$BOOT Earnings Update

Boot Barn Holdings’ Q1 FY2027 Earnings came out last week. As it’s one of the companies I cover, here’s an update on how they did and my thoughts.

Results

• Revenue: $593.5MM vs $584MM expected (+1.7% beat)
• EBITDA: $98.1MM vs $92.8MM expected (+5.7% beat)
• EBIT: $75.8MM vs $69.5MM expected (+9.1% beat)
• Reported EPS: $2.29 vs $1.70 expected (+34.7% beat)
• Core EPS (Ex-Tariff): $1.91 vs $1.70 expected (+12.4% beat)

The company’s revenue increased 18% on the back of 27 new store openings and strong consolidated SSS growth of 4.7% (retail stores +3.8%, e-commerce +13.4%). Merchandise margins exceeded guidance as well. Results benefited from a $14.7MM tariff refund, adding $0.38 to reported EPS. Excluding this one-off, core operational EPS was still a solid $1.91.

During the quarter, $BOOT sponsored many grand openings and music events, generating marketing expenses that affected SG&A less than expected. This disciplined spending contributed to better-than-expected operating margins.

Even though the Q1 earnings beat expectations across the board, management noted that preliminary fiscal July (early Q2) SSS moderated to flat (0.0%), which led to a brief pullback in the stock. Management attributed this transient slowdown to tough year-over-year comps, fewer regional stadium and concert events, and minor traffic distractions from the World Cup during a lower-volume summer month. Core categories like overall apparel, denim, and work footwear still exhibited resilient growth.

Revisiting the Thesis

These earnings results reaffirm the thesis and case for investment.

Omnichannel expansion continues to shine with e-commerce delivering another double-digit SSS quarter (+13.4%). Customers are accessing broader assortments of products that deliver higher margins. Greater e-commerce demand is a structural driver of margin expansion since it contributes directly to $BOOT’s exclusive brands.

This supports the next leg of the thesis: exclusive brands as a margin driver. $BOOT has created standalone websites for its EBs, so more e-commerce growth contributes to this. We also see this manifest in the results of the quarter.

Excluding tariff refunds, core product margins still expanded 60 bps and exceeded company expectations. While EB penetration is a long-term driver of margins, the company noted they expect flat EB penetration for the full year due to strong third-party work boot demand. This is actually a positive outcome: core merchandise margins are expanding even without additional EB mix shift, demonstrating that $BOOT’s margin power is becoming less reliant strictly upon EBs.

Overall Thoughts

I remain confident in the company’s growth story. It continues to support itself through ~50%+ cash-on-cash new store returns to sustain growth with zero net debt. The thesis remains solid, and I’d argue it’s stronger now since exclusive brands can add to margin growth over time without being the company’s only path to margin expansion. The stock dropped on the July SSS update but recovered afterward. My price target remains unchanged at this time.

Disclaimer:

This blog post is for educational and informational purposes only. It is not financial advice. I am not a licensed financial advisor, and nothing in this post should be interpreted as a recommendation to buy or sell any securities. Trading involves risk, and results are not guaranteed. Past performance is not indicative of future results. Always do your own research and consult with a licensed financial professional before making any investment decisions. None of my statements or points of view are reflective of the views of Deep Knowledge Investing.