HomeFinance NewsWhy Boot Barn Holdings Inventory Was Sliding As we speak

Why Boot Barn Holdings Inventory Was Sliding As we speak

What occurred

Shares of Boot Barn Holdings (BOOT -12.41%) have been pulling again after the Western-themed attire and footwear retailer posted disappointing leads to its fourth-quarter earnings report, because it missed estimates on the highest line and provided weak steering.

As of 1:24 p.m. ET, the inventory was down 11.6%.

So what

Lapping the growth within the quarter a 12 months in the past when comparable gross sales jumped 33.3%, same-store gross sales within the fourth quarter fell 5.5%. Nevertheless, income nonetheless rose 11% because of new retailer progress, reaching $425.7 million, which missed the analyst consensus at $441.2 million.

The corporate added 12 new shops within the quarter and 45 throughout fiscal 2023, bringing its grand whole to 345.

Additional down the earnings assertion, gross margin fell 220 foundation factors to 36.6% due partially to greater freight expense and deleveraging from the decline in comparable gross sales.

Working earnings was basically flat at $62.7 million, and adjusted earnings per share rose from $1.47 to $1.51, which topped expectations at $1.43.

CEO Jim Conroy mentioned:

We skilled double-digit whole gross sales progress whereas increasing product margin for the seventh consecutive 12 months. Whereas our e-commerce enterprise confronted top-line gross sales strain, our shops achieved optimistic same-store gross sales progress for the 12 months as they cycled a exceptional 57% comp retailer progress in fiscal 2022.

Now what

Wanting forward, the corporate referred to as for income of $1.69 billion to $1.723 billion in fiscal 2024, representing 2% to 4% progress, and it expects a same-store gross sales decline of 4.5% to six.5%. By comparability, analysts had anticipated $1.8 billion. On the underside line, it predicted earnings per share of $4.70 to $5.00, which was beneath estimates at $5.80 and represents a decline from $5.62 in fiscal 2023.

First-quarter steering was additionally beneath the consensus. 

Regardless of the weaker-than-expected forecast, the corporate nonetheless expects to open 52 new shops this 12 months, making it one of many few attire retailers aggressively increasing its brick-and-mortar footprint. That must also give buyers confidence that administration expects same-store gross sales to return to progress.

Boot Barn inventory nonetheless seems to be moderately priced, however the sell-off is comprehensible, given the forecast for declining gross sales and income.

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