Group 1: Company Performance - Boot Barn's shares have increased by 22.9% over the past month and have gained 116.9% since the start of the year, outperforming the Zacks Retail-Wholesale sector and the Zacks Retail - Apparel and Shoes industry, which saw returns of 20.9% and 13.3% respectively [1] - The company reported an EPS of $1.2 in its last earnings report, exceeding the consensus estimate of $1.08, and beat the revenue estimate by 1.78% [2] - For the current fiscal year, Boot Barn is expected to post earnings of $5.36 per share on revenues of $1.86 billion, reflecting a 10.52% change in EPS and an 11.45% change in revenues [3] Group 2: Valuation Metrics - Boot Barn has a Value Score of B, a Growth Score of B, and a Momentum Score of A, resulting in a VGM Score of A [6] - The stock currently trades at 31.1X current fiscal year EPS estimates, which is a premium compared to the peer industry average of 17.5X, and on a trailing cash flow basis, it trades at 25.2X versus the peer group's average of 8.3X [6] Group 3: Zacks Rank and Industry Comparison - Boot Barn holds a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions from analysts, indicating potential for further gains [7] - The Retail - Apparel and Shoes industry is positioned in the top 41% of all industries, suggesting positive market conditions for both Boot Barn and its peers [10]

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Market Overview - U.S. markets have continued their upward trend in 2024, building on the rally from 2023 despite recent economic turbulence and recession concerns [1] - The S&P 500 has increased over 16% year-to-date, driven by optimism from a decline in the annual inflation rate to its lowest since early 2021 [2] Economic Indicators - The decline in inflation is seen as positive ahead of expected Federal Reserve rate cuts, with a 25-basis point cut anticipated this month [2] - The Federal Reserve's dovish stance is attributed to steady declines in inflation, aligning with its 2% target [2] Stock Recommendations - Recommended stocks based on relative price strength include Limbach Holdings (LMB), Ubiquiti (UI), Royal Caribbean Cruises (RCL), DaVita (DVA), and Boot Barn Holdings (BOOT) [3] Stock Selection Strategy - Investors should focus on stocks outperforming their sectors in price, as they are more likely to provide significant returns [5] - Stocks that have shown better performance than the S&P 500 over the past 1 to 3 months and have solid fundamentals are ideal candidates [6] Earnings Estimates - Positive estimate revisions for upcoming earnings are crucial, as upward revisions typically lead to price gains [7] - Screening parameters include relative price changes over various time frames and positive current-quarter estimate revisions [8] Stock Profiles - **Limbach Holdings (LMB)**: Market cap of $772.8 million, with a 38.1% year-over-year EPS growth estimate for 2024 and a 115.7% increase in shares over the past year [12][11] - **Ubiquiti (UI)**: Market cap of $12 billion, with a 22.2% growth estimate for fiscal 2025 and a 25.2% increase in shares over the past year [13][12] - **Royal Caribbean Cruises (RCL)**: Market cap not specified, with a 71.1% year-over-year EPS growth estimate for 2024 and a 66% increase in shares over the past year [14][13] - **DaVita (DVA)**: Expected EPS growth rate of 17.5% over the next 3 to 5 years, with a 60.2% increase in shares over the past year [15][16] - **Boot Barn Holdings (BOOT)**: Market cap of $4.5 billion, with an 11.2% upward revision in earnings estimates and a 69.5% increase in shares over the past year [16][17]

Company Performance - Boot Barn (BOOT) has gained approximately 99.9% year-to-date, significantly outperforming the average return of 14.2% for the Retail-Wholesale sector [4] - Boot Barn currently holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook [3] - The Zacks Consensus Estimate for Boot Barn's full-year earnings has increased by 9.6% over the past three months, reflecting improved analyst sentiment [4] Industry Comparison - Boot Barn is part of the Retail - Apparel and Shoes industry, which has an average gain of 4.8% this year, indicating that Boot Barn is performing better than its industry peers [6] - In contrast, Carvana (CVNA), another stock in the Retail-Wholesale sector, has a year-to-date return of 146.9% and a Zacks Rank of 2 (Buy) [5] - The Internet - Commerce industry, to which Carvana belongs, has seen a 16% increase this year, ranking 61 among industries [6] Sector Ranking - The Retail-Wholesale sector includes 211 companies and is currently ranked 9 in the Zacks Sector Rank [2] - The Zacks Rank system focuses on earnings estimates and revisions to identify stocks with improving earnings outlooks [3]

Company Performance - Boot Barn's shares have increased by 13.6% over the past month, reaching a new 52-week high of $162.16, and have gained 99.9% since the start of the year [1] - The company reported EPS of $1.2 in its last earnings report, exceeding the consensus estimate of $1.08, and beat the revenue estimate by 1.78% [2] - For the current fiscal year, Boot Barn is expected to post earnings of $5.34 per share on revenues of $1.84 billion, reflecting a 10.31% change in EPS and a 10.67% change in revenues [3] Valuation Metrics - Boot Barn has a Value Score of C, a Growth Score of B, and a Momentum Score of D, resulting in a VGM Score of B [6] - The stock trades at 28.7X current fiscal year EPS estimates, which is a premium compared to the peer industry average of 16.2X, and at 23.2X trailing cash flow versus an average of 7.5X for its peer group [6] Zacks Rank - Boot Barn holds a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, indicating potential for future growth [7] Industry Comparison - The Retail - Apparel and Shoes industry is in the top 35% of all industries, suggesting favorable conditions for Boot Barn and its peers [10] - Another industry peer, Industria de Diseno Textil SA (IDEXY), has a Zacks Rank of 2 (Buy) and shows strong performance with a 4.55% earnings beat and expected earnings of $1.05 per share on revenues of $42.37 billion [8][9]

Core Insights - Boot Barn's shares surged to all-time highs following analysts raising their price targets due to positive same-store sales trends [1][3] - Management provided an update indicating a rebound in same-store sales after a slight dip in July, with growth accelerating in September [2][4] - Preliminary Q2 numbers show a 4% year-over-year gain in same-store sales, compared to just over 1% in the previous quarter [4][5] Analyst Reactions - JPMorgan analyst Matthew Boss raised Boot Barn's price target by approximately 10% to $160 per share based on the same-store sales trends [3] - The positive analyst sentiment contributed to the stock's rise to an all-time high [1][3] Company Performance - Boot Barn's preliminary Q2 results indicate strong performance, countering fears that the brand might lose relevance [4][5] - The company is actively opening new locations across the country, further supporting its growth narrative [5]

Core Viewpoint - Boot Barn's 1Q25 results indicate a return to comparable sales growth after a challenging FY24, driven by improved digital advertising returns and stable margins despite store expansion [1][2][3] Group 1: Financial Performance - Comparable sales increased by 1.4% in 1Q25, reversing negative trends from 2H24 where same-store sales were down nearly 5% to 10% [2] - Operating margins remained flat, with gross margins up 100 basis points from merchandise but offset by a 100 basis point decline in overhead [2] - The company expects FY25 sales growth of 9-11% with flat comparable sales, and operating margins projected to remain around 11.5% [3] Group 2: Management and Strategy - Boot Barn's management is recognized for effective ad spend and inventory management, focusing on long-term profitability rather than short-term growth [4] - The company plans to expand store square footage by 15% annually, with a target to grow from 400 to 500 stores [3] Group 3: Valuation and Market Position - Boot Barn's current market cap is $4.1 billion, with expected operating profits of $220 million, leading to a P/E multiple of 25x and an earnings yield of 4% [5] - The stock is considered overvalued, requiring significant growth to achieve a fair return, with potential risks from execution, fashion cycles, and macroeconomic factors [5]

Group 1 - Boot Barn (BOOT) is currently outperforming its peers in the Retail-Wholesale sector with a year-to-date return of 85.5%, compared to the sector average of 15.1% [4] - The Zacks Rank for Boot Barn is 1 (Strong Buy), indicating a positive earnings outlook and strong analyst sentiment, with a consensus estimate for full-year earnings having increased by 8.4% over the past three months [3][4] - Boot Barn belongs to the Retail - Apparel and Shoes industry, which has an average gain of 16.2% this year, further highlighting its strong performance relative to the industry [6] Group 2 - Carvana (CVNA) is another strong performer in the Retail-Wholesale sector, with a year-to-date return of 201.8% and a Zacks Rank of 2 (Buy) [5] - The Internet - Commerce industry, which includes Carvana, has seen an average increase of 15.3% this year, indicating that while Carvana is performing well, it is still behind Boot Barn in terms of year-to-date returns [6] - Investors are encouraged to monitor both Boot Barn and Carvana for continued strong performance in the Retail-Wholesale sector [7]

Company Performance - Boot Barn's shares have increased by 3.1% over the past month and reached a new 52-week high of $138.78, with a year-to-date gain of 76% compared to 8.8% for the Zacks Retail-Wholesale sector and 8.1% for the Zacks Retail - Apparel and Shoes industry [1] - The company has consistently exceeded earnings expectations, reporting EPS of $1.2 against a consensus estimate of $1.08 in its last earnings report on August 7, 2024, and beating revenue estimates by 1.78% [2] Financial Projections - For the current fiscal year, Boot Barn is projected to achieve earnings of $5.28 per share on revenues of $1.84 billion, reflecting an 8.87% increase in EPS and a 10.67% increase in revenues [3] - In the next fiscal year, earnings are expected to rise to $6.26 per share on $2.1 billion in revenues, indicating year-over-year changes of 18.56% and 13.75%, respectively [3] Valuation Metrics - Boot Barn has a Value Score of B, a Growth Score of B, and a Momentum Score of F, resulting in a combined VGM Score of B [6] - The stock trades at 25.6 times current fiscal year EPS estimates, which is a premium compared to the peer industry average of 15.8 times, and at 20.4 times trailing cash flow versus an average of 8.2 times for its peer group [6] Zacks Rank - Boot Barn holds a Zacks Rank of 1 (Strong Buy) due to favorable earnings estimate revisions from analysts [7] - The company meets the criteria for investors looking for stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, indicating potential for future growth [8] Industry Comparison - Boot Barn's performance is notable within the Retail - Apparel and Shoes industry, which ranks in the bottom 70% of all industries, yet it shows strong fundamentals and potential tailwinds [11]

Financial Data and Key Metrics Changes - Revenue increased by 10% to $423 million, with consolidated same-store sales growth of 1.4% [4][14] - Earnings per diluted share rose to $1.26 from $1.13 in the prior year [6][14] - Merchandise margin expanded by 100 basis points due to supply chain efficiencies [6][14] Business Line Data and Key Metrics Changes - Retail store same-store sales grew by 0.8%, while e-commerce same-store sales increased by 6.7% [4][14] - Men's Western boots and apparel led the merchandise category with mid-single-digit comp growth [9] - Ladies Western boots saw low single-digit comp growth, while Ladies Apparel experienced a low single-digit decline [9] Market Data and Key Metrics Changes - The company opened 11 new stores, bringing the total to 411 across 46 states [7] - The e-commerce channel showed strong performance, with bootbarn.com sales growing approximately 14% [10] Company Strategy and Development Direction - The company aims to open 60 new stores this fiscal year, maintaining a commitment to 15% square footage growth annually [7][19] - Focus on expanding exclusive brand penetration, which increased to 38.1% [11] - The company is enhancing its omnichannel strategy, with over half of online orders fulfilled by stores [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer sentiment and macroeconomic uncertainty [12][20] - The company raised its full-year sales guidance to $1.85 billion, reflecting an 11% growth over fiscal '24 [17][18] - Management noted challenges in mid-July due to external factors but reported a return to positive sales growth afterward [12] Other Important Information - Inventory increased by 11% year-over-year to $627 million, with a 6% increase on a same-store basis [15] - The company is focused on supply chain efficiencies and vendor direct purchasing to enhance margins [11][55] Q&A Session All Questions and Answers Question: Can you break down the drivers behind the return to positive same-store sales? - Management noted broad-based sequential improvement across merchandise categories, geographies, and channels, with positive growth in average transactions per store in May and June [22][23] Question: What are the puts and takes in the second quarter gross margin? - Management expects a 60 basis point improvement in merchandise margin driven by supply chain efficiencies, with a 90 basis point deleverage in buying and occupancy costs [26] Question: How are company-specific initiatives impacting sales? - Management highlighted efforts to balance pricing across product assortments and shift marketing focus to generate immediate demand, resulting in positive growth in units per transaction [28][31] Question: What is the impact of the Morgan Wallen sponsorship? - Management reported an uptick in customer capture, particularly among younger and female demographics, correlating with the sponsorship [32] Question: How is the workwear side of the business trending? - Management indicated that work boots saw slight sequential improvement, while work apparel remains negative but is being addressed through assortment changes [35] Question: How is the company managing sourcing exposure from China? - Management has reduced sourcing exposure from China to about 37-38% and continues to monitor risks associated with potential tariff increases [39] Question: What changes have been made in the online channel? - Management implemented assortment changes and improved online marketing strategies, resulting in a recovery in e-commerce sales [42][43]