Boot Barn (BOOT) 25 Jan 232023 Q3 Earnings call transcript

Good day, everyone, and welcome to the Boot Barn Holdings Third Quarter 2023 Earnings Call.

As a reminder, this call is being recorded.

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

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

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

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

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

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

Thank afternoon. you, and Mark, joining you, Thank us. everyone, good for

initiatives results, four third progress our review across have provide current update the I'll discuss on strategic an each we of business. call, quarter fiscal made this 'XX our and On

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

top sales the delivered quarter I'm entire their as tremendous prior extremely in for total the Boot net at in end sales guidance. XX.X% of the team our the X.X% execution growth third Total by difficulty] proud of on of opened year XX high we Barn period, of XXXX, strong the start [technical three months. sales grown compared primarily the driven just from the prior new quarter year to the over basis, On have fiscal of third pandemic. to past sales total grew a stores

seem added more growth We by brand driven year new an the encouraged frequently. of this purchasing in number to shoppers of number three has the have be are primarily very a that customers increase to transactions as been significant legacy while we

margin expense. From the perspective, points, retail. maintained quarter, a by from selling price we a during third across promotional posture was believe XXX in holiday what merchandise We season full highly margin higher headwind point freight driven declined a our XXX basis basis

or rate we without to the normalizing result, transitory a after Once forward to business ability As margin the of merchandise achieve our Barn freight strength in sales were a the for line year's to drive promotions. nearly again, with last able demonstrates resorting the and performance unnecessary this brand Boot headwinds. record-setting

each now highlighting four will made have time initiatives. I strategic recent some across of spend we progress the our

Let's begin store with our expanding base.

our year. to each grow units continue to pleased ability be We new by

$X.X million we metrics. generating historically, new with targeted both recently on store growth been XX% While each we unit approximately overdelivering annually, have

or XX approximately open more XX% to expect the year stores in We growth. current than fiscal

in are paying million new target. now year back model store more encouraging original $X.X of one XXX% sales, double our over and new is more with is returns. our stores this our just nearly level Even At than cash-on-cash

States. retail footprint continue we remains the across to for pipeline broaden new store openings The United strong our as

stores Northeast the coupled presence. in XX cannibalization the new the nearly more than our further our ability stores we markets, gives During to further triple new of state in of anticipated, originally Connecticut, our first confidence expanding success XXX expand quarter, opened to less stores, or with store opening country store count. sales existing in than new and third our we of our including The us current

same-store our to growth. second sales Moving initiative, driving

are pleased in while same-store our quarter We performance year XX.X% X.X% with sales the same-store in cycling third down the prior sales sales consolidated with same-store growth period.

We ago the store X.X% declined cycling of period. our growth year are by which particularly encouraged the retail in modest while performance sales, XX.X% a a

men's and the strongest categories During work our third were quarter, growth Western apparel apparel.

up or men's it the important double-digit year boots, western ladies and that in has these prior and to ladies is period. against was apparel While of triple-digit declined, strong growth sales incredibly of businesses note each

From and decline is in a which mid-single-digit region East slight our geographic South a a regions, in perennially standpoint, we our region, region. North strongest and our saw decline West growth our in

outsized pleased prior of growth the the we in all period, our are than again with Given more across in we saw regions year the country. XX% performance

attention We mainstream customer for more our a industry not of communication reach our and From much tailoring each has our segment. by within formats modernizing showcases the country marketing use the and customers of base added a lifestyle target marketing carefully Western customer perspective, of to addition brand only in legacy We retail. a recently but our our the brand Boot the combination believe to work and continues fashion team customer to the media expand to broader customers. also garnered Barn content the

From stores, through the perspective, higher of in brand's risen average additional challenge successful quarter. store continued I only The of has the team sales XX our country season. across store proud holiday expand third organization volume the has openings for an new including the the to not footprint very operational am but another to field

store omnichannel inventory and partners. store world-class in our sustain ability of team's to testament store nature sales the to service, dedication is to the of the levels manage needed hardworking team The elevated the place hours all customer offerings the have store now allocate labor deliver we to and a our of many

omnichannel our leadership. strengthening initiative, third our to Moving

our a e-commerce store way importance and of We've to service always involve channel. the most orders seamlessly presence. the is omnichannel focus integrating digital store underscores by our Approximately customer to brick-and-mortar associate on stores integrating continue XX% digital of an We successful profitable capabilities that the online and by channels. believed our and

an added fulfillment As offering. to our in-store example, omnichannel we

Now to not for in XXX than customer across country. inventory that order places a the but access when more merchandise have distribution only also is they select an center, our online, they can stores

much This enabled delivery expansion to in merchandise. us has a of to times selection providing the sales also exclusive shorter which business. of contributes of profitability and fulfillment digital a with enhance online, resulted brand the experience while further in-store customers In-store broader pronounced the

in sales which sales our was e-commerce expectations. declined XX.X%, line same-store with our quarter, third the In --

to our position call, on the this is a discussed believe we to year. will that We our of having the is we but competitors for As stronger in business in-stock for our year. a channel stores important strength our recent e-commerce headwind prior a two quarters impacts cycle last until July that continue the digital reasons. business, couple last compared business of earnings emerged we trend It believe note decline next this softer in not the result of

loyal has a First, less been historically our e-commerce customer customer.

prudent for are with we new acquisition. very spending customer online our Secondly,

bottom back pay-per-click over earnings. the line has growth, top could to spending line on which sales a past focuses profitability pared our more As a been than years erode level that result, several our

past digital of XX% us to an even years the in e-commerce growth sales by earnings. enabled long-term business the health Our our than more over focus grow with three greater on has

to brands. initiative, strategic exclusive Now our fourth

and trailing On During brand the a makes growth now of the prior third exclusive has XXX period. of million over more our quarter, than XX.X% year exclusive to volume our sales. XX.X%, XX-month grew penetration brand basis $XXX up points exceeded basis,

Our to design perspective. exclusive brand merchandise team price on quality both continues and excellent a

were the James, brands Cheyenne top and Consistent Idyllwind. five quarter with of prior Cody third three quarters, the selling in

in provide X,XXX We of the expect growth business are XX comprise stores brands brands with and us basis margin. but both not differentiation, in the portfolio. the this points currently approximately of by to competitive with drive online, only also accretive continued they the These to business that area

expanding of of or last XXX exclusive exclusive again now points. we approximately The At -- of original our exclusive once basis to XXX beginning XX.X% by brands to success our penetration year. of are versus the points year, forecasting are basis now brands had grow the exceeded we growth sales anticipated brands focusing expectations. We

I the the provides online. brands want to in exclusive outsized the both business. for exciting exclusive team and to an our merchandise for assortment, innovation our vendor product express with and We partners, of entire third-party my growth the brands appreciation and brands, provide combination for do strength of along in-store that continuing our diverse to believe exclusive

e-commerce in of preliminary driven in partially prior X.X% Through to weeks Turning fiscal retail compared X.X%. by same-store our quarter, of four same-store the consolidated first our sales fourth period, current by offset year XX% sales store have a decrease declined business. to growth the sales

is note it Please store period our growth same-store sales day our artificially Christmas week that retail that on Day suppressed sales quarter four this this given zero as incorporates of year. began for one short

sustained continued store Importantly, and million when XX per average unit $X.X in for basis, months. maintain our we business of now consecutive to an on elevated volume annualized XXXX at approximately itself This an looking began sales April January sales store. volume

For than annually reference, is million our higher and $X.X store been than more had sales that. average historically now XX% volume

to asked, of of we to questions conducted what us survey our both the learn its would the X,XXX better customers shop particularly to came understand and sustainability, shop reasons the whether continue new Barn were new they from, for customers, AUV to Barn. Boot Among many made an effort the forward. them this with legacy In growth survey and that a approximately we going and curious where Boot

we captured question, greater throughout indicated not mainstream even the that shoppers only industry, customers pandemic, first Western survey from but of within retail the channels. from the we new feedback On number the an gained

quite of upgraded It by expanded these to that our stores to product a Barn assortment. customers attracted combination and encouraging was marketing Boot also were new learn our

Barn customers likely or shop when they are again. Boot of ask Finally, to likely how likely very are shop in with them at calendar this year, they us extremely XX% to said we

of believe from sales we of monthly the customer when qualitative the research a volumes. summarize, the feedback consider new have ongoing we reached To consistency that level and store we both the average sales

like I'd Jim to now Watkins. the to turn over call

Jim. you, Thank

by during X% the growth to sales XX decline Sales by months, sales. partially quarter, in driven million. from inflation, Higher sales. $XXX third part offset sales net the net driven prices, increased in to the average same-store added increase further past was In new retail unit in stores the contributed by

driven $XXX to resulted of from of profit in prior a decrease point million XX.X% the Gross profit gross primarily of buying, XXX in rate year and in points expense. costs. margin deleverage basis basis to of from X% or center a compared sales XXX rate merchandise $XXX basis or was period. basis by The margin The distribution merchandise point in freight million sales decreased decrease and in higher XX.X% XXX XXX rate gross decline headwind point profit occupancy

expenses $XXX primarily as year payroll. result administrative $XX for in XX.X% as to were of of higher and sales the expenses XX.X% expense SG&A compared general increased or million sales of quarter and Selling, store net percentage prior million store-related a sales the or a of period.

operations sales $X.XX years XX% of million period quarter from per two prior share ago. Income the or share and was of share Net or $XX period. year in compared prior XX.X% the diluted $XX $X in sales diluted or to or was $X.XX year million in $XX to per million per the income diluted $XX compared million

increased year and year sales inventory prior consolidated prior inventory -- increased store to store. to per centers our driven increase to Turning by brand our XX% store Average XX% support growth. period level $XXX period inventory over distribution million. over in in sheet. approximately comp the balance basis, the average added exclusive support unit year the the elevated order the in primarily new prior order over of This a to was volume openings On

On the outpaced total over be portion store third during will in basis, our the attributed inventory growth opened stack XX% comp stack open inventory final increase a average of sales stores well our of that new the both next quarter as new stores, the XX X-year XX%. the store The has for X-year same-store [XX] as retail months of of past quarters. inventory the couple can to stores over growth

line on of We be the in that credit. million of cash with $XX with quarter hand million our our weeks $XXX inventory and $XX finished with are current revolving forward pleased average. continue historical in drawn levels and million on We our supply to line our

Turning fiscal to outlook our for 'XX.

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

We X% same-store decline of e-commerce store same-store expect X% X.X%. with of XX.X% growth same-store sales of and X.X% to increase to sales a to retail X.X% sales

between the $XXX and profit to approximately gross be of expect million We XX.X% million $XXX sales. or

point partially Gross expansion. expense profit from basis basis margin freight product XX decline includes estimated of an XXX offset points by

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

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

expect also be $X expense million and capital to We between expenditures our and interest million to $XX $XX be million.

of the new of of stores stores refer at opened the fiscal through expect we row the third XX.X%. open stores be to Please released balance we today XX will including quarter guidance. The tax the to 'XX further in to XX now presentation information financial For new year, expect a on year, effective our plan the our for be the we We have XX sixth during in end XX least to revised quarter. stores. the supplemental rate open fourth the opening the we quarter

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

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

gross the $XXX profit XX.X% of sales. million between We million expect approximately to $XXX be and or

of partially point expansion. pressure, including offset freight estimated of margin Gross points XXX points product XX expense profit basis XXX basis margin merchandise decline by includes basis an from

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

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

As the freight year $X.XX and will extra revision of primary approximately to driver of prior fourth to an The includes earnings reminder, share. of business expense. period, the our million per generate which week guidance we a the quarter estimate compared $XX relates in sales of

faster lower to freight end than rates and inventory lower charges is and what ago. three we expected, to of declining we projected anticipated be than year Our now what are months

great from standpoint, as are carry developments our these it no news, we that also means on both freight longer capitalized While will sheet. an accounting much balance

more that year. higher expense recorded We freight XXX fourth be and expect than quarter points be now last will in will basis the

the positive with current than expense inventory next into charges quarter, we burdened our overall fiscal it are this fourth While freight move benefit negatively margin freight more we is as purchases year. which lower very as merchandise impacts will being expected

be would to year of not points. benefit freight margin are XXX next expect guidance year's we for providing While yet merchandise basis approximately fiscal 'XX, we to expense a

of additional $X.XX fourth had results the the share To per reducing quarter summarize $X.XX reduction the is $X.XX guided. share. quarter to range compared and changes our driven end are our per end high end that The high $X.XX was per $X.XX freight that to in our third the guidance, it we were of headwinds what in add of an of freight quarter the and we're guidance range by expected share, to by provided at expense X.XX below second previously

points continued with combined of with trend, the sales store into opening exclusive freight, an and are fuel retail to stores, of growth. improved brand opportunities in headed penetration we 'XX fiscal anticipated an growth improvement multiple With new XXX earnings basis

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

Thank you, Jim.

levels business years are third store that productivity size quarter and the pleased nearly three pre-pandemic our and is promising. very doubled just exceed of future We We've our growth the believe runway achieved with levels. in business extremely for far

your all proud have from I'm execution. As same-store and dedication into your multiple accretion charges. brands fiscal across store openings Barn you levers lower and to growth and team freight Boot strong we the new for to sales thank to exclusive and we from head of 'XX, want of the country margin very earnings

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

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

thanks. Great,

comps seeing that unit Jim, if opportunity accelerate beyond? we with just continued down to that on you've see store on maybe speak at on there positive year touch your versus you're maybe maybe, progression post-holiday, you you as then trends, ceiling - potential growth by from a the builds could strength. that about current and next or newer could break think can just stores, category, the and So to if the performance seen functional Western the is you you And

sure. Okay

your January of the January, focus if pretty as feel Day, particular after positive making first in minus sales solid a On of store into part same-store stores the we've sales on for we seen the growth I ground. first in day We Christmas nice was which and XXX%. obviously business, zero and question, had calendar up sequential retail acceleration on business turned like we're some the

at gotten of from quarter look into it the have to really categories better performing see category, third love As positively. basic January by we very more functional, the where businesses most we sequentially some

some been gotten cowboy the really had have boots, QX in So nice January like that into things stronger quarter. work and strong of a men's things are third work apparel boots,

really we're tremendous that basic had also the that less, under drive that pressure. of improving. volumes the of parts some business seeing quite the So are in been staple, of more sort pleased businesses We're decline

For cowboy apparel. western numbers as apparel both boots ladies January. got up actually January, into sequentially ridiculously year, better And example, slightly was ladies against was ladies we as last positive they've gotten into strong

softer categories. been nice it's in seen in of progression progression a So regional We've our a nice businesses. some

progression western Our better. seen We've a in gotten the region has nice count. transaction sequential

But our see. been digit, than that. were down. they're quarter, that's to third now and mid-single better getting the down still They're in So nice slightly transactions sequentially

Eastern to just it January, at looks improving. So like we are, States, be stores store the stores sell ability we're a minimum, parts with continue in - United not of volumes, if it's that number a short et cetera. and sustaining, Western to there, things low opening immediate performance, From of volume their of thrilled the a the the certainly bare product month store new perspective, but new

up are exceed this we So set our for well stores XX year. to original

very strong pipeline year. going next into Our is

the that better our is at in for and We than we're good even And sure new are fortune now. modeling than what existing have better that much performing the markets original new stores algorithm and markets. them

open back seven doubled if the bit continue six company but of the at we we nothing So maybe size comps. what ICR, to grow we for did to next the or said years, a didn't we harkening little if even stores

part look every to we'll continue of is business, engine growth in quite So the store try compelling. really to while for new the

maybe a on margin given parts of margin quarter, and couple then guess, And components gross follow-up could maybe merchandise freight? gross maybe, between Jim, just I out help the Great. a the the moving of fourth margin in here the lay you

then your us expectation, selling year, about to full you model historical private margin help the freight in And merchandise look to we sounds price any view? and structural next expansion like between to but label as it the gave think changes -

product margin Sure, freight excluding so points expecting headwind product Product fourth deck the margin expansion, in freight. expansion, XX XXX know, at guide you product to on the we're of - on I'll - XX. quarter, points. The Slide the basis and margin you the for the we've refer modeled basis QX,

a XXX so to out the basis quarter. points merchandise for of works And fourth that decline margin

balance it's standpoint again, as ago more the rates so this a guidance balances time really removing of here, to we As freight year, the lot for of the sheet we fiscal expensive in we QX, at margin a that merchandise what capitalized few in heavy - said off freight moments freight year. think discussion know we're at in an the expense this with purchased just the but is from look or particularly next coming I you in not fiscal 'XX, we're providing not

XXX right expect will we move we from year, And standpoint. just of tailwind into that be of as out basis a gate a freight the points next

seeing months. got And we've freight we're recent charges more so again, in and that and in coming assumes that rates to similar weeks the what

tailwind So that's a there.

to about penetration years, talked and growth brand year. of we started exclusive points XXX the And over XXX a growing that, then a we've basis model

nice really those into we've So items, got as the year. some of out we right tailwinds gate look between two next

comes the from of Keith Peter Piper Please with Sandler. question question. Our with line your next proceed

change afternoon, good follow-up a months thanks, it just Jim ago, from Maybe points. think, a XX I Hi question again three so the an everyone. it extra basis was on freight

that QX so And the correctly am So key costs that into sales of the bit better? this understanding reason of a fiscal fiscal forward I QX. for increased that's your margin freight excess it out little gross now Is pulling some pressure?

not necessarily basis XX freight freight had it's back headwind going ago, three again, basis it. of the the - points of is just It back XXX component that's to months sales points to originally headwind. we numbers, in of going expected and QX, now - And

that us Again, health news business. so with of are are containers our real is the to We components two there this spot less And on the moving Freight's money. rates. that. regards great purchased costing

we're so, managing costs piece that take able And the of down is that than faster other our quite quickly. inventory have advantage down to we expected. - we're had of And the

balances as for of the year our we end inventory that around helps us. So quarter to fourth look

accounting rules ended things, the inventory for through paid that projected match we that last the inventory between year down so, months balance. balance the two the freight three it's So coming during those the when to and sold dictate

the next purchased and that than that year's months - up does we expense inventory come have allows down also this what three then come it your point, to on rates year. freight Peter, from quarter us fourth the in anticipated. the the last expense during than freight And moving more anticipated, to to And more had

- fiscal then is of remain so quickly fiscal QX, tailwind? going Okay. reverse or as is it in QX a And just freight will headwind on to a a pretty bit that

looks as closer the headwind, freight it's the guided points we I We've it and points. basis basis in that. and what like at come to XXX pretty XX about would into reverse they months, mean, And kind to year But the through tailwind. then quickly XXX assuming evidenced complication of last that today the a talked we again, It going should freight rest the where quickly to reverse -- QX by also into expect rates guiding of are of goes year. stay and that the of

for Okay Jim I And to topic. to that's then a want pivot Conroy, separate great. just

the in Is stretched Barn and actually of my products I'm basic some denim of hit and stretch work the do kind subject So that some looks. Boot denim wondering areas. radar you Western has have for the you if your starting to what cycle, stretched be there to meaningful take that's are denim like there? like trend And customer? hit I starting hold? It seems seeing guess a refresh could

Sure, down question. are already, break as the If it's sides you on and functional nature. vast ladies, men's are for several ladies, of our sales the great denim denim a both and of I side, been know, that pretty it ladies and by we've And on years. stretched in for - men's us, most majority in sales business they've

So think we'll replacement pretty standard continue have cycle. I to a

something I'd a for different. love quite because trend get denim that to or say there's and something in the it's promise a we've we're even But on been side. bit, going us, sales to new particularly been ladies in more

balance been denim. men's but will sort more going our of the two-third an -- little meaningfully the it's I On being of with change of nothing think probably sales don't uptick stretched there, are will that rigid our a bit And side, forward. trend there's

promise a number we do replenishment big a customer. take bit think driver been forward. it's to has sales past, been It that nor not of we're think can such I going I that it's is driver going it more but well little than and So care cycle in it's to a be a sales positioned the

Steven next Our the comes proceed question line Citi. Zaccone with with of from your Please question.

this a comparisons? season, year. we just us And Jim, just ask last my function detail versus year expectation your how Wanted you've in performed last the think rodeo outlook this Just tough to some performance about for the there? there more of in then the Thanks weakness of something Is what's quarter, fourth Texas as remind happening for seen the quarter, afternoon. year? Good West. taking you regional it question. on given is for specific Or

Sure.

business. for On on first of the West, the this I would part the entire sort say

Our our we're less phenomenal view The last third or a was business, in in was little that's on quarter business we just relative years that a incredibly down year, multiple the fact West top is down but of execution. bit strong to way internally. growth The it particular, last victory. year, XX% so of and strong not

one lean As with from the for is Western third things is of had quarter, part this region, in than been historically, yes, grow I we've base back help look them the higher elevated the that of so could the the new it gave seen California. much forward that but it base, it persistent in

ag Oftentimes, agricultural we in a amount could we Central volume. call the the was And in that a impact that there's quarter were Valley. of markets region where positive of difficulty out of markets tremendous the in that's that declined reasons much in so our but Western on business, been short-term benefit sales part rain the have have the that the

solid we year. in In fourth we're rodeo quarter Houston, terms for what looking fourth had season pretty of our at quarter a last

pretty was nothing Houston notably the concert lineup business. stronger well The positioned you at take if standpoint, quarters comparison And all looks there think QX. our about to good. be we'll a But on from that look of I

we'll So than several I last what standpoint see. anything quarters. But for there's ominous or the year-over-year cycling been comparison particularly don't we've think a from high other

The Great. is That's the commentary and pricing just about follow-up helpful. question had promotional environment. I

forward calendar that 'XX? the the will look think we the as expectation through to remain still confined Is holiday quarter. plan was I promotions

but different get The When holiday, can sales of we take I with into it. we very months the year things. XX%, we maybe we're prices. more short of slightly this very everything than similar was years, have up on Sure. the on and posture years ago. prior goods business last -- run -- comping We year. essentially few year out very And was when couple two were similar our to promotional a promotions full to XX

we us, get clear January as even happen sales fewer to XX We're months, be month promotions our doing tends throughout the some everybody, inventory. we that that other the a including As into year. there's where of undue this rate is of out actually that's business, accretion quarter. pressure normal put of not fourth has we're any calling year-over-year perspective, why for margin -- on -- course which our a sort from

it So we promotion And from very price change our we don't competitors don't react strategy. clearance there changing expect any just their there, has while or or impact little posture, been to some promotional noise in anyway.

wouldn't of the they for products through balance clearance the full-price the sort clearance all expect have standard I occasional quarter. than of to amount selling anything and So business differently small course and move of of

next question of comes Please Cowen with Our Company. Rakhlenko line your question. Max with from the and proceed

a on thanks quarter. congrats Great, a And solid lot.

customer active impressive grow counts to your at rate. continue a So pretty

you're Can X.X just year? to we of a provide traffic? million stratify them now. there's whether on loyalty way in members or spend think them And think about what past customer has you growing color the I in shopped should behavior, small segment declines versus at by then some how

on first piece, year. shops with the a So our customer approximately average us twice

to great. also shopping very are expression many the bring the and of count be and to as grown the customers One from is have a to definition which retailers, in sticky mainstream with cases, repeat to sort a expanded customer use been Boot and things our Barn year in continue of new proven encouraging different customers retailers, or customers, us those shop. is, of that's we've They brand other twice

Max. up at spending frequency legacy is unit legacy -- They that is with numbers, I per these trip and and you be at same our volume continue average shop of in shoppers, know per back store to triangulates line their of know million. $X.X and customers, which continuing from million the all to basket $X.X remaining to sort

In additional if up customer time, you dramatically per transaction's long and a period it account's reconciling look of terms store over being transactions down, of at up average and the customers meaningfully.

look new shorter basis you If average in average our on transactions period we're customers slightly. it continue over at add of because total time, stores, store if per comes to even an a we adding down

the can you how that's So math. reconcile

been I back think of to as mere XX% makes we more long given and just on invite picture, I've bigger haven't it many database, grew get customer settle back we've growth. And able Barn just And fact that us new these for incredibly of we'll But a hold the sort customers all just we're XX-plus to we normalized -- and the some into Boot past LY been grow so percent retail store time. a pleased. thrilled that But into is in comparisons, them.

out? helpful, the how a exclusive just the to? call Or anything bit little brand very bit whether term, that thinking have you in penetration you've algo some could in then then And than about do I omnichannel That's initiatives? of to be Jim. strength And this you it growth Is are all else higher East mix. it the little longer attribute spoken is there year? new higher historic think to the a the stores what

it new of is East. a A give growth. stores higher maybe just Sure. you portion in think would compositioning slight only But I arithmetically, in the that

think I the piece things. is bigger different two maybe

really many And outstripping were ability vendor, that strong was tried exclusive had us. will, last partners' four that to full so year, The before. ship them brands. single our And we our and business that legacy that six we was if third-party brands was able vendor then think of the you to branded our customers the introduced perhaps show the to never brands -- I within additional first,

Cheyenne that Moonshine, now Idyllwind customers. maybe or long-term they've or And tried lifetime Cody James,

to our in but try that get there working trial. stock had us think the a the trial their last we We had product available that free short. were in when stock, bit I partners little were had year we're branded and to butts in many falling we So of off

new together, is added all when The brands. you we I of just put up outsized brands getting And expanded four we've categories. the into growth. that piece wind the think We've original second

some Going We've My grow forward, do nice guidance probably we points is year. X.X growth from for really say we'll year. haven't before vendor year. our penetration continued guided out next work want to intuition lay we to partners some we got our to see well. branded next as of And X strong we'll do next

of from question. Sam Poser Our comes Williams Please with question Trading. line next proceed the with your

taking the going for ask, expected. be about inventory. I to you like lower usual, Thanks questions. inventory said But than my to want is the

the of inventory you range the at being anticipate? like do you end year? of the what where anticipate a So give the number, us Can you

balance Greg. I can good you really Sam, What hard we on it's tell you the thought prediction orders I et merchants sheet. our than lower a would don't appropriate, give the et is work number where think we as is to cetera. cancel cetera,

inventory position. will in put that's brought relevant also it a from the as better and down, us but described, freight we the Jim So perspective, cap

You the on job our that a inventory based QX, really doing of to in, saw and managing the receipts at you of up combination good if XX%. and it's about now coming And inventory their a position is their will, end quarter. merchants our XX%, was that sales of

can't for I but you. -- number a quantify So

me -- more let just one me let try here. Well, --

You end were of the at million QX. $XXX

at way its and You're another number? it almost Can up billion the at then at from sort end Because million a million, mean that way drop? another of down? reasonable it I of look bounced $XXX going million is worked that It -- we $XX $XXX of kept sequentially. QX. -- XX working Is million went up. Or $XX up it another it $XX and sort

down sort the So to be to come in inventory of like can QX? it expect now start looked -- we way the from sequentially

about me it's growth I call in. year-over-year. think Let That's outlined our about right? we've That before, overall brand the DCs. then and Jim Jim product, was of and the the that support talked growth the about continue exclusive chime if growth in can mean the the you drivers of to just half on

inventory penetration DC supporting is So that brand that driving exclusive half growth. is or the primarily of

and you how And QX the with about in end weeks levels forward in stores, that then between pretty about split non-COVID XX% store think line When of we're of new the of terms at the historical weeks supply is remaining is inventory happy of roughly evenly really supply. The comp stores. comp positioned. is inventory

pretty weeks with XX that of normal come bit? kind we're little that Perhaps. down But happy a could So of supply.

And new it's stores, new grow then continue if going stores. to you think about to we're that quarter, and remaining

we bit, not. in we but are. boots heavy So down we're that maybe a Yes, we from you, comes concerned little inventory. with a the still? Are would Are bit I overall, men's tell of level pleased work pretty it Absolutely markdown a liability? about

thing only of of out historically, depleted inventory. a to little just to help you I end the build QX into holiday, a back the Sam, look to inventory typically try coming of the was at The we have add, year you, going if the of is bit, end

coming the had chasing more of last of of I originally than had year have build going is sizable inventory very what historically, where enough build we less a And think so than for to as out we're and would we've the less holiday it as what we be to expected particularly sales. seen

then I the you Can just how performed North, you sales just weakest, but just me give West, South, know West this. can -- quarter? And I missed the that Okay. was the in East, the

and the The West was The digits. was North South down mid-single were positive. the slightly negative East and

And is sales. same-store Jim of quoting course,

indifferent we focused slightly is store virtually same-store threaten sales sales answer. to investors to kidding. be continue of to stores do from stores. often that. on joke be sales, growth you sales focus growth And forward one the sales cappuccino. quote sales I they're numbers between We One earnings. to my accretive things in should total only to were get growth investors we that, going has we're as as But trying comp from I people on I'm new because new going growth won't No a different if spiked to reporting to stop almost and really want we might comps. are total and that do think those

think think open store at originally at planning planning all you're said ICR, I -- respect, that. to they're opening to much new you're open In I you're higher opening than I you due you mean a stores new X.X, opening that's originally --

leveling versus if they're Wall up X.X. they same-store number. stores standards actually at us you're as off Street They're a better much unfortunately, opening Now were, go The Well, the accretive. go that your but up. are new standards tell than X.X getting lower sales to

your all not I'm with respect, sure, I question. due understood Sam, even

is way X.X Your stores your stores opened which the at to where stores off -- would you went went they you and mentioned -- average, up. on eight that had four And you are ICR Phoenix in originally above around are business that all you you thought averaging topping be.

everybody's then their start pro up Your I go that? sure that and that know we Delaware in and That's make I mean mean probably are years I to stores expectations it's... sort above opening well when getting forma. opened all that of to those need But place. why in stores comp Connecticut that, mean same two the are about you do ago to you want talking

asked And why But going our inventory is total part sales Sam, I to what's massively growth inventory. and yes, drive about goal And levels. continues grow, not but to our is you, ratchet I'm you, sure earnings. inventory of disappoint it's down also to this tell might continually right? our our We're can

that the each we've had we've the our that we've margin extent the seems had in the able us to grow enabled with to to And been years, our grow levels last running inventory of It business years that over past accretion. few business. have five

setting your spin achieve to -- are. set really expectation, faster that's to presently just out something our to we're than inventory much we So also something is

same-store Well, wish I and the more continued the was asking the about Thank all sales. best you. I sales you and success.

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

Thanks.

going So to I store ask growth. was about

expectations reduce had growth guidance. exceeded You've where an lot environment a of to their in other unit retailers

Any that share gas be As of be color you able might little this bit feels like a It kind able to continuation you of I'm color you at But we lot do a on that XX%, any additional XX%? for more. time? sure this you on point. of in that see 'XX, signed at you're might share stepping leases look almost point have FY FY 'XX. to already ahead the beyond

of store nice supply Sure. those done has job just to so Well, companies permitting healthy chain team are a are alluding a a we et net, calling real lot feeling is challenges. pipeline. I can casting very a really And of we honest cetera. to out challenges, think answer many new the same wider The have estate of you're continue challenges,

So for now this opening every quarters we XX of we've while row. year, guiding year. several been get stores next in a stores terms intentions double-digit we in thought don't of quarter have store count up would We

that. get more than We'll

that and the next very facing, be that XX we surprising pipeline we're we've, are that we'll guide I strategically 'XX. growing the or can whole But into I think, XX stores. at for there's or continue made those that stores So carefully think enough face is some least year, pace it in going. the that those challenges fiscal stores sure And retail if industry we of didn't would XX

continue So I least as the it's will next that we look a think years. momentum at few forward for

and Okay. gears And gross then I'm switch to questions going inventory to SG&A. margin avoid

So I wanted just to understand.

sales back, As we growth December as out, since you quarter. total point look pre-COVID

base. As XX.X% years rate, at ago I it XX.X% your back three sales look a in SG&A the quarter, much lower was with

puts that XX of help points takes that of over deleverage basis and growth through through think think that get period? on you'd and sales given a can you talk massive Just amount I sense us X-year for to a of that wanted total But -- might bit leverage. that little the see

Sure.

'XX build new guidance a going we've business level on set and as a looks and business think -- what I level we this we as get of and forward, move fiscal out, we've year I we lay think can better the little and bit Jeremy. bridge the probably think yes, I like that to normalized forward

in I marketing sales, and costs labor. think there continue store some to variable with are that rise will and there that's

to continue around And some had at that around the We've supply we'll hurdle year things other done. have we've that the the then just this so we And those. is stores. one inflation there's have

Hopefully, system. through have the But we so that getting pressures. time. those inflationary down costs some come over And had

on that in year called some those putting We specifically detail, us this is but pressure haven't much QX. out in

rates is through And so tight been that I also. the working the market mean thing the wage something other wage the is we've pressure. in labor

we what through even year as basis, to call to dealing into next able out. regular more year, And and nothing year work I that be called last open we a evenly And little we've saw than kind so and that's as with. those a before, think on we'll we're the while continue we of we stores, out bit this something system get new the

to last first to year, tremendous the sales rate we keep came we support enough were leverage the in half year, the and of in wage that it think I because weren't marketing up saw when to there. able

a rate on, year. down focus there control on that. this that expense that we're we're operating continue pressures it's keeping and SG&A focused the So great to going It's possible, question. But are very are some much something as as inflationary to and wage and

Would you pre-COVID? sense rates are a years elaborate? wage be ago, again a three up versus for able to give you us basis then where Can hourly on year-over-year and

don't that I share I available number. have to this Yes, have number call. on that don't Yes,

Seaport Research. comes with line question Kummetz Mitch next proceed of with from your Please Our the question.

thanks taking my Yes, questions. for

Let's Jim Watkins. start with

gross the XX.X%. Looking you margin think QX, I said guide for at

that ex period? down, pre-COVID I four-year I QX the year-over-year. And XXX I over to up XXX think, bps. that's it's So 'XX, something if up if compare But bps freight, like bps like it's like out that XXX

gross to I'm versus four-year maybe period? understand leveraging exclusive versus occupancy the picked sort by just brands gain that else? that, of that how kind main increase how the of was could I parse you hoping just what of over you've in better margin is much the mean just like structural out I anything components. trying up

that of and over up basis the rate looked like XXX points last depiction margin years, refer think kind where big the ICR that if of piece is we deck - the I the a it's the several points if you And of you back XXX to you have exclude freight. exclude merchandise Over what merchandise I'd five particularly freight. years. Yes, margin, basis

that's driving expansion that that so you're there. And talking a gross about margin lot of

increase? feel have the speak that that improvement you you to margin strategies that And do is? Can how of some driven merch maybe structural

help freight, will promotional a remarks us you Jim we're structural, Mitch, going with going a that great forward. - We Yes the which it's of think to his well driven know alluded And Again, is to it business. promotion exception go very away, which not in standpoint. earlier from question. the margin our that merch

the have that We it's promotions throughout on year, styles but promotion. handful a some more of are of

We'll via a the find earlier developing And team. to about as first exclusive the the compelling brand And out expansion that's customers. the growth. to of ways our product is our we'll increase merchandise some working team and product penetration rate talked to to roll Jim that on continue product seen continue margin we've and

will help that us from merchandise a so margin standpoint. And

his ability to And those in We that that to down about and talked one that, about have fulfillment any that prepared clear needs in-store of - we is marked product benefit able benefits to remarks We're more the talked can as be us. Jim the online to and find store size that us versus going and do moved with and that the out just of one hoping that somebody style that store. product. customers that into purchases that quickly in that preference is

we've to not merchandise to it's it to continue the that lots of sustain So, ideas level currently at grow and got that margin at.

same Conroy competition the wrong, but Okay. when if were well, claim? at your I multiyear that But your store a than Jim, comp your believe has particularly guess probably Jim of make held would one up And has store negatively I basis. maybe And on I'm just me e-comm been inventory impacted comp, competitors then maybe they year by a I late being store correct for better ago. your could look

and your you that relative you of little slide to know standpoint? - store customer just well, stores, ICR your the the But talked that presented just e-comm Could you from to behaving to of customer where customers spoke you - about that strength of intent pulled their - it maybe I at is know customer? And kind kind a especially of talk so terms to retention repurchase. loyal. why more is store bit I a in that

for it. Mitch. Sure, Thank it's a great you asking question,

new a know, you stores. We've assortment, got inventory stores' a And invest first the have we we've where As experience we remodeled always a through brand. of been in number really in-store digital forth. so and and with the the on strength has build continued That brought store to the We've brand prototype. momentum into and store last capabilities coupled years. over several so

changed marketing or of you mind that changed are authoritative our for products. ago. product, and for Most our core years look with make brand to really where extremely us programs. completely join customers. our top lifestyle We've media six more And creative when We've our customer, our at source mix to five our types us, of shop the they of loyal our customers loyalty the

So through sales the loyalty vast majority of our go our program.

come So in and and and we product their They that so need size on when can out the again. are they forth. pleased to they reach in they find so continually them

overlap So again us, and the and our will bootbarn.com that are online. shockingly, that between our extremely rarely They is customer very shop other to demonstrated rarely shop customer just shop and loyal stores, time-and-time they stores has even customer our low. competitors,

that and store, to through once expect that us, like of our our percent see phenomenon to back floor, XX-plus growth the that expect our where grow we business we we maintain. go continue software a levels We it's continues So stores if from the for cycle our bodes business we works e-commerce within to this start happen. get to July, business But and to the would in to well and to hopefully new for just sustain future. that

of John from your Benchmark Company. Please Lawrence the comes proceed question with the line with next question. The

go look Great, it any XX has of go? point place Jim, you look success thanks new are million, you those that of could how guys. that at stores how these of stores at where to $X the When the more going the, tenant changing you where next just the improvements? to to you Anything volumes, changed market, strategy doing you stores at these are to

virtually yes the and virtually underlying the The the same. the model is that say box same. is I'd no size of

drive and goes a Western to or to who historically, was us work would I location a think years, the perhaps looking were customer shop. in is, destination that this squarely really the little changed and things XX we back segment that somebody for five have bit

new merchandise take also and broaden some Then in industry, tried more our was store branding attract media definition outside of suit. when mix products we out to and locations that and customers to marketing Western more our and of followed the its country and we the to expanded outside run just product changed the and reach brand customers casual to assortment Western

to we are centers third more Home or really are of in the next So we Sporting Costco customer power now Dick's or et sort trying attract that base. a were Walmart might maybe where a broader to a a center, now by rate a but Goods, or traditional in be in ourselves past, sometimes Depot cetera, we

together all have lot relatively for looked for So come brand, of retail easy the mainstreamed those and real pieces we've us also estate. locations, nicely we more slightly came as a available which because was of there mainstream

for Good thanks luck. color. that Great,

Thank you.

the questions in over to queue. are There for remarks. I'd Jim the no back Conroy further hand to closing like call

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

you teleconference. conclude this your today's gentlemen, and participation. Ladies for Thank does

have wonderful lines your a time, You and may day. disconnect at this