Shares of Boot Barn (BOOT, Financial) saw a significant increase of 1.8% this week, buoyed by a favorable market reaction to relaxed tariffs on Chinese-imported goods and the company's optimistic forward guidance following their fiscal fourth-quarter earnings release.
In the fourth quarter ended March 29, Boot Barn's (BOOT, Financial) revenue increased by 16.8% to $453.7 million, primarily due to a 6% growth in same-store sales. However, the earnings per share rose 27% to $1.22, falling short of some analysts' expectations, who might have forecasted a higher spike in sales due to anticipated tariff hikes.
Despite the earnings miss, Boot Barn's (BOOT, Financial) positive outlook and strategic plans contributed to boosting investor confidence. CEO John Hazen announced the company's intention to open 65 to 70 new stores in the upcoming fiscal year, compared to 60 new openings last year, indicating a nearly 15% increase in store count. Additionally, Hazen expressed the company's potential to double its store count in the coming years, which could further bolster their market presence.
Management also projected overall same-store sales to remain stable, a better-than-expected forecast amid challenges like low consumer confidence and tariff concerns. Boot Barn (BOOT, Financial) is also aiming to reduce its dependence on China by cutting the percentage of goods sourced from China from 24% in fiscal 2025 to 12% by 2026.
Regarding valuation, Boot Barn's (BOOT, Financial) current price is $157.76 with a price-earnings ratio (PE) of 28.17. The company has experienced a robust market cap of $4.83 billion. However, it is worth noting that according to the GF Value calculation, Boot Barn (BOOT) is currently categorized as "Significantly Overvalued" with a GF Value estimate of $100.51.
The company's revenue growth over the past five years has been strong at 18.4%, while EBITDA growth was even more impressive at 29.7%. Boot Barn (BOOT, Financial) also showcases strong financial health with a solid Altman Z-Score of 5.24, indicating low risk of financial distress. However, investors should remain cautious as the stock is near its 10-year high, which could signal a potential overvaluation.
