Boot Barn Holdings, Inc.

Good day, everyone, and welcome to the Boot Barn Holdings, Inc. First Quarter 2027 Earnings Conference Call. As a reminder, this call is being recorded. Now, I would like to turn the conference over to your host, Mr. Mark Dedovesh, Senior Vice President of Investor Relations and Finance. Please go ahead, sir.

Thank you. Good afternoon, everyone. Thank you for joining us today to discuss Boot Barn's First Quarter Fiscal 2027 Earnings Results. With me on today's call are John Hazen, Chief Executive Officer, and Jim Watkins, Chief Financial Officer. A copy of today's press release, along with a supplemental financial presentation, is available on the Investor Relations section of Boot Barn's website at bootbarn.com. Shortly after we end this call, a recording of the call will be available as a replay for 30 days on the Investor Relations section of the company's website. I would like to remind you that certain statements you will make during this call are forward-looking statements. These forward-looking statements reflect Boot Barn's judgments and analysis only as of today, and the actual results may differ materially from current expectations based on the number of factors affecting Boot Barn's business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made during this office-long webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our first quarter fiscal 2027 earnings release, Thank you, Mark, and good afternoon. Thank you, everyone, for joining us. On this call, I will review our first quarter fiscal 27 results, provide an update on current business,

and discuss the progress we have made across each of our four strategic initiatives. Following my remarks, Jim Watkins will review our financial performance in more detail, and then we will open up the call for questions. I am encouraged by our start to fiscal 27. First quarter results exceeded our expectations and reflected broad-based strength across the business. Revenue increased 18%, driven by the opening of 27 new stores during the quarter, and consolidated same-store sales growth of 4.7%. Merchandise Margin exceeded our guidance driven by stronger than expected product margin and the recognition of tariff refunds during the quarter. Disciplined Expense Management also contributed to first quarter results with our SG&A rate coming in better than guidance even as we invested in marketing initiatives including our sponsorship at the Stagecoach Music Festival and 28 Grand Opening events. As a result of the factors just mentioned, first quarter earnings per diluted share increased 32% over the prior year to $2.29, including a 38 cent benefit from tariff refunds. Our first quarter results reflect the outstanding execution by our team and the strength of our business. I am confident we are well positioned to deliver continued growth throughout the remainder of the year. Now turning to current business. Through the first four weeks of the fiscal second quarter, consolidated pin store sales are approximately flat. While this represents a moderation from our first quarter performance, it was largely anticipated as we lacked the strongest sales month of the second quarter from last year. July sales did, however, come in below our expectations due to a couple of factors that were not contemplated in our original outlook. We believe fewer Western Lifestyle Stadium events and concerts, together with the temporary impact of World Cup matches, on customer traffic during televised games weighed on our performance during the month. Despite these factors, we remain confident in our outlook for the balance of the year. I will now spend some time discussing each of our four strategic initiatives. Let's begin with new store growth. We opened 27 stores during the first quarter, ending the period with 566 locations across 49 states. New store openings continue to exceed expectations across the country and are projected to generate $3.2 million in average annual revenue, with an investment payback of less than two years. We remain on track to open 70 stores this fiscal year, supported by a new store pipeline. As we continue expanding across the country, we believe we are well-positioned to grow the Boot Barn brand for many years to come as we progress towards our long-term opportunity of 1,200 stores across the United States. Moving to our second initiative, same-store sales. First quarter, consolidated same-store sales increased 4.7%, with brick-and-mortar same-store sales increasing 3.8%. Store comp growth was driven by a 3% increase in average unit retail and approximately flat transactions. From a merchandising perspective, we delivered broad-based growth across most major merchandise categories. Men's western boots increased mid-single digits, and ladies' western boots decreased mid-single digits, as they cycled mid-teen comps in the prior year. Men's and ladies' apparel increased high single digits, led by double-digit growth in denim, which also cycled exceptional growth last year. Our work boots business delivered high single-digit comp growth during the quarter, which marks the fifth consecutive quarter of growth in this category and the strongest growth over the past few years. I am pleased to see the continued acceleration in the work business as the team made a concerted effort to reinvigorate the category last year. These efforts, including enhancements to our in-store merchandising and increased marketing focus, and investments in our key third-party brands to ensure we offer the right assortment for our work customers. Moving to our third initiative, Omnichannel. In the first quarter, e-commerce comp sales increased 13.4% driven by double-digit growth on bootbar.com. In addition to driving online sales growth, our Omnichannel capabilities remain a meaningful competitive advantage and reflect our team's commitment to operate as a stores-first organization. Today, a large portion of our e-commerce orders are fulfilled from our stores, enhancing merchandise margins while providing customers with access to a broader assortment of inventory. We continue to see strong adoption of our buy online, pick up in store, and ship to store offerings, which drives store traffic, reduce fulfillment costs, and enhance customer engagement by delivering a more seamless shopping experience across our digital and physical channels. Now to our fourth strategic initiative, merchandise margin expansion and exclusive brands. I am pleased with the team's continued execution of our merchandise margin strategy. including tariff refunds, first quarter merchandise margin exceeded our expectations driven by strong product margins. While exclusive brands remain an important contributor to merchandise margin expansion, the exceptional performance of our work boots business, driven by strong demand for third-party brands, resulted in lower exclusive brand penetration during the first quarter than anticipated. We expect the strength in our third-party work boots business to continue, and as a result, we now expect full year exclusive brand penetration to be approximately flat to slightly down compared to the prior year. We view this as a positive outcome, as the continued strength of our work boots business reflects healthy customer demand, drives incremental sales, attracts new customers to the Boot Barn brand, and further strengthens our position as the leading destination for work. Thank you, Jon. Thank you, Jon.