Boot Barn's Resilient Core Customer Base And Growth Strategy: An Optimistic Outlook By Analyst - Boot Barn Holdings (NYSE:BOOT)

William Blair analyst Dylan Carden reiterated an Outperform rating on the shares of Boot Barn Holdings Inc BOOT.
The company reported mixed earnings for Q4, with sales coming below the consensus, driven by a 6% decline in same-store sales.
The analyst noted that the weakness was more pointed in the e-commerce business.
While initial consensus sales estimates for fiscal 2024 implied an acceleration in annualized growth trends, they now represent a more believable deceleration and negative comp growth that the analyst feels is more reflective of some natural cooling in the business following two years of outsized growth.
While some remain focused on the implications of fashion benefits embedded in more recent increases in store volume, after three years, the analyst believes this is a narrative that fails to recognize the underlying core customer base, with still only 10% of the business that could be considered more at risk from a fashion standpoint.
The theory ignores more tangible facts such as a roughly 50% increase in the number of items now being sold in stores, which in turn has attracted new customers, said the analyst.
The analyst believes in the durability of higher store volumes and in turn margins of the business.
Quicker payback periods, now within 18 months, allows for the company to accelerate its store rollout, going from 10% prior target unit growth to now 15%.
After a reset year in fiscal 2024, the analyst believes the algorithm for growth in the business has therefore shifted to something around mid- to high-teens top-line growth at faster earnings growth given margin recapture opportunity.
Price Action: BOOT shares are trading lower by 11.56% at $66.17 on the last check Thursday.

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