Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — Investor Presentation (August 2020)
35 slides from Boot Barn's investor presentation, Aug 4, 2020
Slide 1: August 2020
1 1 AUGUST 2020
Slide 2: Important Information
2 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-lookin
Slide 3: Agenda: Strategic Initiatives
3 STRATEGIC INITIATIVES CONTINUE OMNI-CHANNEL LEADERSHIP BUILD OUT EXCLUSIVE BRAND PORTFOLIO EXPAND OUR STORE BASE 1 2 3 4 NAVIGATING COVID-19 & BUSINESS UPDATE AGENDA DRIVE SAME STORE SALES GROWTH BOOT BARN STORY
Slide 4: Navigating Through COVID-19
4 NAVIGATING THROUGH COVID-19 COVID-19 and its impact on the world continues to affect the Company through decreased store traffic and temporary store closures as a result of stay-at-home directives and the promotion of social distancing. In order to navigate through the current environment, we have
Slide 5: Strengthening Our Balance Sheet
5 STRENGTHENING OUR BALANCE SHEET METRIC Q4 FY2020 (in millions) Q1 FY2021 (in millions) CHANGE (in millions) CHANGE (percent) Cash $69.6 $83.1 +$13.5 +19.4% Inventory $288.7 $261.5 -$27.2 -9.4% Accounts Payable $95.3 $80.7 -$14.6 -15.3% Total Debt $241.4 $241.4 No Change No Change Net Debt1 $171.8
Slide 6: Managing Inventory
6 MANAGING INVENTORY 2.5% 7.9% 10.5% 9.5% 10.6% 8.6% 9.8% 11.1% 8.0% 5.7% -7.1% -27.1% -0.9% -0.4% 4.4% -1.6% 2.6% 3.8% 3.0% 9.2% 15.2% 9.4% 9.3% -3.0% Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Retail Store SSS% Relative to Comp Store Inventory Retail Store SSS% Average
Slide 7: Managing Inventory
7 MANAGING INVENTORY $288.7 $261.5 Q4 FY2020 Q1 FY2021 Total Inventory Balance (in millions) 9.4% Decline 23.8 26.4 24.5 24.6 Q4 FY19 Q4 FY20 Q1 FY20 Q1 FY21 Weeks of Supply1 1Calculated using the inventory balance at quarter-end and trailing twelve month cost of goods sold.
Slide 8: Preserving Merchandise Margin
8 PRESERVING MERCHANDISE MARGIN Shift in e-commerce sales penetration from 14% in Q1 FY20 to 25% in Q1 FY21 Write-down of discontinued inventory as part of rebranding an acquired work-only store • Growth in e-commerce merchandise margin and EBIT rate in Q1
Slide 9: Reducing Expenses
9 REDUCING EXPENSES $46.1 $38.4 Q1 FY2020 Q1 FY2021 Operating Expenses1 (in millions) $31.8 $14.0 Fiscal 2020 Fiscal 2021 E CAPEX (in millions, net of TI) 2 1Reflects a reduction in operating expenses of $7.7 million despite the opening of 24 new stores since the end of Q1 fiscal 2020. 2Reflects hig
Slide 10: Business Update - Q1 Fiscal 2021 Results
10 10 BUSINESS UPDATE - Q1 FISCAL 2021 RESULTS METRICS Q1 FY 2021 RESULTS Total sales -20.5% Same store sales -14.9% (Stores -27.1% E-commerce +51.9%) 1Consists primarily of 160 basis points attributable to the increased sales penetration of the lower merchandise margin e-commerce business and 30 ba
Slide 11: Boot Barn Story
11 BOOT BARN STORY
Slide 12: Boot Barn Is a Compelling Investment Story
12 BOOT BARN IS A COMPELLING INVESTMENT STORY • Proven history of healthy same store sales growth in stores and online • Importance of quality and fit • Lifestyle experience across stores, e-commerce and events • Significant e-commerce penetration STRONG OMNI-CHANNEL BRAND PRESENCE NATIONAL LEADER I
Slide 13: Our Customers' Lifestyle
13 1 Reuters 1/6/2020, “Table: Top 20 vehicles sold in the United States in 2019”; 2 “2018 GfK Consumer Life Survey: 9% Five Year Growth Rate”; 3 As a result of various initiatives intended to reduce the transmission of COVID-19, many large public events including rodeos, concerts and country music
Slide 14: Nationwide Presence in Stores & Online
14 14 NATIONWIDE PRESENCE IN STORES & ONLINE Today • 264 stores • 36 states STORES 1Represents e-commerce sales dollars by state for the fiscal year ended March 28, 2020. E-COMMERCE 1 More Less
Slide 15: House of Brands
15 15 HOUSE OF BRANDS Western Work / Other TOP 5 Brands1 2 1 3 4 5 = Exclusive brands 1Represents top 5 brands in the stores during the fiscal year ended March 28, 2020.
Slide 16: U.S. Western Wear Chains
16 U.S. WESTERN WEAR CHAINS (ESTIMATED STORE COUNT)1 7 85 More than 3x as many stores as closest competitor National Regional (Mostly Texas) Independent retailers North & South Carolina 1 Store count as of August 3, 2020. Thousands DOMINANT PLAYER IN THE INDUSTRY 264
Slide 17: Diversified Sales Mix Mitigates Risk
17 17 1Fiscal year ended March 28, 2020. 2During the fiscal year ended March 28, 2020, western styles comprised approximately 70% of our sales, with work related and other styles making up the balance. PRODUCT MIX1 DIVERSIFIED SALES MIX MITIGATES RISK END USER1 CHANNEL1 Footwear 51% Hats, Accessorie
Slide 18: Everyday Merchandise with Limited Fashion Risk
18 18 EVERYDAY MERCHANDISE WITH LIMITED FASHION RISK RUGGED FOOTWEAR OUTERWEAR FLAME RESISTANT PANTS SHIRTS WORK & OTHER BOOTS DENIM WESTERN SHIRTS COWBOY HATS BELTS WESTERN • Low fashion quotient minimizes markdown exposure • Sales benefit of in-stock outweighs markdown risk
Slide 19: History of Profitable Growth
19 19 HISTORY OF PROFITABLE GROWTH Note: Fiscal year ends March. FY13 includes 29 stores acquired from RCC with 7 month net sales of $35.5 million. FY14 includes 30 stores acquired from Baskins with 10 month net sales of $63.4 million. Sheplers was acquired June 29, 2015, the beginning of Q2 FY16. ¹
Slide 20: A Decade of Strong SSS
20 20 7.7% 13.8% 16.2% 14.2% 14.1% 18.1% 19.6% 16.9% 17.8% 14.3% 10.7% 7.5%8.2% 7.1% 3.8% 8.9% 7.7%7.3%7.2%7.0% 5.6% 0.1% -2.0% -1.2% 0.4% 1.8% 0.2% -0.9% 1.3%1.8% 5.2% 12.1% 11.6% 11.3% 9.2% 8.7%9.4% 7.8% 6.7% -4.7% -14.9% Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13
Slide 21: Strategic Initiatives: Drive Same Store Sales Growth
21 21 STRATEGIC INITIATIVES CONTINUE OMNI-CHANNEL LEADERSHIP BUILD OUT EXCLUSIVE BRAND PORTFOLIO EXPAND OUR STORE BASE 1 2 3 4 DRIVE SAME STORE SALES GROWTH
Slide 22: Evolution of Customer Segmentation Strategy
22 Western Work Wonderwest EVOLUTION OF CUSTOMER SEGMENTATION STRATEGY Western Work Wonderwest 22 Men’s Country Men’s Work Women’s Country Women’s Work Women’s Contemporary Men’s Western Women’s Western Country Women’s Men’s
Slide 23: Serving the American Worker
23 SERVING THE AMERICAN WORKER FOCUS ON FUNCTIONAL PRODUCT
Slide 24: Strategic Initiatives: Continue Omni-Channel Leadership
24 STRATEGIC INITIATIVES CONTINUE OMNI-CHANNEL LEADERSHIP EXPAND OUR STORE BASE 1 2 3 4 DRIVE SAME STORE SALES GROWTH BUILD OUT EXCLUSIVE BRAND PORTFOLIO
Slide 25: Three Distinct Brands Online
25 25 THREE DISTINCT BRANDS ONLINE
Slide 26: Upgraded Creative Look and Feel of Sheplers.com
26 26 UPGRADED CREATIVE LOOK AND FEEL OF SHEPLERS.COM
Slide 27: Developing Omni-Channel Capabilities
27 27 DEVELOPING OMNI-CHANNEL CAPABILITIES FY 2019 FY 2020 (pre-COVID) FY 20/21 (post-COVID) WHIP (Endless aisle of inventory) Buy Online Ship To Store (Online Outpost) BORIS (Buy Online Return In Store) Same Day Shipping (from DC) BOPIS (Buy Online Pick-up In Store) BOPAC (Buy Online Pick-up At Cur
Slide 28: Strategic Initiatives: Build Out Exclusive Brand Portfolio
28 STRATEGIC INITIATIVES BUILD OUT EXCLUSIVE BRAND PORTFOLIO EXPAND OUR STORE BASE 1 2 3 4 DRIVE SAME STORE SALES GROWTH CONTINUE OMNI-CHANNEL LEADERSHIP
Slide 29: Build Out Exclusive Brand Portfolio
29 29 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 2.6% 22.0% 21.9% FY2012 FY2020 Q1 FY2021 EXCLUSIVE BRAND SALES PENETRATION1 (% of Sales) • Margin enhancement ~1,000 bps 1Represents total company exclusive brand penetration.
Slide 30: Strategic Initiatives: Expand Our Store Base
30 STRATEGIC INITIATIVES CONTINUE OMNI-CHANNEL LEADERSHIP BUILD OUT EXCLUSIVE BRAND PORTFOLIO EXPAND OUR STORE BASE 1 2 3 4 DRIVE SAME STORE SALES GROWTH
Slide 31: Opportunity Exists to Double Store Count
31 31 OPPORTUNITY EXISTS TO DOUBLE STORE COUNT 86 117 152 169 208 219 226 240 259 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 HISTORICAL STORE BASE COMPELLING NEW STORE ECONOMICS GOALS Store Size (sq. ft.) 10,000 Year 1 Net Sales $1.7mm Net Cash Investment $0.8mm Cash on Cash Return (Yr. 1
Slide 32: History of Store Expansion
32 32 HISTORY OF STORE EXPANSION • 264 stores • 36 states CURRENT 2012 • 86 stores • 8 states
Slide 33: New Stores in New States
33 33 UNIONTOWN, PENNSYLVANIA NEW STORES IN NEW STATES RUSSELLVILLE, ARKANSAS
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Slide 35: Adjusted EBITDA and Adjusted EBIT Reconciliation
35 ADJUSTED EBITDA AND ADJUSTED EBIT RECONCILIATION (a) Represents non-cash compensation expenses related to stock options, restricted stock awards, restricted stock units and performance share units granted to certain of our employees and directors. (b) Represents the non-cash accrual for future aw
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