Boot Barn (BOOT) 1 Aug 192020 Q1 Earnings call transcript

Good day, everyone, and welcome to the Boot Barn Holdings Incorporated First Quarter 2020 Earnings Call.

As a reminder, this call is being recorded.

Now I’d like to turn the conference over to your host, Jim Watkins, Vice President, Investor Relations. Please go ahead, sir.

Thank you. everyone. afternoon, Good joining quarter for to Boot discuss Thank XXXX us earnings first fiscal results. Barn’s you today With me Officer. on Chief today’s call are Jim and Hackman, Executive Conroy, Greg Chief Financial Officer; President and

on the A today’s for as website. Boot website the the call, bootbarn.com. copy at a call Investor XX of this Relations after company’s end recording press available replay Barn’s we of Shortly Relations a section section the is will of on Investor days of available be

you certain Boot results These as reliance you Accordingly, statements affecting remind and make to expectations this presentation place statements. and not will may should only like forward-looking in from factors current Boot statements. forward-looking based would I Barn’s actual these that materially of on undue forward-looking today, analysis Barn’s on business. we differ of are a reflects statements judgment number

and as to to that forward-looking whether release of information, not to For well in quarter undertake during this future discussion with a or more our is or thorough call the we the risks associated obligation forward-looking be first statements our made forward-looking the disclaimer SEC uncertainties filings earnings result regarding webcast, referenced and refer We in any XXXX fiscal update any otherwise. alter do as with a that statements statements included of disclaimer. conference as the you events new

Jim President Conroy, now Barn’s Chief to will Officer. call Boot over Jim? I turn the Executive and

as in we been review call, of Thank for and question. Thank strategic for the our highlights Greg I’ll each call as we’ll quarter open you, detail joining our first up today’s the your financial have then initiatives. discuss our us. Jim, the progress and performance then will on core On more well of making you good afternoon. results

first improved quarter double-digit quarter We a as the are very comp significantly last cycling a strong to with results our fiscal despite pleased first in extremely basis, on start XXXX, year. year-over-year

past same-store we the consolidated broad-based acceleration posting and with sequential increase strength X.X% several categories quarters, sales an of geographies in with the saw product all gains. showed Our with Consistent quarter. virtually

channels, locations. at the retail increased our of two-year sales both maximizing marking XX.X%, we X.X% quarter retail on The comps our contribution positive second business. consecutive and quarter. channels to online more as In same-store sales for EBIT sales our in E-commerce same-store store ninth the than our focus of terms of increased XX% dollar our stores stack digital increased consecutive continue

conjunction price exclusive A demonstrated In drove we and clean the minimize expansion. in margin. This more basis a significant brand promotion events. point revenue drove we penetration expansion quarter continue increase in position with significant again the strong to XXX merchandise merchandise once clearance inventory with margin full growth, selling coupled in as

saw expense quarter both A of also We of share. the an improvement in in income per a growth strength XX with the leverage basis SG&A points P&L rate. combination in significant healthy earnings year-over-year drove and operating across our

a XX% in impact last XXX% the benefit income share in years, of options than achieved relative first increase the stock both from the year. of Excluding increase in tax we operating per the to more and quarter exercise of earnings

our the four each continued of on execution is progress result success strong sustained Our growth and of strategic initiatives.

with first me each beginning initiatives the growth. driving from Let sales same-store review highlights quarter

at merchandising Texas growth This average three than in has the growth increase a of was and saw functions. quarters. our our seen healthy and have and rate remained Texas similar a the last sales was store by across rest sales marketing across However, strength growth driven stronger our our XX.X% the our of in country. sequential in sales Same-store chain slightly for geographies. continued operations business was most consistent growth strong performance We retail same-store

growth same-store stores or our now higher quarters. consecutive Our retail about has for been sales seven X% in

merchandising major particular improved hats our and work work categories in these exclusive key strength ranges and ladies’ investment boots, all Western greater including expansion the apparel, in categories brands, broader From year-over-year perspective, results variety. inventory assortment, new with an grew merchandise of was styles, product continued and a apparel. Driving size

work our We’re stores boots the in on also demand. of satisfy selling store working expansion to many a optimize store work to by space basis, growing including categories and apparel

by growth our service scores. is continual stores performing improvement team and in level, consistently to a demonstrated operations, comp high at very Shifting as customer strong

tasks coupled the in believe refocused We operational of several We improved and considerable and store these have a improved streamlined results. labor of reports. aspects administrative resulting service store has amount efficiencies time non-value with that automating selling, added eliminating on by management scheduling

to lapsed From reengage and utilize that customers a both We combination greatly made mix to segmentation to to customize our segment. continue continue our perspective, changes have and brand creative new the customers. we each the customer to tailored communication more attract immediate marketing improved of we believe messaging,

We continue more driving transaction growth in sales. customer same-store to increased and see count

margin approximately rate low the channel on healthy second for online return higher our and each goal, we to income initiative, our sales, and increasing same-store as with June operating X%, combined Growth omni-channel X%. leadership. spend. in eliminating our May our a we’ve dollars Moving experienced month the Consistent focus strengthening and during approximately improving both grew continued progressively in products margin our marketing e-commerce advertising targeting growth on EBITDA quarter to with

selection to is a range which component understand the sorry, our omni-channel e-commerce our visual strategy finder of the type platform stores. type of better browse what is often our They’re stores. in plus assortment, A what to it their in-store if their of to been retail find customer major engaging utilizing accesses web our a for this in our inside are directly. able our store. entire create broader house from Then they nearly customer the help order or needs our or enables e-commerce vendors to to in-store stores specific This the for shipped looking conversion. pickup. most touchscreens, improved of with boot allow fulfill technology size, to our experience – our of with to many an pleased they used item This is assortment our to of We’ve unable customers key store tablet, of and for every which goal customer’s reception the item have our need

have customers. added addition, our options creating we websites, more for In alternative to our payment flexibility

attracting business assortment work to We of by apparel our employees. national business our be the website, are we business also commercial advantage in commercial their accounts, developing the and larger an strong believe versatility available accounts expanding and Barn boots which showcasing launching to and by Boot to will of

Now to initiative, exclusive our strategic third brand.

points penetration During reached of prior compared total exclusive the of brands brands We XX% longstanding to of the period. year exclusive first saw an increase our growth Cody XXX approximately basis in increased grow role strong of nearly as quarter, both success continued from and other Boot and a proprietary customers well are Shyanne, playing four and as major in Barn. in introducing James new key continue Idling to penetration brands. our Spirit to Moonshine sales,

Work have expectations. customer Hawx had and very work by well-received our been exceeded our and Cody James

national with by more brand. competitive Our enhancing differentiation, X,XXX versus our margin exclusive points basis than provide and brands us

sales vendor We and by continue assortment. the assortment growth been we are to our pleased will provided we our that believe while partners brands complement achieve able we’ve that transform exclusive ongoing to

our to during tuck-in with initiative on that fiscal first during current We one expanding a and both fourth Finally, open will opportunistic continue new acquisitions eight Planned quarter. total our augmenting or new the quarter, expect development new to us base. payback remain to store the focused store better a acquired a We target stores. during three-year quickly enter to market, and store of on XX enable year. current opened and stores stores open our the

rebranded a short are all order. reminder, in As acquired stores relatively

Barn integrated quickly Our operations our of program. Boot the field structure part into marketing become and

business. attention our Turning to current

This consolidated a a for into had is weeks our made sales growth we to sale, and and fiscal years. sales in decision continued eliminate see sale again in improvement merchandise of than once every quarter material strong $XX virtually sale with of growth boots along X.X same-store more July have store, second e-commerce. part our week our stores Notably, business in summer growth with in every been offered the X%, dollars. or traditionally outpacing $XX we the rate margin customers pair a and to of year’s approximately last XX multi either We off that same-store recycled

most The across strength in be the current business the continues to categories. geography product broad-based and

the to merchandise our see continue expansion of the of due in given clearance reduction and health of sale, markdowns the brand in exclusive inventory. a to We the elimination margin strength

And now, to to turn over Greg I’d call the like Hackman.

sales, same-store million. the months Good everyone. In sales XX.X% was added Jim. sales first stores acquired by driven increased new afternoon the $XXX stores. increase sales you, past quarter, contributions X.X% in Thank net Sales growth from from XX from over to the

growth buying increased sales merchandise XX.X% margin XXX point profit Gross exclusive profit of sales basis period. prior increased of year increase and increase of rate $XX.X The cost. compared XXX in in penetration. the occupancy basis better of margin or point million XX brand gross or to in in selling XX.X% leverage of rate a and and from basis resulted to XX.X% points full-price $XX.X in profit million result as Merchandise a gross

$XX.X Income or of XX period. was of the quarter for in This We to sales sales or prior the X.X% compared margin. sales $X.X the to basis year or represents expense XX.X% sales compared the or period. million higher by $XX.X XXX $XX.X of X.X% operations in of operating basis points from points expense sales. million on XX.X% million quarter improvement Operating year prior of the million in operating leverage was in

the $X.X the $X.X tax tax rate an share current in expense period for period was respectively year exercise of from the was from XX.X%. of option exercises. tax or a was in year million million to benefit per be Income resulting $X.XX the in rate Income the to income per XX.X%. million Net income period. balance We the tax $X.XX compared diluted and year of share our $X.XX now quarter diluted expect income benefit or $X on $X.XX or stock of prior of tax the prior year quarter, includes options. Net in effective based share stock per year million first last $X.X

compared period. to Excluding income prior tax in year diluted for this $X.XX the to current year XXX% $X.XX share period net the grew in benefit

the Turning to investment year business this work store increase compared $XXX Inventory the approximately to million inventory on earlier. in mentioned new to and inventory for exclusive inventory added balance eight a to of a driven On XX distribution stores the consolidated to XX% center an weeks. the the basis brands, last next is increased basis, increase our year compared Jim open our half for with months, rose to acquired ago. at being Fontana past eight in over supporting sheet. comp scheduled This primarily and our X% a increase merchandise stores staged by support over

amendments, the $XX conjunction term year. we The loan During in quarter from XXXX. outstanding loan our $XXX balance to our our with facility million expected credit prepayment two capacity reducing facility prepaid loan loan, in increased fiscal term of expense The term current more million million. revolving amended million by million. extending in $XX In we is June the these our than amendment million our of $X interest of $XXX.X to save revolving maturity this years credit the to date the $XXX to

our including June hand. a $XX XXXX, we and outstanding, million debt XX revolving of $XXX $XXX.X total credit cash million million on on had of As million facility drawn of $XX of

debt net the was the end million. of leverage $X.X at Our quarter ratio

Turning to fiscal our XXXX. outlook for

full This to range have average the sales to same-store of count share updated guidance, previous million now compares our approximately a to and per share on be of increase expect and year. XX. $X.XX, for estimated our the $X.XX shares $X.XX weighted per based X share. in earnings of $X.XX to X% an guidance to diluted We fiscal

is Our now million to be million. $XX.X income from expected and operations between $XX.X

million. XXXX and to million. income $XX.X expense to $XX.X expected for approximately is between million now $XX.X five be fiscal Interest We expect be net

same-store at share be diluted look income approximately $X.XX quarter, net $X.XX second we we share. sales per and X% per to to the range the expect As increase of in to

Jim to I’d remarks. back some Now like the closing to turn call for

Greg. Thanks,

has quarter We excited quarter. our about the that are from current into the momentum very first positive continued results

the work new Boot omni-channel stores, in our our We drive Barn in brands, I center sales, growing footprint to would ability continue the growth of experience, through the call our thank and to to exclusive hard are and dedication thousands in confident distribution to business. office expand their center, strength and growth. helpline same-store associates national for unit in like

Now questions. I’d your the like to call to open take up Madison?

come JPMorgan. Thank Boss Matthew will from Our you. Instructions] [Operator question from first

another on solid Great. quarter, guys. Congrats

Matt. Thanks,

Thanks, Matt.

of gross industry speak leader growth Jim, line is between position that managing balance process, on And line your actually dollar profit think? how so do with today top and you expansion bottom durable, you’re how wear top factor XX% does growth can Western the as into to profitability? you maybe XX% the the

Sure. Well, know. selling, we’ve store we anniversary this a look as separately, full-price period promotional eliminating the right, at channels been side, in months if right, two more we’ve eliminated quarter, all you of the last on sale the combination our several over

extremely not as brands. clearing and much is so we’ve we’re inventory grown Our clean, goods, exclusive

store margin been significantly our on e-commerce on we’ve merchandise improving and side. So side our

us will, if that’s really helping giving sales other the From course the leverage is nice store occupancy. and you been modeled, the of us some growth thing is than higher same-store side,

in getting perspective, top line that’s from on store the operating fortunately, and great growth we’re getting and side getting this, side. driving our occupancy merchandise significant just So leverage sales same-store or the we EBIT feel store right sales we’re income to all margin, about improving

but about growing income On growing quite rate EBIT on operating business e-commerce to pleased strongly when continuing stronger it. I’m saw our the focusing business, to recent actually most stores’ And glad and with that look we’re strategy the little the quarter very so at have a through improvement, with unusual than follow for grow much we in are the we we been margin business. EBIT e-commerce that It’s e-commerce again. we’ve side, explicit and

So in question, way the view final leader industry, terms I regarding a in think truly a is Barn we part of your brand. of being the the Boot we’re lifestyle

and loyal authentic the the market looking go-to We of have both place. and and men’s both the of work, Western boots we’re and for addressable their They’re side massive business. extremely in customers. ladies’ a And on apparel provider

core with work well. more be business to attract core customers I that outside seem think that Western coupled as results the we there have our part some of trying we the fact to proactively been and getting and

it providing line and So now, right we we kind to and unfolds, us the when higher. of repeat rolled continues but, And a point pleased of underway you’re bottom able or behind And feel through rate and business number fact seem great about was to rest not this of it, not significantly line. we’re and be $XX sale how we to boosts second we’ll anniversary the with not to really that the the the have just our – we can margin we’re our be year that growth see and merchandise of nice were things course top discounting by extremely and the quarter that of start quarter strong. we $XX, the growth but cycle sales

the margin far gross quarter Great. merchandise opportunity expansion And the half quarter-to-date a stance basis the second way And best so sizing year? in in margin about to opportunity merchandise of promotional first the then how’s think just is On to XXX up I as the follow-up. relative you the think with stated, how as guess about the best quarter? back to less margin points maybe

sale likely the I the – was the it way would it – I’d beyond sale Matt, XXX I the would think expand two-week is of Yes. way guess year. course. about – it’s given I last will I guess Gregg, a

it of long but the month it if of was XX% So will. or third it wasn’t year, you quarter sale, that a wasn’t XX% a

margin and margin or about at I come given most XXX, much but be we you beyond you expansion the earnings leverage So out we’ve that. points, expansion guess think guidance will of the when the above provided line. guidance model merchandise the the haven’t that it’ll

the quarter basis And if past rest XXX exclusive we you then, grew with brands the think pleased we’re that. about and of year, about this points, by

margin will, in for – XX for so that’s to improvement And outside to points if QX going you be QX merchandise of temper now and reason of think no basis so that could QX. there’s look us year down, that the ongoing to

guys. great Congrats again, That’s color.

Thanks very much, Matt.

Matt. Thanks,

Piper Peter from come with will Keith question next Jaffray. Our

actually afternoon, good Hey, Peter. nice for on It’s guys. quarter. Friedner Really Bobby

Bobby. Hey,

want how the merchandise how profitability then to e-commerce tale about start think And it specifically follow-up frame QX? on should EBIT also margin, lap fiscal from on e-comm just these probability up margin. the of I to anyway are initiatives your we the Maybe impacting benefit you as initiatives. to

reductions Well, QX. We did Bobby, largely and it’s those work Greg. it. lap We’ll April May and start quarter, it. month the in of We’ve part made started to already of lap to the

that up So against in be QX profitability initiative. we’ll

year, our it’s If through degree and consolidated e-commerce, improvements so of certainly business the just margin are business. the we’re roughly lesser the selling you to XX% but the around think about e-commerce penetration it’s expansion, given the of making a

GAAP quantified that XX looks We by improvement basis say, it’s like, that it the to XX what – haven’t or profile. line but really needless at or be could improving consolidated points of XX

just comp I Got Thanks. though function you. robust. seems guidance imply of? the conservatism off And on it. a is the more anything half trends drop maybe, there very of aware that’s year, to of mainly be if else remain the one can year just in guidance we seem should would Thank a or Full back like

we again. at Bobby, how to Greg is, far. quarter it unfolded about pretty be so year we has That certainly good Yes. out, how tends look feel one the

about how had a from plus – back mentioned, the the at X%, year. business. half and we haven’t think Jim good feel we sales of we how anniversary the But the planned changed pretty last we originally year As wrapping quarter-to-date being really

with in term beat loan. did expectation the same-store QX So bit. and that’s paying folding little a we based change – guidance QX our And revolver balance sales mainly our the bump the also we’re on down the raising in

Got it. All guys. a Thanks right. lot

Thank you.

Thanks, Bobby.

to Baird. Komp go we’ll Next Jonathan with

also Yes. about on Texas with Jim, Thanks, there, outside your especially Texas? bit? maybe your softening a bit Just take. macro attribute comment I of the little hear the kind you ask curious a first, to on guys. would indicators prospective stores oil or sustainability environment. that thoughts a wanted Any accelerating, and basis Hi. maybe of a then of within and environment on to to, take the And the few what level

are company, I results as we a in execution, modesty Look, but right. quiet candidly good us, to Sure. a our results have confidence think of try about the

We now, year. not strong environment was any really oil it stronger – right but strong stronger was the relatively is not are year. it than is it’s any than employment last year. last The It’s this

So XX% comp year point really almost last can’t the I our other and external to business has that the that XXX% doing anything we’re in than marketplace and than internally. grown earnings different things

hate it, but be I driving feel to obligated to immodest credit so that’s business the about So I this forward. to team give

last we plus plus sustainability, about comped X.X%. up for We run up of In just plus terms We’ve year X% XX%. years. comped XX

think I are become oil price point think barrel the recent think when it’s I to of last the because connectivity at oil year actually this a at and of of results bit has as our very And and bit is add, overblown I little a results, look So or down of little price the frankly, might sustainable. a barrel I the a I our up. same oil

has business. a the actually that reality on been I it’s than continued correlation for I think So longer think

So we’re business. the about excited

We’re excited about the quarter.

to and It’s strong. business about pretty in most country of quarters line continues improve. to recent the continues quarter. two much rest the The Texas current be with the excited the We’re

on firing of kind cylinders. all So

a maybe then on the And e-commence. follow-up great. Okay,

already, at of balance of look forward here? year if have just might kind the line top how you you May-June growth the some might the be you in going for you or what curious on the of rate, touched kind baking So think that’s rate of what trajectory more, settle you might and this when run of but in

to plus even flattish in first of e-comm and business maybe be we the was a its QX business we’re kind mid- are have The to the X bit digit. of which Greg, little quarter was Again, mid-single as evaluate continue of the business, the looked And we’ve deduce outperformed as the year, can what thought a digit. have it’s Jon, for to Yes. the the we business. going you business stores better to expect profitability we course. to forward so or e-comm, in e-comm and high-single

continues e-comm click is a per strong. very been Boot to business more you and up. The business The be pay business And cost pay by little gone has as Sheplers that advertising recall click has bit per may Sheplers advertising, Barn tougher. the driven

that a sales look From spend And has the that change. lower giving rate top helps perspective, so we’ve our line may profitability you we’re have up a if moderated it in as, doesn’t implication. It been margin. that

to e-commerce grow the in we’re So way. going continue business a to profitable

great. just implying mentioned Greg, you for of margin margin expansion the and last curious on X%-ish of the kind buyers half. back the kind outlook, second occupancy expense rate, Are on me, Okay, kind of piece that. You’ve in of most half you the And up just I there? of comp merchandise flattish following one so implied think the of

get Just as that? growth wanted up unit how your thinking to about you’re ramps sense the

Roughly, Jon. will you will – leverage buying cost. right, in know X.X% what, get occupancy comp That’s

X% the for bit little leverage a plus a at get year. of we’ll So

great. you. Okay, Thank

Jon. Thanks,

Thanks, Jon.

Oliver question from with Chen a take Company. we’ll Next Cowen and

Hi. Great results.

better primary outperformed? versus how the thoughts perhaps driver, where most that manifested lens your are expected your around new customers what the product existing assortment than on in the of Regarding comp, thoughts or

optimization into that the just brought are And how space. was will about that magnitude question Other selling And your of manifest label, on the Thank and as impact you private you. of numbers? what in thoughts timing?

EPS a other The that Street drivers it the of of same-store experienced that’s the I called growth big announced. merchandise say pretty the we was Thanks, drivers, But rate beat we earnings are and the higher significant and driver the higher point in sales, just the that what piece margin than Oliver. had. of guess were we’ve and out that course than you I There’s guide, drivers. would but multiple two two there’s

again, well, pickup or some on bigger the recent We We of healthy it. sales Once store sales comp same-store size as transactions the see in per it’s store number the more of piece, same-store On in average growth. transactions. basket it’s the a piece growth was than the extremely the the transactions did But consistent side basis AUR on saw of much quarters. more on with the side. nice UPT to nice customers see

a apparel of of same-store consistent again, feel category was And category very drivers, good growth. Western perspective, from strong categories Ladies’ every work From a strong. couple virtually health have standpoint, the been with So sales again, to it ahead. in that row cowboy a very grow hats, apparel the now Work prior ball strongly. a caps about quarters. and that growing was boots continued et for also several was were quarters biggest hats, have cetera,

Western to a that’s that thing boots, drag really had business to in on wording, quarters were QX. announced. which that quarter ladies’ for seen a went is, we’ve in other the several growth been that last business ahead And over if business nice went see the and prior of couple The to QX, we just quarters you in row QX in pick the the apart ahead

enhancement nice additional that to So our was comp. overall a

smaller and to stores. footprint across the there’s selling disparity a strong particularly perspective, higher categories, starting a volume dollars is foot productivity per sales space square see in we’re margin some of From between what pretty our the that

expanding simple we’re dollars – work others. higher minimize home, it’s departments when the and foot So as apparel we’re like some moving we margin productivity, some sales downsizing and boots, or and accessories and it’s higher when space, we work or higher just as – per take expand getting margin rate, departments arbitraging

square what’s inventory of to stores of some base going the selling that go help? footage couple work continuing of side the that’s from Does we’ve So terms the behind of dedicated that on to expand us a business. And dozen and got and perspective. the left in

brands. your label, like pleased Yes, do broadening made momentum very the unique you fashion inventory dive it. you on learned and how really mentioned into risk you’ve to far with the manage helpful. It label? you changes across you’re What deeper And so have private private continue the you as and sounds of

great question. It’s a

pleased, strong. growing we’ve fourth last about about year the quite very been we’re quarter and which just right. years downshifted So points to several was most the X.X recent brands in for the X We’ve exclusive coming quarter, each by points also after

quite pleased, we’re From brands stores’ perspective, vendors surprised and pleasantly fast turning of the to the rest the bit able brands expand we’re store. as of the exclusive in by the that fact it’s the the So every rest assortment. as

So to together, that team brands brands the a are exclusive testament exclusive and which brands given business putting is great product that’s some particularly new. that of these

little our think in reasons And that. it’s by feel and work really biggest brands And Spirit, we exclusive more From exclusive we’re bit The course fashionable. based is a all and investment standpoint our our a one of Western which idling in for men’s could really couple business, fashion Miranda Lambert great nice side side don’t a has Moonshine some of brands. the of risk inventory an in standpoint, seeing be risk and of our of penetration I considered the business assortment business. the increased changed on on that much expansion on the about

But most risk. the the of growth no markdown from coming categories have virtually is that

brands the products risk of whether vast in inventory is in the to replenish areas our of we inventory. the majority distribution exclusive in stores, our center see store So of any little very certain in waiting or they’re fashion

risk the rate than more in we is of by image any extinguished improvement uptick fashion an merchandise margin that get. also So

the So keep me I would night not things list add up at that to a a list not of that worries on at all. of if

your about our thinking maximizing about and also is base offer. relationship they question digital last thinking And Amazon the profitability, great. Okay, with customer about and

that are around from and your partnership your how thoughts benefit So latest what you relationship? on can guardrails

channel what as course, we of – another eyeballs of Amazon view way to but selling get also some a brands. exclusive Amazon on our

business a pretty or think it’s front takes, it double and if that of piece business. rev it, we not get either. given we’re honest, share a I’m tremendously it’s our of more part of But a don’t people, So business, part but our Amazon profitable if on small way the do it anybody’s of to down brands in view pleased intend to I with our as we part

bootbarn.com that to continues and on grow. business our grow very really focus stores those channels. We’re And is our to happy two our business continues

Best you. Thank regards.

you. Thank

Oliver. Thanks,

Jefferies. next will question come from with Stichter Our Janine

Hi. Good afternoon. Congrats.

Thank you, Janine.

on in about was think change think we’ll basis year. us you’re you points private let how growth about I I ultimate there, be you’ve I to mentioned going the a long-term interested And penetration? XX%, this the the thinking about quarter, brand back say, strongest Just this to this think talked while. penetration. XXX getting which Does

So could you represent terms bigger thinking of it picture development? how in just are what

receptivity Look, James with Cody Idyllwind, really of by boots our new brands; we’ve Western of Work, pleased receptivity Hawx, the the on performance the side. been the

business we’re grow ourselves remind partners vendor business. So always to helping this remind today we excited and in on are that. about Having investors truly us said they built our is want that of that, XX% partners third-party and –

we – we’ve that So XX%. fact gotten like to we’re the

to and we or to brands the XX% XX% through think XX%, we XX%, I But over get get time. we’re think haven’t there’s could business. and modeled our XX%, and definitely not we planning upside don’t of to exclusive XX%

own will it grown several broad a the that’s and we new that, the and have, we brands how the provide years with enhancement selection with excitement do products to get fact we brands. differentiation, our burn our like and that that over we business some some Having In margin has to said model build some is want continue can that. of customers competitive to with assortment,

XX%. it’ll picture from now, think few might big that don’t I think I XX% be XX% a be So years

And great. then only said you’ve the like quarter traffic, your bit, could little I there’s it’s was sales. to Okay, opportunity but a you of of I think when your something of XX% speak hoping a

what of the do female you So see especially collection? like from Lambert lines kind as Miranda the growth you consumers, grow

only Wonderwest. that see I segment ladies’ off the growth nice in We our portion into growth to we’ve fact that fashion called not apparel. of real A think added in this due of customers segmented Western, but work we’ve is

to segment, bringing net that associated due the is new with in customers. And segment, marketing some of our that which growth is

early just think it been The the been business important at three a super where I which although of flat least or couple boots years, ladies’ has has is uptick in and is down. significant yet not that business, because

business starting a nice to to see it’s bit. little grow that So

really a get. said, it’s to to start to lever outsized our And we’ll male men’s But, think be because shopper continue of female to to for lot the start than this for because that female another and a male yes, partly female more male to I’ll boots. more we shade can boots. well ladies’ than the with the been have if higher at terms and in apparel We’ve on nice in I continue shopper Western apparel Western disposal. bode tends ladies’ business buys ramp ladies’ relying point get, buy gross up price the the boots work work and for to shopper shopper, outsource partly both than future. tend boots the

Great. Thank you.

Janine. Thanks,

Citi. Next we’ll from take Lejuez a with question Paul

question Tracy about It’s Paul. you’re the customers My in new attracting. Thanks. filling for is

attracting all You wondering customer. your you’re a customer the to have outside of customer? sense your work try to at with talked if And marketing millennial in of how targeting you’re about Western capture that if Thanks. you core performing and some

nice some each customer. do nice different nice really And fashion customers, in marketing our in growth media of the in use customer we We’re work segments. but channels all a different having work that a work mix and for and

some and With more. our want activity and millennial nurture the business. we’ve And is So us spend certainly customer that and I more said, accelerating find on Instagram really we on results there. that of think nice the to some mostly and continuing to millennial really media. side, been degree seen social we’ve to

is years the old Our and with our our core the our XX he loyal customer we off majority has that vast Western to core bottom core on take comfortable and is customer ball the moment. to store, of us. for line been He’s extremely – don’t want work the and work at eye marketing our and comfortable top he’s

that nurturing business. say would I So we’re

If portion the of piece, still millennial you it’s revenue but think the base. our about smaller overall

Thanks Great. guys.

you. Thank

Thank you.

take from Blair. Dylan with Carden William we’ll question Next a

Yes. thank Hi, you.

of point at through to sense if platform, what this if assumptions is much of could around sort give of BXB your there’s a and goes of the expect us sort for you live flowing the any that timing Just when how – year? curious that

outsized part the the of any second that haven’t to So on attributed business. of part we it, sales growth

part be of it’ll digit So, accounts today. business business of our or portion base sales commercial overall BXB which a single is our low

this we help order quarter. team. I if Land you team, wanted the our get accounts. sales we’re and it sales account to way think In to launched is outline, about thinking

what accounts can and go of they an of required, bigger wearing. out keeping that and that after clearly means selling So track they electronic accounts, go to can they’re buying

growth we massive find of the So business. that sales portion haven’t a to really

just the of Great. curious July. I’m in the removal promotion sort of And on then

added I scaling I applications kind done system year and of that back activity some do new in sort have your recently. keep omni to the little go that? so sort the promotional the opportunity of the be to sort or more before some promotions that think a of already you’ve next and to new what’s of What’s targeted on for late of driving

away Sure. Well. was is business now conducted move. that We of full of somewhat north about quote anniversary XX% number. price for our this stores and aggressive of at sale Taking often an that,

don’t and and pleased that do a look sale with so of of remaining. with lot We Monday Doorbuster and But to Friday, have around periods review et to Black it. at going cetera. the maybe Cyber things Thanksgiving, quite shorten we’re tweak Christmas, year other eliminate We’re of exception have of a we or the couple throughout the either result and continue

patterned have have promotion the time-to-time, of on We a a couple we calendar from sale but actually. on left don’t things

big stance individual not other going to in still there’s with using there’ll after to be start we’ve we unless terms are the holidays, of sales healthy to think But clearance where think sales heavy. brands. So targeted only stores there’s merchandise that our We sales we opportunity calendar. inventories clean. aggressive exclusive markdowns, very been we and stores, build now margin are around some lot the really the but take left a are of sales And very, very eliminate on a very clearance fewer

very much. Great. Thank you

you. Thank

Dylan. Thanks,

question from next Morris John come with will Davidson. Our DA

bit congratulations as My new areas there new We a into. to that gone little about some everybody you’ve thanks. Hey, stores of well. the talked

you’ve been about on unit example, and I history some want those performance a of take some doing talk tracking to to entering of if how so markets into For regions you’re think lately. maybe basis? Wondering the new relative and you

that three quote annual the new use essentially we sales, million payback markets, model really of year store new The new Sure. brand we $X.X model that is it for market.

store Texas So open in store a we those or if we new in would likely numbers. exceed new were California, to a

the at entering or top still good new it. we’ve three markets been million look roughly we $X.X about better year we that feel As payback line it holds. that And

of Roanoke. got Virginia One this well of other our in played later We’ve most new And from standpoint. continue openings this the Virginia us into recent very Ashland, two out was Carolina has states and year. north state to to gave confidence year North of payback go Carolina and Beach a North later that Virginia sort

for XXX up store XXX can up and in believe brand we I we and mid-Atlantic that’s that states new chain a stores in markets do to XXX important that to Northeast. that do – expand going the into feel order So expansion that we the feel because need the we’re and or good take us really in to about to

So continue that, can will successfully. that to now that all be right something do seems we evidence

the I even if you you – about Jim, in Virginia at matter assortment performance all in at to performance by of those markets does mean in any North wondering they’re some Differences differently about? Texas. compared product all like or reclassification Beach product change markets Carolina say core it And and think do know tailoring

tailor question. the our Great absolutely region assortment of by We country. Sure.

So by California when the look North assortment thing out Texas the is I Carolina than one at the Virginia is than is the assortment in example store-by-store, different though the to Beach. point in which for But different hesitate say North Carolina I you assortment. business would

Western but natural those that and investors all, Texas. what cowboy hats, the work outpaces sells Western it’s think massively investors true to that pretty is as and and is as And must is seen in most the in not stores East and Coast not boots out the are, inclination sell cowboy the most of I work it across entire North percentage country. business at where of certainly between we’ve Carolina consistent worked and shade

boots prefer is prefer up markets work pull Having boots. said on some boots. that, a the different, Western profile work leased Others of the

Some Others work markets resistant need don’t. flame apparel.

But is to we’re business. So market. bringing and store the and a right local we that do of still we first market-by-market work make third about assortment Western sure those, still the a are and that foremost

for guys. That’s great color. luck Good all

Thank you.

we’ll Next Fargo. Tom go to Wells Nikic from

like an on merchandise It merchandise you’re on those and if of so on where seem of buckets upside sort Thanks for your be there side I think back wondering you seeing your to offset and was would Hey Austrian reinvesting EPS QX that investment guidance there the should for that and of the good half. margin my unless some afternoon in around a the to margin going? question. want upside seems comp the Greg, of commentary gentlemen. taking lot just ask would it given about we it of and are airline. I’m kind the are how SG&A

how XX for back half updated we and sales the what for basis expectation. our tried expansion happen same-store in that When ripples the number. merchandise in certainly through did was, in what’s of points margin to some and a our the private year brands Tom, about in slight XXX So the from guidance the color to reflected uptick give around for we I perspective going basis QXB QX QX talk of points. that’s EPS and I the

those We of haven’t updated Right. results. kinds for

if back will guidance you our left half of guidance intact. we’ve So original

model basis in figure QX. reminder is. That guidance points with XXX your the what up a So back out you float reflects XXX points, have about and think basis half. that you haven’t as from basis to specific out thought after it points penetration or come can might would be XXX going what we we But

increase. of basis XXX points brand was roughly Our exclusive penetration

Understood. it. Got

up. Thanks guys. Following

you. Thank

Our comes Susquehanna. Sam next with from question Poser

thank how Good SG&A of in you grew for you to my back to what year on one I follow-up is, think growth, XX%, question. thinking growth your year. around was quarter this or at basis it you a that how we XX%. held I question. on only XX% first afternoon the taking about Tom’s are and mean about, Last the full grew is wanted year should for

talked about also Yes. operating of our of in QX growth. in great about we – was overall call leverage course. guidance talked expense it’s where terms Sam, I of in the think the but we way And on points terms

something was grow terms talk annual price those I me, leverage of front but thought in I also in first get it nothing SG&A the but leverage have would X% at about roughly X.X%, there of or points. to quarter… expect SG&A notes we don’t that. like at we think that we in in roughly And

That changed. hasn’t

in So XX the half the I mean basis back you merchandise business to you get said that had year. improvement of margin points of

the call, leverage – plan quarter get raised SG&A the those every on comp the that well. And full in you earlier you’ll get the numbers that year if if you the said you’ll leverage on you hit side. you’ve Now or other flattish some and get

So adding than that. significantly up more if it’s

the All I X. Sam, what’s plus same-store tell driving original plus to guidance X on our based of is be our the updated QXB as and sales, we’ve can a guidance updated QX which

much questions. people by do business a And be bit from at And how work little struggling that the work to you think play other then business, of Number helped a you. needs Sears Thank a bankruptcy much one, couple needs that your time? how there from that? this bit, on other growth help and

Western taking of country the around them well. I on any there’s Western and store by you brand work if the side them that side. sure in difficulties would but not retailer the hundreds than the called struggling of out. picking probably from think many national that There’s are some share of different no Western everybody I’m we’re the share know, up big and companies the as and call them on we’ll this

say such from I for share. people apparel is a and good boots work long right demise than to price our business the so share think are go business, some that somebody that undoubtedly our to that part have work customers, can’t points gaining we’re growth on they forfeiting – we But – strong of little of I business our getting the like a So, I undoubtedly Sears. team different been while really further would the a now just and at at. attribute it’s I

better think you or if or value they best are are price So, points a good better, points. and best, we good, price

work So perhaps, boot work there’s Sears traded some overlap, just for customer from boot like but $XXX not one that it’s of has our brands.

the of Denim two yourself. others Thank versus strength the Texas, strength between built real comp Number as from Sheplers did variance of have business where your you as in one, I improvement And see choose you you’ve up in quick. are well given you. that and rolled more stores both… that you book, Western, work stores the said the any the you outperform other will you you secondly, seeing Women’s people from and

Sure.

the change our but in mature were merchandising we brought looked how field the we’ve have in and in at businesses Lone integrated looked standpoint, newly both On Boot or mirror, them, West team several using and business businesses marketing. years the same-store Barn our rearview to of Woods but Boots Texas acquired first operations and part, in integrated the our business, acquired are pretty we started Sheplers significant of them terms had the Star those in in doing brands growth after sales our we from assortment, our at added

some businesses those higher the cases in than significantly average. chain comped higher have So, and

we those plus at payback model when as making acquisition, start gets to payback look three-year three-year But as always stores soon in XX% So, it to to a of be wanted better. better, we we see or in that tuck-in every comps at there acquired scores been bit many look look Boot we customer good. in thing businesses and cases Barn. better can than is the we at other even as tracking legacy And fact in newly the has the service Sam, course,

we can augment new of we tuck-ins, development add kind their good with three-year our oftentimes just the that feel where quite into acquisitions assimilated to store normal better business. about and can have place, they’re the we get model in we payback yes, So tuck-in and once

Denim. And then you. on the Thank

Western Denim been Western strong line Yes. been The the Men’s and of in on business with the in of business. Ladies side; rest sort it’s has the

much. very you Thank

But both, pretty strong.

Thanks, Sam.

you. Thank

will Kummetz question Research. next from come from Our Mitch Pivotal

businesses much private you my went Cody label but that XX was a introduced Hawx you penetration, basis how on Hi. in you’ve from few, either I months? last in XXX taking year. last have was mentioned the James points say Thanks that Can of for questions. work? the from still there the

the of points. can’t would two I head; of the top have five get I in my

directionally mixed that’s think that up. don’t I either, step right. I have that’s but handy

Yes.

Okay.

well pleased but far is They’re it, by second. Shyanne Cody biggest the still still doing all is with James and we’re and

I of Shyanne brands. even and have are five or So, those are the of think though brands James new brands future still and new lots Cody exciting, the biggest of six potential and ahead them,

it? in you of it’s label introduction continue ramp there of new the way to to is private as lot one start a that kind on they imagine think I know bigger than maturity in is those, businesses, about that reasonable And XX, month month a grow. but would because lap to the you’ll

to splash new every We enough most to if a I try the doesn’t in But actually also big overextended. When let’s make support work a of case, and find of I sure a we’re we a know think think cases, dedicated kind nice new we decent that’s you hedge a of fixture, broad this balance. launched brands, selling. saying the to assortment bit fair. went we have products in not

been all all within and brand. expand fortunately, making current their opportunities you’re to that working they to the So they’ve have point

nice Lambert. example, Western or brand started have toe And a bottoms, broader that of an with sole broad leather-soled customer performance So squares receptivity win Miranda we been and square introducing armed – rubber I as and slowly kind have bottoms. have more there. We by don’t the more we’ve seen of sole core

other you resistant about or year And demonstrate half that’s could our we can apparels. through James is get neither each can how go work example. brands and of business resistant. one has Cody each broader. I’ll of through one if our flame we look – Hawx or business nor give the we go I at work and FR apparel they So, today,

have a lot is stores a as those So, well. that and introducing as box, can that the once the think we of our will gotten but the brands I brands well lot of it be tested, places the you think around check to product growth well, by could other can received country we the in FR of and half expand be and customers

think think new and business. logical all new I can where right I in you’re that I and we steps, build there introductions, very a of to think continue brand is next the So, a ramp-up have

introduced. Got of you’ve you’re the of then there’s new guys or it. And the pipeline a in anything year brand set terms in label what for balance the pretty with private

of right And enticed lot, I introduced and for a you last and a “squeeze the year. in always had them” much the a early we work step-up we well. nurturing We launched brands three that and better what with marketing. had hey, to place. and served this now, We stores set let’s sort while another much are that of in we’re tracked building think I had our was into into success do pretty brand. growing, on the know new brands we’re We a it and extremely We’re that. it

we’re and future, Z in Of hey Y, some X, course, day the launching we’ll announce, brands.

attention turn to with launches. been So, three and growing to what’s right now, of our we’re kind working going on the building new

could I around I you the know I talking XX I basis And said margin on know that you annual I Got say it. on basis And last be benefit of what the within you from EBIT if or the don’t doing points. will on able with then XX that comment Greg, think or know – in kind thought that? the don’t if was points EBIT e-comm, you’re from what’s hold you that? was to – about contribution EBIT just e-comm focusing question focus business. didn’t quarter then a the said

points that to was That’s right. basis answering what the could basis of consolidated EBIT points I we’re work improvement doing XX or this add the XX margin,

Okay.

Given of penetration business… its

when And anniversary? it that

work May year. really completed the was So, in of last

Okay.

the margin return doing talk and the kind we we at but and constantly quarter, ad what the things team. about in we anniversary the head first are what had step, we continue on what profitability, business – mean drive of the his what’s look our when down that of e-commerce to we sit with to merchandise So, kind I right. are of spend next getting we’re and

Okay.

the I tweak to we with think retailers biggest both terms with of do steps made but promotions. last we’ll continue year, like it were we the in

Good. It right. guys. sounds good. All Thanks

Thanks, Mitch.

our Conroy conclude call does turn closing back I’d question-and-answer That for for the today. session to to Jim like remarks.

earnings Take for everyone joining second quarter speaking Thank call with care. all call. to look forward today. you on Great. our you We the

That does conclude your you for participation. our for Thank conference today.