Sportsman’s Warehouse hunts for growth with more new stores

Sportsman’s Warehouse Holdings announced plans for its most ambitious expansion program ever with 11 new stores planned for 2016 following a strong fourth quarter performance.



The Midvale, Utah-based operator of 64 stores focused on the categories of hunting, fishing and camping, opened nine stores last year which combined with its strong fourth quarter showing enabled the company to produce record results. The addition of 11 stores this year will give the company, which went public in April 2014, 75 locations in 20 predominantly Western states and Alaska.



"We are very pleased to have ended fiscal year 2015 with a strong fourth quarter and to have delivered on the revenue and earnings goals for fiscal year 2015 that we set at the beginning of the year,” said President and CEO John Schaefer. “Our revenue increase of 10.6%, modest gross margin expansion, and adjusted net income growth of over 22% in fiscal year 2015 compared to fiscal year 2014 reflect our ability to execute, despite a choppy overall retail environment combined with weather headwinds and continued competition in many of our markets.”



Schaefer contends the company’s fourth quarter and full year performance demonstrated the strength of a business model focused on everyday low pricing, best-in-class customer service and a flexible store layout that offers the company an ability to profitably operate in both smaller and larger markets.



The strategy was evident in the fourth quarter when the addition of new selling space and a 4% same store sales increase for the period ended Jan. 30, enabled the company to grow sales by 14.6% to $212.7 million. Full year sales increased 10.6% to $730 million and same store sales increased 1.1%.



Fourth quarter net income, adjusted to exclude non-recurring litigation and loan refinancing costs, increased 25.3% to $11.4 million, or 27 cents a share, from $9.1 million, or 22 cents a share, in the fourth quarter the prior year. Full year adjusted net income, which also excludes expenses related to a secondary stock offering in the third quarter of 2015, increased 22.3% to $25.8 million, or 61 cents a share, from $21.1 million, or 50 cents a share.



Despite the company’s solid performance in 2015 and commitment to open 11 stores this year, Schaefer said the company is planning conservatively for the first quarter and full year. First quarter same store sales are expect to be flat or decline in the low single digits while full year comps are projected to be flat to up 2%.



“Despite the continued momentum we have seen in the use categories of hunting, fishing and camping, we believe it is prudent to take a conservative posture when planning 2016, as we expect the unseasonably warm weather to continue to negatively impact our clothing and footwear categories through the first half of the year,” Schaefer said. “In 2016, we remain focused on growing our store base while maintaining disciplined cost management and responsible capital allocation.”



The company believes its full year sales will range from $800 million to $820 million.