Sportsman’s Warehouse Holdings, Inc. Announces First Quarter 2024 Financial Results
“Although our results continue to be affected by a challenging macroenvironment, we continue to execute on our efforts on resetting the organization to focus on providing our passionate customers with great gear and exceptional service,” said
For the thirteen weeks ended
- Net sales were
$244.2 million , compared to$267.5 million in the first quarter of fiscal year 2023. The net sales decrease was primarily due to lower sales demand due to the impact of consumer inflationary pressures, decreasing discretionary spending, partially offset by the opening of 11 new stores over the last year. - Same store sales decreased 13.5% during the first quarter of fiscal year 2024, compared to the first quarter of fiscal year 2023.
- Gross profit was
$73.8 million , or 30.2% of net sales, compared to$80.0 million , or 29.9% of net sales, in the corresponding period of fiscal year 2023. The increase as a percentage of net sales was primarily driven by improved product mix and rate in our fishing category. - Selling, general, and administrative (SG&A) expenses were
$94.4 million , or 38.7% of net sales, compared to$99.0 million , or 37.0% of net sales, in the first quarter of fiscal year 2023. The decrease in absolute dollars was largely due to our expense management initiatives which reduced overall payroll and lower new store pre-opening expenses compared with the prior year. This decrease was partially offset by higher rent and depreciation expenses primarily due to the opening of 11 new stores sinceApril 29, 2023 . - Net loss was
$(18.1) million , compared to a net loss of$(15.6) million in the first quarter of fiscal year 2023. Adjusted net loss was$(17.8) million compared to an adjusted net loss of$(14.8) million in the first quarter of fiscal year 2023 (see “GAAP and Non-GAAP Financial Measures”). - Adjusted EBITDA was
$(8.7) million , compared to$(7.8) million in the corresponding prior-year period (see “GAAP and Non-GAAP Financial Measures”). - Diluted loss per share was
$(0.48) compared to a diluted loss per share of$(0.42) in the corresponding prior-year period. Adjusted diluted loss per share was$(0.47) compared to adjusted diluted loss per share of$(0.39) in the first quarter of fiscal year 2023 (see “GAAP and Non-GAAP Financial Measures”).
Balance sheet and capital allocation highlights as of
- The Company ended the first quarter with net debt of
$161.8 million , comprised of$2.2 million of cash and cash equivalents and$164.0 million of borrowings outstanding under the Company’s revolving credit facility. Total inventory at the end of the first quarter was$391.6 million . - Total liquidity was
$80.8 million as of the end of the first quarter of fiscal year 2024, comprised of$78.6 million of availability on the revolving credit facility and$2.2 million of cash and cash equivalents.
Fiscal Year 2024 Outlook:
The Company is reaffirming its guidance for fiscal year 2024 and expects net sales to be in the range of
The Company has not reconciled expected adjusted EBITDA for fiscal year 2024 to GAAP net income because the Company does not provide guidance for net (loss) income and is not able to provide a reconciliation to net (loss) income without unreasonable effort. The Company is not able to estimate net (loss) income on a forward-looking basis without unreasonable efforts due to the variability and complexity with respect to the charges excluded from Adjusted EBITDA.
Conference Call Information:
A conference call to discuss first quarter 2024 financial results is scheduled for
Non-GAAP Financial Measures
This press release includes the following financial measures defined as non-GAAP financial measures by the
The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors and are frequently used by analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company’s business and facilitate a more meaningful comparison of its diluted (loss) earnings per share and actual results on a period-over-period basis. The Company has provided this information as a means to evaluate the results of its ongoing operations and uses these additional measurement tools for purposes of business decision-making, including evaluating store performance, developing budgets and managing expenditures. Other companies in the Company’s industry may calculate these items differently than the Company does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that the Company’s future results, cash flows or leverage will be unaffected by other unusual or non-recurring items.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include, but are not limited to, statements regarding our ability to provide a value-driven assortment that aligns with our key outdoor seasons; our ability to reset the organization to focus on providing customers with great gear and exceptional service; and our ability to reduce the balance on our line of credit using free cash flow generated during the second half of 2024. Investors can identify these statements by the fact that they use words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” and similar terms and phrases. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to many factors including, but not limited to: current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the supply and demand for the Company’s products and ability to conduct its business; the Company’s retail-based business model which is impacted by general economic and market conditions and economic, market and financial uncertainties that may cause a decline in consumer spending; the Company’s concentration of stores in the
About Sportsman’s
Sportsman’s
For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmans.com.
Investor Contact:
Vice President, Investor Relations
Sportsman’s Warehouse
(801) 566-6681
investors@sportsmans.com
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited) (amounts in thousands, except per share data) |
|||||||||||||||
| For the Thirteen Weeks Ended | |||||||||||||||
| % of net sales |
% of net sales |
YOY Variance |
|||||||||||||
| Net sales | $ | 244,240 | 100.0% | $ | 267,529 | 100.0% | $ | (23,289 | ) | ||||||
| Cost of goods sold | 170,454 | 69.8% | 187,485 | 70.1% | (17,031 | ) | |||||||||
| Gross profit | 73,786 | 30.2% | 80,044 | 29.9% | (6,258 | ) | |||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative expenses | 94,413 | 38.6% | 99,003 | 37.0% | (4,590 | ) | |||||||||
| Income (loss) from operations | (20,627 | ) | (8.4%) | (18,959 | ) | (7.1%) | (1,668 | ) | |||||||
| Interest expense | 2,908 | 1.2% | 2,047 | 0.8% | 861 | ||||||||||
| (Loss) income before income taxes | (23,535 | ) | (9.6%) | (21,006 | ) | (7.9%) | (2,529 | ) | |||||||
| Income (benefit) tax expense | (5,469 | ) | (2.2%) | (5,367 | ) | (2.0%) | (102 | ) | |||||||
| Net (loss) income | $ | (18,066 | ) | (7.4%) | $ | (15,639 | ) | (5.9%) | $ | (2,427 | ) | ||||
| (Loss) earnings per share | |||||||||||||||
| Basic | $ | (0.48 | ) | $ | (0.42 | ) | $ | (0.06 | ) | ||||||
| Diluted | $ | (0.48 | ) | $ | (0.42 | ) | $ | (0.06 | ) | ||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 37,567 | 37,610 | (43 | ) | |||||||||||
| Diluted | 37,567 | 37,610 | (43 | ) | |||||||||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. Condensed Consolidated Balance Sheets (Unaudited) (amounts in thousands, except par value data) |
||||||||
| 2024 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,168 | $ | 3,141 | ||||
| Accounts receivable, net | 2,102 | 2,119 | ||||||
| Merchandise inventories | 391,643 | 354,710 | ||||||
| Prepaid expenses and other | 19,200 | 20,078 | ||||||
| Total current assets | 415,113 | 380,048 | ||||||
| Operating lease right of use asset | 319,636 | 309,377 | ||||||
| Property and equipment, net | 187,848 | 194,452 | ||||||
| 1,496 | 1,496 | |||||||
| Deferred tax asset | 5,972 | 505 | ||||||
| Definite lived intangibles, net | 312 | 327 | ||||||
| Total assets | $ | 930,377 | $ | 886,205 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 70,056 | $ | 56,122 | ||||
| Accrued expenses | 84,444 | 83,665 | ||||||
| Income taxes payable | 68 | 126 | ||||||
| Operating lease liability, current | 49,351 | 48,693 | ||||||
| Revolving line of credit | 164,035 | 126,043 | ||||||
| Total current liabilities | 367,954 | 314,649 | ||||||
| Long-term liabilities: | ||||||||
| Operating lease liability, noncurrent | 314,891 | 307,000 | ||||||
| Total long-term liabilities | 314,891 | 307,000 | ||||||
| Total liabilities | 682,845 | 621,649 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, |
376 | 375 | ||||||
| Additional paid-in capital | 82,839 | 81,798 | ||||||
| Accumulated earnings | 164,317 | 182,383 | ||||||
| Total stockholders' equity | 247,532 | 264,556 | ||||||
| Total liabilities and stockholders' equity | $ | 930,377 | $ | 886,205 | ||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. Condensed Consolidated Statements Cash Flows (Unaudited) (amounts in thousands) |
||||||||
| Thirteen Weeks Ended | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (18,066 | ) | $ | (15,639 | ) | ||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation of property and equipment | 10,377 | 8,767 | ||||||
| Amortization of deferred financing fees | 38 | 38 | ||||||
| Amortization of definite lived intangible | 15 | 15 | ||||||
| Loss on asset dispositions | 16 | — | ||||||
| Noncash lease expense | (3,187 | ) | 3,548 | |||||
| Deferred income taxes | (5,467 | ) | (1,050 | ) | ||||
| Stock-based compensation | 1,174 | 1,250 | ||||||
| Change in operating assets and liabilities, net of amounts acquired: | ||||||||
| Accounts receivable, net | 18 | (363 | ) | |||||
| Operating lease liabilities | 1,477 | (540 | ) | |||||
| Merchandise inventories | (36,933 | ) | (70,361 | ) | ||||
| Prepaid expenses and other | 839 | 786 | ||||||
| Accounts payable | 13,756 | 50,172 | ||||||
| Accrued expenses | 1,351 | (9,176 | ) | |||||
| Income taxes payable and receivable | (58 | ) | (4,432 | ) | ||||
| Net cash used in operating activities | (34,650 | ) | (36,985 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment, net of amounts acquired | (3,312 | ) | (22,757 | ) | ||||
| Proceeds from sale of property and equipment | 24 | — | ||||||
| Net cash used in investing activities | (3,288 | ) | (22,757 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net borrowings on line of credit | 37,992 | 62,747 | ||||||
| Decrease in book overdraft | (895 | ) | (213 | ) | ||||
| Payments to acquire treasury stock | — | (696 | ) | |||||
| Payment of withholdings on restricted stock units | (132 | ) | (1,445 | ) | ||||
| Net cash provided by financing activities | 36,965 | 60,393 | ||||||
| Net change in cash and cash equivalents | (973 | ) | 651 | |||||
| Cash and cash equivalents at beginning of period | 3,141 | 2,389 | ||||||
| Cash and cash equivalents at end of period | $ | 2,168 | $ | 3,040 | ||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. GAAP and Non-GAAP Financial Measures (Unaudited) (amounts in thousands, except per share data) |
||||||||||
| The following table presents the reconciliations of (i) GAAP net (loss) income to adjusted net (loss) income and (ii) GAAP diluted (loss) earnings per share to adjusted diluted (loss) earnings per share : | ||||||||||
| For the Thirteen Weeks Ended | ||||||||||
| Numerator: | ||||||||||
| Net (loss) income | $ | (18,066 | ) | $ | (15,639 | ) | ||||
| Director and officer transition costs (1) | 324 | 1,113 | ||||||||
| Less tax benefit | (84 | ) | (289 | ) | ||||||
| Adjusted net (loss) income | $ | (17,826 | ) | $ | (14,815 | ) | ||||
| Denominator: | ||||||||||
| Diluted weighted average shares outstanding | 37,567 | 37,610 | ||||||||
| Reconciliation of (loss) earnings per share: | ||||||||||
| Diluted (loss) earnings per share | $ | (0.48 | ) | $ | (0.42 | ) | ||||
| Impact of adjustments to numerator and denominator | 0.01 | 0.03 | ||||||||
| Adjusted diluted (loss) earnings per share | $ | (0.47 | ) | $ | (0.39 | ) | ||||
| (1) Expenses incurred relating to the departure of directors and officers and the recruitment of directors and key members of our senior management team. | ||||||||||
| The following table presents the reconciliation of GAAP net (loss) income to adjusted EBITDA for the periods presented: | ||||||||||
| For the Thirteen Weeks Ended | ||||||||||
| Net (loss) income (1) | $ | (18,066 | ) | $ | (15,639 | ) | ||||
| Interest expense | 2,908 | 2,047 | ||||||||
| Income (benefit) tax expense | (5,469 | ) | (5,367 | ) | ||||||
| Depreciation and amortization | 10,392 | 8,782 | ||||||||
| Stock-based compensation expense (2) | 1,174 | 1,250 | ||||||||
| Director and officer transition costs (3) | 324 | 1,113 | ||||||||
| Adjusted EBITDA | $ | (8,737 | ) | $ | (7,814 | ) | ||||
| (1) Beginning with the three months ended |
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| (2) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2019 Performance Incentive Plan, Inducement Plan and Employee Stock Purchase Plan. | ||||||||||
| (3) Expenses incurred relating to the departure of directors and officers and the recruitment of directors and key members of our senior management team. | ||||||||||
Source: Sportsman's Warehouse Holdings, Inc.