Sportsmans Warehouse Holdings Reports Q2 2024 Financial Results

Intellectia.AI2024-09-04

Illustration by Intellectia.AI

Sportsman's Warehouse Holdings Reports Q2 2024 Financial Results

Sportsman's Warehouse Holdings, Inc. (NASDAQ: SPWH), an outdoor specialty retailer, announced its financial performance for the thirteen weeks ended August 3, 2024.

Key Financial Metrics

Metric	Q2 FY2024	Q2 FY2023	YoY Change
Net Sales	$288.7 million	$309.5 million	-6.7%
Gross Profit	$90.0 million	$100.8 million	-10.7%
Gross Margin	31.2%	32.6%	-1.4 pp
Adjusted EBITDA	$7.4 million	$10.9 million	-32.1%
Net Loss	$(5.9) million	$(3.3) million	N/A
Adjusted Net Loss	$(5.3) million	$(1.6) million	N/A
Diluted Loss per Share	$(0.16)	$(0.09)	N/A
Adjusted Diluted Loss per Share	$(0.14)	$(0.04)	N/A

Interpretation: The company experienced declines across major financial metrics compared to last year. Net sales decreased by 6.7%, primarily due to lowered demand and reduced store traffic. Additionally, net loss and adjusted net loss widened due to similar factors affecting sales, along with aggressive promotional activities.

Key Developments/Operational Highlights

Promotional Activities : Introduced aggressive promotional activities to stay market competitive.
Cost Reduction : Reduced expenses, notably in payroll, achieving around a 17% decrease in payroll expenses per store.
New Stores : Six new stores opened since July 29, 2023.

Management Comments

Paul Stone, Chief Executive Officer and President, and Jeff White, Chief Financial Officer, highlighted: - Ongoing efforts to reset and improve overall operations. - Demand remains challenged by consumer inflation and discretionary spending pullbacks. - Continued focus on expense reductions and operational efficiencies to navigate the difficult macroenvironment.

Forward Guidance

For fiscal year 2024: - Net Sales : Expected to range between $1.13 billion to $1.17 billion. - Adjusted EBITDA : Expected to range between $20 million to $35 million. - Capital Expenditures : Anticipated between $20 million and $25 million, focusing primarily on technology investments.

Stock Price Movement

The earnings release had a 0.0% change on the company's stock price at the time of reporting.

In summary, while Sportsman's Warehouse has navigated some challenging market conditions with strategic promotional and operational adjustments, the financial performance reflects the ongoing difficulties in consumer spending and demand. The company remains focused on cost management and strategic initiatives aimed at returning to growth and profitability.