Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — ICR Conference 2021
30 slides from Boot Barn's conference presentation, Jan 11, 2021
Slide 1: ICR Conference January 2021
ICR Conference January 2021 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
Slide 3: Solid 3rd Quarter Growth Amidst COVID-19 Backdrop
SOLID 3RD QUARTER GROWTH AMIDST COVID‐19 BACKDROP PRELIMINARY Q3 Q3 FY 2020 Q3 FY 2019 METRICS FY 2021 RESULTS RESULTS RESULTS Total sales growth +6.5% +11.8% +13.0% Same store sales growth +4.6% +6.7% +9.2% Stores +1.9% Stores +5.7% Stores +8.6% E‐commerce +16.3% E‐commerce +11.0% E‐commerce +11.6%
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 INVESTMENT THESIS 4
Slide 5: 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 6: Diversified Sales Mix Mitigates Risk
DIVERSIFIED SALES MIX MITIGATES RISK Western: ~70% of Sales2 PRODUCT MIX1 Footwear 51% Apparel 34% Hats, Accessories & Other 15% END USER1 Men 65% Women 23% Work & Other: ~30% of Sales2 Unisex 7% Kids 5% CHANNEL1 E‐commerce 16% Stores 84% 1Fiscal year ended March 28, 2020. 6 2During the fiscal year
Slide 7: 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 • Limited promotional activity maintains margin rate 7
Slide 8: History of Profitable Growth
HISTORY OF PROFITABLE GROWTH NET SALES ($MM) $846 $823 CAGR ~20%1 $777 $678 $619 $569 $403 $346 $233 2 3 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 TTM Q3 FY21 ADJUSTED EBIT ($MM)4 $79 CAGR ~19%1 $68 $71 $46 $49 $39 $41 $32 $23 2 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 TTM 3 Q3 FY21 Note: Fiscal year e
Slide 9: Third Quarter Strength
THIRD QUARTER STRENGTH NET SALES ($MM)1 OPERATING INCOME ($MM) 1 6.5% $302 $284 ~19% $41.6 $35.0 Q3 FY20 Q3 FY21 Q3 FY20 Q3 FY21 EPS1 TAX ADJUSTED EPS1 17.6% 22.2% $1.00 $0.99 $0.85 $0.81 2 2 3 Q3 FY20 Q3 FY21 3 Q3 FY20 Q3 FY21 1All Q3 Fiscal 2021 results are preliminary and contain an estimate of r
Slide 10: Strategic Initiatives Drive Same Store Sales Growth
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI‐CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 10 10
Slide 11: Targeted Customer Segmentation Strategy
TARGETED CUSTOMER SEGMENTATION STRATEGY • Expanded customer segmentation to include “Just Country” • Geared towards the rugged outdoor adventure enthusiast and recreationalist • Curated assortment of ball caps, men’s and women’s apparel, hiking boots, outerwear and more Western Country Work Wonderwe
Slide 12: Just Country Broadens Customer Base
JUST COUNTRY BROADENS CUSTOMER BASE 12
Slide 13: Enhanced Creative & Marketing
ENHANCED CREATIVE & MARKETING 13
Slide 14: Just Country Marketing
JUST COUNTRY MARKETING 14
Slide 15: A Decade of SSS Growth
A DECADE OF SSS GROWTH CONSOLIDATED SSS% 17.5% Average SSS% growth of ~8% over the last 10 years 13.3% 11.9% 10.0% 7.3% 6.7% 5.2% 5.0% 0.3% ‐0.1% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Recovery in same store 9.4% 7.8% sales following the initial 6.7% 4.6%1 impact of CO
Slide 16: Continue Omni-Channel Leadership
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI‐CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 16
Slide 17: Broadening Our Omni-Channel Capabilities
BROADENING OUR OMNI‐CHANNEL CAPABILITIES 1. SALES ORIGINATING IN STORE o Range Finder o WHIP (endless aisle) 2. SALES ORIGINATING ONLINE o Buy Online Return in Store o Buy Online Ship (from DC) to Store o Buy Online Pick Up in Store o Buy Online Curbside Pickup o In‐Store Fulfillment o Same Day Deli
Slide 18: Build Out Exclusive Brand Portfolio
STRATEGIC INITIATIVES 1 DRIVE SAME STORE SALES GROWTH 2 CONTINUE OMNI‐CHANNEL LEADERSHIP 3 BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4 EXPAND OUR STORE BASE 18
Slide 19: Exclusive Brands Positioned Strategically
EXCLUSIVE BRANDS POSITIONED STRATEGICALLY EXCLUSIVE BRAND SALES PENETRATION1 (% of Sales) 23.4% 22.0% 21.4% 2.6% FY2012 FY2020 YTD Q3 YTD Q3 2 FY2020 FY2021 • Margin enhancement ~1,000 bps • FY 2021 growth penetration ~200 bps • Q3 FY 2021 growth penetration ~80 bps2 1Represents total company exclus
Slide 20: Exclusive Brands Are Leading Brands in the Store
EXCLUSIVE BRANDS ARE LEADING BRANDS IN THE STORE Top 5 Brands1 Western Work / Other 1 2 3 4 5 = Exclusive brands 1Represents top 5 brands in the stores during the fiscal year ended March 28, 2020. 20
Slide 21: Expand Our Store Base
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: Customers Continue to Favor the In-Store Experience
CUSTOMERS CONTINUE TO FAVOR THE IN‐STORE EXPERIENCE SALES MIX BY CHANNEL Following initial impact of COVID‐19 14.2% 15.1% 17.1% 18.5% 19.8% 25.2% 85.8% 84.9% 82.9% 81.5% 80.2% 74.8% Q1'20 Q1'21 Q2'20 Q2'21 Q3'20 Q3'21 Stores E‐commerce • E‐commerce mix of business peaked with the initial impact of C
Slide 23: Compelling New Store Economics
COMPELLING NEW STORE ECONOMICS METRIC GOALS Store Size (sq. ft.) 10,000 Year 1 Net Sales $1.7mm Net Cash Investment $0.8mm Cash on Cash Return (Yr. 1) ~30% Payback Period ~3 Years New stores/Tuck‐ins FY12 – Q3’21 122 23
Slide 24: Opportunity Exists to Grow New Units 10% Annually
OPPORTUNITY EXISTS TO GROW NEW UNITS 10% ANNUALLY HISTORICAL STORE BASE ~15% CAGR 259 ~274 240 219 226 208 169 152 117 86 1 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 Outlook 1Reflects estimated store count with Fiscal 2021 guidance to open or acquire 15 stores . 24
Slide 25: Expansion into New and Existing Markets
EXPANSION INTO NEW AND EXISTING MARKETS 2012 CURRENT • 86 stores • 266 stores • 8 states • 36 states • Stores in new markets in the Northeast outperforming expectations • Cannibalization from new stores in existing markets less than anticipated • Expansion into new markets enhances e‐commerce sales
Slide 26: Investment Thesis
“Le INVESTMENT THESIS
Slide 27: Long Term Algorithm
LONG TERM ALGORITHM + Annual new unit growth 10%+ + Same‐store sales growth Low to mid single digits + Merchandise margin expansion 25‐30 bps = Annual EPS growth 20%+ Note: These are not projections; they are goals and are forward‐looking, subject to significant business, economic, regulatory and co
Slide 28: Boot Barn Is a Compelling Investment Story
BOOT BARN IS A COMPELLING INVESTMENT STORY NATIONAL LEADER IN WORLD CLASS OMNI‐ STRONG NEW UNIT ATTRACTIVE NICHE CHANNEL CAPABILITIES GROWTH OPPORTUNITIES • Leader and authority in the western • Strong variety of omni‐channel • Proven ability to open stores in and work industry with minimal offering
Slide 29: Appendix
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Slide 30: Adjusted EBIT Reconciliation
ADJUSTED EBIT RECONCILIATION 1All TTM Q3 Fiscal 2021 results are preliminary and contain an estimate of results for the thirteen weeks ended December 26, 2020. 2The fiscal 2017 column has been adjusted to reflect management’s estimated 52‐week results as fiscal 2017 was a 53‐week year. The Company e