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Category: Stock Market and Delta Apparel
Date: 5 December 2019 Stock Price: $7.33 We take a look at the 3rd quarter earnings report of their 2019 fiscal year of Sportsman's warehouse an outdoor sporting goods retailer focusing on hunting, shooting, fishing and camping gear
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About Sportsman Warehouse
Sportsman’s Warehouse is a high-growth outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant, and every enthusiast in between. Our mission is to provide outstanding gear and exceptional service to inspire outdoor memories. We strive to accomplish this goal by tailoring our broad and deep merchandise assortment to meet local conditions and demand, offering everyday low prices, providing friendly support from our knowledgeable, highly trained staff, and offering extensive in-store events and educational programming. We offer a one-stop shopping experience that equips our customers with the right hunting, shooting, fishing, and camping gear to maximize their enjoyment of the outdoors. These core strategies help position Sportsman’s Warehouse as the “local outdoor experts” and the preferred place to both shop and share outdoor-based experiences in the communities we serve. As a result, we are expanding our loyal customer base in existing markets and increasing our store footprint in new markets. Sportsman’s Warehouse was founded in 1986 as a single retail store in Midvale, Utah; today we have the largest outdoor specialty store base in the Western United States and Alaska. Our principal executive offices are in Midvale, Utah.
Overview of Sportsman's Warehouse 3rd quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $242.466 million (up from $223.099 million for the same quarter in the previous year)
- Net sales increased by 8.7% over the last 12 months
- Cost of goods sold: $158.256 million (up from $145.518 million for the same quarter in the previous year)
- Cost of goods sold increased by 8.7% over the last 12 months
- Net income: $10.494 million (down from $12.398 million for the same quarter in the previous year)
- Diluted earnings per share: $0.24 (down from $0.29 for the same quarter in the previous year)
- Diluted number of shares in issue: 43.599 million (up from 43.094 million for the same quarter of the previous year)
- Cash and equivalents: $1.737 million
- Cash and equivalents per share: $0.09
- Cash and equivalents makes up 3.9% of Sportsman’s Warehouse's current market capital
- Cash and equivalents makes up 0.25% of Sportsman’s Warehouse's total assets
- Merchandise Inventories: $337.894million
- Inventories makes up 50.2% of Sportsman’s Warehouse's total assets
- Stockholders equity in Sportsman’s Warehouse: $99.819 million
- Stockholders equity per share in Sportsman’s Warehouse: $2.28
- Sportsman’s Warehouse is trading at 3.2 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
Sportsman's Warehouse management commentary on their 3rd quarter 2019 earnings
MIDVALE, Utah, Dec. 04, 2019 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's" or the “Company”) (Nasdaq:SPWH) today announced financial results for the thirteen and thirty-nine weeks ended November 2, 2019.
Jon Barker, Chief Executive Officer, stated, “We are very pleased with our third quarter results, which were at the high end of our guidance on the top and bottom line excluding the eight recently acquired stores that were not included in our original outlook. These strong results are reflective of our differentiated positioning within a consolidating industry and the team’s disciplined execution of our growth strategies around merchandising, customer acquisition and engagement, and our omni-channel platform.”
Jon Barker, Chief Executive Officer, stated, “We are very pleased with our third quarter results, which were at the high end of our guidance on the top and bottom line excluding the eight recently acquired stores that were not included in our original outlook. These strong results are reflective of our differentiated positioning within a consolidating industry and the team’s disciplined execution of our growth strategies around merchandising, customer acquisition and engagement, and our omni-channel platform.”
Mr. Barker continued, “As we look to the final quarter of the year, we feel very good about our competitive positioning and the underlying strength of our business. That said, multiple competitors are making assortment changes that are creating some short term sales headwinds which we have incorporated in our fourth quarter outlook. We believe these competitive changes bode well for Sportsman’s Warehouse longer term, and, combined with the investments we have made across our business, we are well positioned to capitalize on the increased market share opportunities moving forward.”
Balance sheet highlights as of November 2, 2019:
Fourth Quarter and Fiscal Year 2019 Outlook:
For the fourth quarter of fiscal year 2019, net sales are expected to be in the range of $263.0 million to $273.0 million based on a change in same store sales in the range of down 1.5% to up 1.5% compared to the corresponding period of fiscal year 2018. Adjusted net income is expected to be in the range of $12.6 million to $15.3 million with adjusted diluted earnings per share of $0.29 to $0.35 on a weighted average of approximately 43.5 million estimated common shares outstanding.
For fiscal year 2019, net sales are expected to be in the range of $891.0 million to $901.0 million based on a change in same store sales in the range of flat to up 1.0% compared to fiscal year 2018. Adjusted net income is expected to be in the range of $24.0 million to $26.6 million with adjusted earnings per diluted share of $0.55 to $0.61 on a weighted average of approximately 43.5 million estimated common shares outstanding, when adjusted for the executive transition costs and acquisition costs incurred (see “GAAP and Non-GAAP Measures”).
Balance sheet highlights as of November 2, 2019:
- Total debt: $160.5 million consisting of $130.8 million outstanding under the Company’s revolving credit facility and $29.7 million outstanding under the term loan, net of unamortized debt issuance costs.
- Total liquidity (cash plus $78.7 million of availability on revolving credit facility): $80.4 million
Fourth Quarter and Fiscal Year 2019 Outlook:
For the fourth quarter of fiscal year 2019, net sales are expected to be in the range of $263.0 million to $273.0 million based on a change in same store sales in the range of down 1.5% to up 1.5% compared to the corresponding period of fiscal year 2018. Adjusted net income is expected to be in the range of $12.6 million to $15.3 million with adjusted diluted earnings per share of $0.29 to $0.35 on a weighted average of approximately 43.5 million estimated common shares outstanding.
For fiscal year 2019, net sales are expected to be in the range of $891.0 million to $901.0 million based on a change in same store sales in the range of flat to up 1.0% compared to fiscal year 2018. Adjusted net income is expected to be in the range of $24.0 million to $26.6 million with adjusted earnings per diluted share of $0.55 to $0.61 on a weighted average of approximately 43.5 million estimated common shares outstanding, when adjusted for the executive transition costs and acquisition costs incurred (see “GAAP and Non-GAAP Measures”).
Sportsman's Warehouse (NASDAQ: SPWH) stock price history
The image below, obtained from Google, shows the stock price history of Sportsman's Warehouse over the last 5 years. And its been not been a very good time for Sportsman's Warehouse stockholders The group's stock traded at around $7.40 a stock 5 years ago and is currently trading at $7.33 a stock. Basically the stock price has gone nowhere over the last 5 years.
Sportsman's Warehouse stock is trading at a lot closer to its 52 week high of $7.67 than it is to its 52 week low of $3.41 which to us is a clear indication that the short term momentum and sentiment of Sportsman's Warehouse stock is very positive
Sportsman's Warehouse stock is trading at a lot closer to its 52 week high of $7.67 than it is to its 52 week low of $3.41 which to us is a clear indication that the short term momentum and sentiment of Sportsman's Warehouse stock is very positive
Recent coverage of Sportsman's Warehouse
The extract below discusses the latest regarding Sportsman's Warehouse as obtained from Zacks.com
Sportsman's Warehouse (SPWH - Free Report) came out with quarterly earnings of $0.25 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this outdoor sporting goods specialty retailer would post earnings of $0.12 per share when it actually produced earnings of $0.13, delivering a surprise of 8.33%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once. Sportsman's Warehouse, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $242.47 million for the quarter ended October 2019, surpassing the Zacks Consensus Estimate by 3.24%. This compares to year-ago revenues of $223.10 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sportsman's Warehouse shares have added about 63.2% since the beginning of the year versus the S&P 500's gain of 23.4%.
Read the full article here
Sportsman's Warehouse (SPWH - Free Report) came out with quarterly earnings of $0.25 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this outdoor sporting goods specialty retailer would post earnings of $0.12 per share when it actually produced earnings of $0.13, delivering a surprise of 8.33%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once. Sportsman's Warehouse, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $242.47 million for the quarter ended October 2019, surpassing the Zacks Consensus Estimate by 3.24%. This compares to year-ago revenues of $223.10 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sportsman's Warehouse shares have added about 63.2% since the beginning of the year versus the S&P 500's gain of 23.4%.
Read the full article here
Sportsman's Warehouse (NASDAQ: SPWH) latest stock valuation
So what do we value Sportsman's Warehouse stock at based on their latest earnings release and the fiscal guidance provided by the group? Based on Sportsman's Warehouse latest earnings report and their fiscal guidance provided our valuation model provides a target price (full value price) for Sportsman's Warehouse stock at $9.80 a stock. We therefore believe the stock of Sportsman's Warehouse is undervalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $9.80. A good entry point into Sportsman's Warehouse stock would therefore be at $8.80or below.
Since the stock of Sportsman's Warehouse is trading at below our suggested entry point we rate the stock of Sportsman's Warehouse as a buy
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $9.80. A good entry point into Sportsman's Warehouse stock would therefore be at $8.80or below.
Since the stock of Sportsman's Warehouse is trading at below our suggested entry point we rate the stock of Sportsman's Warehouse as a buy
Next earnings release of Sportsman's Warehouse
It is expected that Sportsman's Warehouse will release their 4th quarter and full fiscal 2019 earnings report in late February 2020