Boot Barn (NYSE:BOOT) reported third quarter fiscal 2026 results that management said reflected “broad-based strength” across categories, channels, and geographies, while also highlighting continued momentum early in the fourth quarter despite weather disruptions.
Third-quarter results: sales up 16% and EPS of $2.79
CEO John Hazen said the company was “very pleased” with third quarter performance, pointing to higher sales, improved merchandise margin, and “solid expense control.” Revenue increased 16% year over year to $706 million, including consolidated same-store sales growth of 5.7%. Hazen also noted merchandise margin rate increased 110 basis points versus the prior-year period.
SG&A expenses were $166 million, or 23.6% of sales, compared to $139 million, or 22.9% of sales, in the prior-year period. Income from operations was $115 million, or 16.3% of sales, versus $99 million, or 16.4%, last year. Watkins said the prior-year period included a $6.7 million net benefit related to the former CEO’s resignation; excluding that item, the company said SG&A leveraged 40 basis points and operating margin leveraged by 100 basis points year over year.
Early fourth-quarter trends and storm impact
Hazen said that through the first five weeks of the fiscal fourth quarter, consolidated quarter-to-date same-store sales increased 5.7%, but were negatively impacted by an estimated $5 million in reduced revenue from winter storm-related closures. He added that for the first 26 days of the quarter—prior to the storms—comps ran approximately 9.1%, driven by growth in transactions.
In Q&A, Hazen said the early-quarter acceleration was broad-based across major categories, while calling out work apparel as “a little softer” due to warmer weather in January. He said needs-based work categories improved as winter storms arrived, but also cautioned that sales lost from storm closures are not typically recovered later.
Progress on strategic initiatives: stores, comps, omnichannel, and margin
Management framed performance around four strategic initiatives:
- New store growth: Boot Barn opened a record 25 stores in the third quarter, ending with 514 stores. Hazen reiterated that new stores are “on pace” to generate about $3.2 million in annual sales in their first full year and pay back initial investment in less than two years. The company planned 15 openings in the fourth quarter, bringing fiscal 2026 openings to 70. Looking to fiscal 2027, Hazen said the pipeline is strong, with about 20 projected openings in the first quarter, while Watkins said the company remains confident it can open stores within its 12%–15% new unit growth range.
- Same-store sales: Third quarter consolidated comps rose 5.7%, with brick-and-mortar comps up 3.7%. Hazen said store comp growth was driven by low single-digit increases in both basket size and transactions. He cited high-single-digit comp growth in men’s and women’s Western boots, apparel slightly outperforming the chain average, and mid-teen same-store sales growth in denim. Work boots posted a mid-single-digit comp gain.
- Omnichannel and exclusive brand sites: Online comp sales grew 19.6%. Hazen said Boot Barn has been encouraged by standalone websites for exclusive brands Cody James and Hawx, describing “storytelling” as the primary objective while noting a “nice side effect” in sales. Executives said most customers on those sites appear to be net new to Boot Barn, based on comparisons against the company’s B Rewarded loyalty database (which they said totals 10.6 million customers). Hazen said additional standalone sites are planned, including Shyanne and Cleo + Wolf, with Rank 45 also discussed as a future launch.
- Merchandise margin expansion and exclusive brands: Hazen said third quarter merchandise margin improved 110 basis points year over year, driven by buying economies of scale, supply chain efficiencies, and 240 basis points of growth in exclusive brand penetration. He said the company remains committed to a full-price selling model and is working with factory partners to mitigate tariffs through cost concessions.
Pricing actions, inventory, and capital return
Hazen said Boot Barn will increase ticket prices on some exclusive brand products in the fourth quarter, describing a “style-by-style” approach and emphasizing attention to psychological price points. He said some products will avoid increases due to factory concessions, others will be priced higher at the factory level for new product, and some will require retagging of product already in distribution centers or stores, with repricing underway across January and continuing in February and March.
On the balance sheet, Watkins said inventory increased 17% to $805 million, and rose about 4% on a same-store basis. He attributed the increase to new stores (up 15%), comp store inventory growth, and growth in exclusive brands, adding that markdowns as a percentage of inventory are below historical levels.
The company repurchased about 67,000 shares for $12.5 million during the quarter under its authorized $200 million program. Boot Barn ended the quarter with $200 million in cash and zero drawn on its $250 million revolving credit facility.
Guidance: raised full-year outlook; fourth quarter reflects margin headwinds
Watkins provided fourth quarter guidance and said management is raising the full-year outlook based on year-to-date performance and the fourth quarter outlook.
For the fourth quarter, at the high end of the guidance range, Boot Barn expects:
- Total sales: $535 million
- Consolidated same-store sales: +5%
- Merchandise margin: ~50.5% of sales (down 60 basis points year over year)
- Income from operations: $59 million (11.1% of sales)
- EPS: $1.45
Watkins said the fourth quarter merchandise margin outlook includes 20 basis points of expected growth in merchandise margin, offset by a combined 80 basis points of increased shrink and freight expense versus the prior-year period. He characterized shrink as more normalized versus an unusually favorable prior-year comparison, and said freight has been “lumpy” through the year but is expected to normalize as the company moves into next year.
For the full fiscal year 2026, the company now expects:
- Total sales: $2.25 billion (18% growth over fiscal 2025)
- Same-store sales: +7% (retail store +6%, e-commerce +15%)
- Merchandise margin: ~50.8% of sales (up 70 basis points year over year), including 240 basis points of exclusive brand penetration growth
- Gross profit: ~38% of sales
- Operating income: $301 million (13.4% of sales)
- Net income: $226 million
- EPS: $7.35
In closing remarks, Hazen said he believes the company is “well positioned for a strong finish” to the fiscal year and thanked employees for execution across initiatives.
About Boot Barn (NYSE:BOOT)
Boot Barn, Inc is a leading specialty retailer focused on western and work-related footwear, apparel and accessories. The company operates full-price and outlet retail stores under the Boot Barn and BootBarn.com brands, offering a wide assortment of cowboy boots, work boots, casual and fashion footwear, western and work apparel, hats, belts and related accessories. In addition to its brick-and-mortar network, Boot Barn maintains an e-commerce platform to serve customers seeking ranch-and-rodeo style clothing and rugged workwear from coast to coast.
Founded in 1978 in Southern California, Boot Barn began as a single store catering to ranchers, farmworkers and western enthusiasts.
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