Boot Barn Holdings, Inc. · NYSE:BOOT
Boot Barn — Investor Presentation (August 2020)
35 slides from Boot Barn's investor presentation, August 2020
Slide 1: August 2020
AUGUST 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
Slide 3: Agenda
AGENDA NAVIGATING COVID‐19 & BUSINESS UPDATE 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 3
Slide 4: Navigating Through COVID-19
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 s
Slide 5: Strengthening Our Balance Sheet
STRENGTHENING OUR BALANCE SHEET Q4 FY2020 Q1 FY2021 CHANGE CHANGE METRIC (in millions) (in millions) (in millions) (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 $1
Slide 6: Managing Inventory
MANAGING INVENTORY Retail Store SSS% Relative to Comp Store Inventory 15.2% 10.5% 9.5% 10.6% 9.8% 11.1% June Store SSS% in 8.6% 9.2% 9.4% 9.3% 7.9% 8.0% line with Q1’21 comp 5.7% 4.4% 3.8% store inventory 2.5% 2.6% 3.0% ‐0.9% ‐0.4% ‐1.6% ‐3.0% ‐2.2% ‐7.1% ‐27.1% ‐26.3% ‐64.2% Q2'18 Q3'18 Q4'18 Q1'19
Slide 7: Managing Inventory
MANAGING INVENTORY Total Inventory Balance Weeks of Supply1 (in millions) $288.7 26.4 9.4% Decline 24.5 24.6 23.8 $261.5 Q4 FY2020 Q1 FY2021 Q4 FY19 Q4 FY20 Q1 FY20 Q1 FY21 1Calculated using the inventory balance at quarter‐end and trailing twelve month cost of goods sold. 7
Slide 8: Preserving Merchandise Margin
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 8
Slide 9: Reducing Expenses
REDUCING EXPENSES Operating Expenses1 (in millions) $46.1 $38.4 Q1 FY2020 Q1 FY2021 CAPEX (in millions, net of TI) $31.8 $14.0 2 Fiscal 2020 Fiscal 2021 E 1Reflects a reduction in operating expenses of $7.7 million despite the opening of 24 new stores since the end of Q1 fiscal 2020. 9 2Reflects hig
Slide 10: Business Update - Q1 Fiscal 2021 Results
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%) Merchandise margin rate ‐200 bps1 Net loss per diluted share ‐$0.02 1Consists primarily of 160 basis points attributable to the increased sales penetration
Slide 11: Boot Barn Story
BOOT BARN STORY Soest SS Ree:
Slide 12: 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 • Proven history of healthy same • Proven ability to drive growth western and work industry store sales growth i
Slide 13: Our Customers' Lifestyle
OUR CUSTOMERS’ LIFESTYLE Top 3 vehicles sold in 2019 were pick‐up trucks1 Country music popularity continues to rise2,3 Hundreds of rodeos held in the U.S.3 Popular spectator sport 3 1 Reuters 1/6/2020, “Table: Top 20 vehicles sold in the United States in 2019”; 2 “2018 GfK Consumer Life Survey: 9%
Slide 14: Nationwide Presence in Stores & Online
NATIONWIDE PRESENCE IN STORES & ONLINE STORES E-COMMERCE 1 Today • 264 stores More • 36 states Less 1Represents e‐commerce sales dollars by state for the fiscal year ended March 28, 2020. 14
Slide 15: House of Brands
HOUSE OF BRANDS 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. 15
Slide 16: Dominant Player in the Industry
DOMINANT PLAYER IN THE INDUSTRY U.S. WESTERN WEAR CHAINS (ESTIMATED STORE COUNT)1 264 National More than 3x as 85 many stores as Regional (Mostly Texas) closest competitor 7 North & South Carolina Independent retailers Thousands 1 Store count as of August 3, 2020. 16
Slide 17: 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 and Other: ~30% of Sales2 Unisex 7% Kids 5% CHANNEL1 Stores 84% E‐commerce 16% 1Fiscal year ended March 28, 2020. 2During the fiscal year
Slide 18: 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 18
Slide 19: History of Profitable Growth
HISTORY OF PROFITABLE GROWTH NET SALES ($MM) CAGR ~20% $777 $846 $678 $619 $569 $403 $346 $233 1 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 ADJUSTED EBIT ($MM) CAGR ~19% $79 $68 $46 $49 $39 $41 $32 $23 1 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Note: Fiscal year ends March. FY13 includes 29 stores acqui
Slide 20: A Decade of Strong SSS
A DECADE OF STRONG SSS COVID‐19 IMPACTED RESULTS 19.6% 18.1% 17.8% 16.9% 16.2% 14.2%14.1% 14.3% 13.8% 12.1%11.6% 11.3% 10.7% 8.9% 9.2%8.7% 9.4% 8.2% 7.8% 7.7% 7.5% 7.7% 7.3% 7.2% 7.1% 7.0% 6.7% 5.6% 5.2% 3.8% 1.8% 1.3% 1.8% 0.1% 0.4% 0.2% -1.2% -0.9% -2.0% -4.7% -14.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
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 21
Slide 22: 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 22 22
Slide 23: Serving the American Worker
SERVING THE AMERICAN WORKER FOCUS ON FUNCTIONAL PRODUCT 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: Three Distinct Brands Online
THREE DISTINCT BRANDS ONLINE 25
Slide 26: Upgraded Creative Look and Feel of Sheplers.com
UPGRADED CREATIVE LOOK AND FEEL OF SHEPLERS.COM 26
Slide 27: Developing Omni-Channel Capabilities
DEVELOPING OMNI‐CHANNEL CAPABILITIES FY 2019 FY 2020 FY 20/21 (pre‐COVID) (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 Curb) Buy
Slide 28: 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 28
Slide 29: Build Out Exclusive Brand Portfolio
BUILD OUT EXCLUSIVE BRAND PORTFOLIO EXCLUSIVE BRAND SALES PENETRATION1 (% of Sales) 22.0% 21.9% 2.6% FY2012 FY2020 Q1 FY2021 • Margin enhancement ~1,000 bps 1Represents total company exclusive brand penetration. 29
Slide 30: 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 30
Slide 31: Opportunity Exists to Double Store Count
OPPORTUNITY EXISTS TO DOUBLE STORE COUNT HISTORICAL STORE BASE COMPELLING NEW STORE ECONOMICS GOALS 14.8% CAGR 259 240 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 New stores/Tuck‐in
Slide 32: History of Store Expansion
HISTORY OF STORE EXPANSION 2012 CURRENT • 86 stores • 264 stores • 8 states • 36 states 32
Slide 33: New Stores in New States
NEW STORES IN NEW STATES UNIONTOWN, PENNSYLVANIA RUSSELLVILLE, ARKANSAS 33
Slide 34: Appendix
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Slide 35: 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
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