Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — Q2 FY2020 Earnings Presentation
28 slides from Boot Barn's earnings presentation, Nov 4, 2019
Slide 1: November 2019
® November 2019
Slide 2: Important Information: Forward-Looking Statements
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: Summary of Q2 Fiscal 2020 Results
SUMMARY OF Q2 FISCAL 2020 RESULTS Actions •Changed product assortment - exclusive brands. Penetration increased ~600 bps to more than 21% •Eliminated a 20-year old “All boots on sale” promotion •Cycled prior year +11.3% SSS growth •Continued e-commerce EBIT expansion initiative Results •Consolidated
Slide 4: Boot Barn Story: Strategic Initiatives
4 BOOT BARN STORY STRATEGIC INITIATIVES 1DRIVE SAME STORE SALES GROWTH 2CONTINUE OMNI-CHANNEL LEADERSHIP 3BUILD OUT EXCLUSIVE BRAND PORTFOLIO 4EXPAND OUR STORE BASE APPENDIX
Slide 5: Boot Barn Is a Compelling Investment Story
BOOT BARN IS A COMPELLING INVESTMENT STORY NATIONAL LEADER IN ATTRACTIVE NICHE STRONG OMNI-CHANNEL BRAND PRESENCE GROWTH AND PROFIT ENHANCEMENT OPPORTUNITIES 55 •Genuine lifestyle retail brand •Extremely loyal customers seeking authenticity •Unique merchandise assortment •Healthy same store sales gr
Slide 6: A True American Lifestyle
A TRUE AMERICAN LIFESTYLE Top 3 vehicles sold in 2018 were pick-up trucks1 Country music popularity continues to rise2 Hundreds of rodeos held in the U.S.Popular spectator sport 1 Fox News 1/4/2019, “The 10 best-selling vehicles in the United States in 2018 were mostly trucks and SUVs”; 2 “2018 GfK
Slide 7: Diverse Drivers Provide Growth Opportunity
DIVERSE DRIVERS PROVIDE GROWTH OPPORTUNITY ~$20 BILLION1 MARKET OPPORTUNITY ATTRACTIVE DYNAMICS •Highly fragmented Work Wear 60% West rn Wear 40% •Less fashion driven than traditional apparel •Purchases are often non-discretionary DRIVERS OF WESTERN WEAR GROWTH x Country music x Western events x Ran
Slide 8: Diversified Sales Mix Mitigates Risk
DIVERSIFIED SALES MIX MITIGATES RISK PRODUCT MIX1 Western: 70% of Sales2 Footwear 52% Apparel 34% Hats, Accessories & Other 14% END USER1 Men 65% Women 23% Unisex 7% Kids 5% Work and Other: 30% of Sales2 CHANNEL1 Stores 83% E-commerce 17% 1 Fiscal year ended March 30, 2019.8 2As of March 30, 2019, w
Slide 9: Everyday Merchandise with Limited Fashion Risk
EVERYDAY MERCHANDISE WITH LIMITED FASHION RISK WESTERN WORK & OTHER •Low fashion quotient minimizes markdown exposure •Vast majority of our merchandise sales are at full price1 ¹Excludes sheplers.com sales.9
Slide 10: Boot Barn Has a History of Growth
BOOT BARN HAS A HISTORY OF GROWTH NET SALES ($MM) CAGR ~22% $569 $619 $678 $777$820 $233 $346 $403 1 FY13FY14FY15FY16FY17FY18FY19TTM Q2'20 ADJUSTED EBIT ($MM) $68 $79 $23 $32 $39 $46 $41 $49 1 FY13FY14FY15FY16FY17FY18FY19TTM Q2'20 Note: Fiscal year ends March. FY13 includes 29 stores acquired from R
Slide 11: Expand Our Store Base
11 11 4EXPAND OUR STORE BASE 2CONTINUE OMNI-CHANNEL LEADERSHIP 3BUILD OUT EXCLUSIVE BRAND PORTFOLIO
Slide 12: Segmentation Drives Marketing & Merchandising Execution
SEGMENTATION DRIVES MARKETING & MERCHANDISING EXECUTION
Slide 13: Evolution of Customer Segmentation Strategy
EVOLUTION OF CUSTOMER SEGMENTATION STRATEGY WesternWorkWonderwest WesternCountryCasualWorkWonderwest Men’s Men’s CountryMen’s CasualMen’s Work Women’s Women’s Country Women’s CasualWomen’s Work Women’s Contemporary 13
Slide 14: Strong SSS Growth While Reducing Promotions
STRONG SSS GROWTH WHILE REDUCING PROMOTIONS •Q3 QTD SSS of 10% through October 29, 2019 (3 year October stack > +30%) •Average SSS growth of 8.2% over the last 39 quarters 19.6% 18.1% 17.8% 16.2% 16.9% 13.8% 14.2%14.1% 14.3% 7.4%7.7% 10.7% 7.5% 8.2% 7.1% 3.8% 8.9% 7.7% 7.3% 7.2% 7.0% 5.6% 12.1% 11.6
Slide 15: Drive Same Store Sales Growth
15 15 15 1DRIVE SAME STORE SALES GROWTH 4EXPAND OUR STORE BASE 3BUILD OUT EXCLUSIVE BRAND PORTFOLIO
Slide 16: Three Distinct Brands Online
THREE DISTINCT BRANDS ONLINE OUTFITTER SHE-PLE"RS COUNTRY BOOT BARN &l4-jJOI V w (USDok1) BOOT BARN • ••t • •••• t uot •oou ••••• ••u • • •• ..,. t•u ••••ot 0\04 •1\•••••••• •wtSTEJlN STORES • ... c....,_.....,.-· · ·(....,_.· ............ e.:'·H:NQ. ---WOMlN SMIN'S GO AHEAD save s20 orr QrALLIOOT W
Slide 17: 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 17
Slide 18: Continue Omni-Channel Leadership
18 1DRIVE SAME STORE SALES GROWTH 4EXPAND OUR STORE BASE 2CONTINUE OMNI-CHANNEL LEADERSHIP
Slide 19: Men's, Ladies, Work
<( cc a: w u::J c wc -z-X w MEN'S LADIESWORK 19
Slide 20: Acceleration of Exclusive Brand Penetration
ACCELERATION OF EXCLUSIVE BRAND PENETRATION EXCLUSIVE BRAND SALES PENETRATION1 (% of sales) 21.3% 16.2% 2.6% FY2012FY2019Q2 FY2020 EXCLUSIVE BRAND OPPORTUNITIES •Fiscal 2020 growth penetration ~500 basis points •Margin enhancement (>1,000 bps) 1 Represents total company exclusive brand penetration.
Slide 21: Top Brands
TOP 5 brands Western r------Work I Other • ua:n-J•:! c:arhart:t:.C.AT r----------1 L------ST!:_: ?_ ICGDY JAMESaD I l----------1 GRACE:yE_e ""..."..,.. .... ".' .. .. -CORRAl:-L - - ----I DANPOST Wrangler -----------RESI .L I 0Y llW I Jf D.: STa-oO dL. 1 e: m-t-t-s-s-m-t-e-®------r : sHYANNE+I Built
Slide 22: Build Out Exclusive Brand Portfolio
22 22 1DRIVE SAME STORE SALES GROWTH 2CONTINUE OMNI-CHANNEL LEADERSHIP 3BUILD OUT EXCLUSIVE BRAND PORTFOLIO
Slide 23: Opportunity Exists to Double Store Count
OPPORTUNITY EXISTS TO DOUBLE STORE COUNT HISTORICAL STORE BASECOMPELLING NEW STORE ECONOMICS 117 86 15.8% CAGR 208219226 152169 240 264 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 1 FY 12FY 13FY 14FY 15
Slide 24: Reach of E-Commerce Supports Store Expansion
REACH OF E-COMMERCE SUPPORTS STORE EXPANSION STORES E-COMMERCE 1 Today • 248 stores • 33 states More Less 1Represents e-commerce sales dollars by state for the fiscal year ended March 30, 2019.24
Slide 25: 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 National Regional (Mostly Texas) 7 North & South Carolina Independent retailers 84 Thousands > 2.5x as many stores as closest competitor 248 Tuck-In Acquisitions: Average unit volume more than twic
Slide 26: Appendix
APPENDIX •
Slide 27: Adjusted EBITDA and Adjusted EBIT Reconciliation
ADJUSTED EBITDA AND ADJUSTED EBIT RECONCILIATION 1The fiscal 2017 column has been adjusted to reflect management’s estimated 52-week results as fiscal 2017 was a 53-week year. The Company estimated that included in fiscal 2017 reported earnings per share was $0.03 attributed to the 53rd week. As suc
Slide 28: Potential Tariff Exposure
POTENTIAL TARIFF EXPOSURE Approx. % of Total Sales Sourced from China China sourced exclusive brands China sourced 3rd party vendor brands All Other •Tariffs contemplated in FY 2020 guidance with a negligible impact to the year. •As we begin the planning process for FY 2021, we do not intend to chan