Boot Barn (BOOT) 5 Feb 202020 Q3 Earnings call transcript

Good day, everyone. And welcome to the Boot Barn Holdings, Inc.

Third Quarter 2020 Earnings Call.

As a reminder, this call is being recorded.

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

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

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

I today, are certain affecting statements forward-looking and differ materially actual would analysis expectations Boot we presentation forward-looking you These and this reflect results on factors statements may in like of to current a number statements. Barn's Boot from remind of will based business. as that Barn's judgment make only

on statements. you undue forward-looking should these reliance place not Accordingly,

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

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

today's discuss X each highlights an call, good strategic results update our afternoon. Thank on will of Thank initiatives. and for the quarter you us. and you, On provide joining Jim our of third I

for review our detail, performance questions. the Following up call and then that, more we will open Greg in will financial

continued SG&A with XX margin ago. per same-store a full business. $X.XX. pleased of on broad-based a of A our X.X% increase year across basis increased brand which reflect sales in penetration of significant expansion a results, fueled of third increase points Consolidated leverage strength earnings combination very exclusive quarter share in price and X.X% selling, We're the top and EBIT

On year. quarter continues EPS well our our team XX% to the last against strong basis, initiatives, of normalized very grew four to $X.XX The third each resulting execute versus growth a tax quarter. in another strategic of by

third I the quarter initiative, highlights sales each with would driving beginning now to like for growth. same-store review

quarter with in the During growth X.X% in solid consolidated stores. positive of X.X% consecutive comps. our sales third quarter, of brick-and-mortar The same-store grew store XXth our growth marks

we period. XX%, to in retail, pleased are the healthy sales quarter, in the contribute while saw growth profitability. very to continuing We sales E-commerce holiday prior same-store strong on the third with accelerated year of growth during top the X.X% quarter

results virtually same-store line perspective, chain with were quarters, marketing work. our sales the geographies continue segmentation Texas major to Consistent categories. product our all the by we average. evolve a customer several across growth with and past fueled performed in From

and focused past and to fashion. three categories; refining target customer marketing the we work, mix media years, distinct are western, two Over on our

traffic our become only even and site. stores and also but we drive as into more us enable further XXXX, relevant to to segment opportunity ahead continue adjacent additional our Looking to an We expanded to each there and targeting into to refine will segment, defined customer of consumer our database both our believe grow Country, that customers. we not this to e-commerce further fiscal methodology an have is which believe customer to expand

for and Western hats Western average. the positive performed Work chain perspective, all merchandising apparel. strength a product with with most Ladies' boots fourth work coming the categories boots we apparel, and quarter. consecutive ladies' continued from From major growth in saw notable were apparel in men's line Western the

continues who our team merchandising our our the of merchandising. and assortment, in-store offering, growth to enhancing by proud across expanding drive very refining our business I'm

period. market, to during holiday peak performed service during busy the us were We our a Our able job enabling competitive period. well hire the stores to seasonal holiday appropriate extremely customers team shopping associates levels in of

new POS hardware in-store of very further went in-store tools smoothly, experience. the rollout Our and digital enhancing

returns we significant with progress Return in digital the seen competitive competitors this sales our stores. pure-play Store or versus functionality. advantage into Finally, We Buy provide In have and of us omnichannel in convert nice enable BORIS, us believe to our with initiatives use Online, online additional will

our to second leadership. Moving our strengthening omnichannel initiative,

contribution on several reducing SKUs the quarters, assortment. e-commerce by pay-per-click of our discussed cutting past from Over and have business we EBIT advertising low-margin online back improve EBIT-eroding promotions, our the to efforts our removing

to As we've returned double-digit began comps. these has business the efforts, e-commerce to cycle

Third spend. quarter mid-single XX% business driven and of to bootbarn.com the online XX% growth pay-per-click a with growing the digits, by e-commerce accelerated remainder sales reduction primarily down in

grew profit significantly growth of operating than demonstrating more initiative. e-commerce Our growth, our EBIT the our topline effectiveness

the of that online in rebuild redivisioning process an effort to are business. the brand We Sheplers in

that to the valued a price upgrade become of site continue the look feel goal and to While was less continue site offering, the to on reliant will and traffic. be creative paid

believe are value Sheplers of the it lifetime building focusing customer. on core will over ongoing will long-term upcoming year, have an This fiscal we benefit. Ultimately, and the effort a be the we

touch initiatives inside our rangefinder that on our screens. work the will experience to enhance stores, such digital as continue We

These the their to customers our the focus quickly has items customers relevant fit narrow increased quickly hubs allow which needs. portals the specific boots to find help the in-store most our ability in their conversion in-store of that our These digital store shoppers.

meet them expertise customers. product store It that also our allow helps better associates of will the needs to acquire

driven our returns transactions program. of very all products screen. a stores portal theme off our or rangefinder touch platform This online with also seamlessly aisle customer technology with provides purchases, online to the integrates available is as manage online the and efficient it loyalty WHIP endless Our omnichannel

Going our initiative, strategic to third brands. exclusive

growth prior is being than of compared exclusive our at third brands. the increase XXX quarter, of extremely total strong points record the brands more by basis of each During an to exceeded XX% exclusive This fueled major growth in period. brand penetration five sales, year

number two brands stores brands and James on the Cody our are volume. four Our sales and number in Shyanne based

product lines celebrities we Paisley Barn. exclusive from are new and believe to Lambert Our music introducing Miranda continue Boot and grow, to customers Brad country

penetration James boot in also achieve and work Our strong We've some seen fiscal Hawx new point categories, of to apparel Work, growth an in very in Cody able volume success have brands, has XXXX. and which the acceptance. higher been inflection the during resulted and

in it believe will that to XXX will continue denim. rate penetration. to men's points change of brands work to while expect encouraging was see build, business as said XXXX, that, approximately basis solid consumer exclusive show in we fiscal such normalize and back that to It the categories receptivity to of more difficult growth we likely be the Having

fourth our expanding our Finally, base. store initiative,

the stores the to at of During quarter, third opened XX the total our we end XXX across new count states three stores, quarter. bringing

continue expand and We ability states. our to the in our believe in to both base store new to across XXX existing country stores

be driven combination payback of acquisitions, a and by expansion of or tuck-in growth organic three with shorter. Our will years a targeted

are in our and this new in opening coming Pennsylvania goal weeks. states track stores the store We to Ohio our of first year, the including on reach

channels Consolidated and the through plus most business. continues of We've current be quarter cycling two are performance same-store quarter. five weeks X% first to in past the the years. while The across the of sales approximately broad-based fourth business. departments to softening strong work with of seen of the growth attention to our quarter-to-date perennial both in side each merchandise strong of the Turning some continue grow, growth

in January category dynamic result topline this the of is in key And in our that colder year, driven in believe rainier that and last was which transitory. as by markets a weather We work growth XXXX. outsized business many of

philosophy this maintained average lapped as the last comp Merchandise as store in Texas below we Similarly, build penetration. to January, full-price it has expand an our margin and exclusive have positive continues but XX% brands continued to year. selling was

As forward remaining are Texas, positioned about the the to of balance feel good fiscal XXXX. how we season over of we including months we year, in look rodeo the

to Now, I'd the over like to call Greg Hackman. turn

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

of in driven or profit million profit year compared Gross resulted from rate or $XX a prior sales in million point in in penetration. by XX.X% of to the $XX.X XX.X% exclusive profit basis of rate, XX sales gross XX.X% primarily increase increased period. margin gross brand to The increase merchandise growth

both compared acquired increase costs in and XX.X% sales Operating to expense expenses operating year period. of stores. was million or in new result support a the The expense of or $XX.X to of was for million quarter primarily $XX.X additional sales and for prior XX.X% higher the sales

was quarter Income to XX approximately by basis XX.X% on Operating of result improvement million $XX period, a expense expense sales. sales as basis year operating in decreased prior compared million operations of XX margin. higher of leverage percentage sales of points sales representing as in XX.X% in the the points or a of or $XX.X from

million rate was expense tax effective in based quarter of $X XX.X%. the Income an tax on income

quarter or compared our diluted expect the of in per prior diluted fourth per period. $XX.X We $X.XX for sales. tax be rate to income to share million share million $XX was the Net $X.XX or approximately year XX.X%

income diluted per a due share-based $X.XX for per year period tax share the includes income to current share Net compensation. benefit in accounting

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

compared Turning exclusive increase compared consolidated increase $XXX the the rose stores months, approximately to million expect year. primarily of to inventory added comp inventory on year acquired support stores the the we was ago. to inventory, inventory center new fourth XX% driven On store the This a for to Fontana quarter. basis XX basis, by balance a an open inventory last in store increased in our X.X% last growth inventory a to comp sheet, and at to and during for the distribution brands,

We including a we XXXX, million million ratio quarter $XX times. was of the revolving our $XXX cash million of outstanding, on XX, on December $XX hand X.X the of of and $XXX facility. total million our net third drawn end debt credit of had at leverage had debt As

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

operations for million XXXX million, net from expect $XX.X to $XX.X fiscal is expected income between now $XX.X income million. to to and Our million we be now and approximately be $XX.X

million. to Interest be is expected approximately $XX.X expense

be to increase look million, of to share same-store between and X%, the $X.XX with in and As share. income $X.XX range million sales approximately total the $XXX we per to to we sales per fourth net expect quarter, $XXX diluted

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

Greg. Thanks

Our continued initiatives. results third focus reflect our on strategic quarter key

our bottom-line fiscal XXXX the carry Importantly, operating we of A well-positioned and significant a enhanced momentum converting finish execution next to us has margin topline to thanks improvement, merchandise high into year. are strong deliver across expense into to level success leverage. and our organization

I and Barn entire dedication want and results. thank the to growing their delivering work the boot hard continued for brand, to team these Barn strong Boot

Now, I your call to Hector? like would up open to the questions. take

At this question-and-answer a Instructions] be time, conducting you. session. Thank we'll [Operator

Matthew question. Your the of proceed question with first with Boss your from Please JPMorgan. line comes

quarter. Thanks and nice congrats on another

Thanks Matt.

near with margin the and SG&A the helpful. would within gross be I margin So, puts on term, what's the help takes, forecast? front, XQ expectation embedded and the Any for think,

it's Matt, Greg.

points brands QX, points exclusive grow QX. expect of of last and that's percentage on X about top in in year X We to growth

outbound we margin, basis margin And about think expansion. expect to do also we see in thinking also about XX but merchandise commented have we're higher merchandise points or as which continue of higher we this slightly e-com year. So expect offsets to so to We shrink QX. that, we about freight,

development And design for finally, deleveraging from team. costs product some have the higher we buying and

brand results points So, merchandise the might penetration. exclusive margin that expand XX basis that won't from slightly, be it but

health higher And higher SG&A pressure have compensation. from do line, we stock-based store the and labor higher then insurance costs, on some

plus basis XX that minus So, flat SG&A, of kind be we or to or maybe expect roughly thing. points,

comfort Okay, breakdown provide Can current to follow-up. the with and your great. quality you of outline a And bill your you exiting could then you just Maybe to the if your speak inventory? -- of XX% quarter? quantity a just dollar the can just

in gotten increase up Sure. inventory -- we've third quarter, the X.X%. or metric to X% it's the the about the pretty a was feel about and that, When that down of About right? good is we and store comp started XX%, that XX% we same third

is the or increase. and stores stores, third of couple new about of in that's a over that's about opening that of staged inventory being next is for component second The another months dozen upcoming new a the stores XX%

that that most center. then out for final in the And folks we of now the but most replenished our us the I are replenish third-party for vendors exclusive back distribution distribution own stock that recognize the follow our need closely, is product everybody the center, of simply and is brand product piece think of from from or to exclusive stores their brands, that

So, that's it. the final third of

And in terms and pretty the it, it, the we of quality the aging with scalability feel line year, good in quality of of and is about. last

inventory we're from think position a I So, standpoint. an in pretty good

of Best That's great color. luck.

Thanks Matt.

Thanks Matt.

Chen Company. with question Cowen proceed Your your and question. with next comes of the Please line from Oliver

Oliver?

with following Keith Piper Our from line? Oliver, line Peter question comes are on of Sandler. the you the

just follow-up afternoon Hey SG&A good a Greg, the guys. question outlook. on maybe

the comp of So, on it year-on-year sounds flat a be like rate five. would

out sounds Is months calling headwinds rating that guess, forward here around it a a well, causing store little start bit? those -- that's that's to last health maybe at some change any, items the for there level and higher continue like could labor I You're couple of run happened the in insurance.

great Peter. we Yes, -- question,

process We haven't XXXX to that. really planning completed the understand

view had that, we leverage and We are volumes and claim transitory insurance The on a some that able we we're expect wage again, larger a the or in to as less specifically weren't little have higher item. that as bit seen QX, able -- to self-insured don't pressure, much. we insurance, a be

So, things be in go I rate forward. expect don't to run these the

about that, said know, full it's we on you When early the them planning year. days process. Having of talk the points, leverage we about XXXX as talk typically Peter,

this quarter, this expenses, some a it of did leverage so earlier the some of We is year, timing nice plus we're et leverage five. so And not see we'd getting also like cetera. on

reconcile quarterly. And sense. makes full the on versus the follow-up year Okay, quick one the just guidance, to

So, does QX? like fiscal the tax $X.XX with full that benefit year guidance includes

that's Yes, we EPS. compensation. benefit And how year a on full into the we've received always correct. everybody from give GAAP we Peter, anchor should always based update try to much stock-based then

And business there then the that pull could does for pivoting at costs? that January up to you that get back QX? in question Jim. pay-per-click -- a we're And it Sheplers what around now was how look strategic it long even better, you great. the customer holiday caused through pressured. that into guys -- and of business dynamic fiscal on Sheplers happened of more Is When gotten to Okay, out Just more that has some kind competitive that remain frame acquisition trying the to season?

line, were pretty mid-single bootbarn.com's drag. and business the to comps. a much QX had always high sheplers.com double-digit were line itself, QX. then is I That in single QX and sheplers.com digits, by and been in in Well, growth sort by look -- pretty QX driven if of e-commerce total with outsized much a of at was digits bit being The probably

dynamic a e-commerce consolidated that's strengthening topline -- strengthening where -- bottom-line. is has much it's the and not business been very new So,

impute pay-per-click in would spend eroding. and it measure would in behind, us, to been business right BOPIS, and business quite always savings been lifetime it's we're is Sheplers that's customer. the in roll sales can taken omnichannel participate bootbarn.com, value -- Bootbarn.com it have the favor But that all can right? would that in It's the brand. and have the of that and the leaving EBIT BORIS the have and get really loss It's in that business, customer and pay-per-click the greater we essentially out for the

if business because that pay-per-click sales the decline, of really So, never by just traffic know we it's blink predominantly driven lack on out a more sort money, the making we unprofitable. is sheplers.com we're it's of roll

from business of the And leverage close the then really a when dollar books e-commerce all we've when EBIT in we margin the get business. operating end pickup contribution seen in financially, to e-commerce year-over-year the an we really, nice and quarter, the

less more paid Sheplers on So, are customers. to reliant get more Boot to on sort of the emulating going forward, we of traffic, traffic point Barn free can and now composition reliant trying the of be where

for of So, look process in and now, we're testing feel right the sheplers.com. creative new a

If the that creative sheplers.com, you chance get a type the old approximately you two-third and were to in you that one-third get there's a chance new creative.

But as hasn't. to answer And we early think about and changed stages sequentially? the results. we with And new the feel pretty quick good look feel. that continue and more question the comfortable And of that has traffic was, is we'll the expand it more your to I to get that

a and feedback guys. appreciate great Thanks that's and luck. it lot Okay, good

Peter. Thanks

Peter. Thank you,

next Your with Cowen with from your and the question. of Oliver Chen Company. proceed question Please line comes

Hi much. very you Jim and Greg, thank

comments the ahead? percentage means terms the love that's that comparisons what the business, to customer What Regarding the of is targeting the nature more magnitude Country thoughts about big your also work targeting and and on total that of were approximately, your what's relative segment timing? opportunity in the and in product And of opportunity helpful. are Would how of thoughts work?

Sure.

the and So, context first of in terms piece the work department entire sort on let put business business on -- the classifications. in of me

most the improved. QX many about them when departments QX, of you So, big actually and between think of

improved men's Western sequentially. ladies', Apparel improved groups apparel, ladies' both sequentially. -- improved and Accessories Western Western So, men's sequentially. apparel

I'm honest. the the had beginning us. department, The kind good, apparel and while So, internally lot time affect the doesn't And if tone business, on the decelerated of business negative still in boots very not negative any a and and first positive, turned underlying any department good. it's work the turned It major sequentially we've actually is work that's of fourth of us pretty quarter. decelerated business really

year in in sort monster business. the against numbers last work of the up of fourth We're quarter

quarter plus in fourth an the So, boots plus was work year as was apparel XX%, last example, work XX-something-percent. a

In and get particular what QX of the and we terms of balance QX. quarter, happens as this for into then

two of of throughout One becomes balance quarter, happen. gets get this larger a business quarter penetration. year-over-year a the rodeo things a we little of bit goes down season, Texas Western compare the the the as evolve side For the percentage is percent business the bit easier, the and we into as because

we season, penetration So, the we you X% think enter about work numbers, apparel. business grow X.X% then the to up, quarter I rodeo next work is -- almost to picks give as the throughout Western apparel from as the rough will and the get

piece been Country question, comps the quarters the driving part more specifically, stores a On now your increase increase transactions. XX, of our And XX our is of is been in what's driving big in customers. transactions and of for comps, what's part an

comp how Literally can being on the database. track a are customers store many basis, we to added

of So, from work, Western to Western ago, a work we couple years expanded fashion. in be and

of sort and Now we're refine a it also Western in work and Western music to customer split somebody versus saying, a country we can between core cap on hat might wears ball will that a who that a might cowboy or a be concert. ranch cowboy boots outside well, potentially I've live and ride wearing further a horse be going

Western fashion adding to this segment. bit to media dissimilar of -- marketing get that goal what we in the sort of to not a concentric a So, one bit little did the a customer. tweak standpoint, creative the is on side from and the the little a ladies outside It's core circle with there customers mix expand and teams

the think actually of even customers in customer more base. has here, And does than to a if you frankly, the of potential into U.S. kind And able growth will, part to I very probably segment, it's be it Country think because this grow we'll continue fashion Barn we brand. Boot big new

customers the the is underlying B more database, program there. that's into into the So, stores. drive the And to goal into our foot to traffic Rewarded loyalty strategy get and

So, hopefully that--

with will And final internal opportunity, Jim, that be with takes brands the side? third-party merchandise question, opportunity, years How how Greg, seeing. margin get and does I development brands? of impressive. And apparel ahead trends that also with margins were interplay the that about merchandise the -- or regarding country and that private the I place you have product on curious been intersects that was your

performance the apparel how against And feel if apparel on that the a with inventories you despite feeling you up cleanliness of comfortable work can tough are through being the the compare. side? Like you work

map going that to piece, in to exclusive do brands on exclusive already a a Spirit Miranda segments first are two the customer" after the Brad Idyllwind We side, fueled by by "Country the on and right. brand Paisley you're that brands So, our Moonshine have degree. Lambert. customer We arguably

Idyllwind. not for we'll opportunities customer. new to XX though. going to already. and a add tailored going brand, time, over likely next be with But side, or That run map to the moment, Shyanne, will James kind Spirit, men's probably -- Country does some the think looking is six that, at on to continue I and in Cody Moonshine Western forward. to And of that more is the that the specifically Country brand we we're and But degree, months

And it's then, Greg. Oliver,

penetration margin the do -- be coming primary basis I point over penetration growth. or think that we'll On the X,XXX years, continue that of more will the of out that brand points to the and of each growth merchandise get exclusive perhaps driver will expansion,

But So, and out our promotions, that of continue selling opportunity to, driver. business. I'll full markdowns price we primary more think do say I to the be get will the to have our optimize the

expansion in And Western apparel, ladies' as had it really relates to work we we've margin to some Relative those again, don't exposure apparel for very I in to well. continue business, things that nice I we'll the have of mean, that category. lot And expect markdown do a example. clothing,

of don't carrying mark down isn't to buying outerwear, for example, any associated the or for most rid it you've with the markdown followed Carhartt product risk and of best is The over product. perhaps get years, next to and in if that many year. the their there lot product a that Carhartt, line been just And of it. we sell has really We heavy the

to So, merchandise margin coming see for healthy I the we'll years. expansion continue think

regards. Best you. Thank

Thanks.

Oliver. Thank

the comes question next Your with of Janine question. your Please Stichter from with line Jefferies. proceed

afternoon. a was your bit if more thinking you Return In Online, you about think little everyone. I Hi being initiatives? particularly omnichannel I mentioned Buy Good Store could talk successful.

may buying And give attachment you you. they're seeing also color How an Thank items? much Online, can any fairly on Buy store? you're I other on what you So, Pick-Up be you're with then think someone in there when maybe Store, comes update rates In which recently? launched a seeing

Return and BORIS a to California like general. where bootbarn.com On honest. we In for much Buy of or York Sure. into the of saying the BORIS, look states back and bit that stores, Store, the were we no and pretty it's I Online, higher of If where I'm average come stores at that quoted been have about and our -- have a two-thirds pleasant on XX% lots we number surprise, we're like in where stores, XX% that's record New composite We was returns have if even stores Texas, think a we've Pennsylvania. states lot states we a than of

get So, in pair an the the jeans them pair that more of boots turn customer into them to to into opportunity back or and store. a is get traffic, a that's stores for

of to those something. the customers tell do precisely. a the I of that anecdotally on you to terms of buy XX% are to buy, that can in need return come way of working and many that to product, more we'd say folks In conversion how XX% measure we

we tuned. specifically system simply measure done the because right? developed our compared standpoint, been then our online were I able quarters, them that and Stay two yet, to in-store return two We'll haven't and that system through haven't vendors, stores fully next separately different software we integrated in But from get hope. purchase an and

terms been it We of has good a bit. dark BOPIS, We quarter. running. the small business. some in It networking a the pretty part had problems. and had BOPIS beginning In actually had on a of turned up be little of will back our for piece We

capability, our nice I will a minor. be it omnichannel but will that think relatively think addition to be I

Okay, then great. margin. one And on more just gross

in expense costs, between deleverage support on is margin the need see that you growth way might Thank as to about think the gross to I expand team and the mentioned relationship a you team think growth? a should some design brands we there you you. design private in

Good that and team product seen of cost or through the build-out QX. we question, the development Janine. -- cycle we'll as see We've largely of that cost design

of step increases year. had function that two we our add over -- contained for staffing, staffing people, the a one all most is saw big in terms we was last team. last years. into this So, this or We the change years big the that while may of two And in the two

I this kind budget Again, year. think us we've but those we plans, this fiscal about the will how largely behind So XXXX the of be entered that talked that's done we've haven't growth of group discussions. as

much. very you Thank Great.

Thank you.

Janine. Thank

Jonathan Robert Co. with your of question & W. the next question. with comes Baird line Please Komp Your from proceed

you. question. Hi thank a to ask wanted I

as maybe broadly, categories of up just first, the percent mind, Just just apparel of following quarter, Maybe the on work and if beyond a each up how sales? makes you current categories. on wouldn't much more those update work boots current

related it's geographies it or wanted seeing maybe that like pockets make up that, a then would and you're in weakness doesn't I that. anything to And of sound lasting just any trend. clarify to categories more you follow particular think of

Sure.

businesses, I boots seen is that look couple differences. on say we total patch California. percentages, work non-FR XX% non-oil No work real have X% sales, terms or related, things at our related, would major bigger of sales total apparel -- geographical X% a basis. annualized of an if about of we on is rough of of In work one is

either year, in years, five inches about almost the January, or four never California talked last less in Southern weather and in rain year X.X or five in than January, public, last This talked think once. I had And we've we had been we've we And inch. California. it of about

we and based So, Southern Jon, -- as well California. we're know, in you

That When know in we for a is XX-some-odd a have we're in and difference day incredibly customer good stores all California. day stores here, a going and to for is and it is there's work apparel customer rains to sort our cases, either big the down very who some important them. working proper huge gear in the the of or, all work our rain in outside difference out night

we'll us a in will much was Texas, that than do similar colder both business. weather some is get apparel had winter unfortunate weather year. missed work And season and we pretty it was in knows be of of But coming it's year where this business we a in those and a inclement less I me, maybe year. -- this to last lesser we'll boost we the think behind we we slowdown had unfortunately, So, it inclement in just, of sales. kind somewhat get rainy extent, last kind scenario soon, than time, had the saw up, dynamic California, some who it's

And just lot the Okay, comps bottom-line here, asking you. driven at of broader last that's not and three the earnings I if question, maybe on a then targets growth. specifically. Thank look one But very helpful. outperformed years the you've

picture anything on forward? you going above your the to if Or And come range. forward, in any far as to been to that frame were is X% since look long-term, you from just Is delivering there you've last bigger X% up few targets comps your impact model how there to -- years? would thought the back so within

of think long-term that way of of Greg. get thereabouts. algorithm or our holding haven't a would comp plus we Again, true it's X% with in of XXXX plan. can't developed I anything kind that the John, Yes,

that concern with speak specificity. come of growth. to me that in of EPS there's kind for hard nothing any structural has causes XX% up it's that us But So, terms

you Okay. much. very Thank

you. Thank

Thank Jon.

of with Citi. line question your the Please comes proceed question. Lejuez next from Paul with Your

Hey. Thanks guys.

as been I'm that margin. merch promotional margin we've a exclusive penetration think driver Or we can this now think about if cadence of are I looking talking be point or lower brand merch contributed a that bunch as about a a on line? promotions also really curious lower forward, margin at just -- quarter to you expansion? driver

we There's still In kind lot third posture of -- quarter, quarter is our price the left full most for our broad-based promotional system, get the a bigger not few a a big brands the out we're shallower store-wide little still selling. selling clearance kind or price country with make the it sales shorten year exclusive opportunities sales In less There's small of and driver. DNA. driver, that was have rodeo in or during times of we fourth our to we the promotional, full but of bit the event where look discounts. of a of season, pronounced are

that vendors expansion savings We're exclusive continue going think perhaps of those the and to brands will from vendors the discounts always pass products us. and and our in from we ways and looking I hope ongoing most more be efficient margin larger they'll some buy them. to as grow more growth forward, But along for make to

versus average about size that's you then it. transaction over changed several can And the Got online? the in talk how stores And years? past

team, often with necessarily while is say, are -- just fruits an And just the is average its transaction. the typical two its as transaction management I and not -- in-store on average The in Sure. because units. is it's $XXX over

Sometimes it's could apparel, expensive. it items; it's be could if item, be it it's more less than much just several Or $XXX. one

boots. $XXX, the one. skews units. is two over But is than paradoxically, over to more bigger basket a the size transaction transaction store the just lower per So, heavily store are transaction online the unit bit just it's and transaction. The Accordingly, about

over terms how a wholesale last here five time. that's over dynamic versus hasn't In ebbs how our three, there, that online but flows change haven't years. seen really the four, small changed has or of in-store all changed in much. and shopped we There's customer The been

private then the And you. brand in-store? how Got versus online penetration about

couple assortment, store order little penetration there's the One than narrower assortment for bit assortment higher that. a ability reasons cetera. the is the directly vendors, of store is the probably online right? et the a longer is So, to tail, and from online The has

online. to second exclusive more the to we functions have is store, we features the in have And the so ability bring and really of brands than our the life

of penetration stores just XX% on online in composite XX% in double-digits the is our about that or higher So, number business. and --

luck. Good you. Thank it. Got

Thanks Paul.

you. Thank

Your Research. with Please line Kummetz the next Mitch your of question from question. proceed comes Pivotal with

thanks my taking Yes, for questions.

it's the do what overall two of five are that range? work mean, sounds guys X% is And pieces impact weeks the the hundred to just positive math. you for of running this there. of maybe reporting it up. weeks? is five maybe somewhere that that in on when say the your month, basis couple Can business, I'm comp, I the like the or you in for of a trying were somewhere points first add It sort of businesses XX% the On fairly you

think, it's under business it's of the I and down is, math I pulled just mean, total by your close. pretty points. two Yes, that comp XX% probably Yes.

is inventory Are of side, like And do of kind in there -- Thanks. guys it's issues any in -- right. particularly any have softness of excess there terms because markets? any in because of categories, are it related. you that? those access weather there you sounds All As some on the Okay. the those

is of been in round. business, really. work them don't the not that the as the -- see most and apparel not it's several underperforming. of year we mean, we've of quarters, No, And goods sell -- kind I boots business if clear most we tend work for to assortment

don't don't business I work. we slightly from in margin the major smaller So, a erosion -- expect

the second January the The first they and we as quarter bit is in quarter, quarter. little were than other manageable become that into in the a get this thing compares happens more and

the bit Western get bit the in we're we'll think business little as a percent would business. I So, part markets, begin wish it. get rain the but We of of a of not colder little this, accelerate past core worried about to it our and terribly some and a will

work, rodeo happy our on and quarter further point we'll into with still to get we're you as at we're -- think of it's now. close pretty season. the the increase look to at continue I two I for And -- and normalize think if comp the where get with we right or a hurt And just it probably

And could down any you there from comp transitioning way away that pay-per-click. Is then on obviously the negative accretive, and basis, had sort way that transition margin would the you and is there comp, Got that given quarter. can, dragging guess, had it's that mean, again, of are Sheplers but year-over-year I any margin? it business, is the third on that's comp a the on impact getting isolate guys it. you obviously Sheplers, margin? on speak to impact the was I QX there for

specific a the let of XX% year bit basis less our on it's give than business, for e-commerce sales. me Well, a comp which number is a little full XX% piece, of you

mid-single business X% and I it, down can you call of X% erosion get total digits. or it's comp guess So, there. to

a e-commerce we're contribution The reason comps same-store increase. retail same-store up analysts on growth are plus-XX world, of profitability. And putting love almost to be or on on we growth, perspective. look while at are and our investors unprofitable sales EBIT same-store year-over-year good fixated laser-focused for driving EBIT business We EBIT on consolidated a e-commerce, EBIT sales kind we'd because

really again, And EPS us while topline the significantly. number And an e-commerce sheplers.com standpoint. and been headline for number, that working profitability bottom-line the it's while for is impacts the and and consolidated the business, EBIT up down, from is again, comp

Got Good it. All right. Thanks luck. guys.

Thanks Mitch.

your proceed comes question with with Please of Tom Nikic Your from Wells line next question. the Fargo.

follow-up Thanks on guys. for Quick question. margins. my gross the taking Hey

you much and shrink affect of a maybe Can something headwind. the that you I mentioned were the QX, in the how you give gross puts bit magnitude of a little should giving a about QX think, Greg, around margin? when sort color of and takes little that

Sure.

is result the a October as that what this interim this -- would was the we last of year than accrual So, as frame time the year. higher held inventory describe in shrink the year September,

year cycle process completing higher the in distribution we with physical up center. in year. than wound that end inventories and So, our We're counts last in was rate at what the of the stores

in if to have year. it's too we so rate favorability this the any And tell shrink early

shrink But shrink we and exclusive price have didn't we strength on it last benefit. We out basis call, selling, at we're higher when out probably benefited are regular assume but last points from was the accruing and that again, points, shrink. so we year, XX in typically We QX year, year, had call XX our quantify that called a I of don't basis said things you full did a or last help think slightly brands we that was call that rate. XX could

Got it.

Okay.

macro that's So, maybe causing some a in patch, apparel a the on U.S., trends little the perspective down think there's you there. supplier who bit work slowing disruption? oil has the a slowing about about something talked a big business a space in the bit little Is bit, and of little I there going talked Southwestern from

some many The employment so. think don't really two each markets. is In strong. -- very of in had we in these oil last I still growth the the nice years -- of

employment at into business. of So, apparel have sort oil patch. ironically, work some or But apparel doesn't And regular haven't It we any and compares. split work we seen resistant disruption massive look non-flame strong flame this work perfectly layoffs sort by apparel real like apparel. when of resistant in or out our in work we split

that's piece. actually apparel under work non-oil business part pressure of the the And more the non-FR patch is the or

it I on to due anything oil. can't pin So, that's really

departments. is those cycling quarters of really consecutive part almost and really -- work of double-digits growth in really, of apparel, it in some think I both strong eight boots work

rain in been helped and Dallas similar business on sunnier got didn't the out here. which And in five just been the this And hotter and of it's live saw has I we more we California, to inches year. in in degree weather -- Houston. Southern dynamics year see January, some we temperature here real, we being than And last much some the called weather. that we can we that we by recall just year's again, out, mean, last And

a the business work quarter. grower, think solid So, I even will be this in boots

I easier. to much QX have into get and business; to we the work And ground. for become apparel as try lost to comparisons the going some think we're up QX, make

able I be we'll So, through to that. roll think

that other work business a The here, really businesses and picking it are got spoken our the comping one bunch five. about plus nice plus you're still yet, at We're negatively and thing, by buried that's model. of five, being often though, we're diversified right? the bigger guiding a up a seeing apparel, have slack. is of We've departments, And we

diversification classification perfectly. is product it's the the and underpinnings of out So, of the underlying of our strategy playing one

That's All helpful. right. Thanks guys.

Tom. Thanks

line next with the with your John comes question. Please of from Davidson. Your Morris proceed question D.A.

Kind guys. a Thanks. surprised the didn't question. China great I've you so the of question sourcing My get congratulations on far, but quarter got

that partners? hearing your So goods, little are sourced out you you've of between about your from and the China? a percent broken are down private of Maybe I otherwise, think bit before remind it label what us and

the you there Or Are a given is And might you're virus? not or delay contingency be disruption? any any kind any if hearing potential of you concerned? about Corona making whether plans potential

XX% and of China. Greg. it's China situation through a John seemingly from originates our our via dynamic our And that's product third-party about branded XX% vendor of obviously brands daily. via product comes changing about It's a very Yes. exclusive

week That's deliveries that what or weeks. vendors is to we've weeks, was that New given think delayed some the a And Year holiday vacation two be heard extended that their they what extent or about or the they week expect heard. by from Chinese two we've a by of

-- terms are between Xst. before of million worth to and April that have of about receipts now due our In arrive brands, we $X.X before exclusive

and slower. don't And some that that. the our see our follow, as We've result stores about of may center is a our turn other topline meaningful fact you opposed risk talked so inventory levels distribution to also bit that in as shape, a in good are to and the we our any in retailers both

So, that in this I situation bit think well. advantages us a as

point, say closely. but obviously, this really watching it, it I wouldn't at concerned we're So, about we're

Guangdong, where-- are just some assume Wuhan, probably Yes. of those see I factories in locations where those of to more none And checking in

where Yes, don't have described, that I least the we not think exposure, as sure raw from you've I'm originate. perspective, right. that's a finished-goods materials At

bit little alarm be could again, any a there of heard, exposure, off. we going but haven't So, bells

recent opened with consistent the us updating performing, and tracking the what in Ohio been most about ramp? Jim, And yet, stores how talked before you've that Virginia. terms new ones kind Right. are I don't in North you've wondering then I still Carolina, finally, you've anything markets, on of or the think but guess, Pennsylvania of

new were Beach still now stores the are Roanoke in like So, now, the little performing is is harder handily. is originally, Virginia, there a there two quite for Roanoke guys. new stores Roanoke. bit ramp markets some you very plan its news Virginia because in cases The exceeding well.

great feel full But a cycled so that. we about year, So, have we don't haven't ramp. a we

you and if and way it, the you're the ask comp tend comp guys we is of third modeling seven to of to half a think year thinking I plus a year a first of five year model second of XX, plus them. comp

Over we've going, the what past That's we modeling one that. two than base in stores -- coming comp how bit kind a years, we've little of year that's done the of into two. try year better the to guide

Pennsylvania, of about we both feel of XX locations we some terms found, you're stores don't construction now. we should in yet. right next and And Ohio, we days, are in that have And those In right, any the great under have states. the stores there

season. rodeo for luck Good Great.

Thanks.

Thanks John. very much

You bet.

comes of the with Susquehanna. your Poser Please question. Sam next proceed Your from line with question

on -- for my you margin the Thank was your product? afternoon. guess, the quarter? taking questions. the just or was the have on Or -- margin entire gross the us up down can question, I mean, that I the on one for gross branded Good you question I tell branded product -- is was

the I the was at probably products, expanded it at not conference, branded I'm is Greg and points. brands ICR haven't exists, it's Jim it I up it suspicion don't on exclusive basis and sure XX as Sam, about look the we mentioned, both that the it. My both seen even product that because reporting way. but does,

products as growth. as penetration our So, that likely brand included well exclusive branded

there, secondly, site, marketing website? Okay. pretty it are mean, the get good. with look know Sheplers, don't better go going -- you're then how understand should to let any so perspective, do people easier, a Sheplers And what it to to I since clean make and once stores, going to make to have the you they I you you From up

you all website, stores, to to the the but -- any me they how site? to But you're you pay-per-click, see are you don't going then drive that. Barn got go Boot Sheplers out the what Barn makes little given which going can not let you've sense, that have do They complicated. people Boot the a do turn to makes stores,

good a it's No, Right. question.

a convert and traffic. free free the e-mail Boot So, build to Sheplers trying we've it's traffic? There's degree, We how replicates, tweak Barn what some capture our SEO there. to been things continue -- do couple on expanding We of done side. on get to a there that to our database really a can you to search

-- price that customer for this price-driven And And the look while is of then a the the we're for finally, customer. searching that it's feel boot. site, the particular modernizing and particular customer, there's available lowest

always -- tend they any the of item. essentially Sheplers price So, that the always to on lowest find because is Sheplers given fact

have little doing a We bit of contemplated marketing. traditional

So, perhaps some could that's of some Sheplers sponsorships brand some couldn't afford gain to afford rodeos? do advertising do don't we I for television. do in do customers Or can to Sheplers? that TV, any of specifically should we do traditional And radio and marketing should some We native for do way. think but we might some other the digital that. we

the about something of of it, the use, to two-thirds back that that so store, looks else like-- reconfigure it in way or presentation empty -- And off XX% in cut more stores. stores the to of considered estate looks your within in of then of real outside you're for it those [Indiscernible] you big productive make with could entire space just about to eyeballing in multi-use are the do lastly, using, the -- you various cities, Have -- space Sheplers like sort generally

very it's Yes, Yes. so a good question.

there Just of were built were oversized are a be they the seven XX, XX Sheplers, And they to for of specifically, stores, originally, that a store. old. built version on very years everybody and call, ever almost department the we benefit acquired them, before some are western

up store to we thought off -- a Sheplers to space. could merchandise best the did portions head when the goods of normalized kind we acquired stores little more walls And And closing bit the in exact we and building. thing then acquired the them, within shrunk July of got the before first, by with XXXX, putting we the enough that of and same business a

be So, there stores that are could space subleased. seven that free potentially have

so it sake that for opportunity hasn't the little up And we remnant us. at seven if wall; it's if itself, we're the looked to I'm it. take easy, But -- -- It somebody We giving priority presents good an space of it's parking. hasn't on been honest. opportunity we'll buy. it's for have stores, been I a good a there's huge is get it to would but mean, bit, question. a see, maybe behind a them the It the that and hard

very Thanks Good much. luck.

Sam. Thanks

Your Stephens proceed your next of Rick question with Please the from with question. Nelson comes Inc. line

this are that to Country segmentation effort? And with guys, clear, again are purely Hey costs like new conjunction It to currently great it Nick the effort new sounds quarter. categories sounds this segmentation? for you or associated that segmentation, near Rick, marketing Zangler at for on stores point customer but -- -- incremental in are any is with introducing any be you a products you term, the this absorbing just

So, a very question. good

it. give a a ball expand brand examples. we tends On a you cap, ball a wear has on wanted the a western of customer typically really. side, I'll not If department to it small cost particular to cap, couple like Country

not us a And hat. that has nicely. quite cowboy growing it's for been business So,

need fixturing the in some So, we for ball caps. stores

inconsequential this So almost spend. is

a an isolate men's -- assortment, are we long shirt in longer the potentially sleeve that are the riding hand at around cowls customer other and horse, animals because product a I'll sleeves look a they ranch. to woven men's for A longer you western has or trying and moving When rope example merchandise cattle you with literally on on their is give apparel a in side.

buttoned Western that sleeved, more If woven probably fashion that for a And need long or doesn't than item it's expanded anything down, functional lengths guy of that piece. a Country doing. a shirt, kind sleeve untucked, wearing customer, it's of arms particular is -- he's

to the the product to merchants distinctions the sort to eye product, the people the might of important. designers and, the are to buying and pretty be naked minor So, frankly,

adjacent one circle our it's core So, we of think logical customer, a concentric do customer. outside

may or affinity We brand bit there to it just lifestyle. explore and have product already, continue on that but customers invite some have think some expand horse, in Barn the to a work can we ride of we live the the and ranch little a not new a Boot to

Right.

-- new store just you and that and that second was described, before recently example you in? So, is like that something that was that that's that the that gave, in brought product or

of subset it exists In some already. most cases,

So, Ball sell-through caps and we're successes, have business. some example. them. small some to assortment is selling perfect as saw and and The pickup, already seeing a bigger a we expanded breadth and we product to that's expand store, ball thing a depth, a opportunities used be and cap in selling it very become we

bit. example Moonshine of and more it's has been little a store in the years, styles that's is Spirit for expanding watches, denim now more five an and

bit taking to making already see success So, it's and the it something a had we little that broader.

sense. Appreciate lot of makes That it. Great. luck a Good guys.

you. Thank

proceed of with question Jeremy Your Craig-Hallum. Please next the comes Hamblin your from with line question.

and ask XXXX some a quarter. strong moving significant X, Tier like companies actually question pretty plans to forward. closures a on Congrats wanted store realistic here I estate. store in planned real XXXX, in uptick on here attractive closures guys. Thanks a saw

on of many what so side you're So, first, cost opportunities market? I the seeing wanted to with potential on the things ask,

at at some a there potentially would really sites And that convert, in XX% looking Is opportunity, unit algorithm, aggressive potential Thank all that? growth? two, it develop if not say, whether be to your changes and you good you growth let's or you. saw more

believe, slightly better model the that honest, of some of costs because there asked to sites better the to really estate it million. right? part we getting is And mean, the getting, sales, a Yes, same better do to sort to What attributed store occupancy point. that same what that. average, than new doing we've think $X.X we've for cost. be fact I in for is is more we're of On availability, the are real store we maybe people new I the we And dollar. been though better seen your

the about growth that of terms forward, XX% good going feel pretty In we number. unit

now strength almost of just a We -- are Greg our about talked in -- one leverage over position one. ratio, now, our

some available, your that size real we right really stores, tried so opening the -- and and stores have people and need. are estate making and We in of a process closing true that, cases, their in there to point, are shape unfortunately,

that, time the said for not the out calling now. forward. stick going the to we're and right we've the potential explored for that to we're unit contemplated being, time but Having going we're XX% It being. with to going something But stick growth for XX% to is upside

Okay, with online business Sheplers. great. follow-up your then question on And a here

improved improvement in and maybe that sales from you're let's profitability more or of the that's from that though site. X% there's a me. Thanks or potential little more in from Sheplers improvement terms give business the for a mentioned magnitude that outline? even business? business Could downtick the Can you that's give color You with slight dollar sense here of of us roughly, a X% us of it you say, magnitude

Sure.

split hard would brands But tell I costs. online because up we're would the so it's we share you that unprofitable. is -- many business of they because Now, the don't the undoubtedly that be giving

look native we brands we space, advertising other pay-per-click brands saw ad other a and our at around as and example, return X:X on spend. For and in on digital Friday brands, Black bidding Cyber Monday,

a walked a that that they just away was $XXX business to And get spending So, from. were sale. $XXX we

quantify to hard bottom-line it's specific impact the of Sheplers. So,

growth total, margin, the piece efficiency-- nice spend, say We nicely that more exclusive better by partly much is And pay-per-click in efficient prepared becoming in year-over-year. penetration, sales driven EBIT distribution merchandise that's center very bootbarn.com, brand up e-comm improving the did in remarks contribution

some on costs. Leverage fixed

Leverage some on fixed costs.

business So, kind profitable of to And top and given from the it's a our need to we're to measured be profitable. standpoint, a earnings bottom, on e-commerce really e-commerce business. highly we EPS, how story run for that consolidated profitable success a and fact

really we brands going both nice some forward. And progress for made the about we've future So, good feel there.

will continue I think evolve. to just Sheplers

get And a more old a about to hopefully, that able free traffic is maintain be we'll and now. brand century

get its for more some it's to we'll to and marketplace, own got So, look growth. places continue positioning in the

Good guys. luck. Great. Thanks

Thank you.

and gentlemen, Conroy Jim call we remarks. the to and like Ladies have I reached the for of back session the closing turn would end question-and-answer to

Well, thank We today. everyone, earnings the you, call. quarter you care. speaking for call to fourth joining Take with look forward on our

This concludes today's conference.

lines this your you for your at disconnect time. participation. may You Thank