How Sportsman's Warehouse Earnings Knocked It Out of the Park

Retail

Published: August 18, 2017 11:25 am

Last Updated: January 12, 2020 9:00 am

Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH) was perhaps the best performing stock on Friday, coming off one of the worst trading days of 2017. The drop in equities doesn’t seem to be stopping as the broad markets are continuing to trade off. However, Sportsman’s Warehouse seemed to offer some shelter for investors in Friday’s session, and the stock actually bounced off its all-time low.

When the company reported its most recent financial results after the markets closed on Thursday, it posted $0.15 in earnings per share (EPS) and $191.5 million in revenue, versus consensus estimates of $0.13 in EPS and revenue of $191.9 million. The fiscal second quarter of last year reportedly had EPS of $0.20 and $189.8 million in revenue.

Sportsman’s Warehouse opened four new stores in the most recent quarter and ended the period with a total of 83 stores.

In terms of the outlook, management expects to see EPS in the range of $0.23 to $0.28 and net sales between $220 million and $225 million. The consensus estimates call for $0.24 in EPS and $226.66 million in revenue for the fiscal third quarter.

CEO John Schaefer commented:

Our second quarter topline results were in line with our expectations given the anticipated continued softness in firearm demand as we anniversaried difficult comparisons from the Orlando tragedy in June 2016. Our better than expected bottom line results were driven by stronger gross margins resulting primarily from the higher margin product mix shift that we experienced in the second quarter. We remained focused on continuing to capture market share during the quarter and are encouraged by the progress we made against our strategic priorities of expanding our private label segment, maximizing our loyalty program, investing in our best-in-class customer service and enhancing our e-commerce platform.

Shares of Sportsman’s Warehouse were last seen up over 31% at $4.55, with a consensus analyst price target of $6.57 and 52-week range of $3.40 to $11.30.

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