Boot Barn Holdings, Inc. BOOT is targeting further margin expansion through a combination of buying scale, improved full-price selling, supply-chain efficiencies and sourcing initiatives. Management expects these initiatives to support merchandise-margin performance.
In the first quarter of fiscal 2027, merchandise margin expanded 220 basis points (bps), including a 250-bps benefit from tariff refunds and 60 bps of product-margin expansion, partly offset by a 90-bps freight headwind from lapping low freight expense in the prior-year period. For fiscal 2027, Boot Barn expects merchandise margin to reach approximately 52.2% of sales, representing a 130 bps year-over-year increase. This includes a 70-bps benefit from tariff refunds. Excluding tariff refunds, the company expects 50 bps of product-margin expansion and 10 bps of freight improvement.
The company is also leveraging its growing scale. Boot Barn is securing volume discounts from some third-party vendors by purchasing full-container loads of products or styles, with increasing purchasing volumes helping the company obtain more of these discounts as the business grows.
Additionally, management has renegotiated logistics and transportation arrangements to obtain lower rates and better discounts, helping offset elevated freight costs. Omnichannel capabilities provide another efficiency lever. A large portion of e-commerce orders are fulfilled from stores, which enhances merchandise margins and gives customers access to a broader assortment of inventory. The company's buy-online-pickup-in-store and ship-to-store offerings also help reduce fulfillment costs.
Overall, Boot Barn expects its supply-chain initiatives to support merchandise-margin expansion, while its logistics and omnichannel capabilities can help offset some of the cost pressures associated with continued store growth.
Zacks Rundown for BOOT
Boot Barn’s shares have lost 23.7% in the past six months compared with the industry’s decline of 13.8%.
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From a valuation standpoint, Boot Barn trades at a forward price-to-earnings ratio of 12.83, higher than the industry’s average of 11.83. BOOT presently carries a Zacks Rank #2 (Buy).
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The Zacks Consensus Estimate for BOOT’s current and next fiscal-year earnings implies year-over-year rallies of 23.5% and 10.3%, respectively.
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Urban Outfitters, Inc. URBN offers lifestyle products and services in the United States and internationally. At present, URBN carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for URBN’s current fiscal-year sales and earnings implies growth of 9.5% and 14%, respectively, from the year-ago figures. URBN has delivered a trailing four-quarter earnings surprise of 9.7%, on average.
FIGS, Inc. FIGS operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 19.7% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.
Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
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Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report
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