Boot Barn Profit Jumps on Tariff Refunds as Growth Cools
Boot Barn Holdings posted a 32% jump in diluted earnings to $2.29 a share, but same-store sales growth slowed to 4.7% and July trends turned flat, prompting cautious full-year guidance.
Boot Barn Holdings (BOOT) reported diluted earnings per share of $2.29 for its fiscal first quarter, up 32% from $1.74 a year earlier, as the western-wear and workwear retailer collected a one-time tariff refund even as its underlying sales growth continued to decelerate.
Net sales rose 17.7% to $593.5 million, extending a slowdown from 18.7% growth in the fourth quarter of fiscal 2024 and 16.0% in the third quarter. Consolidated same-store sales grew 4.7%, down from 6.1% in the prior quarter and well below the 9.4% comparison in the year-ago period, with both channels cooling: e-commerce same-store sales growth slowed to 13.4% from 19.6% two quarters earlier, while retail-store comparable sales growth eased to 3.8% from 5.2%.
Margins told a different story. Gross profit expanded 130 basis points year over year to 40.4% of sales, reversing an 80-basis-point contraction in the fourth quarter, and merchandise margin rose 220 basis points, helped by $14.7 million in tariff refunds recognized in cost of goods sold. The refunds added roughly 250 basis points to merchandise margin and an estimated $0.38 to per-share earnings in the quarter, with 60 basis points of additional benefit from underlying product-margin gains offset by a 90-basis-point freight headwind. Operating margin expanded 130 basis points to 15.3% of sales, a sharper improvement than the 60-basis-point decline posted in the fourth quarter, even as SG&A deleveraged a modest 10 basis points to 25.2% of sales.
Boot Barn opened 27 new stores in the quarter, bringing its base to 566 and marking an acceleration from 25 openings in each of the prior two quarters, though the company's full-year plan of 70 new stores trails the 80 opened in fiscal 2024. The effective tax rate fell to 24.1% from 25.1% a year earlier, but the company's guidance assumes a rate of 25.7% for the remaining nine months of the fiscal year.
The company's outlook points to a slower pace ahead. Fiscal 2025 sales guidance of $2.580 billion to $2.625 billion implies growth of 14% to 16%, down from the 17.9% net sales growth recorded in fiscal 2024, and full-year same-store sales guidance of 2.0% to 4.0% sits well below fiscal 2024's 7.2% actual growth. For the second quarter, Boot Barn guided retail-store same-store sales to a range of flat to 1.0%, including the possibility of a decline, and consolidated same-store sales to flat to 2.0% — a step down from the first quarter's actual 3.8% retail and 4.7% consolidated comparisons.
That caution was reinforced by preliminary results for the first five weeks of the second quarter, during which consolidated same-store sales came in flat at 0.0%, down from 5.4% in June and the first quarter's 4.7% average. Retail-store same-store sales turned negative at -1.2% even as e-commerce sales stayed positive at 10.7%, a divergence attributed to the timing of seasonal events and concerts.
Boot Barn also disclosed an expansion of its revolving credit facility to $500 million from $250 million, effective July 28, 2024, and it roughly doubled share repurchases to $25.0 million from $12.5 million a year earlier under its $200 million authorized buyback program. Average inventory per store rose about 1.2% on a same-store basis at quarter-end, a new metric the company disclosed for the first time.
The first quarter's earnings growth leaned on a refund that will not repeat at the same scale, and the guidance built around a 2% to 4% same-store sales range signals that management expects the deceleration already visible across three quarters to continue rather than reverse.