Sportsman's Warehouse (NASDAQ:SPWH) Misses Q1 Sales Targets, Stock Drops

Petr Huřťák /
2024/06/04 4:12 pm EDT

Outdoor specialty retailer Sportsman's Warehouse (NASDAQ:SPWH) missed analysts' expectations in Q1 CY2024, with revenue down 8.7% year on year to $244.2 million. The company's full-year revenue guidance of $1.19 billion at the midpoint also came in slightly below analysts' estimates. It made a non-GAAP loss of $0.47 per share, down from its loss of $0.39 per share in the same quarter last year.

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Sportsman's Warehouse (SPWH) Q1 CY2024 Highlights:

  • Revenue: $244.2 million vs analyst estimates of $248.3 million (1.6% miss)
  • EPS (non-GAAP): -$0.47 vs analyst estimates of -$0.37
  • The company reconfirmed its revenue guidance for the full year of $1.19 billion at the midpoint
  • Gross Margin (GAAP): 30.2%, in line with the same quarter last year
  • Free Cash Flow was -$37.96 million compared to -$59.74 million in the same quarter last year
  • Same-Store Sales fell 13.5% year on year
  • (-17.8% in the same quarter last year)
  • Market Capitalization: $157.3 million

“Although our results continue to be affected by a challenging macroenvironment, we continue to execute on our efforts on resetting the organization to focus on providing our passionate customers with great gear and exceptional service,” said Paul Stone, President and Chief Executive Officer of Sportsman’s Warehouse.

A go-to destination for individuals passionate about hunting, fishing, camping, hiking, shooting sports, and more, Sportsman's Warehouse (NASDAQ:SPWH) is an American specialty retailer offering a diverse range of active gear, equipment, and apparel.

Sports & Outdoor Equipment Retailer

Some of us spend our leisure time vegging out, but many others take to the courts, fields, beaches, and campsites; sports equipment retailers cater to the avid sportsman as well as the weekend warrior. Shoppers can find everything from tents to lawn games to baseball bats to satisfy their athletic and leisure needs along with competitive prices and helpful store associates that can talk through brands, sizing, and product quality. This is a category that has moved rapidly online over the last few decades, so these sports and outdoor equipment retailers have needed to be nimble and aggressive with their e-commerce and omnichannel presences.

Sales Growth

Sportsman's Warehouse is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale.

As you can see below, the company's annualized revenue growth rate of 8.4% over the last five years was mediocre as it opened new stores and expanded its reach.

Sportsman's Warehouse Total Revenue

This quarter, Sportsman's Warehouse missed Wall Street's estimates and reported a rather uninspiring 8.7% year-on-year revenue decline, generating $244.2 million in revenue. Looking ahead, Wall Street expects revenue to decline 5.2% over the next 12 months.

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Same-Store Sales

Same-store sales growth is a key performance indicator used to measure organic growth and demand for retailers.

Sportsman's Warehouse's demand has been shrinking over the last eight quarters, and on average, its same-store sales have declined by 11.2% year on year. This performance is quite concerning and the company should reconsider its strategy before investing its precious capital into new store buildouts.

Sportsman's Warehouse Year On Year Same Store Sales Growth

In the latest quarter, Sportsman's Warehouse's same-store sales fell 13.5% year on year. This decrease was a further deceleration from the 17.8% year-on-year decline it posted 12 months ago. We hope the business can get back on track.

Key Takeaways from Sportsman's Warehouse's Q1 Results

We struggled to find many strong positives in these results. Its EPS missed analysts' expectations and its gross margin missed Wall Street's estimates. Overall, this was a mediocre quarter for Sportsman's Warehouse. The company is down 10% on the results and currently trades at $3.42 per share.

Sportsman's Warehouse may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.