Boot Barn Holdings Inc (BOOT) Q2 2026 Earnings Report

- Revenue: $505.4 million, up 19% YoY; QoQ up 0.3% (Q2 FY2026). - Gross margin: 36.4% (up ~50 bps YoY; gross profit $184.149 million). - Operating income: $56.423 million (11.2% of sales, up from 9.4% YoY). - Net income: $42.222 million; EPS (diluted) $1.37 (up 44% YoY). - Inventory: $855.1 million, up 20% YoY. - Cash & equivalents: $64.7 million; cashless revolver: $0 drawn; total debt: $667.95 million; net debt: $603.22 million. - SG&A: $127.726 million (25.3% of net sales; 120 bps favorable vs prior year). - E-commerce: online comps +14.4%; online share of online sales from bootbarn.com ~75% and online activity skewed toward exclusive brands (Hawx, Cody James). - New stores: 64 opened in the last 12 months; 70 opened in FY26; average new store sales ~ $3.2 million with payback <2 years. - TAM expansion: $58 billion from $40 billion; long-term US store count target raised to 1,200. - Guidance: Full-year net sales $2.235 billion; EPS $7.15; Q3 sales ~$700 million; Q3 EPS $2.59; capex $125-130 million; tax rate 26%. - Exclusive brands: penetration at 41%, up 290 bps in the quarter. - Tariff management: partial cost mitigation; planned price increases on exclusive brands after holidays if tariffs persist.

- Growth and store expansion: John Hazen stated, "During the quarter, revenue increased 19% compared to the prior year to $505 million, driven by sales from the 64 new stores opened over the last 12 months and consolidated same-store sales growth of 8.4%." (Q2 FY2026 Earnings Call) - New-store economics: Hazen noted, "We estimate new stores on average will generate approximately $3.2 million in annual sales and pay back their initial investment in less than 2 years." - TAM and store-count ambition: Hazen explained, "the market is substantially larger than our prior estimate, and we now believe that our total addressable market has expanded from $40 billion to $58 billion" and added, "the U.S. store count can reach 1,200 stores" with 12%-15% annual new-unit openings. - Omnichannel performance: Jim Watkins highlighted, "e-commerce comp sales grew 14.4% and bootbarn.com, which is approximately 75% of our online sales, comp positive high teens." He also discussed AI-assisted site enhancements and a Cassidy assistant to support store teams. - Exclusive brands and margins: Hazen noted, "merchandise margin increased 80 basis points… exclusive brand penetration increased 290 basis points to 41% of sales." He also described pricing strategy to mitigate tariffs, with forthcoming price increases on exclusive brands after holidays if tariffs persist. - Online channels and brand websites: The transcript shows emphasis on Hawx and Cody James exclusive-brand sites, with John stating the goal to tell stories on dedicated sites and drive traffic back into Boot Barn stores. - Guidance and outlook: Watkins provided the bridge to the back half, explaining that management modeled a cautious 2%+ comp for the second half with macro headwinds, and that the company will lift prices selectively in exclusive brands to preserve margins post-holiday. - Competitive and promotional environment: Several questions touched on promotions, potential competition, and the robustness of denim as a core product, with management expressing confidence in continued rational promotions and denim momentum.

Boot Barn's QQ2 2026 results reflect a disciplined expansion strategy under a Stores-First operating model, supported by a compelling growth thesis, robust e-commerce momentum, and a clear path to higher margins through exclusive-brand penetration and cost mitigation strategies. The TAM expansion to $58B and the 1,200-store target provide a substantial long-term growth runway. Near term, the company faces tariff-driven cost pressures and macro headwinds, but management has demonstrated a proactive approach to pricing, cost containment, and inventory management to preserve margin. The combination of strong top-line growth (29% YTD net sales growth is not explicitly stated here but implied by segments) with expanding merchandise margin suggests improving profitability if the macro backdrop remains manageable. Investors should monitor: (1) the trajectory of SSS in H2 FY26 as macro headwinds persist; (2) the effectiveness of exclusive-brand price adjustments post-holiday; (3) the translation of online/channel investments into incremental traffic and conversion; (4) margin progression from higher exclusive-brand penetration and cost-mitigation strategies; (5) real-estate deployment and store-productivity evolution toward the 1,200-store horizon; (6) tariff developments and their impact on gross margins and inventory costs. Overall, Boot Barn's strategic levers and growth trajectory position it as an upside-to-base-case opportunity for consumers of Western/workwear and denim, provided it maintains tight cost controls and continues to execute its store-expansion and omnichannel initiatives.