million

    no prior guidance

    EPS (High-end)

    FY 2026

    no prior guidance

    $6.40

    no prior guidance

    EPS (Low-end)

    FY 2026

    no prior guidance

    $5.50

    no prior guidance

    New Store Growth

    FY 2026

    no prior guidance

    65 to 70 new stores (15% unit growth)

    no prior guidance

    Capital Expenditures

    FY 2026

    no prior guidance

    $115 million to $120 million, net of estimated tenant allowances of $35 million

    no prior guidance

    Effective Tax Rate

    FY 2026

    no prior guidance

    26%

    no prior guidance

    Tariff Impact

    FY 2026

    no prior guidance

    $8 million incremental cost (impacting H2 fiscal 2026)

    no prior guidance

    Share Repurchase Program

    FY 2026

    no prior guidance

    Authorization to repurchase up to $200 million of common stock (25% planned for FY 2026)

    no prior guidance

    TopicPrevious MentionsCurrent PeriodTrend

    Same-Store Sales Growth Trends

    Q1 discussed modest growth (1.4%) with sequential improvements; Q2 exhibited stronger growth (4.9%); Q3 reported robust expansion (8.6%) driven by transactions and broad category strength.

    Q4 delivered solid same-store sales growth (6% consolidated with strong e-commerce growth) with targeted guidance for the next quarter and fiscal year.

    Consistent growth maintained over periods although Q4 guidance indicates moderate caution amid market uncertainties.

    Evolving Market Sentiment

    Q1 featured cautious optimism due to macro concerns; Q2 showed broad-based positive demand and confidence for the holiday season; Q3 highlighted accelerating demand in western categories.

    Q4 sentiment remains positive early in the year with strong same-store sales but shows growing caution regarding tariff‐driven price increases and anticipated softer demand later in fiscal 2026.

    Mixed sentiment evolving with earlier optimism now tempered by tariff concerns, indicating greater uncertainty about future consumer behavior.

    Tariff Exposure and Global Sourcing

    Q1 noted reduction in China exposure and discussed contingency plans; Q2 detailed shifts in sourcing percentages (e.g. reducing China’s share, increasing Mexico’s share); Q3 focused on negotiating vendor pricing and exploring alternate sourcing as a hedge.

    Q4 provided in‐depth analysis: mid‐single digit price hikes due to tariffs, proactive pull‐forward of inventory, and detailed line‐by‐line adjustments for exclusive brands to mitigate tariff costs.

    Proactive mitigation strategies persist – consistent focus on reducing risk through diversified sourcing now coupled with explicit pricing adjustments; sentiment is increasingly tactical.

    Inventory and Merchandising Management

    Q1 reported modest inventory growth with improved markdown profiles; Q2 highlighted significant efficiency gains and margin expansion (70‐bp improvement) driven by supply chain efficiencies; Q3 noted steady inventory growth, exclusive brand penetration progress, and margin gains.

    Q4 emphasized a 25% YoY inventory increase driven by new stores and tariff pull‐forward; meanwhile, merchandise margin expanded by 210 basis points as improved buying economies and exclusive brand growth offset tariff pressures.

    Consistent efficiency gains continue to drive margin expansion despite increased inventory investments and tariff risk; proactive measures are in place to sustain profitability.

    Digital, E-Commerce, and Omnichannel

    Q1 highlighted strong performance on bootbarn.com and online marketing improvements (14% site growth, strong omnichannel fulfillment); Q2 introduced the Boot Barn app and emerging AI tools; Q3 emphasized traffic growth, customer acquisition via digital channels, and integrated fulfillment.

    Q4 underscored continued e-commerce growth (9.8% same-store sales online) and noted a halo effect from new store openings boosting online demand, with ongoing omnichannel integration.

    Robust digital momentum maintained – innovative digital tools and strong omnichannel synergy continue to fuel growth, enhancing customer engagement and positioning the channel for future expansion.

    Pricing Strategies and Consumer Demand

    Q1 stressed balanced pricing with limited promotions; Q2 maintained an everyday low price approach with emphasis on premium brands like Cody James Black 1978; Q3 reported flat average transaction value with modest adjustments; overall, demand dynamics were steady across quarters.

    Q4 focused on mid‐single digit price increases passed onto consumers due to tariffs and detailed testing of price elasticity, with expectations that higher prices could lead to a moderation in consumer demand.

    Shifting from stable, balanced pricing to tactical adjustments amid external tariff pressures, potentially impacting demand—indicating a cautious but necessary pricing strategy evolution.

    Exclusive Brand Penetration & Margin Expansion

    Q1 established a strong base with exclusive brands at 38.1% and 100‐bp margin expansion; Q2 saw a slight dip in penetration (–50 bp) but plans for 200 bp improvement in coming quarters; Q3 reported further growth with 180 bp improvement in exclusive brand penetration contributing to a 130‐bp margin expansion.

    Q4 reported significant achievements with exclusive brand penetration growing by 190 basis points in the quarter and 90 bp for the year, contributing to a 210 bp merchandise margin expansion; guidance for fiscal 2026 projects further gains.

    Exceptionally strong performance – exclusive brand initiatives continue to drive superior margin expansion, reinforcing a robust competitive advantage moving forward.

    Leadership Transition and Organizational Uncertainty

    Q1 did not mention leadership changes; Q2 and Q3 discussed CEO transition details and new appointments (e.g. appointment of John Kosoff in Q3, CEO stepping down in Q2) with some transitional costs and uncertainty noted.

    Q4 reflected a more stabilized environment as CEO John Hazen has settled into his permanent role, emphasizing continuity in strategic initiatives and reduced organizational uncertainty.

    Transition phase stabilizing – earlier leadership changes and uncertainty are now resolving into operational continuity, reducing risk for future execution.

    Store Expansion and New Market Penetration

    Q1 revealed plans for 60 new stores and an ambition to double the store count; Q2 demonstrated healthy expansion (15 new stores, 60 planned this year); Q3 reported aggressive new openings with strategic market positioning across 49 states.

    Q4 continued the expansion trend by opening new stores in four new states, achieving a presence in 49 states, and reinforcing the strategy with strong associated e-commerce halo effects.

    Aggressive and consistent expansion – store growth remains a cornerstone strategy with a clear focus on new market penetration, promising substantial long-term revenue opportunities.

    Decline in Workwear Segment Performance

    Q1 reported that work boots and work apparel were underperforming (work boots about –1%, work apparel in low single digits negative); Q2 showed a turnaround with workwear turning slightly positive; Q3 acknowledged ongoing challenges with work boots but signs of improvement.

    Q4 CEO John Hazen acknowledged persistent challenges in the workwear segment, particularly work boots, but outlined new marketing campaigns and digital sales support measures aimed at reinvigorating the category.

    Incremental improvement yet persistent headwinds – workwear remains under pressure; while efforts are underway, it is less emphasized compared to other high‐growth segments, posing a potential area for future focus.

    1. Tariff Impact
      Q: Quantify tariff headwind on margins?
      A: Management explained that tariffs add about $8 million in expense—mainly affecting second‐half margins—and noted mitigation via exclusive brand sourcing and selective pricing, though these costs may persist into fiscal ’27.

    2. Margin Outlook
      Q: How will margins recover despite pressures?
      A: Leadership anticipates operating margins will hold flat this year with potential to return to near 15% over time as cost efficiencies and SG&A leverage improve, offsetting new store and tariff challenges.

    3. SG&A Leverage
      Q: Will SG&A costs drop with higher sales?
      A: Management expects SG&A ratios to benefit from normalized expenses and increased contribution from new stores, resulting in improved leverage as fixed costs are spread over rising revenues.

    4. EB Penetration
      Q: Will exclusive brand share increase further?
      A: The team projects additional exclusive brand penetration—gaining over 100 basis points in Q1—with products remaining competitively priced to win market share.

    5. Same-Store Growth
      Q: What drives same-store sales acceleration?
      A: Management credited robust performance in denim, footwear, and apparel—supported by healthy e-commerce and in-store growth—which underscores solid underlying demand.

    6. Store & E‑comm Impact
      Q: How do new stores impact digital sales?
      A: New store openings, especially in legacy markets like New York, are creating a halo effect that boosts online sales significantly, reinforcing the overall sales momentum.

    7. Tariff Duration
      Q: How long will tariff headwinds last?
      A: Given inventory turns under 2x per year, management expects tariff‐impacted merchandise to affect margins into early fiscal 2027, with a gradual transition as inventory is refreshed.

    8. China Sourcing
      Q: What percent of exclusive orders come from China?
      A: For the second half of fiscal ’26, only about 5% of exclusive brand orders are sourced from China, as efforts to shift production to countries like Mexico continue.

    9. Competitive Pricing
      Q: How are competitors handling price increases?
      A: Management noted that larger retailers remain rational with modest, low single-digit price hikes, suggesting a stable competitive landscape despite broader tariff-related challenges.

    10. E‑comm Volatility
      Q: Why is digital performance variable?
      A: Fluctuations in e-commerce stem from differences in promotional timing and temporary drop-ship issues with a major vendor, although bootbarn.com consistently drives strong performance.

    11. Work Category Focus
      Q: What’s the plan for work boot sales?
      A: The company is intensifying marketing and product focus in the work boot segment to revitalize its performance and appeal to its core customer base.

    12. CEO Strategy
      Q: Any shifts under new leadership?
      A: CEO John Hazen confirmed that the longstanding four strategic initiatives will continue, with enhanced emphasis on sourcing and exclusive brands, ensuring stability and gradual improvement.

    13. Consumer Demand
      Q: Are customers buying ahead due to tariffs?
      A: Management found no evidence of pull-forward buying among consumers despite tariff concerns, reflecting steady purchasing behavior.

    14. Vintage Stores
      Q: How are older stores affecting comps?
      A: Analysis shows that year two and older stores outperform, with second-year stores generating higher sales volumes that bolster overall same-store performance.