Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — ICR Conference 2018
46 slides from Boot Barn's conference presentation, Jan 8, 2018
Slide 1: ICR Conference - January 8, 2018
ICR Conference ‐ January 8, 2018 1
Slide 2: Important Information
IMPORTANT INFORMATION Forward‐Looking Statements This presentation contains forward‐looking statements that are subject to risks and uncertainties. The fiscal year 2018 outlook for net sales, net income, adjusted EBITDA and adjusted EBIT, as well as all other statements other than statements of hist
Slide 3: 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 APPENDIX 3
Slide 4: Compelling Investment Story
COMPELLING INVESTMENT STORY NATIONAL LEADER IN STRONG OMNI‐CHANNEL GROWTH AND PROFIT ATTRACTIVE NICHE BRAND PRESENCE ENHANCEMENT OPPORTUNITIES • Leader and authority in the • Healthy brick and mortar • Proven ability to drive growth western and work industry same store sales growth and expansion • G
Slide 5: An American Lifestyle
AN AMERICAN LIFESTYLE Highest selling vehicle1 Country music popularity continues to rise2 Thousands of rodeos held in the U.S. Popular spectator sport 1 Business Insider 1/7/2017, “The 20 best‐selling cars and trucks in America”; 2 Forbes.com, 10/31/16, “Country Music’s Popularity and Influence Con
Slide 6: Estimated $20 Billion Industry
ESTIMATED $20 BILLION INDUSTRY1 ~$20 BILLION MARKET OPPORTUNITY ATTRACTIVE DYNAMICS • Highly fragmented Western • Less fashion driven than Wear traditional apparel Work 40% Wear 60% • Work wear purchases are often non‐discretionary DRIVERS OF WESTERN WEAR GROWTH DRIVERS OF WORK WEAR GROWTH Country
Slide 7: Sales Diversification
SALES DIVERSIFICATION Western: 70% of Sales2 PRODUCT MIX1 Footwear 52% Apparel 32% Hats, Accessories & Other 16% END USER1 Men 62% Work and Other: 30% of Sales2 Women 25% Unisex 8% Kids 5% CHANNEL1 Stores 82% E‐commerce 18% 1 Fiscal year ended April 1, 2017. 2As of April 1, 2017, western styles comp
Slide 8: Everyday Merchandise Assortment
EVERYDAY MERCHANDISE ASSORTMENT BOOTS DENIM WESTERN SHIRTS COWBOY HATS BELTS / BELT BUCKLES WESTERN RUGGED FOOTWEAR OUTERWEAR FLAME RESISTANT PANTS SHIRTS WORK & OTHER • Low fashion quotient minimizes markdown exposure • Vast majority of our merchandise sales are at full price1 ¹Excludes sheplers.co
Slide 9: History of Growth
HISTORY OF GROWTH NET SALES ($MM) 9% $669 $619 41% $569 16% $403 48% $346 $233 1 2 FY13 FY14 FY15 FY16 FY17 Outlook FY18 ADJUSTED EBITDA ($MM) ADJUSTED EBIT ($MM) $46 $46 $63 $39 $41 $60 $58 $48 $32 $40 $23 $29 1 2 1 2 FY13 FY14 FY15 FY16 FY17 Outlook FY13 FY14 FY15 FY16 FY17 Outlook FY18 FY18 Note:
Slide 10: Preliminary Q3 Fiscal 2018 Results
PRELIMINARY Q3 FISCAL 2018 RESULTS • Net sales increased 13% to approximately $225 million • Same store sales increased approximately 5.2%, compared to guidance of 2.0% to 4.0% • Net income per diluted share of $0.70 to $0.71. Excluding the impact of change in federal tax law, preliminary net income
Slide 11: 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 11 11
Slide 12: 1. Same Store Sales Growth
1. SAME STORE SALES GROWTH 19.6% 18.1% 17.8% 16.9% 16.2% 14.2% 14.1% 14.3% 13.8% 10.7% 8.9% 8.2% 7.7% 7.5% 7.7% 7.3% 7.1% 7.2% 7.0% 5.6% 5.2% 3.8% 1.8% 1.8% 1.3% 0.4% 0.1% ‐2.0% ‐1.2% 0.2% ‐0.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 '11 '11 '11
Slide 13: 1. Merchandising Opportunities
1. MERCHANDISING OPPORTUNITIES Expanding work boot fixtures and growing Broadening our assortment and adding commercial accounts new western styles 13
Slide 14: 1. Broadening Our Creative
1. BROADENING OUR CREATIVE 14
Slide 15: 1. Expanding to National Radio Spots
1. EXPANDING TO NATIONAL RADIO SPOTS LOCAL RADIO DELIVERY (FY 2017) NATIONAL/LOCAL RADIO DELIVERY (FY 2018) 15
Slide 16: 1. Opportunities to Reach Hispanic Customer
1. OPPORTUNITIES TO REACH HISPANIC CUSTOMER GROWING IN UNITED STATES MORE PREVALENT AT BOOT BARN 24% 18% 24% of Boot Barn customers are Hispanic 1.3X more prevalent than the U.S. population 16
Slide 17: 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 17 17
Slide 18: 2. Targeted Multi-Brand Strategy
2. TARGETED MULTI‐BRAND STRATEGY 18
Slide 19: Actual Search Results (January 2018)
Actual search results (January 2018) PPC (Paid) Shopping (Paid) Organic Search (Free) 19
Slide 20: Search Results Continued
Search Results Continued (Scroll Down) Organic Search (Free) 20
Slide 21: 2. Consolidating E-Commerce Management
2. CONSOLIDATING E‐COMMERCE MANAGEMENT Former Set‐up Today Demand Creation • Buying • Site Merchandising ONE Wichita Irvine Fayetteville • SEM Team • SEO Fulfillment Operations ONE • Photo Studio DTC • Distribution Center Wichita Irvine Fayetteville Operation • Customer Service Supporting Systems •
Slide 22: 2. Expanding Customer Purchasing Options
2. EXPANDING CUSTOMER PURCHASING OPTIONS IN‐STORE TABLET, SHIP TO HOME BUY ONLINE, PICK UP IN‐STORE 22
Slide 23: 2. Building Omni-Channel Leadership
2. BUILDING OMNI‐CHANNEL LEADERSHIP IN‐STORE COMMERCIAL ONLINE DIRECT EVENTS STORE POS SHIP FROM DC SELL NEW SITES SPECIAL TRANSACT FULFILL ORDER MOBILE SHIP FROM ECOM VENDOR WHIP COMMERCIAL ACCOUNTS INFORM CREDIT CARD SOCIAL CRM OUTPOST 23
Slide 24: 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 24
Slide 25: Exclusive Brand Growth Plan
EXCLUSIVE BRAND GROWTH PLAN 1 EXCLUSIVE BRAND SALES PENETRATION1 (% of sales) 13% • Growth penetration of 2 ppts annually • Margin enhancement (900 ‐ 1,000 bps) 3% • Continued growth opportunities FY2012 TTM Q3 FY18 1 Represents total company exclusive brand penetration. 25
Slide 26: Cody James
“~ + 3 seh CODY JAMES > i . . au om @CodyJamesSocial
Slide 27: In-Store Fixtures, Social Pages, Email
In‐Store Fixtures Facebook and Instagram Pages Email 27
Slide 28: Shyanne
@ShyanneSocial ‘\
Slide 29: In-Store Fixtures, Social Pages, Email
In‐Store Fixtures Email Facebook and Instagram Pages 29
Slide 30: 3. Exclusive Brands Are Top Brands
3. EXCLUSIVE BRANDS ARE TOP BRANDS TOP 5 brands Western Work / Other 1 2 3 4 5 = Exclusive brands 30
Slide 31: 3. Country Music Star Exclusive Brands
3. COUNTRY MUSIC STAR EXCLUSIVE BRANDS • Renewed partnership • New partnership • Launched lifestyle brand • Launching lifestyle brand chain Moonshine Spirit Dec 2014 wide Fall Calendar 2018 • Boots • Boots • Apparel • Apparel • Accessories • Accessories • Won 3 Grammys and 23 number • Won ACM Female
Slide 32: 3. Expanding Exclusive Brands
3. EXPANDING EXCLUSIVE BRANDS • Xero Gravity boot performance platform • Long wearing, durable, flexible and built for comfort • Launched in stores October 2017 32
Slide 33: 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 33 33
Slide 34: 4. Building a National Presence
4. BUILDING A NATIONAL PRESENCE STORES E-COMMERCE1 More FY12 TODAY • 86 stores • 226 stores • 8 states • 31 states Less 1Represents e‐commerce sales dollars by state for the trailing twelve months ended September 30, 2017. 34
Slide 35: 4. Gaining Market Share - Stores
4. GAINING MARKET SHARE ‐ STORES RANK OF U.S. WESTERN RETAILERS AUGUST 2012 AUGUST 2013 AUGUST 2014 TODAY 1 3 35
Slide 36: 4. U.S. Competitive Landscape
4. U.S. COMPETITIVE LANDSCAPE WESTERN WEAR CHAINS (ESTIMATED STORE COUNT)1 226 National > 2.5x as many 79 stores as closest Regional (Mostly Texas) competitor 9 North & South Carolina 6 WOOD’S BOOTS Arizona • 4 store chain in the Odessa/Midland region of West Texas Independent Thousands • Acquired b
Slide 37: 4. Opportunity to Double Store Count
4. OPPORTUNITY TO DOUBLE STORE COUNT HISTORICAL AND FUTURE POTENTIAL STORE BASE COMPELLING NEW STORE ECONOMICS GOALS 17% CAGR 226 Store Size (sq. ft.) 10,000 208 219 Year 1 Net Sales $1.7mm 169 152 Net Cash Investment $0.8mm 117 86 Cash on Cash Return (Yr. 1) ~30% Payback Period ~3 Years New stores
Slide 38: 4. Iconic Store Design
4. ICONIC STORE DESIGN 38
Slide 39: 4. Authority on Boots
4. AUTHORITY ON BOOTS 39
Slide 40: 4. Strong Work Boot Selection
4. STRONG WORK BOOT SELECTION 40
Slide 41: 4. Broad and Deep Denim Assortment
4. BROAD AND DEEP DENIM ASSORTMENT 41
Slide 42: 4. Engaging In-Store Merchandising
4. ENGAGING IN‐STORE MERCHANDISING 42
Slide 43: Investment Highlights
INVESTMENT HIGHLIGHTS Genuine lifestyle retail brand Clear national leader in a large and fragmented market niche Significant new store growth opportunity Great omni‐channel brand with three leading e‐commerce sites Proven ability to drive same store sales growth Strong portfolio of exclusive brands
Slide 44: Appendix
APPENDIX 44
Slide 45: Overview of Tax Reform Impact
OVERVIEW OF TAX REFORM IMPACT Key Tax Estimated Impact Reform Provisions Boot Barn on Boot Barn Federal tax rate from 35% to Substantially all sales are Long term blended tax rate (federal + state and 21%. domestic and subject to local) will be significantly reduced. federal tax rate + state and/or
Slide 46: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ¹The outlook for the year ended March 31, 2018 reflects results at the high‐end of the Company’s guidance range. 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 estimated that in