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On Friday, JPMorgan analyst Matthew Boss increased the price target on Boot Barn (NYSE:BOOT) Holdings Inc (NYSE: BOOT) shares to $209 from $200, while maintaining an Overweight rating. The revision follows Boot Barn’s third-quarter earnings per share (EPS) of $2.43, which aligned with preannounced results on January 10. The company’s performance was driven by a same-store sales increase of 8.6%, gross margin (GPM) expansion of 100 basis points year-over-year to 39.3%, and selling, general, and administrative (SG&A) leverage of 90 basis points to 22.9%. These results led to an EBIT margin of 16.4%, surpassing the Street’s expectation of 16.2%.
Boot Barn’s management has provided guidance for fourth-quarter EPS in the range of $1.17 to $1.26, which is roughly in line with the Street’s forecast of $1.25. The guidance is based on an anticipated same-store sales increase of between 5.3% and 7.8%, gross margin expansion of 30 to 60 basis points year-over-year to a midpoint of 36.4%, and SG&A leverage of 45 to 75 basis points. Notably, January’s same-store sales grew by 8.3%, demonstrating a consistent performance with the third quarter and holiday season, and indicating a potential upside to the fourth quarter’s sales outlook.
Further insights from the company’s management included confirmation of a 15% annual growth in new store units through fiscal year 2026, with expectations of opening 68 to 70 new stores. These new stores are projected to contribute approximately $3 million in average unit volumes (AUVs), nearly double the pre-pandemic levels, and yield about 60% cash-on-cash returns in the first year. The CEO of Boot Barn, Jim Conroy, indicated that the long-term model algorithm remains unchanged, expecting low-to-mid single-digit same-store sales growth and 15% annual new store growth.
In terms of earnings, Boot Barn’s CFO Greg Hackman pointed to an opportunity for merchandise margin expansion and operating margin improvement, which could result in high-teens EPS growth into fiscal year 2026. JPMorgan’s analysis suggests that this could translate to an 18-20% EPS growth algorithm. As a result, JPMorgan has raised its EPS forecasts for fiscal years 2025 and 2026 to $5.90 and $6.88, respectively, both slightly above the Street’s estimates. The new price target of $209 is based on 26.5 times the calendar year 2026 EPS, reflecting a 1.5 times pre-pandemic price/earnings to growth (PEG) ratio due to the anticipated high-teens EPS growth model. With a current P/E ratio of 34.8x and revenue of $1.85 billion, InvestingPro analysis reveals 16 additional key insights about Boot Barn’s valuation and growth prospects, available exclusively to subscribers.
In other recent news, Boot Barn Holdings Inc. reported robust third-quarter results, exceeding analyst expectations with adjusted earnings per share of $2.43 and a revenue increase of 16.9% year-on-year to $608.2 million. The company also saw an 8.6% rise in same-store sales, with retail store sales up 8.2% and e-commerce sales surging 11.1%. Despite these positive developments, the company’s future guidance fell short of analyst estimates, causing a 7.5% drop in shares in after-hours trading. For the full fiscal year 2025, Boot Barn anticipates an EPS of $5.81-$5.90 and revenue in the range of $1.91-1.92 billion. The company’s fourth-quarter projections include an EPS of $1.17-$1.26 and revenue between $451-460 million. Interim Chief Executive Officer John Hazen expressed confidence in the business’s overall tone and the brand’s future growth potential.
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