10-Q 1 spwh-20240803.htm 10-Q 10-Q
Q20001132105false--02-010.330.330.0830.0830.330.330.0830.08300011321052023-01-292023-07-290001132105us-gaap:CommonStockMember2024-08-030001132105us-gaap:TreasuryStockCommonMember2023-04-302023-07-290001132105us-gaap:RestrictedStockUnitsRSUMember2024-08-030001132105us-gaap:SubsequentEventMember2024-08-300001132105us-gaap:EmployeeStockMember2016-01-300001132105us-gaap:PerformanceSharesMember2023-01-292023-07-290001132105us-gaap:PerformanceSharesMember2024-02-042024-08-030001132105us-gaap:PerformanceSharesMember2023-01-280001132105us-gaap:RetainedEarningsMember2023-07-290001132105us-gaap:RestrictedStockMemberspwh:EmployeesMember2023-04-302023-07-290001132105us-gaap:BaseRateMembersrt:MinimumMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-042024-08-030001132105us-gaap:PerformanceSharesMemberspwh:EmployeesMember2023-04-302023-07-290001132105us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMembersrt:MinimumMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-042024-08-030001132105us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-02-042024-08-030001132105us-gaap:CommonStockMember2024-02-030001132105us-gaap:RestrictedStockMemberspwh:EmployeesMember2023-01-292023-07-290001132105spwh:OpticsElectronicsAccessoriesAndOtherMember2023-01-292023-07-290001132105us-gaap:CommonStockMember2024-05-052024-08-030001132105spwh:TermLoanMember2024-05-052024-08-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-05-052024-08-030001132105us-gaap:RetainedEarningsMember2023-04-290001132105us-gaap:RestrictedStockUnitsRSUMember2024-02-042024-08-0300011321052024-02-042024-08-030001132105us-gaap:RestrictedStockMembersrt:DirectorMember2024-05-052024-08-030001132105spwh:CreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-02-042024-08-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2023-04-302023-07-2900011321052024-08-300001132105spwh:ClothingMember2023-04-302023-07-290001132105us-gaap:PerformanceSharesMember2023-07-290001132105us-gaap:ConstructionInProgressMember2024-02-030001132105us-gaap:LeaseholdImprovementsMember2024-02-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2023-01-292023-07-290001132105spwh:AmendedAndRestatedTwoThousandAndTwentyNinePerformanceIncentivePlanMember2024-05-300001132105us-gaap:TreasuryStockCommonMember2023-01-292023-07-290001132105us-gaap:PerformanceSharesMemberspwh:EmployeesMember2023-01-292023-07-2900011321052024-02-030001132105us-gaap:RetainedEarningsMember2024-02-0300011321052024-05-052024-08-030001132105srt:MaximumMember2024-08-030001132105spwh:FootwearMember2024-05-052024-08-030001132105us-gaap:EmployeeStockMemberspwh:AmendedAndRestatedTwoThousandAndTwentyNinePerformanceIncentivePlanMember2024-08-030001132105us-gaap:RestrictedStockUnitsRSUMember2023-07-290001132105spwh:GiftCardMember2024-08-030001132105us-gaap:RetainedEarningsMember2024-05-052024-08-030001132105us-gaap:FurnitureAndFixturesMember2024-02-030001132105spwh:ClothingMember2024-02-042024-08-030001132105spwh:OpticsElectronicsAccessoriesAndOtherMember2023-04-302023-07-290001132105spwh:WellsFargoStandByLettersOfCreditMember2024-08-030001132105spwh:CreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMembersrt:MaximumMember2024-02-042024-08-030001132105srt:MinimumMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-042024-08-030001132105us-gaap:AdditionalPaidInCapitalMember2024-05-052024-08-030001132105spwh:CreditFacilityMemberspwh:AssetBasedLendingTermLoansMember2024-07-300001132105us-gaap:AdditionalPaidInCapitalMember2023-07-2900011321052023-07-290001132105us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-292023-07-290001132105us-gaap:PerformanceSharesMemberspwh:EmployeesMember2024-05-052024-08-030001132105spwh:HuntingAndShootingMember2023-04-302023-07-290001132105us-gaap:EmployeeStockMember2024-08-030001132105us-gaap:RestrictedStockMembersrt:DirectorMember2023-01-292023-07-290001132105us-gaap:RestrictedStockMemberspwh:EmployeesMember2024-02-042024-08-030001132105us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-042024-08-030001132105us-gaap:CommonStockMember2024-05-040001132105us-gaap:AdditionalPaidInCapitalMember2024-08-030001132105us-gaap:RestrictedStockMembersrt:DirectorMember2024-02-042024-08-030001132105us-gaap:RetainedEarningsMember2023-01-2800011321052022-05-272022-05-270001132105us-gaap:CommonStockMember2023-04-290001132105us-gaap:AdditionalPaidInCapitalMember2023-01-280001132105us-gaap:InterestRateFloorMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-08-030001132105us-gaap:ConstructionInProgressMember2024-08-030001132105spwh:FishingMember2023-01-292023-07-290001132105spwh:HuntingAndShootingMember2024-02-042024-08-030001132105srt:MinimumMemberspwh:CreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-02-042024-08-030001132105us-gaap:BaseRateMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMembersrt:MaximumMember2024-02-042024-08-030001132105us-gaap:AdditionalPaidInCapitalMember2023-04-302023-07-290001132105us-gaap:FurnitureAndFixturesMember2024-08-0300011321052024-05-040001132105spwh:FootwearMember2024-02-042024-08-030001132105spwh:ClothingMember2024-05-052024-08-030001132105spwh:ClothingMember2023-01-292023-07-290001132105us-gaap:AdditionalPaidInCapitalMember2024-05-040001132105us-gaap:PerformanceSharesMember2024-02-030001132105us-gaap:CommonStockMember2024-02-042024-08-030001132105us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-04-302023-07-290001132105us-gaap:CommonStockMember2023-01-280001132105us-gaap:AdditionalPaidInCapitalMember2024-02-030001132105us-gaap:CommonStockMember2023-01-292023-07-290001132105us-gaap:RetainedEarningsMember2024-02-042024-08-030001132105us-gaap:AdditionalPaidInCapitalMember2023-04-290001132105spwh:TermLoanMember2024-02-030001132105us-gaap:RetainedEarningsMember2024-05-0400011321052023-04-302023-07-290001132105spwh:HuntingAndShootingMember2023-01-292023-07-290001132105spwh:CampingMember2024-02-042024-08-030001132105spwh:FootwearMember2023-01-292023-07-290001132105us-gaap:PerformanceSharesMember2024-08-030001132105spwh:FootwearMember2023-04-302023-07-290001132105spwh:TermLoanMember2024-08-030001132105us-gaap:RestrictedStockMemberspwh:EmployeesMember2024-05-052024-08-030001132105spwh:HuntingAndShootingMember2024-05-052024-08-030001132105spwh:CreditFacilityMemberspwh:AssetBasedLendingTermLoansMember2024-07-302024-07-300001132105spwh:LoyaltyRewardProgramMember2024-08-030001132105us-gaap:RestrictedStockUnitsRSUMember2023-01-292023-07-290001132105spwh:OpticsElectronicsAccessoriesAndOtherMember2024-02-042024-08-030001132105us-gaap:LeaseholdImprovementsMember2024-08-030001132105us-gaap:CommonStockMember2023-04-302023-07-290001132105spwh:FishingMember2024-02-042024-08-030001132105us-gaap:BaseRateMemberspwh:TermLoanMember2024-02-042024-08-030001132105us-gaap:RestrictedStockUnitsRSUMember2023-01-280001132105us-gaap:RetainedEarningsMember2023-04-302023-07-290001132105srt:MinimumMemberspwh:TermLoanMember2024-02-042024-08-030001132105spwh:OpticsElectronicsAccessoriesAndOtherMember2024-05-052024-08-030001132105us-gaap:RestrictedStockUnitsRSUMember2024-02-030001132105spwh:FishingMember2023-04-302023-07-290001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-08-030001132105spwh:TermLoanMember2024-02-042024-08-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMember2024-02-042024-08-0300011321052024-08-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-042024-08-030001132105us-gaap:RetainedEarningsMember2024-08-030001132105us-gaap:AdditionalPaidInCapitalMember2024-02-042024-08-030001132105us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberspwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMembersrt:MaximumMember2024-02-042024-08-030001132105spwh:LoyaltyRewardProgramMember2024-02-030001132105spwh:CreditFacilityMemberspwh:DelayedDrawAssetBasedLendingTermLoansMember2024-07-300001132105us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-05-052024-08-030001132105spwh:CampingMember2023-04-302023-07-290001132105spwh:CampingMember2023-01-292023-07-2900011321052023-01-280001132105spwh:FishingMember2024-05-052024-08-030001132105us-gaap:EmployeeStockMember2024-05-052024-08-030001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMember2024-02-030001132105us-gaap:CommonStockMember2023-07-290001132105us-gaap:PerformanceSharesMemberspwh:EmployeesMember2024-02-042024-08-0300011321052023-04-290001132105us-gaap:RestrictedStockMembersrt:DirectorMember2023-04-302023-07-290001132105spwh:CampingMember2024-05-052024-08-030001132105us-gaap:AdditionalPaidInCapitalMember2023-01-292023-07-290001132105spwh:WellsFargoSeniorSecuredRevolvingCreditFacilityMembersrt:MaximumMember2024-02-042024-08-030001132105us-gaap:RetainedEarningsMember2023-01-292023-07-290001132105spwh:GiftCardMember2024-02-030001132105spwh:TermLoanMemberspwh:CreditFacilityMember2024-07-30spwh:Segmentxbrli:purexbrli:sharesiso4217:USDxbrli:sharesspwh:Storespwh:Stateiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 3, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_______to_______

Commission File Number: 001-36401

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

39-1975614

(State or other jurisdiction
of incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

1475 West 9000 South, Suite A, West Jordan, Utah

 

84088

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (801) 566-6681

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

SPWH

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act:

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 


 

The number of shares of the registrant's common stock, $0.01 par value per share, outstanding as of August 30, 2024 was 37,848,369.

 

 


SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

 

TABLE OF CONTENTS

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements (unaudited):

4

 

 

 

 

Condensed Consolidated Balance Sheets

4

 

 

 

 

Condensed Consolidated Statements of Operations

5

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows

8

 

 

 

 

Notes to Condensed Consolidated Financial Statements

9

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

 

 

 

Item 4.

Controls and Procedures

33

 

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

34

 

 

 

Item 1A.

Risk Factors

34

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

 

 

 

Item 3.

Defaults Upon Senior Securities

35

 

 

 

Item 4.

Mine Safety Disclosures

35

 

 

 

Item 5.

Other Information

35

 

 

 

Item 6.

Exhibits

36

 

 

 

 

Signatures

38

 

 

 

 

We operate on a fiscal calendar that, in a given fiscal year, consists of the 52- or 53-week period ending on the Saturday closest to January 31st. Our second fiscal quarters ended August 3, 2024 and July 29, 2023 both consisted of 13 weeks and are referred to herein as the second quarter of fiscal year 2024 and the second quarter of fiscal year 2023, respectively. Fiscal year 2024 contains 52 weeks of operations and will end on February 1, 2025. Fiscal year 2023 contained 53 weeks of operations and ended on February 3, 2024.

 


References throughout this document to “Sportsman’s Warehouse,” “we,” “us,” and “our” refer to Sportsman’s Warehouse Holdings, Inc. and its subsidiaries, and references to “Holdings” refer to Sportsman’s Warehouse Holdings, Inc. excluding its subsidiaries. References to (i) “fiscal year 2024” refer to our fiscal year ending February 1, 2025; (ii) “fiscal year 2023” refer to our fiscal year ended February 3, 2024; and (iii) “fiscal year 2022” refer to our fiscal year ended January 28, 2023.

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “10-Q”) contains statements that constitute forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. These statements concern our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition, which are subject to risks and uncertainties. All statements other than statements of historical fact included in this 10-Q are forward-looking statements. These statements may include words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events or trends. For example, all statements we make relating to our plans and objectives for future operations, growth or initiatives and strategies are forward-looking statements.

These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results.

All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the supply and demand for our products and our ability to conduct our business;
our retail-based business model which is impacted by general economic and market conditions and economic, market and financial uncertainties that may cause a decline in consumer spending;
our concentration of stores in the Western United States which makes us susceptible to adverse conditions in this region, and could affect our sales and cause our operating results to suffer;
the highly fragmented and competitive industry in which we operate and the potential for increased competition;
changes in consumer demands, including regional preferences, which we may not be able to identify and respond to in a timely manner;
our entrance into new markets or operations in existing markets, including our plans to open additional stores in future periods, which may not be successful;
our implementation of a plan to reduce expenses in response to adverse macroeconomic conditions, including an increased focus on financial discipline and rigor throughout our organization; and
the impact of general macroeconomic conditions, such as labor shortages, inflation, rising interest rates, economic slowdowns, and recessions or market corrections.

 

The above is not a complete list of factors or events that could cause actual results to differ from our expectations, and we cannot predict all of them. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements disclosed under “Part I., Item 1A., Risk Factors,” appearing in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 (our “Fiscal 2023 Form 10-K”) and “Part I., Item 2., Management’s Discussion and Analysis of Financial

2


Condition and Results of Operations” and elsewhere in this 10-Q, as such disclosures may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”), including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and public communications. You should evaluate all forward-looking statements made in this 10-Q and otherwise in the context of these risks and uncertainties.

 

Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on any forward-looking statements we make. These forward-looking statements speak only as of the date of this 10-Q and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties and other factors that are in many cases beyond our control. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly, whether as a result of new information, future developments or otherwise.

 

 

3


 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Amounts in Thousands, Except Par Value Data

(unaudited)

 

 

August 3,

 

 

February 3,

 

 

2024

 

 

2024

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,560

 

 

$

3,141

 

Accounts receivable, net

 

 

2,297

 

 

 

2,119

 

Income tax receivable

 

 

22

 

 

 

 

Merchandise inventories

 

 

363,435

 

 

 

354,710

 

Prepaid expenses and other

 

 

17,007

 

 

 

20,078

 

Total current assets

 

 

385,321

 

 

 

380,048

 

Operating lease right of use asset

 

 

325,063

 

 

 

309,377

 

Property and equipment, net

 

 

181,689

 

 

 

194,452

 

Goodwill

 

 

1,496

 

 

 

1,496

 

Deferred tax asset

 

 

8,038

 

 

 

505

 

Definite lived intangibles, net

 

 

297

 

 

 

327

 

Total assets

 

$

901,904

 

 

$

886,205

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

55,250

 

 

$

56,122

 

Accrued expenses

 

 

80,382

 

 

 

83,665

 

Income taxes payable

 

 

 

 

 

126

 

Operating lease liability, current

 

 

49,129

 

 

 

48,693

 

Revolving line of credit

 

 

131,054

 

 

 

126,043

 

Total current liabilities

 

 

315,815

 

 

 

314,649

 

Long-term liabilities:

 

 

 

 

 

 

Term loan, net

 

 

24,032

 

 

 

 

Operating lease liability, noncurrent

 

 

319,022

 

 

 

307,000

 

Total long-term liabilities

 

 

343,054

 

 

 

307,000

 

Total liabilities

 

 

658,869

 

 

 

621,649

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $.01 par value; 20,000 shares authorized; 0 shares issued and outstanding

 

 

 

 

 

 

Common stock, $.01 par value; 100,000 shares authorized; 37,848 and 37,529 shares issued and outstanding, respectively

 

 

378

 

 

 

375

 

Additional paid-in capital

 

 

84,246

 

 

 

81,798

 

Accumulated earnings

 

 

158,411

 

 

 

182,383

 

Total stockholders' equity

 

 

243,035

 

 

 

264,556

 

Total liabilities and stockholders' equity

 

$

901,904

 

 

$

886,205

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


SPORTSMAN’S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Amounts in Thousands, Except Per Share Data

(unaudited)

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

 

August 3,

 

 

July 29,

 

 

August 3,

 

 

July 29,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

288,734

 

 

$

309,495

 

 

$

532,974

 

 

$

577,024

 

Cost of goods sold

 

 

198,716

 

 

 

208,678

 

 

 

369,170

 

 

 

396,163

 

Gross profit

 

 

90,018

 

 

 

100,817

 

 

 

163,804

 

 

 

180,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

94,341

 

 

 

102,334

 

 

 

188,754

 

 

 

201,337

 

Loss from operations

 

 

(4,323

)

 

 

(1,517

)

 

 

(24,950

)

 

 

(20,476

)

Interest expense

 

 

3,183

 

 

 

3,527

 

 

 

6,091

 

 

 

5,574

 

Other losses

 

 

457

 

 

 

 

 

 

457

 

 

 

 

Loss before income taxes

 

 

(7,963

)

 

 

(5,044

)

 

 

(31,498

)

 

 

(26,050

)

Income tax benefit

 

 

(2,057

)

 

 

(1,756

)

 

 

(7,526

)

 

 

(7,123

)

Net loss

 

$

(5,906

)

 

$

(3,288

)

 

$

(23,972

)

 

$

(18,927

)

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.16

)

 

$

(0.09

)

 

$

(0.64

)

 

$

(0.50

)

Diluted

 

$

(0.16

)

 

$

(0.09

)

 

$

(0.64

)

 

$

(0.50

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

37,751

 

 

 

37,498

 

 

 

37,659

 

 

 

37,546

 

Diluted

 

 

37,751

 

 

 

37,498

 

 

 

37,659

 

 

 

37,546

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


SPORTSMAN’S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Amounts in Thousands

(unaudited)

 

For the Thirteen Weeks Ended August 3, 2024 and July 29, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Total

 

 

 

 

 

 

 

 

 

Restricted nonvoting

 

 

 

 

 

 

 

 

paid-in-

 

 

(deficit)

 

 

stockholders'

 

 

Common Stock

 

 

Common Stock

 

 

Treasury Stock

 

 

capital

 

 

earnings

 

 

equity

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Amount

 

 

Amount

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 29, 2023

 

 

37,686

 

 

$

377

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

79,340

 

 

$

196,866

 

 

$

276,583

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

431

 

 

 

(2,052

)

 

 

 

 

 

 

 

 

(2,052

)

Retirement of treasury stock

 

 

(431

)

 

 

(4

)

 

 

 

 

 

 

 

 

(431

)

 

 

2,052

 

 

 

(923

)

 

 

(1,125

)

 

 

 

Vesting of restricted stock units

 

 

53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of withholdings on restricted stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(112

)

 

 

 

 

 

(112

)

Issuance of common stock for
cash per employee stock purchase
plan

 

 

73

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

456

 

 

 

 

 

 

457

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,126

 

 

 

 

 

 

1,126

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,288

)

 

 

(3,288

)

Balance at July 29, 2023

 

 

37,381

 

 

$

374

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

79,887

 

 

$

192,453

 

 

$

272,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at May 4, 2024

 

 

37,632

 

 

$

376

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

82,839

 

 

$

164,317

 

 

$

247,532

 

Vesting of restricted stock units

 

 

116

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Payment of withholdings on
restricted stock units

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

(17

)

Issuance of common stock for
cash per employee stock purchase
plan

 

 

101

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

208

 

 

 

 

 

 

209

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,217

 

 

 

 

 

 

1,217

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,906

)

 

 

(5,906

)

Balance at August 3, 2024

 

 

37,848

 

 

$

378

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

84,246

 

 

$

158,411

 

 

$

243,035

 

 

6


 

For the Twenty-Six Weeks Ended August 3, 2024 and July 29, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Total

 

 

 

 

 

 

 

 

 

Restricted nonvoting

 

 

 

 

 

 

 

 

paid-in-

 

 

(deficit)

 

 

stockholders

 

 

Common Stock

 

 

common stock

 

 

Treasury Stock

 

 

capital

 

 

earnings

 

 

equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Amount

 

 

Amount

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 28, 2023

 

 

37,541

 

 

$

375

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

79,743

 

 

$

212,995

 

 

$

293,113

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

529

 

 

 

(2,748

)

 

 

 

 

 

 

 

 

(2,748

)

Retirement of treasury stock

 

 

(529

)

 

 

(5

)

 

 

 

 

 

 

 

 

(529

)

 

 

2,748

 

 

 

(1,128

)

 

 

(1,615

)

 

 

 

Vesting of restricted stock units

 

 

296

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

Payment of withholdings on
restricted stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,557

)

 

 

 

 

 

(1,557

)

Issuance of common stock for
cash per employee stock purchase
plan

 

 

73

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

456

 

 

 

 

 

 

457

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,376

 

 

 

 

 

 

2,376

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,927

)

 

 

(18,927

)

Balance at July 29, 2023

 

 

37,381

 

 

$

374

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

79,887

 

 

$

192,453

 

 

$

272,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at February 3, 2024

 

 

37,529

 

 

$

375

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

81,798

 

 

$

182,383

 

 

$

264,556

 

Vesting of restricted stock units

 

 

265

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

Payment of withholdings on
restricted stock units

 

 

(47

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(148

)

 

 

 

 

 

(149

)

Issuance of common stock for
cash per employee stock purchase
plan

 

 

101

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

208

 

 

 

 

 

 

209

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,391

 

 

 

 

 

 

2,391

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,972

)

 

 

(23,972

)

Balance at August 3, 2024

 

 

37,848

 

 

$

378

 

 

 

 

 

$

 

 

 

 

 

$

 

 

$

84,246

 

 

$

158,411

 

 

$

243,035

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


SPORTSMAN'S WAREHOUSE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in Thousands

(unaudited)

 

Twenty-Six Weeks Ended

 

 

August 3,

 

 

July 29,

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(23,972

)

 

$

(18,927

)

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

Depreciation of property and equipment

 

 

20,522

 

 

 

17,719

 

Amortization of discount on debt and deferred financing fees

 

 

80

 

 

 

76

 

Amortization of definite lived intangible

 

 

30

 

 

 

30

 

Loss on asset dispositions

 

 

473

 

 

 

 

Noncash lease expense

 

 

(3,027

)

 

 

12,615

 

Deferred income taxes

 

 

(7,533

)

 

 

(2,393

)

Stock-based compensation

 

 

2,391

 

 

 

2,376

 

Change in operating assets and liabilities, net of amounts acquired:

 

 

 

 

 

 

Accounts receivable, net

 

 

(176

)

 

 

(720

)

Operating lease liabilities

 

 

(200

)

 

 

(5,330

)

Merchandise inventories

 

 

(8,725

)

 

 

(58,032

)

Prepaid expenses and other

 

 

2,995

 

 

 

(4,368

)

Accounts payable

 

 

(1,367

)

 

 

11,832

 

Accrued expenses

 

 

2,525

 

 

 

(7,028

)

Income taxes payable and receivable

 

 

(148

)

 

 

(6,178

)

Net cash used in operating activities

 

 

(16,132

)

 

 

(58,328

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment, net of amounts acquired

 

 

(7,686

)

 

 

(51,971

)

Proceeds from sale of property and equipment

 

 

55

 

 

 

 

Net cash used in investing activities

 

 

(7,631

)

 

 

(51,971

)

Cash flows from financing activities:

 

 

 

 

 

 

Net borrowings on line of credit

 

 

5,011

 

 

 

115,556

 

Borrowings on term loan

 

 

25,000

 

 

 

 

Decrease in book overdraft

 

 

(5,917

)

 

 

(904

)

Proceeds from issuance of common stock per employee stock purchase plan

 

 

208

 

 

 

456

 

Payments to acquire treasury stock

 

 

 

 

 

(2,748

)

Payment of withholdings on restricted stock units

 

 

(148

)

 

 

(1,557

)

Payment of deferred financing costs and discount on term loan

 

 

(972

)

 

 

 

Net cash provided by financing activities

 

 

23,182

 

 

 

110,803

 

Net change in cash and cash equivalents

 

 

(581

)

 

 

504

 

Cash and cash equivalents at beginning of period

 

 

3,141

 

 

 

2,389

 

Cash and cash equivalents at end of period

 

$

2,560

 

 

$

2,893

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

Interest, net of amounts capitalized

 

$

5,952

 

 

$

2,343

 

Income taxes, net of refunds

 

 

155

 

 

 

1,448

 

 

 

 

 

 

 

 

Supplemental schedule of noncash activities:

 

 

 

 

 

 

Noncash change in operating lease right of use asset and operating lease liabilities from remeasurement of existing leases and addition of new leases

 

$

12,681

 

 

$

46,081

 

Purchases of property and equipment included in accounts payable and accrued expenses

 

$

936

 

 

$

9,601

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

8


SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements

Dollars in Thousands, except per share amounts (unaudited)

(1) Description of Business and Basis of Presentation

Description of Business

Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (“Holdings”), and its subsidiaries (collectively, the “Company”) operate retail sporting goods stores. As of August 3, 2024, the Company operated 146 stores in 32 states. The Company also operates an e-commerce platform at www.sportsmans.com. The Company’s stores and website are aggregated into one operating and reportable segment.

Basis of Presentation

The condensed consolidated financial statements included herein are unaudited and have been prepared by management of the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company’s condensed consolidated balance sheet as of February 3, 2024 was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments that are, in the opinion of management, necessary to summarize fairly the Company's condensed consolidated financial statements for the periods presented. All of these adjustments are of a normal recurring nature. The results of the fiscal quarter ended August 3, 2024 are not necessarily indicative of the results to be obtained for the fiscal year ending February 1, 2025. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024 filed with the SEC on April 4, 2024 (the “Fiscal 2023 Form 10-K”).

(2) Summary of Significant Accounting Policies

 

The Company’s significant accounting policies are described in Note 2 to the Fiscal 2023 Form 10-K. The Company has consistently applied the accounting policies to all periods presented in the condensed consolidated financial statements presented herein.

 

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures, which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The ASU applies to all public entities that are required to report segment information in accordance with ASC 280, and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has not elected early adoption and will implement this ASU beginning with its the fiscal period ended February 1, 2025.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, which include improvements to income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU also includes certain other amendments to better align disclosures with Regulation S-X and to remove disclosures no longer considered cost beneficial or relevant. This ASU is effective for public entities for annual periods beginning after December 15, 2024, with earlier or retrospective application permitted. The amendments in this ASU should be

9


applied prospectively for annual financial statements not yet issued or made available for issuance. The Company is evaluating the future impact of the issuance of this ASU on its consolidated financial statements.

(3) Revenue Recognition

Revenue recognition accounting policy

The Company operates solely as an outdoor retailer, which includes both retail stores and an e-commerce platform, that offers a broad range of products in the United States and online. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration in exchange for those goods. Accordingly, the Company implicitly enters into a contract with customers to deliver merchandise inventory at the point of sale. Collectability is reasonably assured since the Company only extends immaterial credit for purchases to certain municipalities.

Substantially all of the Company’s revenue is for single performance obligations for the following distinct items:

Retail store sales
E-commerce sales
Gift cards and loyalty rewards program

For performance obligations related to retail store and e-commerce sales contracts, the Company typically transfers control, for retail stores, upon consummation of the sale when the product is paid for and taken by the customer and, for e-commerce sales, when the products are tendered for delivery to the common carrier.

The transaction price for each contract is the stated price on the product, reduced by any stated discounts at that point in time. The Company does not engage in sales of products that attach a future material right which could result in a separate performance obligation for the purchase of goods in the future at a material discount. The implicit point-of-sale contract with the customer, as reflected in the transaction receipt, states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment for the Company’s contracts is due in full upon delivery. The customer agrees to a stated price implicit in the contract that does not vary over the contract.

The transaction price relative to sales subject to a right of return reflects the amount of estimated consideration to which the Company expects to be entitled. This amount of variable consideration included in the transaction price, and measurement of net sales, is included in net sales only to the extent that it is probable that there will be no significant reversal in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The allowance for sales returns is estimated based upon historical experience and a provision for estimated returns is recorded as a reduction in sales in the relevant period. The estimated merchandise inventory cost related to the sales returns is recorded in prepaid expenses and other. The estimated refund liabilities are recorded in accrued expenses. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net sales and earnings in the period such variances become known.

Contract liabilities are recognized primarily for gift card sales and the Company’s loyalty reward program. Cash received from the sale of gift cards is recorded as a contract liability in accrued expenses, and the Company recognizes revenue upon the customer’s redemption of the gift card. Gift card breakage is recognized as revenue in proportion to the pattern of customer redemptions by applying a historical breakage rate of 4.0% when no escheat liability to relevant jurisdictions exists. Based upon historical experience, gift cards are predominantly redeemed in the first two years following their issuance date. The Company does not sell or provide gift cards that carry expiration dates.

Accounting Standards Codification (“ASC”) 606 requires the Company to allocate the transaction price between the goods and the loyalty reward points based on the relative standalone selling price. The Company recognizes revenue for the breakage of loyalty reward points as revenue in proportion to the pattern of customer redemption of the points by applying an estimated breakage rate of 35.0% using historical rates and future expectations.

10


As it relates to e-commerce sales, the Company accounts for shipping and handling as fulfillment activities, and not as a separate performance obligation. Accordingly, the Company recognizes revenue for only one performance obligation, the sale of the product, at the shipping point (when the customer gains control). Revenue associated with shipping and handling is not material. The costs associated with fulfillment are recorded in costs of goods sold.

The Company offers promotional financing and credit cards issued by a third-party bank that manages and directly extends credit to the Company’s customers. The Company provides a license to its brand and marketing services, and the Company facilitates credit applications in its stores and online. The banks are the sole owners of the accounts receivable generated under the program and, accordingly, the Company does not hold any customer receivables related to these programs and acts as an agent in the financing transactions with customers. The Company is eligible to receive a profit share from certain of its banking partners based on the annual performance of their corresponding portfolio, and the Company receives monthly payments based on forecasts of full-year performance. This is a form of variable consideration. The Company records such profit share as revenue over time using the most likely amount method, which reflects the amount earned each month when it is determined that the likelihood of a significant revenue reversal is not probable, which is typically monthly. Profit-share payments occur monthly, shortly after the end of each program month.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Sales returns

 

The Company allows customers to return items purchased within 30 days provided the merchandise is in resaleable condition with original packaging and the original sales/gift receipt is presented. The Company estimates a reserve for sales returns and records the respective reserve amounts, including a right to return asset when a product is expected to be returned and resold. Historical experience of actual returns and customer return rights are the key factors used in determining the estimated sales returns.

Contract balances

 

The following table provides information about right of return assets, contract liabilities, and sales return liabilities with customers as of August 3, 2024 and February 3, 2024:

 

 

August 3, 2024

 

 

February 3, 2024

 

Right of return assets, which are included in prepaid expenses and other

 

$

2,201

 

 

$

1,659

 

Estimated gift card contract liability, net of breakage

 

 

(27,409

)

 

 

(30,541

)

Estimated loyalty contract liability, net of breakage

 

 

(3,735

)

 

 

(4,340

)

Sales return liabilities, which are included in accrued expenses

 

 

(3,285

)

 

 

(2,476

)

 

During the 13 and 26 weeks ended August 3, 2024, the Company recognized approximately $375 and $782 in gift card breakage and approximately $1,385 and $1,823 in loyalty breakage, respectively. During the 13 and 26 weeks ended July 29, 2023, the Company recognized approximately $359 and $799 in gift card breakage and approximately $992 and $1,930 in loyalty breakage, respectively. During the 13 and 26 weeks ended August 3, 2024, the Company recognized revenue of $3,859 and $12,836, respectively, relating to contract liabilities that existed at February 3, 2024.

The current balance of the right of return assets is the expected amount of inventory to be returned that is expected to be resold. The current balance of the contract liabilities primarily relates to the gift card and loyalty reward program liabilities. The Company expects the revenue associated with these liabilities to be recognized in proportion to the pattern of customer redemptions over the next two years. The current balance of sales return liabilities is the expected amount of sales returns from sales that have occurred.

11


Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by department. The percentage of net sales related to the Company’s departments during the 13 and 26 weeks ended August 3, 2024 and July 29, 2023, was approximately:

 

 

 

 

Thirteen Weeks Ended

 

 

Twenty-Six Weeks Ended

 

 

 

 

August 3,

 

 

July 29,

 

 

August 3,

 

 

July 29,

 

Department

 

Product Offerings

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Camping

 

Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools

 

 

16.4

%

 

 

16.0

%

 

 

13.1

%

 

 

12.8

%

Apparel

 

Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear

 

 

6.6

%

 

 

6.8

%

 

 

6.1

%

 

 

6.9

%

Fishing

 

Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats

 

 

16.8

%

 

 

14.4

%

 

 

14.2

%

 

 

12.0

%

Footwear

 

Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots

 

 

6.3

%

 

 

6.8

%

 

 

5.8

%

 

 

6.7

%

Hunting and Shooting

 

Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear

 

 

47.9

%

 

 

49.9

%

 

 

55.2

%

 

 

56.1

%

Optics, Electronics, Accessories, and Other

 

Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts

 

 

6.0

%

 

 

6.1

%

 

 

5.6

%

 

 

5.5

%

Total

 

 

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

(4) Property and Equipment

Property and equipment consisted of the following as of August 3, 2024 and February 3, 2024:

 

 

August 3,

 

 

February 3,