Earnings Highlights and Review: Sportsman’s Warehouse Quarterly Sales Exceeded Expectations

Research Desk Line-up: Black Diamond Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 8, 2017 / Pro-Trader Daily publishes post-earnings coverage on Sportsman’s Warehouse Holdings, Inc. (NASDAQ: SPWH) following the Company’s release of its first quarter fiscal 2017 financial results on May 18, 2017. The outdoor sporting goods specialty retailer reported a 3.5% increase in sales and also provided guidance for the upcoming quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Sporting Goods industry. Pro-TD has currently selected Black Diamond, Inc. (NASDAQ: BDE) for due-diligence and potential coverage as the Company reported on May 08, 2017, its financial results for Q1 2017 which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on Black Diamond when we publish it.

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Earnings Reviewed

For the 13 weeks ended April 29, 2017, S Sportsman’s Warehouse’s net sales increased by 3.5% to $156.90 million compared to $151.62 million in Q1 2016. The Company’s revenue number exceeded analysts’ consensus estimates of $151.4 million. Sportsman’s same store sales had decreased by 6.9% on a y-o-y basis.

For Q1 2017, Sportsman’s Warehouse’s loss from operations was ($3.8) million compared to income from operations of $2.4 million in Q1 2016. The Company’s adjusted loss from operations, which excludes professional and other fees incurred in connection with the evaluation of a strategic acquisition was ($2.0) million compared to adjusted income from operations of $2.5 million in the year earlier same quarter.

During Q1 2017, Sportsman’s Warehouse’s interest expense decreased to $3.2 million from $3.6 million in Q1 2016. The Company’s adjusted EBITDA decreased to $4.2 million from $7.4 million in the year ago same period.

Sportsman’s Warehouse reported net loss of ($4.5) million, or diluted loss per share of $(0.11), for Q1 2017 compared to net income of $0.3 million, or diluted earnings per share of $0.01, in Q1 2016. The Company’s adjusted net loss, excluding professional and other fees incurred in connection with the evaluation of a strategic acquisition was ($3.4) million, or $(0.08) per diluted share, compared to an adjusted loss which excludes secondary offering expenses as well as prior year tax credits of ($0.1) million, or $(0.00) for Q1 2016. The Company’s adjusted loss was wider than Wall Street’s expectations of a loss of $(0.07) per share.

Balance sheet highlights

As of April 29, 2017, Sportsman’s Warehouse had total debt of $212.5 million consisting of $78.1 million outstanding under its revolving credit facility and $134.4 million outstanding under the term loan, net of unamortized discount, and debt issuance costs. Sportsman’s Warehouse’s total liquidity, which was comprised of cash plus $33.0 million of availability on revolving credit facility, was $35.2 million at the end of Q1 2017. The Company’s Q1 2017 ending inventory was $288.3 million compared with $251 million as of the end of the prior year’s same period. On a per-store basis, inventory decreased by 2.6%.

Store Update

During Q1 2017, Sportsman’s Warehouse opened four new stores and ended the reported quarter with 79 stores in 22 states, or square footage growth of 10.7% from the end of the prior year’s same quarter.

Subsequent to the Quarter End

On May 18, 2017, Sportsman’s agreed with its lender to amend certain financial covenants of its term loan, providing additional flexibility for the Company. With this amendment, the Company increased the maximum leverage ratio in each of the remaining quarters by amounts ranging from 0.2x to 1.3x with an average quarterly increase of 0.75x. As a result of the amendment, the interest rate on the Company’s revolver will increase 25 basis points to LIBOR plus 6.25% with a 1.25% LIBOR floor compared to the previous revolver of LIBOR plus 6.0% with a 1.25% LIBOR floor.

Outlook

For Q2 2017, Sportsman’s net sales are expected to be in the range of $189.0 million to $194.0 million based on a same store sales decline in the range of 8.0% to 10.0%. The Company’s net income is expected to be in the range of $5.1 million to $6.0 million with diluted earnings per share of $0.12 to $0.14.

For FY17, Sportsman’s reiterated its previously provided annual guidance. The Company’s net sales are expected to be in the range of $825.0 million to $845.0 million based on same store sales decline in the range of 4.0% to 6.0%. The Company is projecting adjusted net income to be in the range of $25.5 million to $29.0 million with adjusted earnings per diluted share of $0.60 to $0.68.

Stock Performance

At the closing bell, on Wednesday, June 07, 2017, Sportsman’s Warehouse’s stock slipped 2.38%, ending the trading session at $5.33. A total volume of 331.98 thousand shares were traded at the end of the day. In the last month and previous three months, shares of the Company have surged 23.38% and 18.71%, respectively. Shares of the Company have a PE ratio of 9.13. At Wednesday’s closing price, the stock’s net capitalization stands at $241.34 million.

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