SPORTSMAN'S WAREHOUSE HOLDINGS, INC. Q4 FY2024 earnings call

• Phase 1 of transformation: Reset over 100 stores to improve shopping experience, hired marketing/e-commerce leader, managed inventory to end with lower and cleaner inventory, generated positive cash flow.
• 2025 strategy: Goal to return to same-store sales growth, improve margins, pay down debt; 4 strategic initiatives: 1) Narrow and deep in hunting and fishing to improve in-stock levels of key products. 2) Lean into local by leveraging store outfitters and local brands. 3) Become authority in personal protection, with personal protection near 25% of total sales. 4) Strengthen brand awareness with omnichannel campaigns. - Financial progress in 2024: Q4 comp sales down 0.5% vs down 12.8% last year, adjusted EBITDA $15M vs $5M last year, reduced net debt by $27M, decreased inventory $13M, ended with liquidity $131M.

Firearms: Unit sales increased mid-single digits in Q4, but sales dollars pressured by trade-down to lower-priced firearms. Camping and Fishing: Fishing saw double-digit growth in Q4, camping also saw growth. Apparel and Footwear: Comps down in Q4, but inventory down more than sales declines. Hunting and Shooting Sports: Unit sales up mid-single digits, but sales dollars pressured by trade-down, though average order value (AOV) remained at an all-time high due to attachment items. E-commerce: Driven sales comped positive, up double digits in Q4, with trends carrying into 2025. Revenue contribution percentages were not explicitly stated in absolute terms but discussed by category performance.

• Fiscal 2025 net sales estimated in range of negative 1% to up 3.5% over last year. - Adjusted EBITDA expected in range of $33M to $45M. - CapEx expected between $20M and $25M. - Tariffs: Relatively low exposure, modest gross margin pressure anticipated.

• Tariffs could impact gross margin. - Potential underperformance of stores not 4-wall positive. - Consumer behavior changes may affect sales trends.

Q: How did comps trend through February and March, and timing of store opening?

A: Jeff White noted February had good trends, but Q1 felt pressure from later holiday start, with more upside in Q2, Q3, Q4; store opening slated for end of Q3, beginning of Q4.

Q: Is trade-down in firearms an opportunity to gain market share, and mix within personal protection category?

A: Jeffrey White said merchant team adjusting to be in stock of value items, outperforming adjusted NICS; Paul Stone noted personal protection at ~25% mix, opportunity in lethal/nonlethal.

Q: Insights on consumer behavior, ammunition add-ons, and e-comm growth?

A: Jeffrey White discussed consumables pricing to drive traffic, attachment of ancillary services in firearms; Jeff White said e-comm comped double-digit positive, over 17% of business, heavily weighted in firearms.

Q: Tariffs impact and store optimization?

A: Jeffrey White said tariff exposure <2% of COGS, some stores not 4-wall positive but costs to exit leases exceed losses; Paul Stone mentioned getting ahead of tariff impacts.

Q: Tariffs, e-comm profit model, and gross margin outlook?

A: Jeffrey White discussed low tariff exposure, e-comm buy online pickup in-store supports stores, with gross margin expansion expected from focusing on core goods in fish and hunt.