Boot Barn Holdings, Inc. Q4 FY2026 earnings call

Core Sales & Market Expansion

• 7.2% year-over-year comparable sales this year are consistent with pre-pandemic 7%+ performance, exceeding the historical 2% to 4% target
• Boot Barn has expanded its total addressable market: it is now viewed as a denim destination, gaining denim market share from struggling mainstream players, and attracting new lifestyle customers beyond its traditional needs-based core customer base
• Over half of top-selling products have been in the product line and in stores for more than five years, demonstrating durable product demand
• No widespread consumer pullback across income cohorts, geographies, or occupations is observed; current comparable sales sit at +5% after starting the year at +4%, despite facing tough 2025 comparables

Exclusive Brand Strategy

• Exclusive brand penetration reached 39.6% last fiscal year, beating guidance; management maintains a long-term target of 50% penetration, with 50 basis point penetration growth guided for this fiscal year
• Strong third-party work brand sell-through is temporarily slowing overall exclusive brand penetration growth this year, which management views as normal category rebalancing and not a concern for long-term targets
• Standalone websites for exclusive brands are driving net new customer acquisition: ~70% of exclusive website customers are new to Boot Barn, and many of these new customers convert to regular Boot Barn shoppers across channels
• Most marketing spend for exclusive brands is allocated to Meta and TikTok, as their algorithms effectively target new customers and users are receptive to product discovery ads on these platforms
• Management has identified long-term additional growth levers for exclusive brands including international distribution via third-party distributors and expansion in commercial accounts, though these are not planned for the current fiscal year

Store Expansion Plan

• Boot Barn plans to open 70 new stores this fiscal year; the majority of new stores will be located 40+ miles away from existing locations to enter new markets, with a smaller share of closer proximity locations in large metropolitan areas
• Two new high-visibility, high-traffic test stores are planned: one on the Las Vegas strip, and a second in Southern California; these stores will bring incremental one-time costs that pressure near-term margins

Merchandising Optimization

• After successfully narrowing assortment and focusing on core SKUs for denim and apparel, management is executing the same assortment optimization strategy for footwear/boots
• The footwear assortment focus project is ~5/6 complete, and is expected to improve inventory turnover, conversion rates, and sales performance by prioritizing high-demand core styles

Sourcing Strategy

• Management is actively diversifying sourcing to capture tariff savings: shifting more production to Mexico under USMCA and to eligible duty-free countries under agreements like AGOA, and multi-sourcing products across different countries to manage trade costs
• No dramatic raw material cost increases related to higher oil prices are expected in the near term

Marketing Highlights

• Boot Barn's sponsorship of the Mustang Stage at the Stagecoach Festival received positive industry and consumer feedback; the event was streamed nationally by Amazon, delivering long-term national and global brand awareness, and the company plans to expand its Stagecoach presence next year

No full segment financial results (absolute revenue or contribution percentages) were disclosed in the provided transcript. The only partial segment-related information notes that exclusive brands reached 39.6% penetration, exceeding the prior year's 100 basis point growth guidance by 120 basis points, work boots make up roughly 15% of total sales, and third-party work boot brands are currently growing faster than exclusive work boot brands, creating a minor drag on overall exclusive brand penetration for the fiscal year.

• Full-year comparable sales guidance is in the 2% to 4% range. Guidance is derived from extrapolating February, March, and April sales trends, with no macro haircut applied to the extrapolated run rate, unlike last year
• Management projects a 10 basis point year-over-year improvement in full-year freight costs, with a freight tailwind expected in Q2 and flattish freight performance in the second half of the year
• Exclusive brand penetration is guided to grow 50 basis points for the current fiscal year, which incorporates the temporary drag from growing third-party work boot sales
• The 10% IEPA tariff rate is currently factored into guidance; management will adapt pricing if tariffs change, but does not expect significant pricing changes barring major tariff shifts
• Gross margin buying and occupancy leverage is expected to be ~10% of sales growth this year; this leverage ratio is expected to decline by a couple of percentage points next year as one-time investments in the two test stores and a Southern California distribution center lease amendment cycle off
• For sales mix this year, management expects average unit retail (AUR) to grow 2% to 3%, and transaction count to grow 0% to 1%
• Incremental upside to guidance from better-than-expected comps is expected to flow through to operating income at a ~35% margin

• Sustained elevated or further increases in freight and fuel costs beyond current modeled levels would reduce the expected 10 basis point full-year freight cost improvement and pressure margins, with any new elevated freight costs incurred in the first half of the year hitting the P&L in the back half
• The 10% IEAA tariff is still in place despite being deemed unlawful; any reversion to higher pre-ruling tariff rates would require price increases and pressure margins
• Tough year-over-year comparable sales in the back half of May and throughout the rest of the year create headwinds to hitting the upper end of the comp guidance range
• One-time costs associated with the two new high-visibility test stores create near-term margin pressure
• The footwear assortment optimization process is still incomplete, and full benefits have not yet been realized

Q: How should we think about freight cost headwinds for the rest of the year, and how are freight expenses capitalized? Does customer reduced price elasticity give more pricing optionality, and is there room to increase prices on exclusive brands after previous smaller increases? / A: The company expects a Q2 freight tailwind after lapping last year's Q2 freight headwind, with flattish freight in the second half leading to a 10 basis point full-year year-over-year improvement. Freight expenses are capitalized into inventory and expensed over ~6 months, matching the company's twice-annual inventory turn. Recent logistics contract negotiations have offset current freight cost increases, and container costs remain far below recent peaks, so only very large container cost spikes would materially impact results this year. Pricing is back to a normal cadence: exclusive brand price increases are complete for the season, and third-party vendor price increases are proceeding as usual, with business continuing as usual despite the 10% tariff.

Q: What were the first quarter contributions of transactions versus average ticket, and what is the outlook for both for the full year? Where are the two new test stores located, and what share of the 70 planned new stores are in new vs existing markets? / A: Year-to-date, AUR is up ~3% and average daily transactions are up ~1%, which matches the full-year guidance of 0-1% transaction growth and 2-3% AUR growth. The two test stores are on the Las Vegas strip and in Southern California. A majority of the 70 new stores will be located 40+ miles from existing locations in new markets, with a smaller share of closer locations in large metro areas.

Q: How does sustained higher gas and oil prices impact Boot Barn's business today, and is there any benefit to oil-focused markets like Texas? What long-term benefit do you expect from your Stagecoach Festival sponsorship? / A: Higher oil/fuel prices raise freight costs, which puts margin pressure and can require price increases. While the market historically believed higher oil production benefited Boot Barn's core customer, the business is now far more diversified, and there is no visible positive impact on performance in oil-focused geographies today. The Stagecoach sponsorship, particularly the streamed Mustang Stage, delivered significant national and global brand exposure far beyond the in-person event, and management expects this to drive long-term brand awareness growth, with an expanded partnership planned for next year.

Q: What is the long-term plan for exclusive brands, and will additional supply chain or IT infrastructure be needed for future expansion like international distribution? / A: Management maintains a long-term target of 50% exclusive brand penetration, with near-term growth temporarily slowed by strong third-party work boot sales. The company is continuing to grow standalone exclusive brand websites and market them via digital and influencer channels. No major infrastructure additions are needed for future international expansion, as product would ship directly from the source to international distributors with no domestic warehousing or logistics changes required.