Thursday, 18 April 2024
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Sportsman’s Warehouse (Ticker: NASDAQ:) reported fourth-quarter net sales of $370.4 million, aligning with the lower end of their guidance, while earnings per share surpassed expectations. The company’s inventory and debt levels concluded the year on a positive note, better than anticipated. With a focus on returning to profitability in 2024, Sportsman’s Warehouse plans to enhance retail fundamentals, channel capabilities, loyalty programs, and marketing strategies, along with investing in technology and talent to support store operations.

Key Takeaways

  • Fourth-quarter net sales hit $370.4 million; earnings per share exceeded expectations.
  • Inventory and debt levels finished the year better than expected.
  • Plans for 2024 include improving profitability and investing in technology and talent.
  • The company aims to streamline inventory management and refine product assortment.
  • Gross margin for the quarter stood at 26.8%; SG&A expense rose to 29% of net sales.
  • Full-year sales reached approximately $1.29 billion; adjusted EPS was negative $0.64.
  • Inventory ended at $354.7 million, a 20% per-store reduction from the previous year.
  • Fiscal 2024 net sales projected between $1.15 billion and $1.23 billion; adjusted EBITDA expected to be $45 million to $65 million.

Company Outlook

  • Sportsman’s Warehouse aims for a reset in 2024 to achieve profitability and retail improvement.
  • The company anticipates net sales for fiscal 2024 to range from $1.15 billion to $1.23 billion, with adjusted EBITDA between $45 million and $65 million.
  • A strategic plan is in place to focus on debt reduction through free cash flow generation in 2024.

Bearish Highlights

  • The fourth quarter saw a net loss of $8.7 million, a downturn from the net income of $11 million in the previous year.
  • Adjusted net loss was reported at $7.5 million, and adjusted EBITDA plummeted to $5.3 million from $28.2 million in the prior year.
  • Gross margin pressures were felt in the ammunition category due to competitive pricing.

Bullish Highlights

  • The company exceeded its inventory reduction goal in the fourth quarter, ending with inventory $10 million below guidance.
  • Year-over-year growth was observed in the camp and fish categories, attributed to early investments and better inventory management.
  • Apparel and footwear categories have been reset, with expected positive impacts to be seen in the fall season.

Misses

  • Full-year adjusted EPS was in the negative, at $0.64 per diluted share.
  • Gross margin for the quarter was affected by promotional…

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