Sportsman's Warehouse Projects Full-Year EBITDA Between $22M and $26M Due to Increased Promotions and Cautious Q4 Forecast
Management Insights: Sportsman's Warehouse reported a 2.2% increase in same-store sales for Q3 2025, driven by strong performance in hunting, shooting sports, and fishing, despite challenges from a prolonged government shutdown affecting consumer confidence.
Financial Performance: The company achieved net sales of $331.3 million and improved gross margin to 32.8%, but adjusted EBITDA guidance was lowered to $22-$26 million due to increased promotional pressure and lower-than-expected Q4 sales.
Strategic Focus: Management emphasized a conservative approach moving forward, prioritizing inventory discipline and cost control while continuing to focus on core categories and enhancing digital marketing efforts.
Risks and Concerns: Analysts expressed skepticism regarding sales sustainability and inventory risks, highlighting macroeconomic headwinds and the impact of promotional activities on margins as ongoing challenges for the company.
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Analysts Downgrade Sportsman's Warehouse Forecasts Following Q3 Results
Earnings Report: Sportsman’s Warehouse Holdings Inc reported third-quarter earnings of 8 cents per share, meeting analyst expectations, while sales of $331.323 million exceeded estimates.
Future Outlook: The company anticipates flat to slightly increased net sales for FY25 and expects adjusted EBITDA between $22 million and $26 million.
Store Expansion: The CEO announced the opening of a new store in Surprise, Arizona, marking the company's first personal protection-focused concept, with no further openings planned until 2026.
Stock Performance: Following the earnings announcement, Sportsman’s Warehouse shares fell 34.7% to $1.60, prompting analysts to adjust their price targets downward.
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U.S. Stock Market Performance: U.S. stocks saw gains, with the Dow up 0.17%, Nasdaq rising 0.2%, and S&P 500 increasing by 0.15% on Friday. Communication services led the sectors with a 0.9% increase, while utilities fell by 0.6%.
Notable Stock Movements: Praxis Precision Medicines surged 31% after FDA alignment, DigitalBridge Group rose 32% amid acquisition talks, and Rubrik Inc gained 23% following strong financial results. Conversely, Parsons Corp dropped 25% after losing a bid, and Domo Inc fell 23% due to disappointing guidance.
Economic Indicators: The U.S. PCE price index rose 0.3% month-over-month in September, aligning with market expectations. Personal income and spending also increased by 0.4% and 0.3%, respectively.
Global Market Trends: European shares mostly declined, with the STOXX 600 down 0.01%, while Asian markets closed higher, led by gains in Hong Kong and China, despite Japan's Nikkei falling 1.05%.
