Boot Barn Q1 Earnings Call Highlights

Key Points

• Boot Barn exceeded Q1 expectations, with revenue up 18% to $594 million, same-store sales up 4.7%, and diluted EPS rising 32% to $2.29. Growth was supported by 27 new stores, strong e-commerce, and high-single-digit gains in Work boots and apparel.
• Management said comparable sales were approximately flat during the first four weeks of Q2 as July traffic weakened, particularly in women’s Western categories. However, it attributed the slowdown to temporary factors and maintained a high-end Q2 outlook of $582 million in sales and $1.65 EPS.
• Boot Barn raised its fiscal 2027 outlook to $2.6 billion in sales and $9.23 in diluted EPS, helped partly by $17.8 million in expected tariff-refund benefits. The company remains on track to open 70 stores, while ending the quarter with $139 million in cash and no revolver borrowings.

Boot Barn NYSE: BOOT reported first-quarter fiscal 2027 results that exceeded its expectations, with revenue rising 18% and earnings per diluted share increasing 32% from a year earlier. The retailer also raised its full-year outlook, though management said sales during the first four weeks of the fiscal second quarter were approximately flat as July traffic weakened.

Chief Executive Officer John Hazen said first-quarter revenue growth was supported by 27 store openings and consolidated same-store sales growth of 4.7%. The company ended the period with 566 locations in 49 states and remains on track to open 70 stores during fiscal 2027.

“First quarter results exceeded our expectations, reflected broad-based strength across the business,” Hazen said. He added that new stores are projected to generate average annual revenue of $3.2 million with an investment payback period of less than two years.

First-Quarter Sales and Earnings

Net sales increased to $594 million in the first quarter. Consolidated same-store sales rose 4.7%, including a 3.8% increase in retail-store comparable sales and a 13.4% increase in e-commerce comparable sales.

Retail-store comp growth was driven by a 3% increase in average unit retail, while transactions were approximately flat. Hazen said growth was broad-based across most major categories. Men’s Western boots rose in the mid-single digits, while women’s Western boots declined in the mid-single digits against mid-teen comparable growth in the prior year. Men’s and women’s apparel each increased in the high single digits, supported by double-digit denim growth.

The Work business was a particular area of strength. Work boots delivered high-single-digit comp growth, its fifth consecutive quarter of growth and its strongest growth in recent years, according to Hazen. He attributed the momentum to improved in-store merchandising, increased marketing and investments in key third-party brands.

Chief Financial Officer Jim Watkins said merchandise margin increased 220 basis points year over year. The improvement included a 250-basis-point benefit from tariff refunds and 60 basis points of product-margin expansion, partly offset by a 90-basis-point headwind from lapping lower freight costs in the prior-year period.

Gross profit rate increased 130 basis points, while selling, general and administrative expense was $149 million, or 25.2% of sales. Income from operations was $91 million, or 15.3% of sales. Earnings per diluted share rose to $2.29 from $1.74 a year earlier, including a $0.38 per-share benefit from tariff refunds.

July Trends and Second-Quarter Outlook

Management said consolidated comparable sales were approximately flat through the first four weeks of the second quarter. Hazen said the moderation from first-quarter growth was largely anticipated because the company was comparing against the strongest month of last year’s second quarter, but July results came in below its original expectations.

Boot Barn cited fewer Western Lifestyle stadium events and concerts, as well as the temporary effect of World Cup matches on customer traffic during televised games. Hazen said the traffic pressure was seen across geographies and was more pronounced in women’s Western categories, particularly leather boots. Average unit retail remained healthy, he said.

Management characterized July as an unusual, short-term period rather than a broader change in customer health. Hazen said the company was not seeing evidence of a “K-shaped” consumer environment, in which lower-income customers cut back more sharply than higher-income shoppers. Work apparel and Work boots continued to post high-single-digit comparable growth in July, he said.

For the second quarter, Boot Barn expects at the high end of its guidance range:

• Total sales of $582 million.
• Consolidated same-store sales growth of 2%.
• Merchandise margin of approximately 51.8% of sales.
• Income from operations of $67 million, or 11.5% of sales.
• Earnings per diluted share of $1.65, compared with $1.37 in the prior-year quarter.

Watkins said the company built its second-quarter outlook by applying July’s sales trend to historical seasonality, then adding roughly one point of comparable-sales growth to account for what it viewed as artificially weak July sales. He noted that comparisons become easier later in the quarter.

Tariff Refunds, Margins and Full-Year Guidance

Boot Barn received a $14.7 million first-quarter merchandise-margin benefit from tariff refunds, along with $500,000 of related interest income. The company expects tariff refunds to add $2.4 million to second-quarter merchandise margin and $700,000 in the third quarter. For the full year, it expects $17.8 million of merchandise-margin benefit and $500,000 of interest income, equating to an estimated $0.46 benefit to earnings per share.

Excluding tariff refunds, Hazen said first-quarter merchandise margin exceeded expectations because of stronger product margins. While exclusive brands remain an important driver of margin expansion, the strength of third-party Work boot brands reduced exclusive-brand penetration more than anticipated.

Boot Barn now expects full-year exclusive-brand penetration to be approximately flat to slightly down from the prior year. Hazen said that outcome reflects strong demand for third-party Work boots and is positive for sales, new-customer acquisition and the company’s position in the Work category. The company continues to target 50% exclusive-brand penetration over the longer term.

At the high end of its updated fiscal 2027 outlook, Boot Barn expects:

• Total sales of $2.6 billion, up 16% from fiscal 2026.
• Consolidated same-store sales growth of 4%, including 3% retail-store comp growth and 13% e-commerce comp growth.
• Merchandise margin of approximately 52.2% of sales, up 130 basis points year over year.
• Gross profit rate of approximately 38.7% of sales.
• Operating income of $374 million, or 14.3% of sales.
• Net income of $281 million and earnings per diluted share of $9.23, representing 26% EPS growth.

Store Expansion, Inventory and Capital Position

Inventory increased 16% year over year to $900 million, while same-store inventory rose 1%. Watkins said the total inventory increase reflects the needs of new stores, exclusive brands and purchases made at volume discounts. Management said markdowns as a percentage of inventory remain below historical standards and that it is comfortable with inventory health, including in women’s leather boots.

During the quarter, Boot Barn repurchased more than 158,000 shares for $25 million under its $200 million share-repurchase authorization. Since beginning repurchases in fiscal 2026, the company has repurchased $75 million of stock, representing about 445,000 shares.

The company finished the quarter with $139 million in cash and no borrowings under its line of credit. It also amended its revolving credit facility, doubling capacity to $500 million and extending the maturity date to 2031.

About Boot Barn (NYSE:BOOT)

Boot Barn, Inc is a leading specialty retailer focused on western and work-related footwear, apparel and accessories. The company operates full-price and outlet retail stores under the Boot Barn and BootBarn.com brands, offering a wide assortment of cowboy boots, work boots, casual and fashion footwear, western and work apparel, hats, belts and related accessories. In addition to its brick-and-mortar network, Boot Barn maintains an e-commerce platform to serve customers seeking ranch-and-rodeo style clothing and rugged workwear from coast to coast.

Founded in 1978 in Southern California, Boot Barn began as a single store catering to ranchers, farmworkers and western enthusiasts.

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