Sportsman's Warehouse (SPWH) Stock Trades Up, Here Is Why

Kayode Omotosho /
2023/09/26 1:26 pm EDT

What Happened:

Shares of outdoor specialty retailer Sportsman's Warehouse (NASDAQ:SPWH) jumped 7.79% in the morning session following the announcement of Paul Stone's appointment as the new Chief Executive Officer and President of the company. Paul Stone has a background in outdoor specialty retail and a successful track record at Cabela's Inc. and Hertz Global Holdings. He will officially assume his role on November 1, 2023. Joseph P. Schneider, who has been serving as Interim Chief Executive Officer and President since April 2023, will continue to contribute to the company as Independent Chair of the Board until the end of 2023, after which director Rich McBee will take over as Independent Chair.

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What is the market telling us:

Sportsman's Warehouse's shares are not very volatile than the market average and over the last year have had only 24 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 20 days ago, when the stock dropped 13.7% on the news that the company reported second quarter revenue and EPS below Wall Street's estimates. Its full-year revenue guidance also came in significantly below analysts' expectations. Given the decrease in demand, Sportsman's Warehouse said it would be more aggressive in its promotional activity to drive foot traffic to its stores, putting pressure on its profit margins in future quarters. Furthermore, the company has yet to find a permanent CEO. Overall, this was a bad quarter.

Sportsman's Warehouse is down 59.7% since the beginning of the year, and at $3.73 per share it is trading 63.8% below its 52-week high of $10.31 from December 2022. Investors who bought $1,000 worth of Sportsman's Warehouse's shares 5 years ago would now be looking at an investment worth $637.61.

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