Boot Barn (BOOT) 31 Jan 242024 Q3 Earnings call transcript

Good day, everyone, and welcome to the Boot Barn Holdings Third Quarter 2024 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, Senior 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 Financial on and Chief today's call are Officer; Jim Jim and Watkins, Chief Officer. Executive Conroy, President release A copy is on website Investor the with Barn's supplemental section Boot bootbarn.com. financial available of along Relations at of presentation a press today's company's Shortly after available a Investor a for replay call, section as on Relations the the of we recording end website. of the XX this be call days will

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

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

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

the have across on this X thank everyone, Thank and business. review an call, our results, fiscal you, for strategic quarter On progress made current provide I third joining Mark, will we and update of initiatives us. discuss our each you, good afternoon, 'XX

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

with Barn's in We the our sales which marks history. results, third Boot highest pleased quarter are volume

year-over-year stores worth over It last the by XX XX new went quarter, partially decline added the is we in To X.X%, from up have noting since for same our years grown XX in third quarters, X.X% every from perspective, quarter same-store pre-pandemic X offset nearly grew by COVID-impacted that almost on stores was by are sales same-store quarter our revenue performance the that this levels XX% we XX% During basis incremental stack basis new a sales up put sales over The public a on with period. ago. sales. except months. X-year driven sales a

Boot comprised of achieved points we expansion. with the XX points in quarter freight and combined exclusive quarter and pre-pandemic. share per driven Additionally, basis from expense this XXX was ability a than earnings margin utilize at in believe point in demonstrates of model expansion earnings execute ability basis drove penetration, gross of per points levers double the of basis in improvement increase points Barn level. than margin a during growth high The drive in XXX and to The increase during $X.XX of XX margin the to operating merchandise earnings same margin the margin, We year and basis our team's a to the product multiple growth activity the quarter, up and of by reduced more share control, ago buying $X.XX the and diluted XXX more basis level sales economies brand strength of scale. promotional solid product

our on X beginning executing each of against for XXXX expanding our of our with X As an we strategic focus store on we would prepare approach XXXX, minutes the like them, to will providing a I initiatives. last maintain spend fiscal base. few months and update

our added XX footprint stores Western across footwear the we expand [ today, the ] quarter, stores are industry. in In country. player XXX we the we With as largest the new

than performance a underwrite most X- to approximately $X payback. investment As new million expecting to recent the The of a than typical million XX XX% on more in $X XXX projected revenue store generate X-year considerably with approximately with better average a we accelerated or model revenue than the reminder, stores been new months. investment this an of of with has typically higher the thesis store, payback new

line, opportunity $X.X units on annual believe year We last And compelling XX return on more the full months. one combination openings, stories if our and growth that opening than on the average revenue have the shorter over the been to the double that before most have in of XX% approximately this a retail capital view is December opened of a calendar million XX% we recent of stores XX X industry. time new store XXXX, strongest, the most generated

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

more the boots Our western third sales by transaction within driven and functional work Western higher as such decline was partially guidance outperformed boots, on negative more lower by range November. same-store The outlined comp The discretionary mid-single -- and quarter ladies a while AUR and declined men's X.X% categories we in offset basis still apparel size. transactions, digit departments.

West were the chain average than and better regions South North and chain worse East slightly and Geographically, slightly average. than were the

of over the holiday Boot e-commerce customer of scores period. also quarter performed total evidenced supported the in managed very in highest team the constraining The product holiday orders as improving As for our XX% team. proud by our levels reflect a history omnichannel on fulfilling execution merchandising in growth service team sales. double-digit well, the by I the despite business entire our They earning of merchandise also in than inventory The extremely any storage decline Barn. and quite same-store well, I'm clearance margin quarter, more cross-functional

to want Before to to sales moving perspective next provide initiative, do recent the I bit historical results. strategic of a on same-store our

year to beginning remained same-store and years 'XX, by a have full plus I increased XXXX March store XX% for store sales for than plus retail that levels nearly declined our remember average at our of of by the fiscal is and cycling think basis, helpful X XX% to X%, year-to-date that. year a it On approximately now. full prior more X% in volume has elevated

the growth to nearly that our while forward, at may we store portion future, store repeat for The elevated began Similarly, statistics average it that of we store we is significant customer count of sales most an the sales in comp a average same-store purchasers. a the look years believe will XX% ago continue unlikely be when the a that higher became Going we a of volume. X we near likely conclusion. of going same average will sales maintain new in few customers, result those belief forfeit our negative store confidence was metrics, of customers reached level and and forward. These a us give in elevated most volume

to handful erosion decline Moving the vendors online pressure To channel to In efficient has of color, low spend less more third was comped consumers online demand. [ some our to of down our approximately an strengthening felt our omnichannel initiative, third quarter, the business sales by e-commerce spend, the our add and due ]. of single by XX.X% X/X partly heated digital the our due bootbarn.com [ in caused marketing ] and leadership. quarter in downed a and increase digits

a Sheplers more Outfitter sites, erosion significant on the on and traffic them. X paid demand are impact dependent of so Country other has Our paid

remain with to for profitability digital it's so earnings top to to continues our disciplined maximize line we be desire business online objective our so and spend, to erode sales. Our our grow will not

This the than store Operationally, country. warehouse the of all we've enabled our pre-Christmas us to in be. a season demand ever our to improved locations and delivery fill ability across commit from to nearly later

Cody our our Black, in particularly to able penetration brands. the did In ] launch and to ladies approximately stores achieve for in hats. as basis with business, we boots end [ were initiative, to to a higher extension which increased healthy strategic XX.X%. which customer fourth result, over-indexes growth cowboy brands. Exclusive XX called the we am quarter a despite exclusive Colby I Now quarter, targets exclusive this pleased brands and Men's penetration points softness James brand XXX in

the new exclusive the to stores. contributor relatively small great brand a are we the be and of results initial assortment business, will in this XXX the feel do to While process extending about overall

expanded XXX we over exceeding testament per brands back the team's to our last ability points of and years, world-class is Looking points, penetration basis far historical basis develop goal assortments. to exclusive X,XXX have brands X year. merchandise a the This growth compelling

compared the the to business. fourth Turning consolidated X.X% year to Through sales fiscal period. preliminary our our same-store first X declined have current prior weeks of quarter,

operating hours winter On the for third did second due we see presented to in travel customers. a week forced significant this the weather disruption business surface, modest that our improvement the and month sales a sequential reduced in significant closures, However, store pattern in the is challenges of and only

same-store from by approximately the of Conversely, West of the weather, South were the evaluate the impacted impacted When third by trend deteriorated X in weather, improved the than sequentially more regions, we by the the regions, from quarter region, by and have points North the sales business which comp. less East which X prior comp. by were and quarter have points sequentially

the we business persists, tone the underlying variability compared holiday comp of quarter. weekly significant in has the believe improved While sales to

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

to In Jim. million. you, third X.X% increased sales net $XXX Thank quarter, the

for profit costs. partially a in XXX a or point gross XX.X% prior expense in decrease of XX $XXX months a and merchandise by decline basis increase a of [ improvement and sales stores increase Gross year margin a e-commerce in to from merchandise sales comprised increased sales million of point the compared by XXX increase The XX benefited points performance a past $XXX XXX deleverage in margin points X% decrease same-store XX.X% million basis basis was buying, sales margin by new expansion. freight X.X%, rate of The resulted sales and distribution profit of XX.X%. percentage XXX X.X% occupancy of basis product retail store center of in in rate, point gross of basis in same-store sales driven offset profit Our period. to rate or the of in as sales from ] opened during partially same-store offset

store Selling, XX the primarily SG&A payroll period. sales $XXX or overhead an with and XX.X% The quarter XX.X% expenses higher compared when increase associated year period. operating to in a prior million the prior in general additional compared year of million and was stores compared or prior costs administrative the to the of expenses were result for period year sales to $XXX of

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

the credit. over same-store X% to year $XXX finished revolving Turning decreased X% $XXX prior On on sheet. basis, the the on a consolidated $XXX decreased basis. X a million drawn cash line and period of million balance in We our with to inventory million and quarter

I outlined like provide now presentation. our update would in quarter to is guidance, financial our supplemental which an fourth on

out the range, guidance low our my of range to the of only will remarks. As high and presentation high the end end lays in speak the following I

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

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

We of open openings all the stores XX with quarter. second to the scheduled expect new for half

sales reminder, quarter quarter weeks includes of last in year. a this compared weeks XX fourth As sales the XX of year's to fourth

XX.X% approximately fourth or expect gross to sales. be quarter We of million profit $XXX

exclusive XXX to basis to an growth, margin profit point when be year-over-year including basis in in XXX basis margin in XXX a down freight the year. Gross expense improvement basis product a estimated improvement increase brand product expect Included XX margin. we and rate, point point merchandise quarter penetration compared reflects to flat fourth last in points

year. exclusive higher sales. basis primarily to brand the wrapping penetrates softer grew rate the points of growth remarkable due last the exclusive at in As in penetration fourth past a few slowdown ladies reminder, of a besides the brand driver quarter is XXX years which The business,

fourth a XX-week We of deleverage anticipate center fourth as year. in distribution the we costs quarter in quarter occupancy quarter quarter the points last cycle buying, year, XX-week XXX in and last basis

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

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

year-to-date guidance. full our estimates updated of rest the the our As our year, we updating result for and of are year a performance

year year, fiscal total expect X.X% representing reminder, sales which compares 'XX, be to a billion of a billion. ]. growth of guidance previous we the was fiscal For $X.XX as [ over XX-week This $X.XX to full now our

guidance XX.X%. We or expect margin, a We from reflects This same-store and improvement basis Gross update increase a to retail XX.X% to same-store sales of of of and estimated X.X%, gross decline freight consolidated a sales. XXX previous merchandise sales X%. expect point sales store our compares decline a from of with profit an basis profit decline approximately same-store XX declined in margin. million point sales point XXX an e-commerce to now same-store expense $XXX be basis improvement product including X.X%

anticipate brand occupancy XX.X%. costs. We year, our buying, total penetration in and XXX full exclusive points distribution basis points bringing project penetration of XXX We deleverage now in of the to growth basis for center

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

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

to our begins that fiscal now about I'd talk on XXXX like XX. year March

annual get as helpful for planning share fully is outline our guidance our to to budget components begin it the we select our P&L we to While it year, on would premature next thoughts ready be process. thought of

plan During generate of $X new at we during fiscal again open are XX sales these units, expected XXXX, million to least the and months business. XX% stores to year first of new

We points of margin our expect partners. XX penetration growth economies achieve approximately vendor to product scale expansion exclusive with basis of and better through brand

we supply costs efforts expenses mentioned. the overall our chain part of expansion our Additionally, points of a product manage the merchandise XX and reduction basis larger margin drive our benefit beyond in will just in are margin efficiency see to I improvements business. These to expect that

nearby have lease put third during in lease office first 'XX. pressure costs building moved in As we will and outgrown or which of Irvine, increased XXXX. signed move We our SG&A SG&A look will a California, fourth fiscal and expenses, a on the the associated into to quarter corporate depreciation we for The we building line. some

May on We call. will provide our financial projections more detailed earnings

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

Thank Jim. you,

store same-store able with our and We the of Barn. began been result. proud were that is your for modest We the sales to Further, the our to sales very ability team the to increase since across want earnings average quarter. thank all volume [ there during ]. grow has despite encouraging execute March to only sales XX outsized dedication We a are I negative to in pleased that in it third country. you a Boot decline I'm see

Now Camilla? the I'd to questions. call take like to open your

[Operator Instructions].

Boss with Our of JPMorgan. will first question come line from the Matthew

Great.

relative unit improvement in cited a at could on So maybe the you outside the then level, question, to of on Jim, total maybe December term, November, first a near category weather, elaborate follow-up -- regional and company you that January volumes. sales average just on your

we're forward? sustainable unit multiyear, So a see seen a the under the to improvement? ] of I peak from, move X think I over was ], you've I structural today. [ the X you what what think it supports guess company as pre-pandemic average bit just do AUV [ and for going million volumes $X.X And

Sure.

is by and category. and the week Essentially, weather what temperate that first was sales was January. question X in it the X January sales On of storm X weeks other West, in X. had weeks us, most California, weather Texas across as of which the the and the and X and much The for feel the And other the regions. a didn't Arizona a few as regions states, X quite couple South, Nevada had week your happened one, X, went we by was first Actually, winter around others. by which is

points So their sequentially by about quarter. from improved business X actually the holiday

early that had drive regions, at -- stores we we couldn't or lot of And never we out get and had as not just know, In X call opening other almost all. a X out customers stores. this weather. The we and Matt, you had case, closing

region by business and our North decelerated regions, X third quarter. their from of X East points region, our comp those the So

has as believe So holiday -- the we my from that we -- overall I in business tone said remarks, prepared the quarter. the of improved

Actually, back In something, be X.X terms we've is than go And around then before in to that. volume X.X average just I you X or of second used we're your your We million. much to question more years million. think ballpark. grown the number if

it ways fiscal are same base, now we were at you at stores at will, at base had is. of to stores those if open QX stores million XXX and unit average or stores We of that average looked looked been a comp were volume. of X.X the 'XX about in volume. think X.X million One a Those unit

like So went increase, math XX% to that X.X And million that greater I than that's on I million with X.X X.X. base think people other a X.X for of live stores. doing right? listening.

want your think X driven over chain unit basis, basis is driven going but last tremendously the X we've [ X in The count average a customers also that's volume north part the thing to of whole approximately so of up store still that it's on is that. or our we customer ]. is years of forward, If driven and course, by what's biggest what XX% in new single on is total, stores, also. of question that comp a added store comp our Embedded

stores When you feel an XX, we period growth. we business X% pretty roughly time of together, see nothing basis, at X we're plus look in but those good down plus a a on year-to-date actually and we retail And over and put when cycle about our the all that facts number. extended tremendous

model the the supply for multiyear, best maybe just elaborate you as you of Jim magnitude fourth to leverage SG&A moving flow fixed -- cited And up quarter? size how through in and the then of an impact the occupancy the in think efficiencies buying And the forward? hurdles magnitude it. chain Got on just Could Watkins, on model. in deleverage we cost

Sure. Yes.

XX-week have higher deleverage. fourth right look we to the given period, as do that you're quarter, we So

point basis buying then look we and the the but to where that the again, if I'd OpEx, fourth to in I SG&A, XXX And we of occupancy to for on Page kind slide that as so through that, components it's you look end points deleverage the of go basis quarter. And XX, points. guide, same period of XXX during different of DC the

on of the it's is thing one deleverage, and of the you we And unique I working quarter upsized -- the Besides in remind same-store part of on more period, XX-week the SG&A last the because a that that little the our would gave around factors negative particularly report against some the quarter in when are sales you'll remember us. year for fourth that.

sales into reversed bit got we January as As turned a March. negative, of they back little and out get our as as we pulled incentive-based compensation. and went marketing into then and We deteriorated February expenses we such several on more

And fourth get create SG&A. quarter those the we that things little are more so into bit a as deleverage around

that is in far be of should and color improvements right how year. look million the as around the I would fiscal beyond, next those way beyond we the you rate now to expecting model you that that we'll again, give run we magnitude supply But impact more with And leverage points. years we'll something of but that as into that the As on the color as we 'XX. next they chain us as annual give on $X into more get an continued we're year, see out get

you. Thank

Your question Steven the Citi. comes line Zaccone next with from of

to gave think you fiscal on gave driven? details Matt's there. the discretionary better? the of -- 'XX, preliminary you get you drill But for get I you you and about how wanted be recovery maybe see commentary you bit keen category? by in potential same-store up do curious to Any I happening a about appreciated. down that would to Do question was follow sales. on How being about Do business need think commentary a sort that transaction

Sure. Yes.

guide the -- guide that. to a look year, little we same-store on As sales for the again, it's early for to us

So we're lot around commentary of a not providing that.

lot look increases is probably the behind unit As that I AUR components about I big if think price of Low us. far as in the are we the think single-digit increase the recovery goes, retail, at a way the that. average

transaction-based get into in we any as expect we nature. that next so And would see we year, to recovery be

about -- a been improve How you And your start see some Or to from stabilize? guess, could do does point? from challenged we category standpoint, I to a you Do category. that that's that that? most perspective, think it discretionary think needs at

I a think it's question. good

which sales. has isn't a discretionary, I less which it's ladies businesses, think that completely And of an we sense of unique recent years giant the comp ladies just business to business true. all back think the do simply a cycling couple same-store just that in business to drag way flat, But numbers, on We abbreviated challenges get in been drag. we'd like a XXX% that the in even ago. has we're call so that

help overall So or back declines that the -- low course. of if that that to can get math single-digit flat would

like -- What to climbs we've our at were though quarter, look we third the is we see broad-based. when really

the also were So ladies was businesses worse, down of but other most basis. comp on a

So healthy forward, customer mostly do there's some relatively I our optimism is core going and employed. that think is

I think I are of still. cetera. economy, And et feeling they an overall concern impacts the geopolitical around factors, think is inflation there maybe the

So customer. don't spending, the tendency but there's think of push off there's challenges endemic to a any our with health I

comps we'll quarters. as over -- So think 'XX, back few look positive the possibility there that fiscal a into to next as I get is I we

you. Thank

question comes Our TD with from the Cowen. Maksim next line of Rakhlenko

on Great. comment. actually Jim, if that elaborate curious could last just you

meaningfully on any then over as months. pretty appear you underlying Just will trends color of the think could next flip sequentially do compares positive and ease improving the couple comps when be to

a the we're I Max, date the merchandise I opportunity more. we [ We And high stores $X among can by that's ] to are, still still grow industry. certainty difficult folks forward. company important They're fairly predict call. to is the do to the XX next to or We or XX going far, the to have year. very think on in open palms predict you margin. give going biggest very of million recognize this What with degree wish I could It's a we going quarter.

else specific I to everything the for version growth. give or well. is you extraordinarily day timing sales positive same-store business Nearly a while just can't operating in So

based our sales same-store manage we levels on currently while the facing. So inventory that we're

grow merchandise amount clearance even environment. up of able markdowns. are at margin built sales to continue We don't -- we a negative a tremendous We same-store haven't to

current managing sales trend, I we're think, So well. through extremely the

company, sort we've And once-in-a-lifetime company. all that of back uptick the And had the recognize buy the hasn't years for But again, the most folks portion recognize a And is in folks it, still sell give I a company we that darn of give and [ work couple sales all a of same-store that to the the you ] a just small really bothered comfort. quarter the for lot stock may based that healthy. not recent overall, on pretty sales, of ago.

Got trough it. that just then level. million you [ $X And color to And assume view is on then sinatic just the now ], new fair dispersion any waterfall are it closer within potentially as between That's helpful. if like bottom, that look thinking we and ahead? are And to ramping new maybe just store how some of the stores? then slower the that, could you the on faster

there's few right? would in think and back and Wall historically, things and about for open it $X.X was vehicle Street store would great X were and a that us, a pay So growth So a in happy home volumes was happy the about it. every in new at are million bit stores store we that it new run success, a The new question. embedded we of is just, years,

a number a to And victim we'll could success we $X.X It I $X.X that we it's public. view million To accelerated promised and spiked to a down, a a [ in we've it when continue what go is up now which of cash-on-cash is ] go because very we double our could went up billion degree, bottom. know do some What I as don't there. return, from stores XX% it's first that been open way. had

In away, a a and the we X the And a were [ first extremely love start comp turned growing strong my up year, someday, they're we'd where but opening right over get are ones ] store trend. terms to want To victim new time comping sort kind back to their ], XX own degree, that. of store the stores they're success, volume an And at opening some average They're into really we're the the waterfall not. comment them of to ago. at volumes. to company's I'd of [ while opening minute would that start up million waterfall, double just our if

One more reasons they to about you when a Once by recognizing of little the return ever year, pressure sales. because volume We're the we than actually not And mean we could we a worried expected category of oftentimes, we're about could. getting does of ladies do I a higher ladies a business give on in the year faster And want constrain why the have for if is that, of under we the back open. the suppose that category stores time. if second bit that. I to we on new it that Street success our something Wall outsized side business is from on and reasons bit first not sales. that of tend to seeing waterfall. be the that's fashion We're same-store one cycle, that think the extremely again, focused think capital

So we have think the but I that. go to do we don't waterfall, back to plans

Haas Our Bank from line America. next the with Jason of of question comes

on a And you by X-year some curious I stack quarter imply to does the being basis. if through was weather. January since a how thought XQ it fiscal you especially guidance color on comp seem because the about impacted curious could about for I'm it deceleration through provide talked you

Jason. Yes, Sure.

the which sales. guiding fourth business using in all we at been most followed year, approach the we've the perfect, quarter, to So or it the this while than And has this same seasonality to case, historical a of recent looking the X- is X-year apply the use better in a of we And much sales. hasn't non-holiday the been stack. been predictor business recent

this years then November that's and to how pre-COVID And So the the we out January, quarter. kind case, using before of and year seasonality applied year, of seasonality talk of exclude of out and rolled those the we the and in business. month and blended rest we from January sales the the historical last out flow at looked the what the really about noise the and COVID of to to project the when used historical tried October,

you October, enough, almost January's just March, the roll use identical exclude and answer forward guide. the to you Interestingly and when an that in get February, business to November

off and out historical kicks based So we've trend, more at expect what a reliable. it's to little looking not been a it's a continued and it's kind the number. And you seasonality it bit look at multiyear of would oftentimes, but when recent business

Got you exposure helpful. to potential could I then China, I And was if sourcing as some there's give for talk it. more follow-up, us in. your coming tariffs a about That's think curious

would curious overall. how And I'm so that industry you impact in the

Mexico rough speaking, comes of the countries. numbers, about the balance we sell half about what generally and from from and other XX% from Yes, China, coming U.S.

uniquely we're could We've an argument certainly us. less doesn't it certainly said, competitive didn't really a before, add back biggest I to And it competitive makes make doesn't player. that impact it comment. would because us to more and prefer come us would the actually lived That construct industry. We through that we Jim's environment in that, the us.

our We at margin cetera. et brands have exclusive drivers,

really either. don't at we're think being and of it's watching cognizant -- awake it's us but something keeping So night I

Thank you.

of line comes Blair. Carden question William from Dylan the with next Our

but flat helpful some growth fourth you on down raise might can the eyebrows. sounds that Any anticipating label color will next like Just penetration quarter, in in to year, you're more back It to there there? be add in. those anticipation comments private

It's the Sure. really essentially. brands. about the bad weaker exclusive at brands product. not It's result worry arithmetic of all or wouldn't I

penetrated are those penetration composition businesses with ladies of because we're different facing because simply businesses levels quarter XXX the penetration penetrated our comping the portion points the taking and exclusive more. headwind That due exclusive our highest they're down it. this It's of at brands. with sales the in in a So brand basis of are And smaller down our business. to are

brands. the in of differently, composition we'd this have if if we in growth were SaaS -- particular seen quarter, for would change exclusive quarter So -- said we be the projecting didn't if

So mean, the have result of growth. margin exclusive the think build helps just get it's math brands. that our It I I other have business. answers margin way. abilities to I hope our also And more the we margin, to addition truly that of we grow merchandise course, of prefer a We question. in but to merchandise

to this as 'XX, Dylan, right? we the planning are fiscal And a on returning one on penetration, business. brand So exclusive drag look quarter growth we is and into

Is remaining behavior like you're some losing? obviously, discretionary around one of kind weaker, it of the kind volume where comfort the Great. that bleeds of around and more theory business Or of And as reaching think do women's, in you've lose? nature to you sense? a you what's question way perhaps how customers? is or unit another look you makes of could been And point into some categories about just what feel question where some to the you're the anything of you of newer in through give much kind

does. It

very have functional business. I solid continue base think we to a

functional. [ to business functional. portion all business work business ladies our men a ] these is men's So of most ladies of is Western of And

more is that it by much and functional. there's still the that So to relatively store does up doing the significant couple fashion still years caught in cyclical, further some we sales business a a tempered and there. are of ladies overall it's bid business the cycle more have fashion be in perhaps tend a large could But -- ago, still extent to decline

we're think business in to to the next few the ] see flatten, that. trend quarters that [ perhaps get or the out next don't I in the point, X quarters. some I I do happen after to openly we'll ladies X improve think that's woods and So start yet. in at think going probably necessarily don't But of positive

Janine Our next line comes from question the of with Stichter BTIG.

the the year. business hearing me negative about of it's not low the I think We're And that of how ask hear to hovering about pieces you in the want push thinking would that that range. rates having e-commerce are to the Country business. into Amazon Remind ad still business the I importance business. to next kind business. Sheplers, driving higher. you're to about continuing strategic wanted I seems the bootbarn.com double-digit love It how know down like of then Outfitter,

in year. think ad higher next than business of you So that just how costs how do into about evolves light maybe spend

question. Sure. Very good

also been bootbarn.com, the omnichannel that together of retail share pieces, X X think And store. stitched they on So course, extension And I prices. and is those of the ourselves same an quite the well, really channels we do experience. have pride

like brand oftentimes, a Sheplers.com true bootbarn.com, are game. heritage customer is very price-conscious a at price lower price online other us compete players enables than we and playing and it that against because to a to that a frankly,

Sheplers' the of kind strategic that's So importance.

tends the difficulty acquisition on also us was an things that We to years a Outfitters to one is think there without several focused ground It of much reasons which new some it's right bigger possibility why ago. having back the impacting do get growth. is X for fashion, be gives business. It for trying business long-term so ladies to Country now. testing

The Amazon necessary a product some on evil. sell think, We there. I business is,

do other of still people. lot profitable. low-margin tends a be It us, for business to but So a

gives participate more business product. sort of that is casual ] us heat we [ purchasers in our that might demand And public Amazon. a So be the of on the of -- sort read general of

and would more real. sales business In spend that could terms We the be sales is of inefficiency the eroding. and the easily EBIT online the future growth, and money more of and of get quite the spend those online

just we don't So do it.

the perspective. to can growth we'd is fact extremely be sometime fiscal there'll But So back such back a few expected. might of bag historic while go look at it business do equilibrium. in positive to outsized normalize That it do will we algorithmically. business, point, we a sort of though, when at be some years. grown new a think over It's strongly And a manage another somewhat I that sales, think kind we positive like get that 'XX. it it's to portion of giving after

wanted Perfect. of that of you that estimate a your half you question. And the to China, to think from are import what tariff directly have is on products follow understand China, just portion [indiscernible]. said you an I only then from trying Do up but of

about brands XX%. Yes. and It's brands similar party, still with exclusive between exclusive the third it's

import direct would roughly. of be The XX%, half

you. Thank

from line comes Komp next Our of the with question Baird. Jonathan

-- to sales at more more. share that follow inform another? what the you and should up any Maybe exercise comps. and how When exercise, a of the you swing the about way quarter do that When once business Can back out insight. the to when called think little you factors does turn just comps just that you projecting volumes And for same positive? run could through we or sales you fourth look the one

as and quarter stores recently. that guiding of ] and to improvement X [ more up of if it's this off February an to that's what minus minus right? we're ], a business deceleration March encouraging other we a and seen stack So we in current It's on X-year period, [ the be or we've the X while a back Sure. look stacks, far in go and couple maybe

talked last think of lot Omicron And things between and has we time there. noise also March, in period and about that's stimulus go this several April, different so the I February, over encouraging. back COVID refund a a years and macro had say couple and if of quarters, it tax were tax in you I would payments

abnormal kind year, March going. we business bit where what a in seasonality of would harder the I did of little see just of of the business read a last trend ago, that. is and a year But slowing was so is it the So that say for is to February that

back long getting answer February to March, fiscal a a when just so that as as but would get positive. I upside to normal, some to 'XX, been that there's any we're kind be way 'XX, better next your months as question, you as there's look to X it's and to if have encouraging and year and the to fiscal we -- planning and So the on what's really turns give through this to read look March, or not think John, at we February we well least through of reversion

The update couple a just confirm, margin Maybe you you like the Jim, color. helpful it for today of the looks follow-ups fourth product quickly. you lower than was maybe exclusive it gave. That's could brand account a little even previously, Yes. quarter, after implied is just

XXXX? to implying you If So reason a 'XX, side? you SG&A setup more SG&A? the commentary the today that comments the I for to Just product that's is similar still of clarify, than to just for leverage read case. want X% changing the if to to in how was need comp anything trying confirm just margin then on the And are fiscal giving that's the on kind

no yes, problem, Sure. John.

and XXX that So on on freight points points. QX, year-over-year basis we're plus be the product margin basis margin XX would the guiding for product the

And to from scale. so of exclusive despite negative still expect brand flat to maybe better that grow bit economies penetration, a little we

lower there full assuming that of say not. that called that benefits it's done and then you 'XX things, the needed year, that that, as supply that changes to and too year's precisely to to then budget, you of or occupancy, to any to see leverage leverage fiscal update occupancy next out talk get I'll comp we guess buying we've to the we we the We'll about talked kind changes And know point. our let side SG&A not buying are or of that But look before kind to buying there early on as we of are and help for next and chain next whether on X% if I SG&A. would X% occupancy. On year buildup to to

on like our on next And hurt May year $X a again, million leverage there into leverage we're be tell, give we million of That that on -- year. on to that, working next get pressure same-store as that point hopefully. little a $X will it help to X.X%, some SG&A And new early still kind or things been required that. the a that offset call. building put of update get we'll leverage you in what an point going the SG&A, to on then similarly, it's corporate some but SG&A But historically has sales on again, will probably call looks

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

new And the openings. to just door start with wanted

QX caught the of all the going be half for the March that expecting were I quarter. openings just of were think back end then ] in I of script And the that in the if you for [ quarter cadence there those on provide could commentary color bit of that? little you out related, is expected we a anything on FY notable openings? that you And look your on would growth, point the to as ahead unit to 'XX then

I think you recounted comments. script the

back into this loaded quarter. We are

In make do that nothing to not prepared that they're to unique our be out be on the call. 'XX, we're out certainly them next we'll try guidance fiscal the the going laying There's to call to all today, at out to We're do -- terms we're of throughout to the of spread risk going in relatively going first quarter. all year.

nothing So specific call to out.

of Jeremy, leases pipeline would that And add, got signed. We've lot we've just the a healthy. I is

with pipeline. year a And headed so next we're healthy into very

what then is could is lease higher or what new fiscal QX than the QX a And move cost And Got paying. in guess expected headquarter, then expected you currently the here is dig just the depreciation on are annual I it. if annualized bit the an on what I which little 'XX, basis?

Yes.

cost. expense it's years [ a organization, million this for we -- those a point where increased threw the lease much of next in costs out year, built anymore. we moved But several into the and all million smaller we important P&L currently don't building just fit that $X that I the we're were still early little space. when just $X ago, you includes out to out And we that ad there, property to the the it's would and So to give haven't ] number be

in million, year basis that kind that though, be is we included get million bit costs and will run higher, year. expectation a a are million -- it lease some costs rate $X are the $X building, depreciation year, so some it's little a incur some lower -- this lease a a that moving. later following the And than bigger as will be nature given of that into well, onetime the that we that $X it's of starts as my more rent, And the period double to just in likely as on in new we'll

some in kind that tune and the we'll between a building make aware was little the due some your It's $X have that SG&A you our of costs the of out drag corporate little bit to in supply again, million chain a line. models the office sure it a and that. of of calling geography benefit neutral of create to a you're may to So of but work two, for and the just one purpose

you. Thank

from the Securities. comes of with Jeff question next Our Riley B. line Lick

guidance. like contraditional Thanks wondering implied just in was math, for like that thoughts the kind then did previously I anecdotes question I of be, as New that million. we over when to you by you on or Scottsdale just in you shows Hampshire. couple openings resonating there's relates a squeezing relative kind terms your give of it store another if could what's concept If about me had And to QX the in. if, of us, guidance Jim new just gave you Connecticut is Conroy, changed usually, by can quick I'm the was $XX taken markets, with anything good wondering, in your places seems period? my of elaborate would how down time curious, you've it like

pretty Jim markets on QX. markets. can in in The everywhere I'll new are take the new working the and legacy and one stores Well, much one new the Watkins guidance on stores take for

you have be used I we alluding think example there. that X to is the Phoenix/Scottsdale to might stores

gone X their opportunities, And Now those are adding we're and stores stores comped while up. there. development our more with -- And used view, more in we has still X up to stores have there. there. volume We've

been erode that learned business be markets not open our the some of traditionally to out markets kind We've and So new up real net do could have we build comp. also Western. able be it to had successes and have wouldn't in considered Northeast in and we've legacy that nice

Yes.

trend change in we of function November the question, $XX October your of part business the guided a on really first the done, we sales, have QX million the -- when is in the X On the and we got, And particularly bit more the what things softened guided based a anticipated. we December sales September, as off of kind little than had late October of into in we business. more unfortunately,

softer -- had And what so anticipated than and we've January was we also.

business. forward in we've the just seen off that what we've So rolled based of recent

fashion you what primarily I'm I assuming, or the business? discretionary for the is business I'm looking -- what guess, And ladies that's call

than Yes. more else and of it's thought. but not that of what got mean significantly the stayed kind broad-based had a worse than business it's just kind It's one broad-based that. everything lower same, we I

you. Thank

of X-hour up with Mitch As come on the will limit, we are coming Global from Securities. Kummetz final line the our Seaport question

the you were comp kind One, things. those When X Jim I sort anything little that weather-wise those few you to X weeks? like of pretty January I of across hoping the mid-single-digit do appreciate get to in Conroy, a comp. more given can about A the the low country. and of breakout on sort say nonweather-impacted store bit range? you normal weather. is there isolate weeks, Or more was clarity But had weeks think regional I

Yes.

double-digit just markets the total negative really course, minus were And getting was non-weather-impacted and single-digit negative. in really, January of with the we're So with X-ish businesses weather. low hurt then, some

color the that's provide. I'd So

the ladies your quarter? weeks first what of was or for say X you Could for comp Okay. January the

functional of little to In our certainly the somebody businesses, line go with at making difficult QX, trip worse by. during special bit weather maybe a a least

from [ QX sequentially ] deterioration erosion in or business. single our So

your in comments? going fourth of kind you And penetration and expect the to the in The suggest ladies seen fourth your brands that bigger be then, what right ladies. non-ladies the those that comments I exclusive that the guess, performance between that how skews be Is business a lastly, does just around fact and you've that than ] given of down, to to [ year-to-date. the from of sort penetration of kind there's delta quarter takeaway quarter

a problem ]. with son feel I math [ It's hypothesis. I'm like fair doing my a

out this number still but have it called we was push called feeling called positive be could we to that because making to worked up, when to eyebrows. brands We to right? would a work think on If XXX for quarter, -- X than penetration I didn't going in the because out we points have basis from grown but the being composition. didn't back basis you that exclusive is raise XXX most just had particular had -- we rather negative, this the points, penetration brands reason my a we same it we could the quarter, -- exclusive what's grew We recent we time think the suppose from going math. dynamic this it out standpoint but points, decline that up I could

important read call anything it than fact wouldn't it that we further a rather to pushed in decline I other into improvement it that So penetration the an than because thought out. to was

Mr. back floor turn to of closing reached end the Conroy question-and-answer Jim would our the over for have And I comments. We to like session.

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

This concludes today's teleconference.

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