Sportsman's Warehouse Holdings, Inc. Q2 FY2025 earnings call

• Same-store sales grew 2.1% YoY, with positive comps each month of Q2 despite macroeconomic headwinds.
• Inventory precision: Peak inventory build in Q2, ahead of fall hunting season, with healthier inventory and stronger in-stock levels.
• Local relevance: Launched partnership with USCCA for in-store training; expanded in-store events with outfitters.
• Personal protection: Expanded Byrna product line in stores; launched TASER in top personal protection stores.
• Brand awareness: New "Adventure like a local" campaign; refined digital strategy for customer acquisition.

Hunting and Shooting Sports: Grew 4% in Q2, driven by firearms, ammo, and personal protection products. Fishing: Up 10.9% vs last year, 20% on a 2-year stack. Camping: Down 10% vs last year. E-commerce: Grew 3% over last year, with over 70% of online transactions fulfilled via BOPUS. Firearms: Unit sales up >4% despite adjusted NICS checks down 4.9%; average unit retail down 4% but average order value at all-time highs. Ammunition: Sales up 10% in Q2, with shift to EDLP on core calibers and improved in-stock.

• Net sales: Lower end of outlook raised to flat growth vs prior guide of down 1%, top end remains up 3.5%.
• Adjusted EBITDA: Between $33M and $45M.
• Capital expenditures: Between $20M and $25M for technology and store maintenance.
• Inventory: Expect slight sell-down in Q3, end year with lower inventory than last year.

• Macroeconomic headwinds impacting consumer spending.
• Potential margin pressure from higher tariffs.
• Ensuring proper inventory mix and sell-through to manage working capital.

Q: Can you talk about the drivers of comp performance and durability of growth?

A: Strategy around hunt, shoot, fish, and personal protection; reinvestment of working capital into top-performing items; fish has more growth upside; personal protection outperforming.

Q: Implied back half guide and margin drivers?

A: Margin mix shift due to hunt (lower margins) and fish (falling off); Q4 is promotional.

Q: Comp guide for back half and demand trend?

A: August started well, Q3 has tailwind, Q4 is apples-to-apples digital to digital.

Q: AOV trend and room for improvement?

A: AOVs up despite lower AUR in firearms; huge opportunity to grow AOV through attachment of accessories.

Q: Guns, non-lethal, and store portfolio?

A: Non-lethal brings new customers; focus on paying down debt before new store growth; monitor underperforming stores.

Q: Comp breakdown by transactions vs average ticket?

A: Strong transactional count with BOPUS; both AOV and UPT up.

Q: Tariffs and gross margin?

A: Merchants ahead of tariffs; MAP pricing provides flexibility; mix pressure from hunt and camping affected margin, but rates up overall.

Q: Inventory and hunt category margin?

A: Elevated inventory for fall season; hunt category margin down due to mix of lower-margin firearms and ammo.