Boot Barn (BOOT) 27 Oct 222023 Q2 Earnings call transcript

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

Second Quarter 2023 Earnings Call.

As a reminder, this call is being recorded.

Now, I like to turn the conference over to your host. Mr. of President Vice Dedovesh, Financial Planning. Mark ahead, go sir. Please

statements are you Thank Second today us Greg afternoon, Hackman, today's Quarter Executive President and Thank call you. will available everyone. section for XX number of call on the to me Chief in and forward-looking reflect of based place are statements. these make forward-looking XXXX that Executive Results. actual joining results Conroy, Officer; Earnings like forward-looking President only Chief current factors Good a differ Fiscal With Relations Jim and website Accordingly, days website. reliance today, on should discuss Vice company's of Boot available press on replay business. affecting and with you the Barn's supplemental Operating I would this Officer as presentation Financial of for expectations bootbarn.com. Chief will Boot These of along Watkins, at Investor Officer. be materially Barn's A the section to presentation you statements. we from release, call, is Investor judgment we may on after and Jim copy on statements the Relations a of end the remind today's recording undue a Shortly analysis as Barn's financial Boot not this Barn's certain Boot

earnings turn result the undertake well as Chief uncertainties call disclaimer that this to quarter over Jim and disclaimer. with our the any or Boot new or that will associated future obligation the release XXXX Conroy, to with any events of and a information, forward-looking now President I update statements, otherwise. included Officer. referenced statements the We to risks you discussion and Barn's do call Executive the as alter our Jim? in conference not during whether is of thorough webcast, SEC be forward-looking as second filings statements more made a we fiscal For regarding in to forward-looking refer

this Mark. each review the good second you an fiscal thank On initiatives quarter of call, I'll afternoon. business. across joining us. we've current discuss strategic on our you, Thank provide our and made results, And update And continued progress everyone for XXXX

Jim we remarks, detail open up performance for the will financial in my more review and Following our will Watkins questions. then call

quarter are our We we've share very gain the few reflect growth over past pleased of the with on which second top continued results achieved years. market

XX.X% we've to sustainable. opened stores additional growth a gain During compared the strong growth fiscal year period. over of quarter, stores both will total growth sales the from XX.X% sales past and in grew share on new XX-months. over demonstrates the XX% top existing the that grew on second years total such the prior driving of that net basis, On The top sales market We XXXX. of believe strong year several this quarter last be the achieved three-year

three-year basis, in by quarter, compared the quarter store the second X%. XXXX. store sales On partially any XX% consolidated sales increase same grew fiscal growth same sales e-commerce decline During a to X.X% of X.X% of store retail an same comprised offset of grew store of sales consolidated second

expansion XX a continued new quarter. stores least by straight fourth at also year new this our We opening unit for

again, and of our maintain selling. top points solid result line In exclusive Once a addition top forward. strength and in rate in a as price margin we and growth not philosophy combination of markdowns change margin better merchandise to in EBIT ongoing performance or XX.X%. to full growth of selling line The resulted promotions anticipate expect basis XX penetration merchandise primarily expanded do brand margin price in material going full

sales range. We growth in $X.XX time reflects than of potential success each and our better or second the of the the showcases strategic spend our $X.XX our initiative. highlighting on share will future brand. high diluted end I execution the progress of initiatives per now the was some our guidance four earnings consistent Our and quarter believe recent

sales thriving Let's same growth. store begin with

are able the top that we've been build same last growth store to sales of pleased on quite We year. outside

our quarter, year a the same sales grew For we store in increase as the X.X% XX.X% remarkable prior cycled period.

sales in store approximately retail price, increase per on fact in level last due of transaction testament the a last grow flat step comp the Our year's unit we've an of transactions function to versus driven by brand retail in was X% top We the we the of strength experienced. that durability store average X% continue average is the year. to that with to increase size a and increase believe in

Western quarter, Boots During comp store Work basis almost apparel, Men's Apparel were and flat. denim Ladies' Hats. and sales growth Men's Sales and non- men's strongest western on second Work apparel Denim, our the and boots were and Boots, of categories year declined Ladies' period, of Cowboy prior Ladies' the over

recent region put is basis. continues modernize comp this and region, chain the west decline From a perspective, multiple our more in was our a apparel in a in brand Boots of a XXX% our basis, had strong we east for standpoint, region quarter That it that while which geographic While team call build and From same our important solid our a strongest cycled this a the and growth three-year year. lagging Ladies' perennially has regions, south to the To marketing comp most quarter. average our creative of is performance of than is negative categories across region. on outperformed the region, out to one-year north growth and on results perspective, media. west forms both in in last

creative, operational and new nurture extremely proud legacy stores us world customer country. sales combination mix We in brand across perspective, continues grow our customers. of an The believe customer of base that by performance field continue of the we brand As tailored organization east the the are the the segments on country. strength of build new we evidenced the and as across to of new strategic the class retention-oriented markets coast. From to strong messaging enabled a has add and programs our to acquisition

Over the sales than unit past by XX%. has volume years, our more grown average store two

Our organization manage handle model, increased the this augment demonstrated field in-store fuel ability this inventory to has level staffing additional to needed and sales the to to the growth.

In have the new channel addition, they taken further new experience. solutions, several initiatives implemented enhancing and omni on technology in-store store

has feel surge, store As our we holiday hiring want holiday sales challenges overall and we growth, provide staffing flow while current quite omni and seasonal about the season, team service, partners begun channel from The managing supply for commend preparedness. sales to approach the customer application and the already initiatives. is all candidates as field multiple entire healthy. chain the continue team to I new excellent they good

channel we continue omni and channel our our integrate strengthening initiatives second our capabilities to our two selling omni to leadership, build channels. Moving

that of As profitably is increasingly digital leveraging our of the long-standing model to we fulfill evaluate proving businesses strategy customer we the combination store be broader confident our are to demand. retail landscape, and successful a

sales. use than instrumental they our example, e-commerce to have store and business continue new in some For extremely more to two Conversely, growth e-commerce customers channel the stores for to then are or digital business of customers. our prospect in as of our we our omni involvement thirds convert them

to as ecommerce ability or and well by has channel our store at all to of our expanded of exclusive our including our we given to the Over multiple the ability inventory increase from the a brand demand dramatically clearance advantages, fulfill regardless markup ability sales, this year, us stores. penetration to inventory past the have location. more through capability e-commerce as shoppers available move higher efficiently making Adding all

quarter, recent the in store primary sales our most ecommerce X%. There sales. e-commerce same are decline sales declined the For drivers or two of e-commerce

X% to sharp marketplace. erosion quarter This small, decline in is in XX% during total of of sales. is making attributable our of up majority business a Amazon sales sales First sales, the online approximately relatively the online on or

Amazon nature this than third-party given of commerce less strategically sites. business portion Additionally, our the is less profitable important relationship, traditional e- the and our of

made position e-commerce competitors strong sites while year, last gains in relates because low branded back many year. to we and business factor second our a Last inventory The stock. online had we were considerable

back a sales past over and Now competitors with a have online we are three-year quite we pleased some back growth the stock, we XX% as business e-commerce basis, From we growth continued with have the our seen in in given perspective, made multiyear of are longer-term on year. the multiyear in gains up profitability.

Now to our exclusive brands. third initiative strategic

basis to three and points, our quarter, higher the our which exclusive the by quality exclusive ago, year over has than the to brand years During is percentage grown penetration Compared brand compelling the penetration a than created period. to testament product XX.X% more design XX prior team. grew XXX points

in their growth encouraged the be to newly brands added that optimistic of the We performance continue are prospects. by future

for brands basis. three brands more five a quarter the among consolidated on our the top Additionally, of were exclusive well-established selling

us, differentiation exclusive Our provide build margin. brands for an ongoing and merchandise to of opportunity for a our us we create strategic point believe

to 'XX. fiscal brand fiscal approximately the we full For over exclusive penetration basis to increase XX.X% XXX grow points year, and expect

store fourth our our initiative expanding Finally, base.

the Our a national on new continues development capability store build business to scale.

across total second New to XX stores During we XX stores opened states. quarter, Delaware, into bringing XXX and the count Jersey our new expansion including

goal. than perform stated in much New our first markets million both with a sales results existing on stores in opening payback expectations, faster continue line to which and $X.X historical new year our three-year investment our

excited are new confident to Connecticut new ability year including our are We York, our New continue store about Maryland. for markets this store momentum plan the and with in openings in to pipeline and

X% prior four by we year total third growth and Turning first business, approximately sales the to through over period, quarter grown opened current fiscal stores the new the weeks our over the driven XX-months. last have net have continued sales of

down sales, growth the store X.X%. by through in same the offset store XX.X% to X.X% of decrease period, driven partially period consolidated sales Our same store same e-commerce preliminary are compared prior by year sales retail

third-party have in a sales marketplace. we basis, result October. of on up We on store online many vendors believe Amazon sites sales, store seen a softness XX% our of than and and which to is their and our in more position competitors On impact e-commerce three-year are e-commerce returning further same

to the pleased over very given retail the to sales growth I'd Jim call strong in the in Watkins. like same particularly are store year to turn now we prior the store We see periods. sales saw

had by expense rate. and distribution than expense offset increased we The point improvement in points buying, we The a from margin penetration quarter resulted XXX inflation. decrease costs of prior basis basis by in profit increase was period. result million, and year the ago. of in rate merchandise deleverage sales in XXX XX.X% brand in $XXX full-price elevated expansion profit million in anticipated Gross the part XX of increase X% gross were with better to to merchandise by center of at costs, Included rate prices the XXX-basis XX% which a of sales merchandise deleverage growth storage for rate added partially experienced consolidated points an In new unit driven sales retail Jim. points the same XX a in experience margin XX-basis a from in selling. which better stores container in the net to freight fees, X.X% saw a during margin along average freight increase million. higher increased you, months exclusive in store our past was second some growth what increase This of driven and primarily profit $XXX we sales than or sales year compared point leverage. $XXX or Thank continue sales, capitalized inventory gross were a basis as to quarter, XX.X% occupancy of was

We inventory we the charges. through with fourth expense as these burdened freight freight in third quarters and expect elevated see sell to the peak

XX% the in most containers rates regularly spot Missouri. now have fees and City, eliminated opening booking of new are recent Kansas storage distribution we lower with Fortunately, our at peaks than off-site center

normalized we to of we prior to XX.X% trends, in expense of next freight $XX period. general as the anticipate these the sales or million $XX quarter were into Selling, move encouraging fiscal Given million compared expenses reverting year year. for and administrative sales XX.X% back or

XX% sales net store higher of increased payroll. or expenses, expected, expenses expense and as $XX XX.X% compared sales higher diluted of of share or prior the or in quarter Net period. period. to to prior diluted was $XX a million a result from other store-related per was as million operations $XX year $XX million $X.XX primarily As of the SG&A year income in Income in million percentage $X.XX share marketing or the sales per compared

average new the sustained XX distribution prior consolidated Turning XX% store which to expectations. the we openings basis, This centers is to our in volume. sales in a additional comp XX increase updated is a increased the over On both period the new Average to the million the order We healthy. brand final the our the support million of order doing was revolving in with When $XXX we balance primarily will to have in to on against total exclusive increase which prior to the great to couple over our position attributed line inventory that credit. on XX% the increased team stores job our sheet. maintaining in-store inventory support projection, $XXX supply, well growth, as next $XXX cash our year sales and brands, to hand stores, driven the over approximately by believe with increase The exceed of of inventory needed and of in-stock The quarter our portion evaluating continue continues months our opened million. can in the in line inventory year in drawn open inventory forward a of historical store over approximately weeks past $XX average. unit stores composition is house stock new that XX and as inventory inventory pipeline of finished be quarters. of as million our

'XX. fiscal for outlook our to Turning

billion, prior We have to now updated year. be and to between year billion our expect guidance representing sales XX.X% for $X.XX fiscal the the $X.XX over XX.X% of growth and total

X% retail e-commerce same same store minus to store of growth X% increase sales range and be We of with X.X% of X% sales to to XX% decline the expect store of approximately to the in XX%. sales same

be from or approximately profit headwind between Gross expect million to of profit XX.X% freight estimated an $XXX $XXX We basis gross and million sales. includes point extent. XXX

expected is operations $XXX to from be sales. and between XX.X% income XX.X% $XXX million Our of to million or

$XXX.X income million expect fiscal $XXX.X million. be for to between We net 'XX and

diluted and earnings expect to per $X.XX. $X.XX between share We be

between also We opened be presentation we interest on million million stores further track $XX stores we our financial refer $XX released XX XX expect open to to supplemental fiscal have be We and including year, our 'XX expense and the guidance. information today the million. capital Please on new $X.X to during revised expenditures to remain for the year-to-date.

we As we to look expect and million to quarter, between total million. sales $XXX the third be $XXX

minus XX% same store sales We sales of expect same flat of sales store X% e-commerce with to store the store decline and X% X%, XX%. to same approximately to of retail decline

million We profit point XX.X% from and an $XXX of headwind to or expect gross profit million sales. approximately expense. $XXX between be includes Gross basis estimated XXX freight

expected and to to Our income is million XX.X% million from be between or sales. $XX of operations $XX XX.X%

earnings two drivers to $X.XX. be the $X.XX change our between There guidance. in full and expect diluted primary per share of are We year

and competitors result position Amazon the on softness our the expect online this sales of the sites our continue of vendors believe and third-party We year. their balance September an we October for is and that softness the First, in-stock e-commerce on to many to returning of of Marketplace.

in planned from store delays of store stores stores half expected pushed a result quarter Despite stores opening are These this our many these being plan. we approximately the their in opening the our third remain these and in and reduction opening permitting stores XX back in on back quarter. opening of has Second, delays stores dates new resulted dates new new sales in open year. in the in nine construction track original XX year, delays, in to with from to fiscal fourth

we the freight our half freight the year third anticipate freight timing predict. more the year to first peak of expense last expect In the We On the as call, with expense negatively been while additional has within half our impacting back to now full in than was the particularly the the during actualized. what through headwind earnings year charges. burdened we our impact the quarter of of year, in inventory freight to and not guidance, the addition above the sell difficult

Third freight fourth basis prior and be to XXX-basis quarter in quarter be is expense expected XX to points freight than period. year headwind higher a point expense the

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

you, Thank Jim.

We add I past with to more to to forward sustainable. looming same my three-year finish take do supply nearly we to years and a margin of business our gratitude are sales, the second grow earnings by strong sales entire pleased XX% want Barn recession. Boot our time merchandise to than in and XXX% these are added minute a been store to the in new the three performance to proven level Despite has year. and have triple team. express a our a of to to and that look the massive quarter challenges chain the on impacted sales more to pace now period. pandemic, by The to that We've obstacles, than considerably our average annual be global

You should achievements. incredible these all be proud of

triple look growth I us team. clear and your the as sales Finally, opportunities for you forward, our opportunity for count future and provides growth considerable store to

I like your questions. to Now Ryan? open to would the take call

[Operator Instructions] the line from of Matthew comes JPMorgan. Our Boss first question from

nice and congrats a Thanks quarter. Great. on

low Jim, us could the in back quarter, the digits half to on now forecast. category? in bridge single second I What's help relative relative the think elaborate mid-single of for implied back maybe the the prior down you implied So October? comps year business digits, the half moderation to by And which to driven negative was

October, first, to to I you give commentary. into change of some want Happy do context though. we'll sort color give sequential and the QX and Sure. between you it put

it's XX%. the can growth. on a in want to and story it view And basis that is just those on as up up XXX% a a which second, Our new sequential for that really to get in is I was that let a earnings basis QX than three-year sink over for while that XX% sales we to less look we That the because do at sales. are on plus plus plus And XX%, three-year three-year slightly XX% right? three-year particularly business I deceleration, of hard growth kind total in a a quarter, upset me We're quarter, when was October think business, in a total phenomenal our basis.

Ladies' the Boots sequentially the back that question thing changed our really specific businesses. category Apparel around biggest perspective, what to and So from changed sequentially to relates a Ladies'

merchandise XX-or-so classifications So major there's Boot within Barn.

Some some biggest et between the and change is a Boots down a But are bit, frankly, and -- are little and QX QX, QX was Apparel. bit, then cetera. up Ladies' little between and QX

of XX% So October. comparison from standpoint was we reflect against. case in in strong back in in that in up against very October. about or QX Ladies' flat businesses are what on and Ladies' have X% in Ladies' and down up of QX say kind Boots QX, in once case was year. Apparel to Those least a last Ladies' Boots again of at last down XXX% year X% the Apparel the they're I'd

classification single from probably merchandise that's standpoint, biggest a change. So the

other sales store same to is in decline the our has different which pieces a consolidated it. or deceleration change -- affects few The our that it business, e-commerce

product it with more softness a inventory Amazon flush with people they sort them were and lot struggling a of other and we just were more leg the of One the up on the their last same supply on Marketplace, is chain. is the we year because had bit that selling

actually the end you looking that same comp slide that to range, high high XX. high and Matt, year, guided X% the XX% the e-commerce to would speaking assumptions and to little We're back of the we range the stores of did have the from the at can end a just store minus half now the sales, the I increased X.X% range, the year and see And end but of of at here add on bit at -- for full X%. at the at

store we're October, we plus see at we're growth stores. of see in continuing growth so plus strength the in month X.X% X.X%. And there continue sales same to our our In Year-to-date, stores. to nice at

of the we've guided minus back year to the half stores two so to in flat. And

in the there were in our I the also would that and of note November last quarter. conservatism some year strongest stores. there's So December month

quarter year And the our of of we as so volumes sales we QX planning our, considering and of business of off want rest to in were based third last and current kind that within of quarter. flow the be regular mindful a

maybe to call Okay. believe higher-margin margin to operating you follow-up, a for past what then years consider? easier just your from in model maybe through relative That's And as that it's if other be would pre-pandemic material profile the the Or way, at has here margins a walk year drivers to are mid-teens, to earned guidance to over the you would we the any the the great. relative finish there that looked sustainable two of if out? drivers

two merchandise the XX I the if years, increased, of the our margin is very has believe, the the number know with you been exception row quarters the don't I think product several is, last what And over I margin number. in from look has pandemic, the standpoint, quarters sustainable. in back margin a product

continued margins we've so strong. product And guide to

us -- cost of we brand raise as increases of back penetration prices couple is lift a ago, were product those. the we on we things inventory exclusive margin a year, look were But this retail slow to received to nice standpoint. on our slow to a we year half from there a as Our giving

in raising to the the over our these were margin were initially, several the so weren't. last going months. Again, get more increases or be thinking increases react those cost benefit in to going looks those still quarter transitory. quarter, It prices. we We from we like quarter third in to price were And they put that we've get fourth as we're margin -- continue having into and the sustained third that

the expectation. And that transitory. one occupancy looks get will cost of think down be I we year can away, a that's we center P&L from mean decrease go the Kansas So it in as is The again, our a to, that's I something from is City. new in see cost through And we little headwinds but is those will I just think our sustainable. least vendors. then rate those P&L, our distribution are sustainable standpoint that the distribution end new at product our and freight bit this react thing the as like buying going product margin

create of that pressure some bit look QX little as buying a in So occupancy of on we and will we see at QX. deleverage, and the

Matt, we sales And Greg. the leverage getting new volume I really to that it's add would just are store compared on per average nice the pre-COVID period.

So occupancy fixed or improvement it's fixed cost, any in that SG&A, in the have of us whether embedded the cost in line the structural margin. or help sustainable operating

Our next the Zaccone question from comes Citi. of Steven line from

on from of taking you're afternoon, peers? my you Thanks seeing the everyone. wanted elaborate little bit you the on e-com Good Great. promotional e-comm what focus to of online should a question. I more Could channel activity commentary. for things back Are trend in? and to quarters' you're kind participate sales this not seeing And give that normalize? more then a see willing a do few of you as

the going successful So was product with available we had last to don't We've nice problem part further or had few the because product I a years. growth slightly last lucky agree that online your help this We our in making in available managing and and chain really the supply that. year were is more getting sentence. last some stores advantages sell of over some the structural I think sort forward. of

a last pricing, has most say standpoint, online iMAP the floor product pricing I'd outperformed of From our a couple years. we price. of So

that So that to are very do not And our competitor forbidden countless industry; business do the we're pricing overspend rarely is our they're on marketing. not of so and The or in below I really in examples to really social industry. does price but mean pay-per-click a buy if goods. direct-to-consumer a marketing, branded It's that go will third-party thing. repercussions. companies face to there selling way

those also goods the on of big other Some competitors same selling their site. are

product sell direct the We They loads same fine. -- get have one as just the that called same if we someone is ours, the will. Texas And their site at They competitor as their price in have do. website formidable versus we Cavender's. quickly sales competitor, they'll

one that against, understandably, easily of of to themselves, us would we our that the other vendors so business or And reasons could brands to exclusive some before are people it The their come right? online. important continue to wrangler.com direct-to-consumer compete us. piece go ariat.com, or of our vendors justin.com why the strategically is of is our to course, business And build,

opposite out reverting. intentions to profitability down. drive profitability really the doing And go So the have years nature I be our brand, do and channel, of and business the the overspend normal few Boot and the over buy think is improving of no our this on the exactly a that want sale pay-per-click There'll spent and couple somewhat next based we of strength build transitory. And we that on level last the quarters. we of to of Barn new and not lifestyle

you. Thank Jim. helpful, That's

I for like And positioning. The because wanted the seems inventory. It comfortable second I on but was still just follow pretty to it with I question up you're guess had Greg quarter. asked I last elevated,

you about months some do ago, Any it? it three think feel You just product? or still of areas as But concern you to today pockets of pretty elevated relative kind cited with of reasons. comfortable

view business Yes. Great highly we how Boots Men's quality question, inventory Boots, as to risk. be risk those very, or functional Rubber have Steve. come Performance a us. in through in be the And little the in our No, may I to of no months quantity and very continues bit Sole or three feel Work markdown to been would from really We're a those inventory. Where inventory, ago. and heavy fashion it I little and There's we'll work about business. the continue change good

Our question Peter Keith the line Sandler. from next Piper of from comes

growth afternoon, a the XX% to I wanted everyone. question, results the Hey, three years. Nice good Jim, over today. about ask last

a earning. still we I that is over concerns lot get Barn Boot of think

certainly You much rate have the did faster last compounded you up than three pre-COVID. at years a

that just here years you've going can you and think last the that three to the sales something in maybe you is why reiterate gained on forward? So guys hang structural

'XX, a a we in right to investors is roughly answer store XX run That our like And per rate try at step and anyway. volume. And supplemental -- very Sure. building when Even it's stores in $X.X average We a a give sort continuing you to for on unit the $X.X does million public $X.X we In company saw actually I'd build because The of the gravitating are bucking volume is wasn't people to we $X.X how the it is store ago million. and graph It's happy question factor on went that around what channel. been for single of I'm it the this head address conventional stores, to profitability our seems last towards. on of wisdom strategy asked that several call to March one months sense average basis, run now to a that function were brick-and-mortar up be our were of actually we've that been focus that years. stores. many drives on. included million rather change straight XX presentation look that months our sustainable it. focus the usually That's biggest now involved million.

how be million? go the It take that you balance roughly for million? Could of Could It year, guide end could. number go increase business through believe. I store is $X.X can that, could. that don't back number March. just to would transitory. number that average sales that -- the think is If this to million. in back the happened that's a our believe that understand I There the to nothing to coupled way $X.X Could million it's $X.X to hard a number go continue overnight I have go driven that all it $X.X we find will of to upcoming down $X.X with the that million, XX% our in

We do in we'll that it's appreciated. So or single business of few over company stores know, out itself a understood, we the Hopefully, XX work the little for store XX get another be it And back quarters. money. certainly volume. billion elevated believe not years, will store you average bit, And open enough or every does at to next well seem as to to remain continue if year. XX growing a makes we'll levels sales. a and in well $X But these e-commerce not

So accelerator we'll new the store continue on to press growth.

even seen you've with gains last Cavender's stores, even of Ranch and competitors just I in over the mom-and-pop couple that some Maybe know helpful. the and past, key you've like chain. share the be That's years. Do the Farm would channels, about Okay. talked of pulling you're historically your like Country denim, may just of customers customers think maybe a shopped or your Walmart kind some fast in Just fashion in of launch? have the that's you maybe with customer some other thinking that

So yes, do. we

probably I more think are we've some of mom-and-pops towards the than the got from would share industry. point Cavender's. I within gains against

I think be strong. to their pretty business pie continues

also And Hats. Jeans it is we just Cowboy are our the from channels. think Western that Country that -- one of concentric Boots to Cowboy cowboy tried customer customer is But assortment, a in They initiative. the the appreciate retail and getting the to we sell also of Just our more capture I of one were we've you traditional I -- target. that of we sort around still customers bull's circle Peter, of circle and expand and mean aperture customer. very customer know that that eye product part well. And really

lifestyle. fan, et be hiking, not may a casual They outdoor they but rodeo they of be more may a camping, being -- enjoy it's do outside, cetera. probably So

point, retailers. fashion great now share of of And bit are piece could that forfeiting just stores have business We traffic come share, our gains is could any little Wonderwest. from mall-based traditional, in more specialty otherwise the number have that traditional To sell a number small your of at any a trends. been We given bought a mall example. that denim denim have is there

So I coming think of but I certainly I point share Walmart. are think customers, necessarily too. wouldn't I price our number Bentonville the goods I in think about goods going coming share people it's lot think the different doubt of are a a from worried after of just think places. their from their it's of wallet. I piece But and -- loss, actually don't we a that

the line & from Next Cowen from of Rakhlenko question Company. comes Max

lot my Thanks taking for guys. question. a Hey,

there, that as maybe shoppers pretty pandemic? country Western but during between on Peter, then shopper. any to just the October fashion say, just from are bucket just the the you as into, as so a differences similar follow-up that of behavior staying to share gained in able you're taking topic, you last ones in those or versus that the more moms-and-pops quarter shoppers And shopping well gained then and core So maybe date, a your

are. we So

of the sort as information We have have why. tagged piece to question, who -- our back your our Be It's program. to in very last we program, is buying all of Rewarded loyalty good

retained if sales count a count worry how then drove So are back types question, parse or to would of The see you whole we've growth. you'd see average back quick the gotten answer new decline. down, to we customer is and that out customers up had of we come Coming the prior behaving. we a store bunch our customer sales that store average customers can would customers continue different

We see at haven't new slightly both seen they're not or high-level the the deterioration accounts that. but count. most and would groups, that same acceleration customers. recent the in a I say seen probably in seeing not We shopping less to appreciate, year sort we're frequently, the so, we've traditional of customer customer continue

transactions if clearly You deduce shopping could frequently. customer slightly they just sort be of is less flattish, up are that count must and

we very several tailwind quarters. went if that we mentioned try got always the Ladies' the you over honest we that prior thing from be to to and other Boots Ladies' The last about back calls, Apparel additional

plus are trend and ladies' estimated businesses, small that plus there what said were quarters. those comp a several or without I'm we I And the XX we said numbers, out or are that And XX have were of had we -- these fact, And for we would on Again, but impact spiked a bit it something. was we our been fashion we -- something. rough In numbers, pretty close. but think up for that. would to And But That it's on was points departments. some balance, we're just and few happy really XX adding of in business. businesses. now or a that probably giving XXX% those here It in back a now, still those -- was over or On we our that quarters take two-year basis, with giving ladies' all gains long. of you day back. creating X are two really outsized

for happen. You a in we magic that but all might to can't it wand to year XX% prefer make two row, a wave years the be

full-price broader product confidence ability the drive Thanks And promos, step in Got through in but margins your the what helpful. would positions, holiday promotional then walked how across in of current in promotional inventory especially the very remain quarters risk us potentially would lot. landscape? up greater to very the next you this then if it. assess That's selling that And is couple environment? retail you your you need a just

Sure. a anyway. I'll we take promotional way intention the the to standpoint, have piece, or competitively, no desire From first go pricing changing of look, we market.

to overbought there something be in We and single just competitors doing aren't out themselves out associated brand mom-and-pop that. to of inventory the work have an to are operator I We the a have store position. invested And and could going that respond sales. with experience running Boot there suppose Barn

competitor, number Cavender's, consistent. very one Our direct

tend rarely very the a the overbought or store lot which promotional They in operate, where point get massively modest excitement discount. clearing at to of deep that have occasionally operate highly a but for they company. is to full-price we product to sale position, We to some where a some selling, are they're in way respect mostly the similarly drive

markdowns operate chatter That to So well, It's go been may just of will don't the of payer discounted There'll true. going be other change think level the holiday. price of outside rather think industry, -- don't going to payer cowboy a we I -- more we then there's our of channels by is I be higher way and going a not when fact be a a than lot business. shoes retail athletic someone of promotional. full in around to look and really sales boots.

-- two it feels like our with don't to to because rational competitors, competitor with going farm we prior modest were in and ranch activity. sales consistent, incredibly we're very the if year, year, very had direct our year a ago. bare our years much we're to And were fortunate This Cavender's. in industry both an was and promotional be business keep good very know last minimum I -- was channel product. it help Last bit and at strong with the pricing So chasing little were we artificial where of we

-- I raise said with don't Max, think it. I more would Jim to that add we guess cash. on inventories, perfectly, more to sell you covered be just I the it mostly inventory need to promotional

of healthy our quarter. sheet. We balance of cash raise pay We're plenty have the headed a holiday into We'll down line to credit.

little Greg to worked if do is promotional. we'll a on with. for than a an have mentioned that so that couple there may rather on area And it to be where months, more get inventory, we're we heavy If hold

Ladies' trouble. our the It's Boots We've That's some get and already. We Apparel we disciplined in businesses another. the both into cleared Ladies' Boots in Ladies' non-denim. most where on could recent numbers right. is the denim quarter. very remain is one, biggest

a cycle businesses So those do pretty more the we are certainly than than typically and have categories diligent more about Men's that category. fashion Western the keeping Work of

clean those So they faster. businesses categories. turn very of we closely we feel watch and that those both in pretty And we're

Our the next of question comes Tarlowe line Jefferies. from from Corey

results. my and afternoon the on Good for question. Hi. thanks congrats taking And strong

is So one thing to and continue really they've exclusive that clear your been that's, I received brands think, customers. by grow, well

basis exclusive like XXX quarter penetration year-over-year. I think brand this the points up is something

of ahead? those profitability exclusive about you I there? segment to then talk ahead How can bunch drive what some of sustainable brands. opportunity is the more specifically you know this And see launched bit a little your just So are new trending? initiatives you business for a

Yes. question. Great brands. new Sure. We've added

we And we a go categories. And XX. new categories. sort happen the a off runway of the we pleased of now of certain related We've number and new see things. So had The in pleased brands to up winners clear the there. sell-through. have are the some and we successes then sort good out. We with with. on into We're is then what's different launches six, all maybe four some start. What used balance, of we brands, working, respond each we had other we're start quite expand brand But on a tends of to a

So add outerwear it. add on, then it hats brand we or to might launch later and a to

that's some once last the So start it four gives brands. a of categories. couple -- to ago when us a expand related while, we year, then growth. then added in added how into in now we every years And those few But of the brands. That brands where was a each the

or increase kind think slow is by three Boot want There'll So we do where point very may we to have points to partners a We I a some us strong within that out year. can of brands exclusive that. are our we're to points with. close expecting They've yet. we point we brands customer third-party be where that continue and vendor a helped basis XXX today. grow they there want house are that Barn. to we believe of business continue experience don't grow great brands this to And to

it get XX%. that's even now. if to to six away years, of hit XX%, from And north five years were wouldn't expect I So exclusive brands

way So thinking that's it. the about we're

have great We there. team a up

continue team. We invest to in that

we're exclusive brands. And We about heights. new pretty on has have taken in a to relatively the new leader what's going and who energized that excited group

you. Got -- probably like drive efficiencies and to the sustainable wanted supply also underpin a a follow the ahead side just chain. profitability looks Barn it which should help I And on it. supply Very think -- think, to up business of should more new the in really automation help chain, there with Boot then Packsize I was, helpful. with that I Thank called that partnership established

that So could lies opportunity a there? ahead about talk the you more bit little

goods if the our that Yes, And customer. versus that will, bags Corey, you think we opportunity efforts used we've love that. branding historically. it's that the a as being It's to waste shipping, to to work well. reduce of for ESG we use in right for able noticing as we toward Greg. great the the it's Thanks partnership,

slight probably it in for maybe to But just general, do. is cost. So thing a financially us right or a the push it's

Williams from Our of next from question comes Sam line Trading. the Poser

for questions. taking Thank you my

to the touch and I to to want e-commerce want course, I inventory. on So on business, of go

about being you your impacted the better by e-commerce competitors. So by business talk in-stocks

many you program question did your many e-commerce people -- quality files I how of couple have add over consumers is last through the your how So the to or years?

of I specific e-commerce I getting my Boot would we're we when has strong. at that look that don't tell still traffic. Barn, on have been you particularly fingertips. mean amount number at our fair a our business, relatively I traffic

then on, they conversion some I what's money is is that the shopping shopped had elsewhere happening past. of either not the stimulus or they're think they're shopping with within

win were themselves paradox pretty about a that go less of and No most on called businesses Amazon product same right. do, it they [Inaudible]. down, reinforced not right? So be retail, us we the The because our down. significantly than Amazon have some in stock physical Marketplace, the pushing seeing going a as in retail just just is more bootbarn.com a XX-plus of year-over-year from If and good given we of it's feel that on across really brick-and-mortar stock, our us for of for take out paradox the box. that standpoint, this are about last actually we been matter the through to stores it's what we they focusing weakness the a the iMAP strategy performance to year. our carry And strength to site in site Marketplace, going Amazon complete was the the But strategy, so channel they're basis, protected. to buy business price has e-commerce traffic in degree, have percent of the long-standing and

number growth. now to we've head of our up less business native to of stores, opening digital And will you stores strength national I But forward. And customers a back, be pendulum are native the building can is across XX-year what can of digital So in and for DXC sort e-commerce digital about to we've had do a swinging we going great work chain a to becoming return and if the brand that start able been I channel. our that support feel country. create think our see a

the group And -- maybe for because customer to that Boot more I have So strength to or talking what in get but place Barn Boot go? can engage, his as necessary. the questions, whole there anchor But to not you to --. people of coming become when do pocket them book open guess promotions with pull a of Barn to you her up can to more question of the I overcome site I'm better about another to brand how purpose the is --

a that's question. No, fair

we to and authority online. are continue reinforce We authentic the that brand the

trust in So need and Rewarded Boot they more buying Be We've should deal from points. the added frictionless Barn. to ability of feel a great earn really

Be program online. always well less Rewarded Our the stores but extremely has been developed strong in

to leveraging the more third So to try timely would there. the product I'd describing. should same-day of we're And do. forward to And would third say continuing localized nature to the that try of that a of piece to make to delivery tactically piece that's puzzle exactly you're bigger sort offer help customers base or our is going get the one in fashion be thing store we a what

to are, brand in win the is way -- boots different price same cases commodity industry. the at And in selling sites. the we're again, the the present -- leading it's we as brand that, many Beyond that across to

percent October? a of is you're quarter that then Cool. Is the like And number? December big And is what, So XX%? fair like XX%? what how --

of yes. XX Probably but sort

XX.

is was struggling boots brands I like now So having with right of to a traveling assortments. now Celine junior their the -- women's Western both brands business a lot in that saw lot, fashion

might what from of are there, you be reemerge -- lapping a sort of you're -- sudden, year see you'll just people do the So year? when you the an quarter you have more into sort a this business last this fourth business think is I and potatoes the -- get lull? is last And holiday that when you all event the when meat when women's question of as versus of

as course, that happen. at or business. I call it's to we that's And would look and XX% business, X% possible. our When of to it of our we business, see suppose love it, now used X% our though, a Ladies' of percentage of Boots be,

comparison into bigger historically. gift-giving product customer a we as bit, And approaching than it We we get season reinvigoration the a suffering a literally get the New Year's year-over-year the for have sure. has as sell then portion more and and it party it's that season might of to But caters et business change holiday be into of well. while still that our quite part been more a do So bit a and business, cetera. could of

see. we'll is there. instinct Hopefully, your right So

just Christmas one -- then business you does when month, November through like way Or The into December you in again get the mean thing. that's let's business are Thanksgiving you was Or December, how you're e-commerce stores are? like so and last -- say, And month? pick last to by year draw that it people I guiding lapping can I better? up? to the mean huge the e-commerce you by quarter there, that use why and

weaker, year-over-year in October So year-over-year considerably and e-commerce line a weaker was basis, on year December than November last and were on a roughly November basis.

we So we'll cycling a but a benefit might see. December, bit weaker from

month things calendar And December. some of between November, -- Black and that the different shift Friday between was and

October, we're guiding, quarter. fourth that the business playing we're that Sam, third the we're think and seeing through I out e-commerce in

at the looking of kind that's So we're way it.

from Capital question the next of Craig-Hallum Our line Group. from Hamblin comes Jeremy

congrats Thanks the on and sustained success.

don't remind I QX. if in freight looking was that in have So it, first, my confirm in of for points basis you're QX, I XXX notes. to drag want think just you me it included what I

actually, was basis Jeremy. of XX points a It tailwind,

we it really have lot, it. call So

about -- are then inventories above are ago I points in $XXX three second. sales it inventory, million It's start And of come clearly up we inventory terms a be. topic. QX, as desired up probably level versus the Okay. hot for XXX if here, in percentage where three versus it's like XX% have just QX, to would want years about looks years XX% of back you to ago, a about And up

rates, you buying feel in like higher think be. than thinking your comfortable. inventory that about to pretty of probably of -- going you'd you and not it's a be order it's You're to But might promotional; your this, terms acknowledge about I little

where Because whether be action of where are couple where I boots a be fashion, what higher. ladies' categories a a little today. taken other orders might work future on probably you possibly might -- people like it's or have it Have company You levels feel little most it the reduce about inventory a you is go-forward made basis? that think, to positioned the anxious the frankly, items,

Yes. Greg. Jeremy, it's

to fulfilled So sell analysis, we our to vendor about well, of you shipping cite that very of most the by three-year-ago a our the think things couple when distribution know our inventory is the you after store product. directly model

to continue in in be distribution and to increase that made it factory, As of centers. our possession immediately, It put need own inventory need penetration, to right? it we brand a we we to needs take exclusive

or points it, three EB, of, XX X those we've XX grown XX%. years, it, on over call points, a So base call

EB. to increase we've of significant support So we amount to in inventory the need that own had

factor you to need So that's one consider. that

Jim, few and denim, kind mentioned As this ago, the whatever, where replenishment has which a to minutes Ladies' is go buyer not day and or fashion that's a it Boots. taking relates denim, the I denim, bad Apparel Ladies' action, merchandise of categories where

the some that we taken thought we we've that to. six to some inventory past of over through so weeks And action needed move

Work again, holding bit off is action high two levels functional in And on a where We have little about where to. not great so we're those the sole, So that Western inventory think very we a categories. boots need rubber nature. we frankly Men's in taking Boots, feel we're

and good So level the again, I continue health inventory of feel inventory. about the of that to

here probably as little a extrapolating quarters to normalize just a about -- thinking next few So bit. as the follow-up things then,

in margins? year, there's You've again look in basis following wouldn't margins. of you pretty reason you got XX% your to to fair be projected the guidance forward that it assume FYXX as gross the that points to no for range Is gross on you XXX drag think, XX% why

I -- at looking Watkins. Jim haven't I'm mean We

out guidance fair put that's think that there, I haven't but way. We to think

Greg's modest a -- Jeremy. or less have answer. earlier have merchandise right, When inventory point that's Other for in -- X, a than have literally sort one back think to want of problem. you the had X decline a XX%, a growth. I point. store emerged we and in first years just to sales margin, And we would fell than quarter I add to that, your we -- a COVID of something, we've never model, row pressure-tested and circle where for margin XX% you sales very called now, out thought

So continues I come recognize question to that this up.

total to strong a really sales growth. incredibly lot inventory helped has continue inventory. We drive of That

soon been off. has bet us expect any material the I based on don't time to And margin with paying So out come markdowns. erosion any

from next question Mitch comes from Our of the line Kummetz Seaport Research.

Yes, thanks for taking my questions.

reconcile little could guidance comp off, you QX. First hoping for I was the bit just a

sorry, I'm for for So -- QX.

Or guess to is within that there curious off, deterioration kind for X% that quarter, I'm minus you're And X.X%, of the first X.X%. your minus running extrapolating sequential seeing number in minus over address of minus balance you're difference I a X%. guide quarter-to-date, So that and the quarter? balance over please? some that, quarter? the quarter-to-date more like the function of just of the the tougher forward between quarter the is going a Can compare you the

anything that sales if minus and continuing the the weeks about Mitch, into October, we're you October e-commerce for is, it we've break sequential, two you're pieces, balance it within of four no. piece, of the year talking No, what e-commerce to October, the Really, there's the in Yes. whether high-teens. seen extrapolate is

nice the flat. the as in for and rest stores, with a the extrapolating seeing X% we're for XX% out of the to that the think comes plus it to And month and minus X.X% QX I of October. stores minus year. October growth are QX we're And guiding

guide And comps do we've that is there's into have planned so there. got November there some in and December. conservatism But -- tougher really, that some we

be the the minus over the quick high-teens And the of high quarter? to extrapolating Okay. Does saying you're splitting I e-commerce just real follow-up, and on here, you're balance then a might difficult Is see December e-commerce than the more become comp Is why over you bigger? balance it penetration higher October? of versus in the a November, a part of would quarter that but October?

is guess. as XX%. e-commerce Yes. of I the Well, about the for the sales, a But comp quarter talking the percent third more difficult sales about really store is

than higher be it's going So for XX% an average quarter about to year. it's and the

it a the November, quarter is October, lower of For portion than December.

that there question, some on guide? then just are guidance little me line quantify of construction to second maybe you same one permitting I a a And And think delays. in the of if a impact Jim way opening housekeeping. coming mentioned that you're the the guess just Is I'm of some on for year. Watkins, top just the still Okay. stores bit was the maybe any that It's stores of later? the online I the number correct wrong, changes

Yes. No, that's right. From half for million the $X-ish the a sales of year. standpoint, it's yes,

of from the line UBS. Sole from comes question next Jay Our

so questions. just short two have you much. Thank I Great.

one you more maybe this. But explain you I if to The one Jim, could is, sort spoke think just time. it of first

comp? of can mean point the on the X% deleverage the the And you still the trend on in pressure points? it it online basis seeing center why leverage And overall. Is down need the is comp deleverage was you and have pretty of on distribution buying is costs? impacting more the it to centers? maybe the the that then Is the relate consistent? secondly, what break I going comps buying store You're occupancy it to occupancy, maybe business. on occupancy? distribution possible stores has not the XXX been not But forward on kind stores? if What and Why is X.X% do buying

customer our stores me between on surprisingly are want e-commerce a overlap of there versus half than so It's of base the piece, to a and first, channels. You amount customer small store certainly e-commerce customer. less adjustable

They've And customer different is the in to our a and a than stores. sort we just a long competitors environment for second continue Be our of none. time. shopped to And do in-store part us have ensure we us. online we very our program. of is So stores that with experience typically Rewarded loyal of set to They're just

a storage the fortunately, So on the growth inside pair course. business, top sell our they to boots a can pair up pair I ability everyone of transacted market and brands for our and, and of for The has online get the a business of of of a boots. directly, or do with the and most of a e-commerce last industry, And open jeans -- is conducted last store. incredibly think most But continues just of strong year to sell site frankly, growth decade.

your easy set want from XX% the complicated really, you which and question? have it's competitive to the to change really Do to URL to our while a very else, browser position take more on strong the the on in market, So XX% is part stores. the that happens we buy somebody other second of of

Yes.

you the to the maybe Jay, of look XXX things. on have points year, full So on deleverage to basis three occupancy

last the new store being XX item. first openings pressure XX some The year line put versus on this being that year

rates. is second the related ago DC but wages we costs into increased about to the fall labor. holiday that in pay from a The increased last heading We talked year year

incurring And We're live costs first -- then of we paying distribution got thing this and half we're on our that, that the center. now to there. higher we compared have cost Kansas a didn't up period So those where we're third, just rent year, the costs. those City the ramping up operating

some So back prior year, pressure compared something that's the half for the when will the to of year. that put

and X.X% far out for buying When about we As year. and put didn't the basis same this occupancy, sales points occupancy we we had deleverage. growth, points XX and a planned store guide that of started we as leverage had year buying

provide to you been can this this more into And have we year Again, of those at year. that and anchor would leverage we start so at a year, reset look the the kind of to of -- as it use points. what

next would my provide is that now we As year, we forward. get that thinking going to

Our Benchmark. comes line John the of next Lawrence question from from

to the of when mentioned are you -- just continuing comments of, please? You couple just sort I -- a coming Right. Are faster about the and went much last talked you But anything the that thought. Jim, through the ground, trends some bit -- some of markets. those guys. new you than cannibalization market? Can these I just time. of Appreciate Thanks your stores about mean you quarters. that talk it of stores. out go new would of those a your new the you know that lack you comment Delaware it, and little about briefly,

love same, to. could and story it story as I'd Yes, The the is imagine. good you is as exactly a

of all in country. open to parts continue the stores We up

opened brand-new opened in Jersey. to budget probably was It's $X a in So California. million. stores going a up up Its a $X Pennsylvania, We've store Delaware, we -- probably just store million. do few New

are probably each. budget Now again, million million or running more their was they depending and $X at million, $X.X store, $X.X on the or

So we're it, rather in, back than call pay years, months. in paying three back XX

Arizona cannibalization seen We do to there. a of and Phoenix, opened million. added markets. is and any $XX And same stores. $XX as example. The We do there different up like eight store now seen to haven't we eight stores sales material stores million. have used four four we haven't Those stores to a used deterioration have we've perfect now

is up So low. forward, quite of look the as we the store risk opening downside

We have of XXX moment. them stores one positive at and every is single EBIT the

up stores. next open They'll XXX open will stores. each. million to $X.X continue be we'll $X do That So the billion. We'll

is ask continue questions the to of just can our if openings. is $X comp you we in sales next So what around of execute front million in can right us sort people will tell I us October. store on But our new that XXX billion of

where question the because growth and here got we've our proven retailer. was which that way today focus be, sort is of is when of to we from it on new on grow appreciate the And it it I XXX sort this can the XX-store should unit a XXX. that chain I puts to So

the correct? you belabor So e-commerce selected and but that point, of the business, tremendous And at of the growth. just not reason part that those sites is looking to because store

one factors, factor I'm if of many honest. It's

do and psychographic levels, multiple income think information, retail I population, use -- cetera, et employment et levels, et in though, inputs, we model, cetera, giant We a use it. cetera.

those is switch direct part of that store be of some maybe you bit of from customer little that a But a markets? could to simply customer that customer a it just in

and we e-commerce store hypothesis, It's up a a new we is not goes market, in have seen put a what when fair the but down. business

other to just -- one I at happen site. will in tell thing Delaware entire we the you more store e-commerce The Delaware. business than look the do one would store The in

hypothesis. don't that at the trade time. as I it. notion Ryan, data locations question. that I can the think it retail access I was or customers, the least buy that all e-commerce would talk to So the dismiss about just we have a can into you store impact And

Conroy the Mr. we Ladies end gentlemen, session. would question-and-answer of have and turn ahead. for closing like the the Jim reached I to Please conference to comments. go

quarter call. Thank today. the you I joining Take you speaking appreciate call everyone. on with third our earnings to care. We forward look you,

Holdings, your now you Barn conference The has Thank of participation. Inc. concluded. Boot for

your lines disconnect now may You