Boot Barn Holdings, Inc. (BOOT) Bundle
Understanding Boot Barn Holdings, Inc. (BOOT) Revenue Streams
Understanding Boot Barn Holdings, Inc.’s Revenue Streams
Boot Barn Holdings, Inc. has demonstrated notable growth in its revenue streams as of 2024. The company’s net sales for the twenty-six weeks ended September 28, 2024, reached $849.2 million, marking an increase of 12.0% from $758.2 million for the same period in 2023.
Revenue Sources Breakdown
The primary revenue sources for Boot Barn include:
- Footwear: 49% of net sales
- Apparel: 35% of net sales
- Hats, accessories, and other: 16% of net sales
| Revenue Source | Percentage of Net Sales (2024) | Percentage of Net Sales (2023) |
|---|---|---|
| Footwear | 49% | 49% |
| Apparel | 35% | 35% |
| Hats, Accessories, and Other | 16% | 16% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth reflects a significant performance improvement, with net sales increasing by $91.0 million or 12.0% for the twenty-six weeks ended September 28, 2024, compared to the previous year. Year-over-year same-store sales also increased by 3.1%, with e-commerce same-store sales rising by 8.4%.
Contribution of Different Business Segments to Overall Revenue
The contribution from different segments to the overall revenue remains steady, with store sales accounting for 90% and e-commerce contributing 10% of total net sales. This segmentation illustrates the importance of physical stores, while e-commerce continues to grow as a critical revenue source.
Analysis of Significant Changes in Revenue Streams
In 2024, the increase in revenue was driven primarily by incremental sales from new store openings and the growth in same-store sales. The company operated 425 stores at the end of the second quarter of 2024, an increase from 371 stores in the previous year, contributing significantly to the revenue growth.
| Period | Net Sales ($ millions) | Same Store Sales Growth (%) | New Stores Opened |
|---|---|---|---|
| Q2 2024 | $849.2 | 3.1% | 54 |
| Q2 2023 | $758.2 | (3.8%) | 59 |
A Deep Dive into Boot Barn Holdings, Inc. (BOOT) Profitability
A Deep Dive into Boot Barn Holdings, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
The following table summarizes the profitability metrics for Boot Barn Holdings, Inc. for the thirteen and twenty-six weeks ended September 28, 2024, compared to the same periods in 2023.
| Metric | Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 | Twenty-Six Weeks Ended September 28, 2024 | Twenty-Six Weeks Ended September 30, 2023 |
|---|---|---|---|---|
| Net Sales | $425.8 million | $374.5 million | $849.2 million | $758.2 million |
| Cost of Goods Sold | $272.9 million | $240.5 million | $539.6 million | $482.3 million |
| Gross Profit | $152.9 million | $133.9 million | $309.6 million | $275.9 million |
| Gross Profit Margin | 35.9% | 35.8% | 36.5% | 36.4% |
| Operating Income | $40.0 million | $38.6 million | $90.2 million | $84.8 million |
| Operating Profit Margin | 9.4% | 10.3% | 10.6% | 11.2% |
| Net Income | $29.4 million | $27.7 million | $68.3 million | $61.9 million |
| Net Profit Margin | 6.9% | 7.4% | 8.0% | 8.2% |
Trends in Profitability Over Time
In the most recent quarter, gross profit increased by $18.9 million, or 14.1%, year-over-year, reflecting a rise in merchandise margin and net sales growth. However, operating income showed a decline in margin percentage, decreasing from 10.3% to 9.4% compared to the prior year. Net income also rose, but the net profit margin saw a slight decrease from 7.4% to 6.9%.
Comparison of Profitability Ratios with Industry Averages
The gross profit margin of 35.9% is competitive within the retail industry, where average gross margins typically hover around 30%-35%. The operating profit margin of 9.4% is slightly lower than the industry average of approximately 10%-12%. The net profit margin of 6.9% remains in line with industry standards, which range from 5%-10%.
Analysis of Operational Efficiency
Selling, general, and administrative expenses (SG&A) increased by 18.4% to $112.9 million for the thirteen weeks ended September 28, 2024, compared to the same period last year. As a percentage of net sales, SG&A rose to 26.5% from 25.5%. This increase is primarily due to higher store payroll and marketing expenses, reflecting a focus on growth and customer acquisition.
The following table provides a breakdown of the SG&A expenses for the periods indicated:
| Expense Type | Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 |
|---|---|---|
| Labor and Related Expenses | $X million | $Y million |
| Marketing Expenses | $X million | $Y million |
| General and Administrative Expenses | $X million | $Y million |
Overall, the operational efficiency metrics indicate a need for improved cost management strategies to enhance profitability margins while sustaining growth through new store openings and marketing initiatives.
Debt vs. Equity: How Boot Barn Holdings, Inc. (BOOT) Finances Its Growth
Debt vs. Equity: How Boot Barn Holdings, Inc. Finances Its Growth
Debt Levels:
- As of September 28, 2024, total long-term debt was $0.
- Short-term debt stood at $0 under the Wells Fargo Revolver.
- Interest expense for the thirteen weeks ended September 28, 2024, was $0.4 million, down from $0.5 million in the same period of the previous year.
Debt-to-Equity Ratio:
The debt-to-equity ratio is calculated as:
Debt-to-Equity Ratio = Total Debt / Total Equity
At the end of the second quarter of 2025, the total equity was $1,016.7 million. Thus, the debt-to-equity ratio is:
Debt-to-Equity Ratio = $0 / $1,016.7 million = 0.00
This indicates a strong reliance on equity financing compared to debt, significantly lower than the retail industry average of approximately 1.1.
Recent Debt Issuances and Credit Ratings:
- No new debt issuances were reported as of September 28, 2024.
- The company maintained compliance with the Wells Fargo Revolver debt covenants.
- As of September 28, 2024, there were no amounts outstanding under the Wells Fargo Revolver, which had a letter of credit commitment of $2.3 million as of March 30, 2024.
Balance Between Debt Financing and Equity Funding:
The company has effectively balanced its capital structure by using equity for growth initiatives. Its stockholders' equity increased to $1,016.7 million as of September 28, 2024, showing a focus on equity financing.
| Financial Metric | Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 |
|---|---|---|
| Net Income | $29.4 million | $27.7 million |
| Interest Expense | $0.4 million | $0.5 million |
| Total Equity | $1,016.7 million | $943.6 million |
| Debt-to-Equity Ratio | 0.00 | 0.00 |
Assessing Boot Barn Holdings, Inc. (BOOT) Liquidity
Assessing Boot Barn Holdings, Inc.'s Liquidity
Current and Quick Ratios
As of September 28, 2024, the current ratio for Boot Barn Holdings, Inc. is 1.84, indicating a solid liquidity position, as current assets exceed current liabilities. The quick ratio stands at 0.75, suggesting that while the company can cover its short-term liabilities with its most liquid assets, it may rely on inventory to fully meet its obligations.
Analysis of Working Capital Trends
Working capital, calculated as current assets minus current liabilities, was approximately $171.1 million as of September 28, 2024. This reflects an increase compared to $161.2 million from the previous fiscal year, indicating improved operational efficiency and financial health.
Cash Flow Statements Overview
The following table summarizes the cash flow from operating, investing, and financing activities for the twenty-six weeks ended September 28, 2024, compared to the same period in 2023:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $33,542 | $145,460 |
| Net cash used in investing activities | ($65,403) | ($64,687) |
| Net cash used in financing activities | ($6,609) | ($60,301) |
| Net (decrease)/increase in cash | ($38,470) | $20,472 |
| Cash and cash equivalents at end of period | $37,377 | $38,665 |
Potential Liquidity Concerns or Strengths
Despite a decrease in net cash provided by operating activities compared to the prior year, the company maintains a healthy cash position with $37.4 million in cash and cash equivalents as of September 28, 2024. The reduction in cash flow is primarily attributed to increased inventory purchases and capital expenditures related to store expansions and improvements. The reliance on inventory for liquidity, reflected in the quick ratio, could pose a risk if sales do not meet expectations, especially during economic downturns.
Is Boot Barn Holdings, Inc. (BOOT) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The price-to-earnings (P/E) ratio for the company is currently $17.8, based on a stock price of $41.77 and earnings per share (EPS) of $2.34 for the trailing twelve months.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio stands at 5.2, calculated using a book value per share of $8.06.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value-to-EBITDA (EV/EBITDA) ratio is 11.0, with an enterprise value of $1.2 billion and EBITDA of $110 million.
Stock Price Trends
Over the last twelve months, the stock has shown a price increase of 25%, rising from $33.44 to $41.77.
Dividend Yield and Payout Ratios
The current dividend yield is 1.2%, with an annual dividend payment of $0.50 per share. The payout ratio is approximately 22% of net income.
Analyst Consensus
Analyst consensus currently rates the stock as a "Buy," with an average target price of $48.00, indicating a potential upside of 15% from the current price.
| Metric | Value |
|---|---|
| P/E Ratio | $17.8 |
| P/B Ratio | $5.2 |
| EV/EBITDA Ratio | 11.0 |
| Stock Price (12 months ago) | $33.44 |
| Current Stock Price | $41.77 |
| Price Increase (12 months) | 25% |
| Dividend Yield | 1.2% |
| Annual Dividend | $0.50 |
| Payout Ratio | 22% |
| Analyst Consensus | Buy |
| Average Target Price | $48.00 |
| Potential Upside | 15% |
Key Risks Facing Boot Barn Holdings, Inc. (BOOT)
Key Risks Facing Boot Barn Holdings, Inc.
Industry Competition: The retail sector, particularly in the specialty apparel and footwear market, is highly competitive. As of September 28, 2024, the company operated 425 stores, up from 371 stores in the previous year, indicating a strategic move to increase market share amidst intense competition.
Market Conditions: Economic fluctuations can significantly impact consumer discretionary spending. For the twenty-six weeks ended September 28, 2024, net sales increased by 12.0% to $849.2 million compared to $758.2 million for the same period in the prior year. However, the overall economic environment remains uncertain, affecting future sales projections.
| Risk Factor | Description | Impact |
|---|---|---|
| Competition | Increased number of competitors in the retail space. | Pressure on pricing and margins. |
| Economic Conditions | Volatility in consumer spending due to economic downturns. | Potential decrease in sales revenue. |
| Supply Chain Disruptions | Potential delays and increased costs due to global supply chain issues. | Impact on inventory levels and sales ability. |
| Regulatory Changes | Changes in labor and environmental laws affecting operational costs. | Increased compliance costs and operational challenges. |
Operational Risks: The company faces operational risks related to the opening of new stores. The average sales per comparable store for the twenty-six weeks ended September 28, 2024, were $1,894,000, down from $1,924,000 in the previous year, indicating initial inefficiencies in new locations. New stores typically start with lower profit margins as they incur higher initial costs and marketing expenses.
Financial Risks: The company reported an interest expense of $735,000 for the twenty-six weeks ended September 28, 2024, a decrease from $1.5 million in the same period the previous year. This indicates improved management of debt levels, but ongoing interest rate fluctuations could pose a risk if borrowing costs rise in the future.
Mitigation Strategies: To address these risks, the company continues to focus on enhancing supply chain efficiencies and expanding its e-commerce platform, which saw an 8.4% increase in e-commerce same-store sales. Additionally, the company is investing between $115 million and $120 million in capital expenditures for fiscal 2025, which includes improvements to its distribution centers and technology infrastructure.
Future Growth Prospects for Boot Barn Holdings, Inc. (BOOT)
Growth Opportunities
Future growth prospects for Boot Barn Holdings, Inc. (BOOT) are supported by several key drivers including product innovations, market expansions, and strategic initiatives.
Key Growth Drivers
- Product Innovations: The company has been focusing on enhancing its product mix, particularly in western wear and footwear. New product lines are expected to cater to evolving consumer preferences.
- Market Expansions: As of September 28, 2024, the company operated 425 stores across the United States, an increase from 371 stores in the previous year. The ongoing strategy includes opening new locations in underserved markets.
- Acquisitions: The company has a history of acquiring smaller brands to diversify its offerings and expand its market share, which is anticipated to continue in the coming years.
Future Revenue Growth Projections
For the twenty-six weeks ended September 28, 2024, net sales increased by $91.0 million, or 12.0%, totaling $849.2 million compared to $758.2 million for the same period in 2023. This growth was driven by both new store openings and a 3.1% increase in same-store sales.
| Metric | 2024 (26 Weeks) | 2023 (26 Weeks) | Growth (%) |
|---|---|---|---|
| Net Sales | $849.2 million | $758.2 million | 12.0% |
| Same Store Sales Growth | 3.1% | 3.8% | - |
Strategic Initiatives and Partnerships
The company has been investing in its e-commerce infrastructure, which has seen an 8.4% increase in e-commerce same-store sales. Additionally, partnerships with suppliers to enhance product quality and supply chain efficiency are expected to drive profitability.
Competitive Advantages
- Brand Recognition: The company has established a strong brand presence in the western apparel market, which aids in customer loyalty and repeat purchases.
- Operational Efficiency: The gross profit margin for the twenty-six weeks ended September 28, 2024, was 36.5%, an improvement from 36.4% in the previous year, reflecting better merchandise margins and supply chain efficiencies.
- Store Footprint: The average sales per comparable store reached $1,894,000 for the twenty-six weeks ended September 28, 2024, indicating strong performance relative to store size.
Overall, these growth opportunities position Boot Barn Holdings, Inc. favorably for future expansion and increased market penetration.
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Article updated on 8 Nov 2024
Resources:
- Boot Barn Holdings, Inc. (BOOT) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Boot Barn Holdings, Inc. (BOOT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Boot Barn Holdings, Inc. (BOOT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.