On Wednesday, B.Riley analyst Anna Glaessgen upgraded Sportsman's Warehouse (NASDAQ:SPWH) stock from Neutral to Buy, doubling the price target from $2.00 to $4.00. The upgrade followed a quarter that showcased significant improvements in the company's performance, particularly in the crucial hunting category.
The analyst highlighted that Sportsman's Warehouse Holdings, Inc. demonstrated meaningful sequential improvement with comparable store sales that exceeded expectations. This was primarily driven by an increase in hunting category sales. Additionally, the company saw a year-over-year increase in gross margin, which the analyst attributed to a refined assortment strategy that helped reduce the risk of liquidating softgoods.
The company's recent decision to expand, with one new store planned for 2025, was also seen as a positive indicator of management's confidence. This move, albeit modest, signals the beginning of an expansion strategy for Sportsman's Warehouse.
The analyst expressed confidence in the company's direction under the leadership of the new CEO and the strategic hires, such as the Chief Retail Officer. These changes at the executive level have been key in steering the company through a period marked by high volatility due to intense market pressure and ongoing efforts to turn the business around.
This quarter's performance was noted as a turning point that provided the necessary assurance for B.Riley to adopt a more optimistic stance on Sportsman's Warehouse's stock. The firm now sees the company as an early-stage turnaround story, with the recent improvements serving as a foundation for future growth.
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