10-K: Sportsman's Warehouse Reports Fiscal Year 2024 Results, Navigates Economic Headwinds
Annual Results
Sportsman's Warehouse reports a decrease in net sales and a net loss for fiscal year 2024, impacted by consumer inflationary pressures and recession concerns, while focusing on cost reduction and strategic investments.
Summary
- Sportsman's Warehouse Holdings, Inc. reported its fiscal year 2024 results, which ended on February 1, 2025.
- The company experienced a decrease in net sales by 7.0% to $1,197.6 million compared to $1,288.0 million in fiscal year 2023.
- Same store sales decreased by 7.8% compared to the previous fiscal year.
- The company reported a net loss of $33.1 million, or $0.87 per share.
- Gross profit decreased by 3.4% to $370.5 million, with a gross margin of 30.9%.
- Selling, general, and administrative expenses decreased by 4.9% to $388.7 million.
- The company opened no new stores in fiscal year 2024 and plans to open one new store in fiscal year 2025.
- The company is focusing on cost reduction measures and strategic technological investments.
- As of February 1, 2025, the company had cash and cash equivalents of $2.8 million and $128.3 million available for borrowing under its credit facilities.
- The company is working to grow its loyal customer base, increase its omni-channel presence, and build brand awareness.
Sentiment
Score: 4
Explanation: The document presents a mixed sentiment. While the company is taking steps to reduce costs and invest in technology, the overall financial performance is negative due to decreased sales and a net loss. The outlook is cautious, with only one new store planned for the next fiscal year.
Positives
- Gross profit margin increased to 30.9% for fiscal year 2024 compared to 29.8% for fiscal year 2023.
- Selling, general, and administrative expenses decreased by 4.9% due to cost reduction efforts.
- The company is focusing on strategic technological investments.
- The Fishing department saw a net sales increase of $8.6 million during fiscal year 2024 compared to fiscal year 2023.
- The company has extended the end date of the lenders commitment for the Companys $20 million delayed draw term loan facility from April 30, 2025 to July 31, 2025.
Negatives
- Net sales decreased by 7.0% to $1,197.6 million in fiscal year 2024 compared to fiscal year 2023.
- Same store sales decreased by 7.8% for fiscal year 2024 compared to fiscal year 2023.
- The company reported a net loss of $33.1 million, or $0.87 per share.
- The company opened no new stores in fiscal year 2024.
Risks
- Consumer inflationary pressures and recession concerns may continue to impact discretionary spending.
- The company's performance is subject to seasonal fluctuations.
- The company faces competition in the outdoor activities and sporting goods market.
- Changes in laws and government regulations, particularly those related to firearms and ammunition, could negatively impact demand.
- The company relies on a single distribution center, which could be disrupted by natural disasters or other events.
- The company is subject to stringent and evolving U.S. obligations related to data privacy and security, and its actual or perceived failure to comply with such obligations could lead to adverse business consequences.
Future Outlook
The company plans to open one new store in fiscal year 2025 and continues to evaluate its short-term strategy related to opening new stores. The company intends to prioritize the repayment of outstanding debt with any excess cash flow.
Industry Context
The company operates in the large, growing, and fragmented outdoor activities and sporting goods market. The company believes that the U.S. outdoor activities and sporting goods retail sales total over $170 billion annually. The company primarily operates in the outdoor equipment, apparel, and footwear segment, which includes hunting and shooting, fishing, camping, hiking, and boating.
Comparison to Industry Standards
- The document does not provide enough information to make a detailed comparison to industry standards.
- To perform a comparison, we would need to know the performance of key competitors such as Cabela's, Bass Pro Shops, and Dick's Sporting Goods.
- We would also need to know industry average growth rates, profit margins, and inventory turnover rates.
Legal Proceedings
- On January 22, 2024, Jon Kogut filed a putative class action lawsuit against the Company and the members of its Board of Directors in the Delaware Court of Chancery (the 2024 Delaware Litigation).
- On March 27, 2025, the Court stayed the action pending the resolution of motions to dismiss in other cases challenging advance notice bylaws.
Stakeholder Impact
- Shareholders: The net loss and decreased sales may negatively impact shareholder value.
- Employees: Cost reduction measures may lead to workforce adjustments.
- Customers: Strategic investments in technology may improve the customer experience.
- Suppliers: The company's focus on cost reduction may impact vendor relationships.
Next Steps
- The company plans to open one new store in fiscal year 2025.
- The company intends to prioritize the repayment of outstanding debt with any excess cash flow.
- The company will continue to focus on cost reduction measures and strategic technological investments.
Key Dates
| Date | Description |
|---|---|
| 2015-06 | The Companys stockholders approved the Sportsmans Warehouse Holdings, Inc. Employee Stock Purchase Plan (ESPP). |
| 2016-01-01 | The first plan period began on January 1, 2016. |
| 2018-05-23 | SWI, as lead borrower, and Wells Fargo, as agent and a lender, and the other parties listed on the signature pages thereto entered into a Second Amendment to Amended and Restated Credit Agreement. |
| 2022-05-17 | The parties agreed to amend the Amended and Restated Credit Agreement, dated as of May 23, 2018. |
| 2023-09-22 | Sportsmans Warehouse Holdings, Inc. and Paul Stone entered into an Employment Agreement. |
| 2024-05-30 | Upon effectiveness of the Amended 2019 Plan on May 30, 2024, the date of the Company's 2024 Annual Meeting, the Company's authority to grant new awards under the Inducement Plan terminated. |
| 2024-07-30 | SWI, as lead borrower, Holdings, as guarantor, and other subsidiaries of Holdings, each as borrowers, and PLC Agent LLC (the Pathlight Agent), as administrative and collateral agent for various lenders affiliated with Pathlight Capital (the ABL Lenders), entered into an ABL Term Loan Credit Agreement. |
| 2025-02-01 | End of fiscal year 2024. |
| 2025-03-31 | Sportsmans Warehouse, Inc. (SWI) a wholly owned subsidiary of Holdings, as lead borrower, Holdings, as guarantor, and other subsidiaries of Holdings, each as borrowers, and PLC Agent LLC (the Pathlight Agent), as administrative and collateral agent for various lenders affiliated with Pathlight Capital, entered into the First Amendment to ABL Term Loan Credit Agreement. |
| 2025-04-30 | The $20 million availability under our term loan was scheduled to expire on April 30, 2025 and we recently extended the expiration to July 31, 2025. |
| 2027-05-27 | The Revolving Line of Credit matures on May 27, 2027. |
| 2028-12-31 | The building is leased under an agreement expiring on December 31, 2028, with three options that each allow us to extend for an additional five years. |
| 2029-07-30 | The Term Loan has a stated maturity date of the earlier of July 30, 2029 or the maturity date of the Revolving Line of Credit. |
| 2035-03-31 | Our corporate headquarters is located in an approximately 70,000 square foot building in West Jordan, Utah. The building is leased under an agreement expiring on March 31, 2035. |
Keywords
Sportsman's Warehouse, financial results, net sales, same store sales, gross profit, net loss, outdoor retailer, firearms, ammunition, credit facility, inventory, e-commerce
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