Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — ICR Conference 2020
37 slides from Boot Barn's conference presentation, Jan 13, 2020
Slide 1: ICR Conference January 2020
ICR Conference January 2020 1
Slide 2: Important Information
IMPORTANT INFORMATION Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this presentation are forward-looking statements. You can identify forward-looking s
Slide 3: Strong Q3 Fiscal 2020 Results
STRONG Q3 FISCAL 2020 RESULTS PRELIMINARY Q3 Q3 FY 2019 Q3 FY 2018 METRICS FY 2020 RESULTS RESULTS RESULTS Total sales growth +11.8% +13.0% +12.7% Same store sales growth +6.7%1 +9.2% +5.2% (Stores +5.7% (Stores +8.6% (Stores +7.9% E-commerce +11.0%) E-commerce +11.6%) E-commerce -4.9%) Merchandise
Slide 4: Agenda
AGENDA BOOT BARN STORY STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI-CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE RECAP & LOOKING FORWARD 4
Slide 5: Boot Barn Is a Compelling Investment Story
BOOT BARN IS A COMPELLING INVESTMENT STORY NATIONAL LEADER IN STRONG OMNI-CHANNEL GROWTH AND PROFIT ATTRACTIVE NICHE BRAND PRESENCE ENHANCEMENT OPPORTUNITIES • Leader and authority in the • Healthy same store sales • Proven ability to drive growth western and work industry growth in stores and onlin
Slide 6: Bucking the Retail Trend
BUCKING THE RETAIL TREND Customer Base • Diversified across gender and demographics • Seeks authenticity • Highly loyal customer embraces B Rewarded program • Track record of growing customer database Sales Growth • New store opportunity plus tuck-in acquisitions • SSS track record (broad based) • D
Slide 7: A New Perspective on America
A NEW PERSPECTIVE ON AMERICA 7
Slide 8: Urban Living
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Slide 9: Rural Living
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Slide 10: Our Customer
OUR CUSTOMER 10
Slide 11: Our Customers' Lifestyle
OUR CUSTOMERS’ LIFESTYLE Top 3 vehicles sold in 2019 were pick-up trucks1 Country music popularity continues to rise2 Hundreds of rodeos held in the U.S. Popular spectator sport 1 Reuters 1/6/2020, “Table: Top 20 vehicles sold in the United States in 2019”; 2 “2018 GfK Consumer Life Survey: 9% Five
Slide 12: Diversified Sales Mix Mitigates Risk
DIVERSIFIED SALES MIX MITIGATES RISK Western: 70% of Sales2 PRODUCT MIX1 Footwear 52% Apparel 34% Hats, Accessories & Other 14% END USER1 Men 65% Women 23% Work and Other: 30% of Sales2 Unisex 7% Kids 5% CHANNEL1 Stores 83% E-commerce 17% 12 1 Fiscal year ended March 30, 2019. 2As of March 30, 2019,
Slide 13: Western: Everyday Merchandise with Limited Fashion Risk
EVERYDAY MERCHANDISE WITH LIMITED FASHION RISK BOOTS DENIM WESTERN SHIRTS COWBOY HATS BELTS WESTERN RUGGED FOOTWEAR OUTERWEAR FLAME RESISTANT PANTS SHIRTS WORK & OTHER • Low fashion quotient minimizes markdown exposure • Sales benefit of in-stock outweighs markdown risk • Vast majority of our mercha
Slide 14: History of Profitable Growth
HISTORY OF PROFITABLE GROWTH NET SALES ($MM) CAGR ~20% $777 ~$850 $678 $619 $569 $403 $346 $233 1 2 FY13 FY14 FY15 FY16 FY17 FY18 FY19 TTM Q3'20 ADJUSTED EBIT ($MM) ~$85 CAGR ~20% $68 $46 $49 $39 $41 $32 $23 1 2 FY13 FY14 FY15 FY16 FY17 FY18 FY19 TTM Q3'20 Note: Fiscal year ends March. FY13 includes
Slide 15: Strategic Initiatives
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI-CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 15 15
Slide 16: Merchandising Segmentation
SEGMENTATION DRIVES MARKETING & MERCHANDISING EXECUTION SEGMENTATION MARKETING MERCHANDISING 16
Slide 17: Western Segment
WESTERN SEGMENT 17
Slide 18: Evolution of Customer Segmentation Strategy
EVOLUTION OF CUSTOMER SEGMENTATION STRATEGY Western Work Wonderwest Western Country Work Wonderwest Men’s Men’s Western Men’s Country Men’s Work Women’s Women’s Women’s Western Women’s Country Women’s Work Contemporary 18 18
Slide 19: Country Segment
COUNTRY SEGMENT 19
Slide 20: A Decade of SSS Growth
A DECADE OF SSS GROWTH • Q3 SSS of 6.7% • Stores 5.7% and e-commerce 11.0% • Combined Nov. + Dec. 6.0% • Q3 merchandise margin expansion of ~50 bps • +80 bps better product margin • -30 bps higher freight and duties expenses • Q3 expense leverage of ~40 bps 19.6% 18.1% 17.8% 16.9% 16.2% 14.2%14.1% 1
Slide 21: Strategic Initiatives
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI-CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 21
Slide 22: Three Distinct Brands Online
THREE DISTINCT BRANDS ONLINE 22
Slide 23: Updating Creative Look and Feel of Sheplers.com
UPDATING CREATIVE LOOK AND FEEL OF SHEPLERS.COM 23
Slide 24: Digital Experience Should Drive In-Store Conversion
DIGITAL EXPERIENCE SHOULD DRIVE IN-STORE CONVERSION RANGE FINDER – DIGITAL STORE HUB PRODUCT RECOMMENDATION ENGINE ENDLESS AISLE CAPABILITY BOPIS/BORIS 24
Slide 25: Strategic Initiatives
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI-CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 25
Slide 26: Exclusive Brands Positioned Strategically
EXCLUSIVE BRANDS POSITIONED STRATEGICALLY MEN’S LADIES WORK LEGACY CUSTOMER EXPANDED CUSTOMER BASE 26
Slide 27: Acceleration of Exclusive Brand Penetration
ACCELERATION OF EXCLUSIVE BRAND PENETRATION EXCLUSIVE BRAND SALES PENETRATION1 (Sales $ Millions) (% of Sales) ~$176M 20.7% ~$126M 16.2% ~35x Growth 2.6% ~$5M 2 2 FY2012 FY2019 TTM Q3 FY2020 FY2012 FY2019 TTM Q3 FY2020 EXCLUSIVE BRAND OPPORTUNITIES • FY 2020 growth penetration ~500 basis points • Q3
Slide 28: Exclusive Brands Are Leading Brands in the Store
EXCLUSIVE BRANDS ARE LEADING BRANDS IN THE STORE TOP 5 Brands Western Work / Other 1 2 3 4 5 = Exclusive brands 28
Slide 29: Strategic Initiatives
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI-CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 29
Slide 30: Opportunity Exists to Double Store Count
OPPORTUNITY EXISTS TO DOUBLE STORE COUNT HISTORICAL STORE BASE COMPELLING NEW STORE ECONOMICS GOALS 15.8% CAGR 264 240 Store Size (sq. ft.) 10,000 219 226 208 169 Year 1 Net Sales $1.7mm 152 Net Cash Investment $0.8mm 117 86 Cash on Cash Return (Yr. 1) ~30% Payback Period ~3 Years 1 New stores/Tuck-
Slide 31: Reach of E-Commerce Supports Store Expansion
REACH OF E-COMMERCE SUPPORTS STORE EXPANSION STORES E-COMMERCE 1 PENNSYLVANIA OHIO ARKANSAS Today More • 251 stores • 33 states Less States Coming Soon 1Represents e-commerce sales dollars by state for the fiscal year ended March 30, 2019. 31
Slide 32: Tuck-In Acquisitions Adding Outsized Sales Per Store
TUCK-IN ACQUISITIONS ADDING OUTSIZED SALES PER STORE U.S. WESTERN WEAR CHAINS (ESTIMATED STORE COUNT)1 Tuck-In Acquisitions: Average unit volume more than 251 twice new store target National Woods Boots ~3x as many stores as closest • 4 stores in West Texas Regional 85 competitor • Acquired 9/11/201
Slide 33: Recap & Looking Forward
RECAP & LOOKING FORWARD 33
Slide 34: EPS Drivers
EPS DRIVERS 3 YEAR EPS CAGR OF 47%1 SAME STORE SALES EXCLUSIVE BRAND PENETRATION 22.6% 10.0% 16.2% 6.5% 14.2% 5.2% FY18 FY19 FY20E 1 Q3 FY18 Q3 FY19 Q3 FY20E 1 OPERATING INCOME % TOTAL STORE COUNT 264 9.5% 7.8% 240 6.4% 226 TTM Q3 TTM Q3 TTM Q3 2 FY18 FY19 FY20E 1 FY18 FY19 FY20 ¹Reflects actual res
Slide 35: Recap & Looking Forward
RECAP & LOOKING FORWARD Same Store Sales Growth • Customer growth continues • “Country” segment opportunity for expansion • In-store digital platform taking root • Multiple categories driving growth Omni Channel Leadership • Much improved profitability on e-commerce • Updating look and feel of Shepl
Slide 36: Appendix
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Slide 37: Adjusted EBITDA and Adjusted EBIT Reconciliation
ADJUSTED EBITDA AND ADJUSTED EBIT RECONCILIATION 1All TTM Q3 Fiscal 2020 results are preliminary and contain an estimate of results for the thirteen weeks ended December 28, 2019. 2The fiscal 2017 column has been adjusted to reflect management’s estimated 52-week results as fiscal 2017 was a 53-week