SPORTSMAN'S WAREHOUSE HOLDINGS, INC. Q1 FY2025 earnings call

Key Initiatives

• Focus on inventory precision, local relevance, personal protection, and brand awareness as part of turnaround plan.
• Q1 sales up 2%, first positive year-over-year sales comp in nearly four years.
• Firearm unit sales significantly outpaced adjusted NICS data, capturing market share.
• Fishing sales up 11%, ammunition up 3%.
• Launched Safety Outpost on website for personal protection, soft launched less lethal with Verna, and a new omnichannel brand campaign to reinvigorate brand relevance.

First quarter sales were $249.1 million, up 2% compared to the same period last year. Firearm unit sales increased nearly 7% despite adjusted NICS declining 5.4%. Fishing sales were up 11%, ammunition up 3%. Gross margin for the quarter was 30.4%, up 20 basis points, driven by favorable mix in the Fishing business. SG&A expenses were $95.3 million, or 38.2% of net sales. Net loss for the first quarter was $21.3 million, and adjusted net loss was $15.6 million. Adjusted EBITDA for the first quarter was negative $9 million.

Full Year 2025

• Net sales expected to range between down 1% to up 3.5% compared to 2024.
• Adjusted EBITDA expected to be between $33 million and $45 million.
• Capital expenditures between $20 million and $25 million, primarily for technology investments and store maintenance.

• Consumer macroeconomic pressures.
• Later start to the spring selling season.
• Uncertainties related to tariffs and international trade policy.

Q: Could you break down comp trends by month and extend into May?

A: February had good trends, March was pressured by ad shift, April was strong, and May has continued positive comp with strong fishing season trends.

Q: Are you seeing increased foot traffic or higher basket sizes?

A: It's a mixture of better traffic, transaction, UPT, and AOV trends, with strategy driving positive metrics despite tough consumer environment.

Q: Thoughts on debt and balance sheet with inventory pull forward?

A: Confident in generating positive free cash flow to pay down debt, with inventory pull forward helping in-stock for summer and early fall selling seasons.

Q: Mitigating tariff impact and when to expect tariff P&L impact?

A: Constantly assessing and adjusting prices, pull forward of inventory helps get ahead of tariff impact, with in-stock expected to last through summer and early fall, especially in camp and fish categories.