Sportsman's Warehouse Holdings, Inc. Q4 FY2025 earnings call

Paul Stone mentioned Q4 and full year results exceeded revised expectations. First half of Q4 had pressured promotional environment but back half turned sales positive. Positive same-source sales growth in first three quarters of 2025, first positive comp since 2020. Core pursuits: Hunting and shooting sports grew over 5%, fishing 3.2% (excluding ice fishing over 11%), e-commerce sales up 8.3% in Q4 and 6.6% for year. Made progress on four strategic priorities: stronger planning and merchandising discipline, re-anchoring to local market, strengthening personal protection, and strengthening brand awareness and digital-first go-to-market strategy. Jennifer Fall Young discussed full year and Q4 financials, inventory management, balance sheet and liquidity, and 2026 guidance priorities.

Full year 2025: Net sales and comparable store sales grew 1%. Adjusted EBITDA was $27.5 million. Inventory down $29.1 million or 8.5% YOY. Net debt $90 million, total liquidity $107.8 million. Fishing grew 10.3% for the year, nearly 18% on two-year stack. Hunting and shooting sports increased 4.4% for the year. Fourth quarter: Net sales 334.9 million, down 1.6% YOY; comparable store sales down 1.8%. Hunting and shooting sports up 6.2%. Fishing up 3.2% but impacted by unseasonably warm weather; excluding ice fishing, up over 11%. Other categories declined. Gross margin for Q4 28.4% vs 30.4% last year. SG&A expense 28.7% of net sales vs 29.4% last year. Net loss for Q4 $21.7 million or 56 cents per diluted share.

2026 same-store sales expected in range of down 1% to up 2% over last year. Adjusted EBITDA expected in range of $30 million to $36 million. Capital expenditures between $20 and $25 million. Priorities: driving profitable comp store sales growth through strategic initiatives, managing inventory efficiently, using excess free cash flow to pay down debt and strengthen balance sheet.

U.S. consumer remains under pressure; rising fuel costs and broader microdynamics add weight to discretionary spending. External events can influence industry, and there are various legislations (state and federal) that impact consumer demand. Also, inventory management and store performance risks as they work on closing underperforming stores.

Q: Matt Coranda asked about near-term demand trends, if first quarter is comping positive and category strength.

A: Jennifer said trends started in January continued through February and March, with strength from firearms, ammunition, and fish despite ice fishing pressure.

Q: Anna Gliskin asked about hunt penetration and margin outlook.

A: Jennifer said they're contemplating it in margin, working on cleaning up apparel business and other categories.

Q: Mark Smith asked about gross profit margin headwinds in Q4.

A: It's a combination of mix and promotional cadence, with ice fishing not performing and need to clean up inventory.