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Category: Stock Market and Sportsman's Warehouse
Date: 30 March 2020 Stock Price: $5.96 We take a look at the 4th 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 4th quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $258.152 million (up from $242.683 million for the same quarter in the previous year)
- Net sales increased by 6.3% over the last 12 months
- Cost of goods sold: $173.125 million (up from $163.177 million for the same quarter in the previous year)
- Cost of goods sold increased by 6.1% over the last 12 months
- Net income: $9.683 million (down from $10.629 million for the same quarter in the previous year)
- Diluted earnings per share: $0.22 (down from $0.25 for the same quarter in the previous year)
- Diluted number of shares in issue: 43.796 million (up from 43.079 million for the same quarter of the previous year)
- Cash and equivalents: $1.685 million
- Cash and equivalents per share: $0.038
- Cash and equivalents makes up 0.65% of Sportsman’s Warehouse's current market capital
- Cash and equivalents makes up 0.27% of Sportsman’s Warehouse's total assets
- Merchandise Inventories: $275.505 million
- Inventories makes up 44.7% of Sportsman’s Warehouse's total assets
- Stockholders equity in Sportsman’s Warehouse: $110.268 million
- Stockholders equity per share in Sportsman’s Warehouse: $2.51
- Sportsman’s Warehouse is trading at 2.37 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 4th quarter 2019 earnings
WEST JORDAN, Utah, March 26, 2020 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's Warehouse" or the “Company”) (Nasdaq: SPWH) today announced financial results for the thirteen and fifty-two weeks ended February 1, 2020.
“We are pleased with our fourth quarter and fiscal year 2019 results. Despite some competitive challenges in December, we exceeded the high-end of our updated outlook on net sales, and met the high-end of our updated outlook on earnings per share,” said Jon Barker, Sportsman’s Warehouse CEO. “We made great progress in 2019 executing on our growth initiatives, which included enhancing our omni-channel platform, improving our loyalty program, and broadening our firearms products and services offering. In 2019, we grew to 103 stores through our acquisition of eight Field & Stream stores in October and three additional store openings earlier in the year.”
“We are pleased with our fourth quarter and fiscal year 2019 results. Despite some competitive challenges in December, we exceeded the high-end of our updated outlook on net sales, and met the high-end of our updated outlook on earnings per share,” said Jon Barker, Sportsman’s Warehouse CEO. “We made great progress in 2019 executing on our growth initiatives, which included enhancing our omni-channel platform, improving our loyalty program, and broadening our firearms products and services offering. In 2019, we grew to 103 stores through our acquisition of eight Field & Stream stores in October and three additional store openings earlier in the year.”
Mr. Barker continued, “Looking forward to 2020, we feel very good about our competitive positioning and the underlying strength of our business. Today, we are announcing two additional new stores for 2020, which increases our new store announcements to seven for the year so far. These seven new stores include two previous Gander locations, two additional Field & Stream locations, and our first small-format concept store.”
“We have gained significant momentum both online and in stores to date in Q1. We believe this is driven by fewer competitors, the current election cycle, and increased demand from COVID-19 uncertainty. However, there is significant uncertainty in the current environment and therefore, we will not be issuing forward guidance at this time.”
“We remain optimistic about the long-term opportunities for our business. As competitors continue to de-emphasize and/or exit the firearm and ammunition categories, we see significant opportunity to capture market share,” Mr. Barker commented. “Our differentiated positioning within a consolidating industry, our dedication to the specialty outdoor retail space, and our talented team are combining to create a competitive advantage for Sportsman’s Warehouse. We look forward to a strong 2020 and beyond.”
“We have gained significant momentum both online and in stores to date in Q1. We believe this is driven by fewer competitors, the current election cycle, and increased demand from COVID-19 uncertainty. However, there is significant uncertainty in the current environment and therefore, we will not be issuing forward guidance at this time.”
“We remain optimistic about the long-term opportunities for our business. As competitors continue to de-emphasize and/or exit the firearm and ammunition categories, we see significant opportunity to capture market share,” Mr. Barker commented. “Our differentiated positioning within a consolidating industry, our dedication to the specialty outdoor retail space, and our talented team are combining to create a competitive advantage for Sportsman’s Warehouse. We look forward to a strong 2020 and beyond.”
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 $8.60 a stock 5 years ago and is currently trading at $5.96 a stock. That's a -44.6% loss suffered by Sportsman's Warehouse Holdings stockholders over the last 5 years.
Sportsman's Warehouse stock is trading at closer to its 52 week low of 3.41 than it is to its 52 week high of $8.90 which to us is a clear indication that the short term momentum and sentiment of Sportsman's Warehouse stock is negative right now, as is the case with most listed stocks around the world as the Coronavirus fears and its economic impact it is having weighs heavily on world markets. Read more about recent market sell offs here.
Sportsman's Warehouse stock is trading at closer to its 52 week low of 3.41 than it is to its 52 week high of $8.90 which to us is a clear indication that the short term momentum and sentiment of Sportsman's Warehouse stock is negative right now, as is the case with most listed stocks around the world as the Coronavirus fears and its economic impact it is having weighs heavily on world markets. Read more about recent market sell offs here.
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) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.20 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 5%. A quarter ago, it was expected that this outdoor sporting goods specialty retailer would post earnings of $0.25 per share when it actually produced earnings of $0.25, delivering no surprise.
Over the last four quarters, the company has surpassed consensus EPS estimates two times. Sportsman's Warehouse, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $258.15 million for the quarter ended January 2020, surpassing the Zacks Consensus Estimate by 2.36%. This compares to year-ago revenues of $242.68 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
Read the full article here
Sportsman's Warehouse (SPWH) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.20 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 5%. A quarter ago, it was expected that this outdoor sporting goods specialty retailer would post earnings of $0.25 per share when it actually produced earnings of $0.25, delivering no surprise.
Over the last four quarters, the company has surpassed consensus EPS estimates two times. Sportsman's Warehouse, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $258.15 million for the quarter ended January 2020, surpassing the Zacks Consensus Estimate by 2.36%. This compares to year-ago revenues of $242.68 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
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 $8.70 a stock (down from our 3rd quarter 2019 earnings report valuation of Sportsman's warehouse). 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 $8.70. A good entry point into Sportsman's Warehouse stock would therefore be at $7.80 or 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 (once the markets return to normal after all the noise and distractions and disruptions from the Coronavirus)
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 $8.70. A good entry point into Sportsman's Warehouse stock would therefore be at $7.80 or 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 (once the markets return to normal after all the noise and distractions and disruptions from the Coronavirus)
Next earnings release of Sportsman's Warehouse
It is expected that Sportsman's Warehouse will release their 1st quarter 2020 earnings report in late June 2020