ĞĂƌ^ƚŽĐŬŚŽůĚĞƌƐ͕
&ŝƐĐĂůϮϬϮϰǁĂƐĂƐŽůŝĚLJĞĂƌĨŽƌŽŽƚĂƌŶ͕ĂƐǁĞĨƵƌƚŚĞƌĨŽƌƚŝĨŝĞĚŽƵƌƉŽƐŝƚŝŽŶĂƐƚŚĞŶĂƚŝŽŶΖƐůĞĂĚŝŶŐ
ůŝĨĞƐƚLJůĞƌĞƚĂŝůĞƌŽĨǁĞƐƚĞƌŶĂŶĚǁŽƌŬĂƉƉĂƌĞůĂŶĚĨŽŽƚǁĞĂƌ͘dŽƚĂůƌĞǀĞŶƵĞŐƌĞǁŵŽƌĞƚŚĂŶϮйLJĞĂƌͲ
ŽǀĞƌͲLJĞĂƌǁŚĞŶĞdžĐůƵĚŝŶŐƚŚĞϱϯƌĚǁĞĞŬŽĨĨŝƐĐĂůϮϬϮϯƚŽĂƌĞĐŽƌĚΨϭ͘ϲϳďŝůůŝŽŶ͕ŵĂƌŬŝŶŐƚŚĞŶŝŶƚŚ
ĐŽŶƐĞĐƵƚŝǀĞLJĞĂƌŽĨƌĞvenue growth since Boot Barn’s IPO in fiscal 2015.ĚĚŝƚŝŽŶĂůůLJ͕ǁĞŝŶĐƌĞĂƐĞĚŽƵƌ
ĞdžĐůƵƐŝǀĞďƌĂŶĚƐƉĞŶĞƚƌĂƚŝŽŶďLJϯϳϬďĂƐŝƐƉŽŝŶƚƐ͕ǁŚŝĐŚĐŽŶƚƌŝďƵƚĞĚƚŽƌŽďƵƐƚŵĞƌĐŚĂŶĚŝƐĞŵĂƌŐŝŶ
ĞdžƉĂŶƐŝŽŶ͘ŽŵƉĂƌŝŶŐŽƵƌĨŝƐĐĂůϮϬϮϰƌĞƐƵůƚƐƚŽĨŽƵƌLJĞĂƌƐĂŐŽ͕ƉƌŝŽƌƚŽƚŚĞƉĂŶĚĞŵŝĐ͕ŽƵƌƌĞǀĞŶƵĞŚĂƐ
ŶĞĂƌůLJĚŽƵďůĞĚ͕ĂŶĚĞĂƌŶŝŶŐƐƉĞƌƐŚĂƌĞŚĂƐŶĞĂƌůLJƚƌŝƉůĞĚƚŽΨϰ͘ϴϬƉĞƌƐŚĂƌĞĨŽƌĨŝƐĐĂůϮϬϮϰ͘
tŚĂƚŵĂŬĞƐŽƵƌƌĞĐĞŶƚĂĐĐŽŵƉůŝƐŚŵĞŶƚƐŵŽƌĞƌĞǁĂƌĚŝŶŐŝƐƚŚĂƚǁĞǁĞƌĞĂďůĞƚŽďƵŝůĚƵƉŽŶŽƵƌ
ƐŝŐŶŝĨŝĐĂŶƚŐƌŽǁƚŚŝŶƌĞĐĞŶƚLJĞĂƌƐ͕ǁŚŝůĞĐŽŶƚŝŶƵŝŶŐƚŽŶĂǀŝŐĂƚĞƚŚĞŵĂĐƌŽĞĐŽŶŽŵŝĐŚĞĂĚǁŝŶĚƐƚŚĂƚ
ŚĂǀĞŝŵƉĂĐƚĞĚĐŽŶƐƵŵĞƌƐƉĞŶĚŝŶŐĂĐƌŽƐƐŵƵĐŚŽĨƚŚĞƌĞƚĂŝůŝŶĚƵƐƚƌLJ͘tŚŝůĞǁĞǁĞƌĞŶŽƚĞŶƚŝƌĞůLJ
ŝŵŵƵŶĞƚŽƚŚĞďƌŽĂĚĞƌŵĂƌŬĞƚƉƌĞƐƐƵƌĞƐ͕ŽƵƌƚĞĂŵƌĞŵĂŝŶĞĚĨůĞdžŝďůĞĂŶĚĨŽĐƵƐĞĚ͕ŵĂŶĂŐŝŶŐƚŚĞ
ĨĂĐƚŽƌƐǁŝƚŚŝŶŽƵƌĐŽŶƚƌŽůĂŶĚĚĞůŝǀĞƌŝŶŐƐŽůŝĚƌĞƐƵůƚƐŝŶĂƐŽŵĞǁŚĂƚĐŚĂůůĞŶŐŝŶŐĞdžƚĞƌŶĂůĞŶǀŝƌŽŶŵĞŶƚ
ďLJƌĞŵĂŝŶŝŶŐƐƚĞĂĚĨĂƐƚůLJĨŽĐƵƐĞĚŽŶŽƵƌĨŽƵƌƐƚƌĂƚĞŐŝĐŝŶŝƚŝĂƚŝǀĞƐ͘ ĂĐŚŽĨƚŚĞƐĞŝŶŝƚŝĂƚŝǀĞƐĐŽŶƚƌŝďƵƚĞĚƚŽ
ŽƵƌƌĞƐƵůƚƐƚŚŝƐLJĞĂƌ͕ŝŶĐůƵĚŝŶŐ͗
ϭ͘ džƉĂŶĚŝŶŐŽƵƌƐƚŽƌĞďĂƐĞ
tĞŝŶĐƌĞĂƐĞĚŽƵƌƐƚŽƌĞŐƌŽǁƚŚĨƌŽŵŽƉĞŶŝŶŐϰϱƐƚŽƌĞƐŝŶĨŝƐĐĂůϮϬϮϯ͕ƚŽŽƉĞŶŝŶŐϱϱŶĞǁƐƚŽƌĞƐŝŶĨŝƐĐĂů
ϮϬϮϰ͕ĞdžĐĞĞĚŝŶŐŽƵƌŽƌŝŐŝŶĂůƉůĂŶĂŶĚďƌŝŶŐŝŶŐŽƵƌƚŽƚĂůƐƚŽƌĞĐŽƵŶƚƚŽϰϬϬĂĐƌŽƐƐϰϱƐƚĂƚĞƐ;ĂƐŽĨDĂƌĐŚ
ϯϬ͕ϮϬϮϰͿ͘dŚĞƐĞŶĞǁƐƚŽƌĞƐŚĂǀĞŐĞŶĞƌĂƚĞĚƌŽďƵƐƚĨŝƌƐƚLJĞĂƌƐĂůĞƐǀŽůƵŵĞƐ͕ĂĐŚŝĞǀŝŶŐĂŶŝŵƉƌĞƐƐŝǀĞ
ϲϬйĐĂƐŚͲŽŶͲĐĂƐŚƌĞƚƵƌŶŝŶƚŚĞŝƌĨŝƌƐƚLJĞĂƌ͘KǀĞƌƚŚĞƉĂƐƚϭϮLJĞĂƌƐ͕ŽŽƚĂƌŶŚĂƐƚƌĂŶƐĨŽƌŵĞĚĨƌŽŵĂ
ƌĞŐŝŽŶĂůƌĞƚĂŝůĞƌƚŽĂƚƌƵĞŶĂƚŝŽŶĂůůŝĨĞƐƚLJůĞďƌĂŶĚ͕ĂŶĚǁĞďĞůŝĞǀĞƚŚĂƚƚŚĞƌĞŝƐƉŽƚĞŶƚŝĂůĨŽƌĂƚůĞĂƐƚϱϬϬ
ŵŽƌĞƐƚŽƌĞƐŝŶƚŚĞh͘^͘ĂůŽŶĞ͘>ŽŽŬŝŶŐĂŚĞĂĚ͕ǁĞƉůĂŶƚŽŵĂŝŶƚĂŝŶŽƵƌƉĂĐĞŽĨϭϱйĂŶŶƵĂůƵŶŝƚŐƌŽǁƚŚ
ĂƐǁĞĐŽŶƚŝŶƵĞƚŽĞdžƉĂŶĚŽƵƌĨŽŽƚƉƌŝŶƚĂŶĚďƌŝŶŐƚŚĞŽŽƚĂƌŶĞdžƉĞƌŝĞŶĐĞƚŽŶĞǁŵĂƌŬĞƚƐ͘
Ϯ͘ƌŝǀŝŶŐƐĂŵĞͲƐƚŽƌĞƐĂůĞƐŐƌŽǁƚŚ
tŚŝůĞĨŝƐĐĂůϮϬϮϰƐĂŵĞͲƐƚŽƌĞƐĂůĞƐĚĞĐůŝŶĞĚŵŝĚͲƐŝŶŐůĞĚŝŐŝƚƐ͕ǁĞƐĂǁƐĞƋƵĞŶƚŝĂůŝŵƉƌŽǀĞŵĞŶƚĂƐǁĞŐŽƚ
ŝŶƚŽƚŚĞĨŽƵƌƚŚƋƵĂƌƚĞƌĂĐƌŽƐƐǀŝƌƚƵĂůůLJĂůůŵĂũŽƌŵĞƌĐŚĂŶĚŝƐĞĚĞƉĂƌƚŵĞŶƚƐ͕ďŽƚŚŝŶƐƚŽƌĞĂŶĚŽŶůŝŶĞ͕ĂŶĚ
ŝŶĂůůŐĞŽŐƌĂƉŚŝĐƌĞŐŝŽŶƐ͘KƵƌͲZĞǁĂƌĚĞĚůŽLJĂůƚLJƉƌŽŐƌĂŵĐŽŶƚŝŶƵĞƐƚŽďĞĂŬĞLJĚƌŝǀĞƌŽĨĞŶŐĂŐĞŵĞŶƚ
ĂŶĚƐĂůĞƐ͕ǁŝƚŚĂĐƚŝǀĞŵĞŵďĞƌƐŚŝƉŶŽǁƌĞĂĐŚŝŶŐϴ͘ϰŵŝůůŝŽŶ͕ĂŶϭϴйLJĞĂƌͲŽǀĞƌͲLJĞĂƌŝŶĐƌĞĂƐĞ͘dŚŝƐ
ƉƌŽŐƌĂŵĞŶĂďůĞƐƵƐƚŽďĞƚƚĞƌƉůĂŶĂƐƐŽƌƚŵĞŶƚƐ͕ĂůůŽĐĂƚĞŵĞĚŝĂƐƉĞŶĚ͕ĂŶĚƉĞƌƐŽŶĂůŝnjĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ
ƚŽŽƵƌĐƵƐƚŽŵĞƌƐ͕ĨƵƌƚŚĞƌĞŶŚĂŶĐŝŶŐƚŚĞŝƌƐŚŽƉƉŝŶŐĞdžƉĞƌŝĞŶĐĞĂŶĚƐƚƌĞŶŐƚŚĞŶŝŶŐƚŚĞŝƌůŽLJĂůƚLJƚŽƚŚĞ
ŽŽƚĂƌŶďƌĂŶĚ͘
ϯ͘^ƚƌĞŶŐƚŚĞŶŝŶŐŽƵƌŽŵŶŝͲĐŚĂŶŶĞůůĞĂĚĞƌƐŚŝƉ
Over the past few years, we’ve made ƐŝŐŶŝĨŝĐĂŶƚĞŶŚĂŶĐĞŵĞŶƚƐǁŝƚŚŝŶŽƵƌĞͲĐŽŵŵĞƌĐĞĐŚĂŶŶĞů͘tĞ
ĐŽŶƚŝŶƵĞĚƚŚŝƐǁŽƌŬŝŶĨŝƐĐĂůϮϬϮϰďLJĞdžƉĂŶĚŝŶŐŽƵƌŽŵŶŝͲĐŚĂŶŶĞůĨƵůĨŝůůŵĞŶƚĐĂƉĂďŝůŝƚŝĞƐƚŽĞŶĂďůĞ
ĨĂƐƚĞƌ͕ŵŽƌĞůŽĐĂůŝnjĞĚĚĞůŝǀĞƌLJ͕ĨƵƌƚŚĞƌŝŶƚĞŐƌĂƚŝŶŐŽƵƌĚŝŐŝƚĂůĂŶĚƉŚLJƐŝĐĂůĐŚĂŶŶĞůƐƚŽŵĞĞƚĐƵƐƚŽŵĞƌƐΖ
ĞdžƉĞĐƚĂƚŝŽŶƐĨŽƌĐŽŶǀĞŶŝĞŶĐĞĂŶĚĨůĞdžŝďŝůŝƚLJ͘tĞĂůƐŽďĞŐĂŶůĞǀĞƌĂŐŝŶŐ/ƚŽĞŶŚĂŶĐĞŽŶůŝŶĞƉƌŽĚƵĐƚ
ĚĞƐĐƌŝƉƚŝŽŶƐ͕ƐĞĂƌĐŚĨƵŶĐƚŝŽŶĂůŝƚLJ͕ĂŶĚŽƵƚĨŝƚƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐ͘tĞďĞůŝĞǀĞƚŚĂƚƚŚĞƐĞĞŶŚĂŶĐĞŵĞŶƚƐ
ƉŽƐŝƚŝŽŶƵƐǁĞůůĨŽƌƚŚĞĞǀŽůǀŝŶŐĚŝŐŝƚĂůůĂŶĚƐĐĂƉĞĂŶĚǁŝůůĂůůŽǁƵƐƚŽƉƌŽǀŝĚĞĂŵŽƌĞƐĞĂŵůĞƐƐĂŶĚ
ƉĞƌƐŽŶĂůŝnjĞĚŽŶůŝŶĞƐŚŽƉƉŝŶŐĞdžƉĞƌŝĞŶĐĞĨŽƌŽƵƌĐƵƐƚŽŵĞƌƐ͘
ϰ͘/ŶĐƌĞĂƐŝŶŐƚŚĞƉĞŶĞƚƌĂƚŝŽŶŽĨŽƵƌĞdžĐůƵƐŝǀĞďƌĂŶĚƉŽƌƚĨŽůŝŽĂŶĚĞdžƉĂŶĚŝŶŐŽƵƌŵĞƌĐŚĂŶĚŝƐĞŵĂƌŐŝŶ
&ŝƐĐĂůϮϬϮϰŵĂƌŬĞĚĂŶŽƚŚĞƌLJĞĂƌŽĨƐŝŐŶŝĨŝĐĂŶƚƉƌŽŐƌĞƐƐŝŶŽƵƌĞdžĐůƵƐŝǀĞďƌĂŶĚƐƚƌĂƚĞŐLJ͘ džĐůƵƐŝǀĞďƌĂŶĚ
ƉĞŶĞƚƌĂƚŝŽŶŝŶĐƌĞĂƐĞĚďLJϯϳϬďĂƐŝƐƉŽŝŶƚƐƚŽƌĞĂĐŚϯϳ͘ϳй͕ĨĂƌƐƵƌƉĂƐƐŝŶŐŽƵƌĂŶŶƵĂůƚĂƌŐĞƚŽĨϮϱϬďĂƐŝƐ
ƉŽŝŶƚƐ͘dŚŝƐĐĂƉƐŽĨĨĂƚŚƌĞĞͲLJĞĂƌƉĞƌŝŽĚǁŚĞƌĞƉĞŶĞƚƌĂƚŝŽŶŚĂƐŝŶĐƌĞĂƐĞĚϭ͕ϰϬϬďĂƐŝƐƉŽŝŶƚƐ͕
ĚĞŵŽŶƐƚƌĂƚŝŶŐƚŚĞŐƌŽǁŝŶŐĂƉƉĞĂůĂŶĚƐƚƌĞŶŐƚŚŽĨŽƵƌĞdžĐůƵƐŝǀĞďƌĂŶĚƐ͘&ƵůůLJĞĂƌŵĞƌĐŚĂŶĚŝƐĞŵĂƌŐŝŶ
ĞdžƉĂŶĚĞĚďLJϭϲϬďĂƐŝƐƉŽŝŶƚƐ͕ĚƌŝǀĞŶďLJŝŵƉƌŽǀĞŵĞŶƚŝŶĨƌĞŝŐŚƚ͕ĞdžĐůƵƐŝǀĞďƌĂŶĚƉĞŶĞƚƌĂƚŝŽŶ͕ĂŶĚ
ďƵLJŝŶŐĞĐŽŶŽŵŝĞƐŽĨƐĐĂůĞ͘ƐǁĞůŽŽŬƚŽĨŝƐĐĂůϮϬϮϱ͕ǁĞƐĞĞĨƵƌƚŚĞƌŽƉƉŽƌƚƵŶŝƚŝĞƐƚŽŐƌŽǁďŽƚŚ
ƉĞŶĞƚƌĂƚŝŽŶĂŶĚŵĂƌŐŝŶ͕ůĞǀĞƌĂŐŝŶŐďŽƚŚƚŚĞĐŽŵƉĞƚŝƚŝǀĞĚŝĨĨĞƌĞŶƚŝĂƚŝŽŶĂŶĚĞŶŚĂŶĐĞĚƉƌŽĨŝƚĂďŝůŝƚLJƚŚĂƚ
ǁĞďĞůŝĞǀĞƚŚĂƚŽƵƌĞdžĐůƵƐŝǀĞďƌĂŶĚƐƉƌŽǀŝĚĞ͘
/ŶĐůŽƐŝŶŐ͕/ĂŵŝŶĐƌĞĚŝďůLJƉƌŽƵĚŽĨƚŚĞĞŶƚŝƌĞŽŽƚĂƌŶƚĞĂŵΖƐƌĞŵĂƌŬĂďůĞĞdžĞĐƵƚŝŽŶĂŶĚĂŐŝůŝƚLJŝŶ
ŶĂǀŝŐĂƚŝŶŐƚŚĞĚLJŶĂŵŝĐĂŶĚĐŚĂůůĞŶŐŝŶŐĞŶǀŝƌŽŶŵĞŶƚŽĨĨŝƐĐĂůϮϬϮϰ͘/ďĞůŝĞǀĞƚŚĂƚŽƵƌƵŶǁĂǀĞƌŝŶŐĨŽĐƵƐ
ŽŶŽƵƌĨŽƵƌƐƚƌĂƚĞŐŝĐƉŝůůĂƌƐŚĂƐĞŶĂďůĞĚƵƐƚŽŵĂŬĞŐƌĞĂƚƐƚƌŝĚĞƐĂŶĚƉŽƐŝƚŝŽŶƐƵƐĨŽƌĐŽŶƚŝŶƵĞĚŐƌŽǁƚŚ
ĂŶĚƐƵĐĐĞƐƐŝŶƚŚĞLJĞĂƌƐĂŚĞĂĚ͘
KŶďĞŚĂůĨŽĨĞǀĞƌLJŽŶĞĂƚŽŽƚĂƌŶ͕/ǁĂŶƚƚŽĞdžƉƌĞƐƐŵLJƐŝŶĐĞƌĞŐƌĂƚŝƚƵĚĞƚŽLJŽƵ͕ŽƵƌƐƚŽĐŬŚŽůĚĞƌƐ͕ĨŽƌ
LJŽƵƌŽŶŐŽŝŶŐƐƵƉƉŽƌƚĂŶĚďĞůŝĞĨŝŶŽƵƌǀŝƐŝŽŶ͘tĞůŽŽŬĨŽƌǁĂƌĚƚŽĐĂƉŝƚĂůŝnjŝŶŐŽŶƚŚĞŽƉƉŽƌƚƵŶŝƚŝĞƐ
ĂŚĞĂĚŝŶĨŝƐĐĂůϮϬϮϱĂŶĚďĞLJŽŶĚ͕ĂƐǁĞĐŽŶƚŝŶƵĞƚŽƉŽƐŝƚŝŽŶŽŽƚĂƌŶĂƐƚŚĞůĞĂĚŝŶŐƌĞƚĂŝůĞƌŝŶƚŚĞ
ǁĞƐƚĞƌŶĂŶĚǁŽƌŬůŝĨĞƐƚLJůĞƌĞƚĂŝůŝŶĚƵƐƚƌLJ͘
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Jim Conroy
President & CEO
Boot Barn Holdings, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 30, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-36711
BOOT BARN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
90-0776290
(I.R.S. Employer
Identification No.)
15345 Barranca Pkwy
Irvine, CA 92618
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (949) 453-4400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.0001 par value
BOOT
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of the end of its most recently completed
second fiscal quarter was approximately $2.062 billion. Shares held by each officer, director and person owning more than 10% of the outstanding
voting and non-voting stock have been excluded from this calculation because such persons may be deemed to be affiliates of the registrant. This
determination of potential affiliate status is not necessarily a conclusive determination for other purposes. Shares held include shares of which certain
of such persons disclaim beneficial ownership.
The number of outstanding shares of the registrant’s common stock, $0.0001 par value, as of May 13, 2024 was 30,399,070.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for the 2024 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A within
120 days after the end of the 2024 fiscal year, are incorporated by reference into Part III of this Form 10-K.
TABLE OF CONTENTS
Page
PART I
Item 1.
Business
1
Item 1A.
Risk Factors
13
Item 1B.
Unresolved Staff Comments
33
Item 1C.
Cybersecurity
34
Item 2.
Properties
35
Item 3.
Legal Proceedings
35
Item 4.
Mine Safety Disclosures
36
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
37
Item 6.
[Reserved]
38
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
38
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
51
Item 8.
Consolidated Financial Statements and Supplementary Data
52
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
79
Item 9A.
Controls and Procedures
79
Item 9B.
Other Information
81
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
81
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
82
Item 11.
Executive Compensation
82
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
82
Item 13.
Certain Relationships and Related Transactions, and Director Independence
82
Item 14.
Principal Accounting Fees and Services
82
PART IV
Item 15.
Exhibits and Financial Statement Schedules
82
1
Fiscal Year
We operate on a fiscal calendar that results in a 52- or 53-week fiscal year ending on the last Saturday of
March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. In a 52-week fiscal year, each
quarter includes thirteen weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include
thirteen weeks of operations and the fourth quarter includes fourteen weeks of operations. The data presented contains
references to fiscal 2024, fiscal 2023, and fiscal 2022, which represent our fiscal years ended March 30, 2024, April 1,
2023 and March 26, 2022, respectively. Fiscal 2024 was a 52-week period, fiscal 2023 was a 53-week period and fiscal
2022 was a 52-week period.
PART I
Item 1. Business.
Our Company
We are the largest lifestyle retail chain devoted to western and work-related footwear, apparel and accessories
in the United States. With 400 stores in 45 states as of March 30, 2024, we have more than four times as many stores as
our nearest direct competitor that sells primarily western and work wear, and believe we have the potential to grow our
domestic store base to 900 stores. Our stores, which are typically freestanding or located in strip centers, average 10,900
selling square feet and feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable
store associates. We target a broad and growing demographic, ranging from passionate western and country enthusiasts
to workers seeking dependable, high-quality footwear and apparel. We strive to offer an authentic, one-stop shopping
experience that fulfills the everyday lifestyle needs of our customers and, as a result, many of our customers make
purchases in both the western and work wear sections of our stores. Our store environment, product offering and
marketing materials represent the aesthetics of the true American West, country music and rugged, outdoor work. These
threads are woven together in our vision, “To offer everyone a piece of the American spirit – one handshake at a time.”
Our product offering is anchored by an extensive selection of western and work boots and is complemented by a
wide assortment of coordinating apparel and accessories. Many of the items that we offer are basics or necessities for our
customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing fashion
trends. Accordingly, a majority of our inventory is kept in stock through automated replenishment programs. Our boot
selection, which comprises approximately one-third of each store’s selling square footage space, is merchandised on
self-service fixtures with western boots arranged by size and work boots arranged by style and function. This allows us
to display the full breadth of our inventory and deliver a convenient shopping experience. We also carry market-leading
assortments of denim, western shirts, cowboy hats, belts and belt buckles, western-style jewelry and accessories. Our
western assortment includes many of the industry’s most sought-after brands, such as Ariat, Cinch, Cody James, Corral,
Dan Post, Durango, El Dorado, Idyllwind, Justin, Laredo, Miss Me, Montana Silversmiths, Moonshine Spirit, Resistol,
Shyanne, Stetson, Tony Lama, Twisted X, and Wrangler. Our work assortment includes rugged footwear, outerwear,
overalls, denim and shirts for the most physically demanding jobs where durability, performance and protection matter,
including safety-toe boots and flame-resistant and high-visibility clothing. Among the top work brands sold in our stores
are Carhartt, Cody James Work, Georgia Boot, Hawx, Thorogood, Timberland Pro and Wolverine. Our merchandise is
also available on our e-commerce websites.
Boot Barn was founded in 1978 and, over the past 46 years, has grown both organically and through successful
strategic acquisitions of competing chains. We have rebranded and remerchandised the acquired chains under the Boot
Barn banner. We believe that our business model and scale provide us with competitive advantages that have contributed
to our consistent and strong financial performance, generating sufficient cash flow to support national growth.
Acquisitions
The Company has historically experienced growth organically and through strategic acquisitions. No
acquisitions have occurred in the past three fiscal years.
2
Our Competitive Strengths
We believe the following strengths differentiate us from our competitors and provide a solid foundation for
future growth:
Powerful lifestyle brand. The Boot Barn brand is built on western lifestyle values that are core to American
culture. Our deep understanding of this lifestyle enables us to create long-lasting relationships with our customers who
embody these ideals. Our brand is highly visible through our sponsorship of local and national rodeos, stock shows,
concerts and country music artists. We sell our products through pop-up shops at several of the largest events that we
sponsor. We believe these grassroots marketing efforts make our brand synonymous with the western lifestyle, validate
our brand’s authenticity and establish Boot Barn as the trusted specialty retailer for all of our customers’ everyday needs.
Strong e-commerce positioning. We offer a compelling shopping experience to our customers, including 400
brick-and-mortar stores combined with our e-commerce websites consisting primarily of bootbarn.com, sheplers.com,
countryoutfitter.com, idyllwind.com and third-party marketplaces, as well as the Boot Barn app. Bootbarn.com and
sheplers.com offer a compelling every-day low price shopping experience catered towards a lifestyle customer with
western roots and a strong work influence. Countryoutfitter.com has a curated assortment appealing to a more fashion-
based country lifestyle customer. Each of our e-commerce sites has distinct brand positioning and provides a
differentiated shopping experience to our customers.
Fast growing specialty retailer of western and work wear in the U.S. Our broad geographic footprint, which
currently spans 45 states, provides us with significant economies of scale, enhanced supplier relationships, the ability to
recruit and retain high quality store associates and the ability to reinvest in our business at levels that we believe exceed
those of our competition.
Loyal customer base. Our customers come to us for many aspects of their everyday footwear and clothing
needs because of the breadth and availability of our product offering. Our customer loyalty program, B Rewarded,
enhances our connection and relationship with our customers. Our loyalty program has grown rapidly since its inception
in fiscal 2011 and as of March 30, 2024, includes approximately 8.4 million members who have purchased merchandise
from us in the last three fiscal years. The majority of our sales are made to these customers. We leverage this database,
which provides useful information about our customers, to enhance our marketing activities across our stores and e-
commerce websites, refine our merchandising and planning efforts and assist in our selection of sites for new stores.
Differentiated shopping experience. We deliver a one-stop shopping experience that engages our customers
and, we believe, fulfills their lifestyle needs. Our stores are designed to create an inviting and engaging experience and
include prominent storefront signage, a simple and easy-to-shop layout and a large and conveniently arranged
self-service selection of boots. We offer significant inventory breadth and depth across a range of boots, apparel and
accessories. Additionally, all of our stores are equipped with touch screen devices that allow our customers to access
additional boots, apparel and other items from our e-commerce distribution center inventory as well as the inventory at
most of our larger third-party vendors, purchase these items in store, and, in most cases, receive free shipping. We also
have touch screen devices that allow customers to browse our in-store assortment and select an item that meets their
functional requirements and preferences. We continue to enhance customer service with our omni-channel initiatives,
including buy online pick up in-store, buy online pick up curbside, buy online return in store, buy online ship from store,
same day delivery and in-store fulfillment of online purchases. We believe that our strong, long-lasting supplier
relationships enhance our ability to provide a compelling merchandise assortment with a strong in-stock position both
in-store and online. Our knowledgeable store associates are passionate about our merchandise and deliver a high level of
service to our customers. These elements help promote customer loyalty and drive repeat visits.
Compelling merchandise assortment and strategy. We believe we offer a diverse merchandise assortment
that features the most sought-after western and work wear brands, well-regarded niche brands and exclusive brands
across a range of merchandise categories including boots, apparel and accessories. We have a core assortment of styles
that serves as a foundation for our merchandising strategy and we augment and tailor that assortment by region to cater
to local preferences.
3
Portfolio of exclusive brands. We have leveraged our scale, merchandising experience and customer
knowledge to launch a portfolio of brands exclusive to us, which include Shyanne, Cody James, Moonshine Spirit,
Idyllwind, Hawx, Cody James Work, El Dorado, Cleo + Wolf, Brothers & Sons, Rank 45, Blue Ranchwear and Cody
James Black 1978. Our exclusive brands are currently available in stores, on bootbarn.com, sheplers.com,
countryoutfitter.com and third-party marketplaces, and offer high-quality western and work boots as well as apparel and
accessories for men, ladies and kids. Each of our exclusive brands address product and price segments that we believe
are underserved by third-party brands and has historically achieved better merchandise margins than the third-party
brands that we carry. Customer receptivity and demand for our exclusive brands have been strong, demonstrated by their
increasing penetration and sales momentum across our store base and e-commerce websites.
Versatile store model with compelling unit economics. We have successfully opened and currently operate
stores that generate strong cash flow, consistent store-level financial results and an attractive return on investment across
a variety of geographies, markets, store sizes and location types. We operate stores in markets characterized as
agribusiness centers and ranch regions, and in other various geographies throughout the United States. Our stores are
also successful in small, rural towns, suburban and major metropolitan areas.
Our new store model requires an average net cash investment of approximately $1.5 million and targets an
average payback period of three years. Our lean operating structure, coupled with our strong supplier relationships, has
allowed us to grow with minimal supply chain investments as a portion of our products ship directly from our suppliers
to our stores. We believe that our proven retail model and attractive unit economics support our ability to grow our store
footprint in both new and existing markets across the U.S.
Highly experienced management team and passionate organization. Our senior management team has
extensive experience across all key retail disciplines and has been instrumental in developing a robust and scalable
infrastructure to support our growth. In addition to playing an important role in developing our long-term growth
initiatives, our senior management team embraces the genuine and enduring qualities of the western and work lifestyle
and has created a positive culture of enthusiasm and entrepreneurial spirit which is shared by team members throughout
our entire organization.
Our Growth Strategies
We are pursuing several strategies to continue our profitable growth, including:
Continuing omni-channel leadership. Our growing national footprint, social media following and broader
marketing efforts drive traffic to our stores and e-commerce websites. We operate our e-commerce websites and app as
an alternative to shopping in the stores, which allows us to reach customers outside our geographic footprint. We
continue to make investments in both online and in-store advertising, aimed at increasing traffic to our e-commerce
websites, which reached more than 86 million total visits in fiscal 2024 compared to more than 91 million total visits in
fiscal 2023, and increasing the amount of merchandise purchased by customers who visit our websites, while improving
the shopping experience for our customers. Additionally, all of our stores are equipped with touch screen devices that
allow our customers to access additional boots, apparel and other items from our e-commerce distribution center
inventory as well as the inventory at most of our larger third-party vendors, purchase these items in store, and, in most
cases, receive free shipping. We also have touch screen devices that allow customers to browse our in-store assortment
and select an item that meets their functional requirements and preferences. We continue to enhance customer service
with our omni-channel initiatives, including buy online pick up in-store, buy online pick up curbside, buy online return
in store, buy online ship from store, same day delivery and in-store fulfillment of online purchases. We have also made
investments in our e-commerce infrastructure, including adding automation to our distribution centers to support
expanding e-commerce growth. Our e-commerce sales as a portion of total consolidated net sales were 11.0% and 12.8%
in fiscal 2024 and fiscal 2023, respectively.
Driving same store sales growth. We believe that we can grow our same store sales by increasing our brand
awareness, driving additional traffic to our stores, e-commerce websites and app, and increasing the amount of
merchandise purchased by customers while visiting both our stores and e-commerce channels. Our management team
4
has several initiatives in place to accelerate growth, enhance our store associates’ selling skills, drive store-level
productivity and increase customer engagement through our loyalty program.
Building our exclusive brand portfolio. We believe we can achieve gross margin enhancement by increasing
the penetration of our exclusive brand sales. As of March 30, 2024, our exclusive brands include Shyanne, Cody James,
Moonshine Spirit, Idyllwind, Hawx, Cody James Work, El Dorado, Cleo + Wolf, Brothers & Sons, Rank 45 Blue
Ranchwear and Cody James Black 1978, and are sold in our stores, on our e-commerce websites and app, and on third-
party marketplaces. Each of our exclusive brands, which address product and price segments that we believe are
underserved by third-party brands, offers high quality exclusive products to our customers and has historically achieved
better merchandise margins than the third-party brands that we carry.
Expanding our store base. Driven by our compelling store economics, we believe that there is a significant
opportunity to expand our store base in the U.S. During fiscal 2024, we opened 55 new stores with no acquisitions. We
typically rebrand acquired stores within twelve months from the date of acquisition. Based on an extensive analysis, we
believe that we have the potential to grow our domestic store base of 400 stores as of March 30, 2024 to approximately
900 stores over time. Over the long-term we plan to target store openings in new and existing markets and in adjacent
and underserved markets that we believe will be receptive to our concept. Over the past several years, we have made
investments in personnel, information technology, distribution center infrastructure and e-commerce platforms to support
the expansion of our operations.
Leveraging our economies of scale. We believe that we have a variety of opportunities to increase the
profitability of our business over time. Our ability to leverage our infrastructure and drive store-level productivity is
expected to be a driver of our improvement in profitability. We intend to continually refine our merchandise mix and
increase the penetration of our exclusive brands to help differentiate us from our competitors and achieve higher
merchandise margins. We also expect to capitalize on additional economies of scale in purchasing and sourcing as we
grow our geographic footprint and online presence.
Enhancing brand awareness. We intend to enhance our brand awareness and customer loyalty in a number of
ways, such as continuing to grow our store base and our online and social media initiatives. We use broadcast media
such as radio, television and outdoor advertisements to reach customers in new and existing markets. We also maintain
our strong market position through our grassroots marketing efforts, including sponsorship of rodeos, stock shows and
other western industry events, as well as our association with country music, including partnerships with Miranda
Lambert and Brad Paisley and up-and-coming country musicians. We have an effective social media strategy with high
customer engagement, as evidenced by our strong following on Facebook and Instagram.
Our Market Opportunity
We participate in the large, growing and highly fragmented western, country lifestyle and work wear markets of
the broader apparel and footwear industry. We offer a variety of boots, apparel and accessories that are basics or
necessities for our customers’ daily lives. Many of our customers are employed in the agriculture, oil and gas,
manufacturing and construction industries, and are often country and western enthusiasts. We believe that growth in the
western and country lifestyle markets will continue to be driven by the growth of western events, such as rodeos, the
popularity of country music, growth in casual wear, affinity for outdoor activities, and the continued strength and
endurance of the western lifestyle. We believe that growth in the work wear market will continue to be driven by
increasing activity in construction and manufacturing. Additionally, government regulations for workplace safety have
driven and, we believe, will continue to drive sales in specific categories, such as safety-toe boots and flame-resistant
and high-visibility clothing for various industrial and outdoor occupations.
5
Our Sales Channels
During fiscal 2024, we continued to enhance our omni-channel capabilities. Our current omni-channel presence
consists of both brick-and-mortar stores as well as an e-commerce platform, consisting primarily of bootbarn.com,
sheplers.com, countryoutfitter.com, idyllwind.com and third-party marketplaces as well as the Boot Barn app.
Our stores
As a lifestyle retail concept, our stores offer a broad array of merchandise to outfit an entire family, while
working during the week, relaxing on the weekend, or dressing up for an evening out. Our stores are easy to navigate
across all major product categories. The majority of our stores have ladies’ and children’s apparel, men’s western and
work apparel, basic and more stylized denim, and accessories such as hats, belts, jewelry, handbags, gifts and various
other items.
Boots are our signature category, with an expansive assortment displayed on fixtures up to six shelves in height.
We offer virtually all of our boots in pairs out on the sales floor. To reflect the typical purchasing decision process of
each of our customer segments, we arrange all western boots by size and all work boots by function and brand. While
our knowledgeable and friendly store associates are readily available to assist our customers, the store design facilitates a
self-service shopping experience.
Our stores are generally located in or near high visibility, power and large neighborhood shopping centers with
trade areas of five or more miles. Our stores average 10,900 selling square feet and feature a comprehensive assortment
of brands and styles, coupled with attentive, knowledgeable store associates. Our stores are designed and managed to
drive profitability and, we believe, create a compelling customer shopping experience.
During fiscal 2024, we opened 55 new stores. As of March 30, 2024, our retail footprint included 400 stores in
45 states across the U.S. All stores operate under the Boot Barn name.
6
The following table shows the number of stores in each of the 45 states in which we operated as of March 30,
2024.
Number of
State
stores
Alabama
4
Arizona
17
Arkansas
3
California
69
Colorado
16
Connecticut
1
Delaware
2
Florida
10
Georgia
5
Idaho
4
Illinois
5
Indiana
7
Iowa
6
Kansas
5
Kentucky
4
Louisiana
7
Massachusetts
2
Maryland
1
Michigan
4
Minnesota
5
Mississippi
1
Missouri
5
Montana
4
Nebraska
2
Nevada
12
New Hampshire
1
New Jersey
3
New Mexico
7
New York
5
North Carolina
11
North Dakota
6
Ohio
8
Oklahoma
10
Oregon
5
Pennsylvania
10
South Carolina
5
South Dakota
2
Tennessee
12
Texas
81
Utah
5
Virginia
7
Washington
7
West Virginia
2
Wisconsin
3
Wyoming
9
Total
400
7
E-commerce
Our e-commerce websites are an integral part of our brand and allow us to further build awareness in our
current markets and reach customers not served by our current geographic footprint. During fiscal 2024, we had more
than 86 million total visits to our websites and we sold merchandise to customers in all 50 states. Approximately 3.0% of
our total e-commerce revenue for fiscal 2024 was generated from customers outside of the United States. Such
foreign-source revenue constituted approximately 0.4% of our overall net sales in fiscal 2024.
Our growing national footprint and broader marketing efforts drive traffic to our bootbarn.com website and app,
which in turn also drives traffic to our stores. We believe that many customers, especially those shopping for boots,
browse online at bootbarn.com or our app and then visit our stores to make their purchases to ensure a proper fit. As a
multi-channel retailer, we are implementing technology initiatives that integrate in-store and e-commerce platforms into
one seamless customer experience. As an example, our stores have in-store touch screen devices that expand the product
offering available to our in-store customers, including additional styles, colors and sizes not carried in the store. We
continue to enhance customer service with our omni-channel initiatives, including buy online pick up in-store, buy online
pick up curbside, buy online return in store, buy online ship from store, same day delivery and in-store fulfillment of
online purchases.
Our e-commerce businesses are every-day low price models. For all of our e-commerce brands, we
communicate information on current promotions and upcoming events on our e-commerce websites, which helps drive
purchases online and traffic to our stores. We continue to improve follow-up email communication related to order
confirmations, as well as offer boot care and other accessories associated with boot purchases.
Store expansion opportunities and site selection
We have substantial experience in opening stores in new and existing geographic markets. During the last three
fiscal years, we have successfully added, on a net basis, 127 new stores through organic growth. We evaluate potential
new locations in light of a variety of criteria, including local demographics and population, the area’s industrial base, the
existing competitive landscape, occupancy costs, store visibility, traffic, environmental considerations, co-tenancy and
accessibility. We also consider a region’s total store potential to help ensure efficiencies in store management and media
spending. Most of our stores are in high-traffic and highly visible locations and many have freeway signage. Stores
located in metropolitan areas are typically established in high-density neighborhoods, and stores located in rural areas are
typically established near highways or major thoroughfares.
Based on a recent extensive internal and external analysis of our current customer base, store performance
drivers and competitor penetration, we believe that the U.S. market supports the ability to grow our current domestic
store base to approximately 900 stores. We utilized multiple methods for measuring market size, including a review of
demographic and psychographic factors by core-based statistical areas across the United States. We supplemented that
data by analyzing our share of the geographic markets in which we currently operate and extrapolating that share to new
geographic markets. Based on our market analysis, we have created a regional and state-by-state development plan to
strategically extend our store portfolio. Careful consideration was given to operational constraints and merchandising
differences in new and existing markets, while balancing the relevant risks associated with opening stores in those
markets.
Over the past several years, we have invested in construction and real estate resources, information technology
and distribution center infrastructure to support the expansion of our operations. In addition, we have developed a model
for new stores that assumes a leased 10,000 to 15,000 square foot space, requires an average net cash investment of
approximately $1.5 million and targets an average payback period of three years. We believe that under this model we
can grow our store base by at least 10% annually over the next several years without substantially modifying our current
resources and infrastructure.
8
Store Management and Training
We have a strong culture focused on providing superior customer service. We believe that our store associates
and managers form the foundation of the Boot Barn brand. We recruit people who are welcoming, friendly and
service-oriented, and who often live the western lifestyle or have a genuine affinity for it. We have a positive culture of
enthusiasm and entrepreneurial spirit throughout the Company, which is particularly strong in our stores. Given the
lifestyle nature of the Boot Barn brand, we have developed a natural connection between our customers and our store
associates.
Given the importance of both fit and function in selling much of our product, we utilize a well-developed sales,
service and product training program. We provide more than 20 hours of training for new store associates, as well as
ongoing product, sales and leadership training. Additionally, we provide home office and supplier-led workshops on
products, selling skills and leadership at our annual three-day store manager meeting. Our store management training
programs emphasize building skills that lead to effective store management and overall leadership. Our store managers
are responsible for hiring and staffing our stores and are empowered with the sales, customer service and operational
tools necessary to monitor employee and store performance. We believe that our continued investments in training our
employees help drive loyalty from our store associates and, in turn, our customers. We are committed to providing the
right merchandise solution for each of our customers based on the ultimate end use of our products. Our goal is to train
each of our store associates to be able to guide a customer throughout a store and provide helpful knowledge on product
fit, functions and features across our departments. Rather than rely heavily on sales commissions and supplier-specific
incentive programs, we utilize a system under which the vast majority of our store associates’ compensation is based on
an hourly wage. We believe that this produces a team-oriented culture, creates a less pressured selling environment and
helps ensure that our store associates are focused on the specific needs of our customers.
Merchandising
Strategy
We seek to establish our stores as a one-stop destination for western and work-related footwear, apparel and
accessories. Our merchandising strategy is to offer a core assortment of products, brands and styles by store, department
and price point. We augment and tailor this assortment by region to cater to local preferences such as toe profiles for
western boots, styling for western apparel, and functions and features for work apparel and work boots depending on
climate and the local industries served. In addition, we actively maintain a balance between third-party brands and our
own brands that, we believe, offer our customers a compelling mix between selection, product and value.
Our business is moderately seasonal and as a result our revenues fluctuate from quarter to quarter. The third
quarter of our fiscal year, which includes the Christmas shopping season, has historically produced higher sales and
disproportionately higher operating results than the other quarters of our fiscal year. We believe that many of our
customers are driven primarily by utility and brand, and our best-selling styles tend to be items that carry over from year
to year with only minor updates. In fiscal 2024, fiscal 2023 and fiscal 2022 we generated approximately 31%, 31% and
33% of our net sales during our third fiscal quarter, respectively.
We have a minimal amount of seasonal merchandise that could necessitate significant markdowns. This allows
us to implement automated replenishment systems for the majority of our merchandise, meaning that, as in store and e-
commerce sales are captured at the point of sale, recommended purchase orders are systematically generated for
approval by our merchandising group, ensuring our strong in-stock inventory position. As a result, demand and margins
for the majority of our products are fairly predictable, which reduces our inventory risk. Unfavorable economic
conditions could leave us with either excess inventory or a shortage of inventory and increased pressure on our margins.
For more information about the risks, uncertainties, and other factors that could affect our future results, please see Item
1A, Risk Factors, of this Annual Report on Form 10-K.
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Our products
During fiscal 2024, our products contributed to overall sales in the following manner:
•
Gender—Men’s merchandise accounted for approximately 60% of our sales with the balance being ladies,
kids and unisex merchandise.
•
Styling—Western styles comprised approximately 70% of our sales, with work-related and other styles
making up the balance.
•
Product category—Boots accounted for 47% of our sales, with apparel comprising an additional 36% and
the balance consisting of hats, gifts, accessories and home merchandise.
Throughout our long history we have maintained collaborative relationships with our key suppliers. These
relationships, coupled with our scale, have allowed us to carry a wide selection of popular and niche brands. In many
cases, we are one of the largest accounts of our suppliers and have become important as the largest specialty retailer of
western and work wear in the U.S. As a result, we have several advantages relative to our competitors, including
increased buying power and access to first-to-market or limited-edition products. This provides us with competitive
differentiation and the ability to generate higher merchandise margins.
Our scale has also allowed us to introduce our own proprietary western wear brands, Shyanne and Cody James,
which offer high-quality western boots, shirts, jackets and hats for women and men, respectively. We also have an
exclusive license agreement with country music star Brad Paisley, who designs a collection of boots, apparel and
accessories for us, under the brand name Moonshine Spirit, that reflect his lifestyle and personality. In fiscal 2019 we
entered into a new partnership with country music artist Miranda Lambert, to develop a lifestyle brand, Idyllwind,
inspired by her music and creative talents, which includes boots, apparel and accessories. In fiscal 2020 we developed
two additional exclusive brands, Hawx and Cody James Work. These brands offer high quality work wear and work
boots to our customers. We created these brands to address segments that we believe are underserved by third-party
brands. In fiscal 2022 we developed four new exclusive brands, Cleo + Wolf, Brothers & Sons, Rank 45 and Blue
Ranchwear. These brands expand our exclusive merchandise assortment to our country customer. In fiscal 2024 we
developed one new exclusive brand, Cody James Black 1978. We created this brand to offer premium products to our
customers. We have a dedicated product development team that designs and sources merchandise from suppliers around
the world. These product assortments are exclusive to Boot Barn and are merchandised and marketed as if they were
third-party brands. In fiscal 2024, sales from our exclusive brand products accounted for approximately 37.7% of our
consolidated sales. These exclusive brands differentiate us from our competitors and have historically produced higher
incremental merchandise margins than the third-party brands that we carry.
Planning and allocation
We believe that we have assembled a talented and experienced team in both the buying and merchandise
planning functions. The experience of our team is critical to understanding the technical requirements of our
merchandise based on region and use, such as the appropriate safety toe regulations for work boots in a particular
industry. The team is constantly managing our replenishment model to ensure a high in-stock position by stock keeping
unit, or SKU, on a store-by-store basis. Our merchandising team optimizes the product selection, mix and depth across
our stores by analyzing demand on a market-by-market basis, continuously reviewing our sell-through results,
communicating with our suppliers about local market preferences and new products, shopping our competitors’ stores,
and immersing themselves in trade and western lifestyle events including rodeos, country music concerts and other
industry-specific activities. Our merchandising team also makes frequent visits to our stores and partners with our
regional, district and store managers to refine the merchandise assortment by region. Our team has demonstrated the
ability to effectively manage merchandising, pricing and promotional strategies across our store base.
To keep the product assortment fresh, we reposition a small portion of our merchandise on the sales floor every
month. To drive traffic to our stores and create in-store energy and excitement, we execute a promotional calendar that
showcases select brands or merchandise categories throughout the year and rotates on a monthly cadence. Our
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promotional activity also enables us to consistently engage with our customers both online and in-store, as well as
through our various marketing media. Our ability to optimize the price for each merchandise category on a
market-by-market basis, helps us to maximize profitability while remaining price competitive.
Marketing and Advertising
Our marketing strategy is designed to build brand awareness, acquire new customers, enhance customer loyalty
and drive in-store and online transactions. We customize our marketing mix for each of our markets and purposes. For
example, during store grand openings we engage in additional local community outreach and advertise in local print
media in select markets. We primarily use the following forms of media:
Pay-per-click—We use pay-per-click advertising to reach online shoppers whose behavior indicates an interest
in our products. This marketing medium allows us the opportunity to grow our business and acquire new customers.
Radio and television—We purchase spots on both national and regional radio stations to draw customers to
nearby locations. We also maintain relationships with several country music artists in order to capitalize on the
popularity of country music, using our stores and marketing communications to promote their concerts or album sales.
These country music artists occasionally make in-store appearances, mention us on social media or give private
performances. We also purchase both regional and national television spots to create awareness in new markets, grow
our brand recognition in existing markets and occasionally help support grand openings of new stores.
Direct mail—We conduct several direct mail campaigns, and during fiscal 2024, we sent out approximately
10.4 million mailers, ranging in size from postcards to catalogs of approximately 50 pages.
E-mail—We e-mail our e-commerce customers and members of our B Rewarded loyalty program as part of our
cross-channel effort to drive traffic to our stores and websites. We sent more than two billion e-mails in fiscal 2024.
Social media—We also have a marketing strategy that has produced a fast-growing social media presence, as
evidenced by our strong following on Facebook and Instagram. Our posts celebrate country and western life and humor,
and routinely get thousands of likes, hundreds of shares and dozens of comments each.
Strategic Partnerships— We have strategic partnerships with professional sports teams and athletes, country
music artists, and NASCAR teams. We enter these partnerships to broaden our brand awareness and reach new
customers.
Event sponsorship—We typically sponsor community-based western events each year within the regional
footprint of our store locations. Houston Livestock Show and Rodeo, a well-known 20-day celebration of western
heritage, is one of our most prominent sponsorships and attracts more than two million visitors to Houston, Texas, where
we operate many stores in the area. We also sponsor the San Antonio Stock Show and Rodeo, an 18-day event with more
than a million attendees. Other prominent sponsorships include Cheyenne Frontier Days, the largest outdoor rodeo in the
U.S., the Professional Rodeo Cowboys Association and related National Finals Rodeo in Las Vegas, Nevada,
Professional Bull Riders and the National High School Rodeo Association, which supports rodeos for competitors in
high school and junior high school. At more prominent events, we often set up large pop-up shops which allow
participants to purchase our merchandise.
Distribution
Our suppliers ship a portion of our in-store merchandise directly to our stores and a portion of our e-commerce
merchandise to our e-commerce customers. The remaining units are shipped from one of our distribution centers, which
are located in Fontana, California, Kansas City, Missouri, and Wichita, Kansas. Our distribution centers in California and
Missouri primarily distribute our exclusive brand and volume discount purchases to our stores, and supplies inventory
for sponsored events and new store openings. Our Wichita, Kansas distribution center fulfills our e-commerce orders. In
accordance with our automated replenishment programs, third-party suppliers typically deliver merchandise to our stores
daily, ensuring in-stock merchandise availability and a steady flow of new inventory for our customers.
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Competition
The retail industry for western and work wear is highly fragmented and characterized by primarily regional
competitors. We estimate that there are thousands of independent specialty stores scattered across the country. We
believe that we compete primarily with smaller regional chains and independents on the basis of product quality, brand
recognition, price, customer service and the ability to identify and satisfy consumer demand. In addition, as we expand
our e-commerce sales presence, we are competing to an increasing degree with online retailers and the e-commerce
offerings of traditional competitors. We also compete with farm supply stores and, to a lesser degree, mass merchants,
some of which are significantly larger than us, but most of which realize only a small percentage of their total revenues
from the sale of western and work wear. We have more than four times as many stores as our nearest direct competitor
that sells primarily western and work wear and we believe that our nationally recognized lifestyle brand, economies of
scale, breadth and depth of inventory across a variety of categories, strong in-stock position, portfolio of authentic
exclusive brands, enhanced supplier partnerships, exclusive offerings and ability to recruit and retain high quality store
associates favorably differentiate us from our competitors.
Information technology
We have made significant investments to create a scalable information technology platform to support growth
in our retail and e-commerce sales without further near-term investments in our information technology infrastructure.
We use an Enterprise Resource Planning system (“Aptos Retail”) for integrated point-of-sale, merchandising, planning,
sales audit, customer relationship management, inventory control, loss prevention, purchase order management and
business intelligence. We operate Aptos Retail on a software-as-a-service platform. This approach allows us to regularly
upgrade to the most recent software release with minimal operational disruption, nominal systems infrastructure
investment and a relatively small in-house information technology department. Aptos Retail also interfaces with our
accounting system.
We have also invested in an information technology platform for our e-commerce websites, which acts as the
foundation for our digital store fronts.
Intellectual property
We regard our trademarks as having value and as being important to our marketing efforts. We have registered
our trademarks in the U.S., including our brand name “Boot Barn” and our exclusive brands. We have a registered
trademark for the “Sheplers” and “Country Outfitter” brand names. We have foreign trademark protection in China and
Hong Kong where we have registered our Boot Barn trademarks. We also own the domain name for www.bootbarn.com,
www.sheplers.com and www.countryoutfitter.com. Our policy is to pursue registration of our trademarks and to
rigorously defend their infringement by third parties.
Our employees
As of March 30, 2024, we employed approximately 3,100 full-time and 8,200 part-time employees, of which
approximately 1,000 were employed at our Store Support Center and distribution centers and approximately 10,300 were
employed at our stores. The number of employees, especially part-time employees, fluctuates depending upon our
seasonal needs. None of our employees are represented by a labor union and we consider our relationship with our
employees to be good. We have never experienced a strike or significant work stoppage.
Regulation and legislation
We are subject to labor and employment laws, laws governing truth-in-advertising, privacy laws, safety
regulations and other laws at the federal, state and local level, including consumer protection regulations, such as the
Consumer Product Safety Improvement Act of 2008, that regulate retailers and govern the promotion and sale of
merchandise and the operation of stores and distribution centers. We monitor changes in these laws and believe that we
are in material compliance with all applicable laws.
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We source many of our exclusive brand products from outside the U.S. The U.S. Foreign Corrupt Practices Act
and other similar anti-bribery and anti-kickback laws and regulations generally prohibit companies and their
intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
Our policies and our supplier compliance agreements mandate compliance with applicable law, including these laws and
regulations.
Available Information
Our internet address is www.bootbarn.com and the investor relations section of our website is located at
investor.bootbarn.com, where we make available, free of charge, our annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as well as proxy statements, as soon as reasonably practicable
after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
Information on our website should not be considered part of this Annual Report on Form 10-K unless specifically
incorporated by reference herein.
Cautionary Note Regarding Forward-Looking Statements
This annual report contains forward-looking statements that are subject to risks and uncertainties. All statements
other than statements of historical or current fact included in this annual report are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Forward-looking statements refer to our current expectations and projections
relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of
operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify
forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may
include words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”, “will”,
“could”, “should”, “can have”, “likely” and other words and terms of similar meaning in connection with any discussion
of the timing or nature of future operating or financial performance or other events, but not all forward-looking
statements contain these identifying words. For example, all statements we make relating to our estimated and projected
earnings, revenues, costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future
operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are
forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to,
the factors set forth in Item 1A. Risk Factors – “Summary of Risk Factors” below.
We derive many of our forward-looking statements from our current operating budgets and forecasts, which are
based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very
difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our
actual results. For these reasons, we caution readers not to place undue reliance on these forward-looking statements.
See “Risk Factors” for a more complete discussion of the risks and uncertainties mentioned above and for a
discussion of other risks and uncertainties. It is not possible for our management to predict all risks, nor can we assess
the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements we may make. All forward-looking
statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others
made in this annual report and in our other SEC filings and public communications. You should evaluate all
forward-looking statements made by us in the context of these risks and uncertainties.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important
to you. Furthermore, the forward-looking statements included in this annual report are made only as of the date hereof.
Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint
ventures or investments that we may make. We undertake no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or otherwise, except as otherwise required by law.
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Item 1A. Risk Factors
Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This
summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor
summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully
considered, together with other information in this Form 10-K and our other filings with the SEC.
Risks Related to our Business
•
Our sales could be severely impacted by decreases in consumer spending due to declines in consumer
confidence, local economic conditions in our markets or changes in consumer preferences.
•
Our business largely depends on a strong brand image, and if we are unable to maintain and enhance our
brand image, particularly in markets where we have newly acquired stores and in new markets where we
have limited brand recognition, we may be unable to increase or maintain our level of sales.
•
Most of our merchandise is produced in foreign countries, making the price and availability of our
merchandise susceptible to international trade risks and other international conditions, including supply
chain disruptions and geopolitical conditions such as the ongoing conflict between Russia and Ukraine.
•
We face intense competition in our industry and we may be unable to compete effectively.
•
Our failure to adapt to new challenges that arise when expanding into new geographic markets could
adversely affect our ability to profitably operate those stores and maintain our brand image.
•
Our continued growth depends upon successfully opening new stores as well as integrating any acquired
stores, and our failure to successfully open new stores or integrate acquired stores could negatively affect
our business and stock price.
•
Any significant change in our distribution model could initially have an adverse impact on our cash flows
and results of operations.
•
As we expand our business, we may be unable to generate significant amounts of cash from operations.
•
If we fail to maintain good relationships with our suppliers or if our suppliers are unable or unwilling to
provide us with sufficient quantities of merchandise at acceptable prices, our business and operations may
be adversely affected.
•
Our efforts to improve and expand our exclusive product offerings may be unsuccessful, and implementing
these efforts may divert our operational, managerial, financial and administrative resources, which could
harm our competitive position and reduce our revenue and profitability.
•
A rise in the cost of fabric, raw materials, labor or transportation due to inflation or otherwise could
increase our cost of merchandise and cause our results of operations and margins to decline.
•
We purchase merchandise based on sales projections and our purchase of too much or too little inventory
may adversely affect our overall profitability.
•
We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft,
subject us to potential liability and potentially disrupt our business.
•
If our management information systems fail to operate or are unable to support our growth, our operations
could be disrupted.
•
We rely on UPS and the United States Postal Service to deliver our e-commerce merchandise to our
customers and our business could be negatively impacted by disruptions in the operations of these third-
party service providers.
•
Higher wage and benefit costs could adversely affect our business.
•
If we cannot attract, train and retain qualified employees, our business could be adversely affected.
•
If we lose key management personnel, our operations could be negatively impacted.
•
Another widespread health epidemic could materially impact our business.
•
The concentration of our stores and operations in certain geographic locations subjects us to regional
economic conditions and natural disasters that could adversely affect our business.
•
We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase
the costs our customers would have to pay for our products and adversely affect our operating results.
•
The adoption of new tax legislation could affect our financial performance.
•
We are required to make significant lease payments for our stores, Store Support Center and distribution
centers, which may strain our cash flow.
14
•
We may be unable to maintain same store sales or net sales per square foot, which may cause our results of
operations to decline.
•
Any inability to balance our exclusive brand merchandise with the third-party branded merchandise that we
sell may have an adverse effect on our net sales and gross profit.
•
Our management information systems and databases could be disrupted by system security failures, cyber
threats or by the failure of, or lack of access to, our Enterprise Resource Planning system. These disruptions
could negatively impact our sales, increase our expenses, subject us to liability and/or harm our reputation.
•
If our suppliers and manufacturers fail to use acceptable labor or other practices, our reputation may be
harmed, which could negatively impact our business.
•
Our e-commerce businesses subject us to numerous risks that could have an adverse effect on our results of
operations.
•
The debt outstanding under our revolving credit facility has a variable rate of interest that may increase our
cost of borrowing in the future.
•
Our revolving credit facility contains restrictions and limitations that could significantly impact our ability
to operate our business.
•
Our leverage may reduce our cash flow available to grow our business.
•
New accounting guidance or changes in the interpretation or application of existing accounting guidance
could adversely affect our financial performance.
•
Use of social media may adversely impact our reputation or subject us to fines or other penalties.
•
Our sales can significantly fluctuate based upon shopping seasons, which may cause our results of
operations to fluctuate disproportionately on a quarterly basis.
•
We buy and stock merchandise based upon seasonal weather patterns and therefore unseasonable or
extreme weather could negatively impact our sales, financial condition and results of operations.
•
Litigation costs and the outcome of litigation could have a material adverse effect on our business.
•
Our failure to maintain adequate internal controls over our financial and management systems may cause
errors in our financial reporting. These errors may cause a loss of investor confidence and result in a
decline in the price of our common stock.
•
If we fail to obtain and retain high-visibility sponsorship or endorsement arrangements with celebrities, or
if the reputation of any of the celebrities that we partner with is impaired, our business may suffer.
•
We may be subject to liability if we, or our suppliers, infringe upon the intellectual property rights of third
parties.
•
If we are unable to protect our intellectual property rights, our financial results may be negatively impacted.
•
Union attempts to organize our employees could negatively affect our business.
•
Issues with merchandise safety could damage our reputation, sales and financial results.
•
Violations of or changes in laws, including employment laws and laws related to our merchandise, could
make conducting our business more expensive or change the way we do business.
•
We may engage in strategic transactions that could negatively impact our liquidity, increase our expenses
and present significant distractions to our management.
•
Terrorism or civil unrest could negatively affect our business.
•
If our goodwill, intangible assets or long-lived assets become impaired, we may be required to record a
significant charge to earnings.
Risks Related To Ownership of Our Common Stock
•
The market price and trading volume of our common stock have been and may continue to be volatile,
which could result in rapid and substantial losses for our stockholders, who may lose all or part of their
investment.
•
Anti-takeover provisions in our corporate organizational documents and current credit facility and under
Delaware law may delay, deter or prevent a takeover of us and the replacement or removal of our
management, even if such a change of control would benefit our stockholders.
•
If securities or industry analysts do not publish research and reports or publish inaccurate or unfavorable
research and reports about our business, the price and trading volume of our common stock could decline.
•
We do not currently intend to pay cash dividends on our common stock, which may make our common
stock less desirable to investors and decrease its value.
•
Shareholder activism could adversely impact our business.
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Risk Factors
You should carefully consider the risks and uncertainties described below, together with all of the other
information in this annual report, including our consolidated financial statements and the related notes included
elsewhere in this annual report. If any of the following risks were realized, our business, financial condition, results of
operations and prospects could be materially and adversely affected. In that event, the price of our common stock could
decline, and you could lose part or all of your investment.
Risks Related to Our Business
Our sales could be severely impacted by decreases in consumer spending due to declines in consumer confidence,
local economic conditions in our markets or changes in consumer preferences.
We depend upon consumers feeling confident about spending discretionary income on our products to drive our
sales. Consumer spending may be adversely impacted by economic conditions, such as consumer confidence in future
economic conditions, interest and tax rates, continued inflation, employment levels, salary and wage levels, the
availability of consumer credit, the level of housing, energy and food costs, general business conditions and other
challenges affecting the global economy. These risks may be exacerbated for retailers like us who focus on specialty
footwear, apparel and accessories. Our financial performance is particularly susceptible to economic and other conditions
in California, Texas and other states where we have a significant number of stores. Many of our stores operate in
geographic areas where the local economies depend to a significant degree on oil and other commodity extraction, and
many of our customers are employed in these industries. Our financial performance is accordingly susceptible to
economic and other conditions relating to output and employment in these areas. Our financial performance also is
impacted by conditions in the construction sector, domestic manufacturing and the transportation and warehouse sectors,
the growth of which we believe is an important driver of our work wear business. In addition, our financial performance
may be negatively affected if the popularity of the western and country lifestyle subsides, or if there is a general trend in
consumer preferences away from boots and other western or country products in favor of another general category of
footwear or attire. If this were to occur or if periods of decreased consumer spending persist, our sales could decrease,
which could have a material adverse effect on our business, financial condition, results of operations and prospects. In
addition, difficult economic conditions may exacerbate some of the other risks described in this Item 1A. Risk Factors,
including those risks associated with increased competition, decreases in store traffic, brand reputation, the interruption
of the production and flow of merchandise, the ability to achieve our growth strategies, and the ability to improve and
expand our exclusive product offering. These risks could be exacerbated individually or collectively.
Our business largely depends on a strong brand image, and if we are unable to maintain and enhance our brand
image, particularly in new markets where we have limited brand recognition, we may be unable to increase or
maintain our level of sales.
We believe that our brand image and brand awareness have contributed significantly to the success of our
business. We also believe that maintaining and enhancing our brand image, particularly in new markets where we have
limited brand recognition, is important to maintaining and expanding our customer base. Our ability to successfully
integrate newly opened stores into their surrounding communities, to expand into new markets and to maintain the
strength and distinctiveness of our brand image in our existing markets will be adversely impacted if we fail to connect
with our target customers. Maintaining and enhancing our brand image may require us to make substantial investments
in areas such as merchandising, marketing, store operations, community relations, store graphics and employee training,
which could adversely affect our cash flow and which may ultimately be unsuccessful. Furthermore, our brand image
could be jeopardized if we fail to maintain high standards for merchandise quality, if we fail to comply with local laws
and regulations or if we experience negative publicity or other negative events that affect our image and reputation.
Some of these risks may be beyond our ability to control, such as the effects of negative publicity regarding our
suppliers. Failure to successfully market and maintain our brand image in new and existing markets could harm our
business, results of operations and financial condition.
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Most of our merchandise is produced in foreign countries, making the price and availability of our merchandise
susceptible to international trade risks and other international conditions, including supply chain disruptions or
geopolitical conditions including the ongoing conflict between Russia and the Ukraine.
The majority of our exclusive brand products are manufactured in foreign countries, including Mexico and
China. In addition, we purchase most of our third-party branded merchandise from domestic suppliers that have a large
portion of their merchandise made in foreign countries.
The countries, specifically Mexico and China, in which our merchandise currently is manufactured or may be
manufactured in the future could become subject to trade restrictions imposed by the United States, including increased
tariffs or quotas, embargoes and customs restrictions, which could increase the cost or reduce the supply of products
available to us and have a material adverse effect on our business, financial condition and results of operations. Any
tariffs on imports from foreign countries, as well as changes in tax and trade policies such as a border adjustment tax or
disallowance of certain tax deductions for imported merchandise could materially increase our manufacturing costs, the
costs of our imported merchandise or our income tax expense, which would have a material adverse effect on our
financial condition and results of operations. Any tariffs by China or other foreign countries on imports of our products
could also adversely affect our international e-commerce sales. Any increase in our manufacturing costs, the cost of our
merchandise or limitation on the amount of merchandise we are able to purchase, or any decrease in our international e-
commerce sales, could have a material adverse effect on our financial condition and results of operations.
Additionally, public health issues, such as a resurgence of COVID-19 or another pandemic, affecting China,
Mexico or another foreign country from which a large portion of our third-party and exclusive brand merchandise is
purchased and imported, may result in the temporary closure of our suppliers’ facilities or shipping ports, resulting in
product delivery delays. These travel restrictions, factory closures and production and logistical constraints may result in,
among other things, delayed shipments and increased shipping costs. These impacts on our supply chain could have a
material adverse effect on our financial condition and results of operations.
Furthermore, in response to the ongoing conflict between Russia and Ukraine, the United States has imposed
and may further impose, and other countries may additionally impose, broad sanctions or other restrictive actions against
governmental and other entities in Russia or other associated countries. While the existing sanctions do not materially
impact our business or operations, additional sanctions may be imposed in the future that could impact our supply chain.
Additionally, further escalation of geopolitical tensions could have a broader impact that extends into other markets
where we do business. These impacts could have a material adverse effect on our financial condition and results of
operations.
We face intense competition in our industry and we may be unable to compete effectively.
The retail industry for western and work wear is highly fragmented and characterized by primarily regional
competitors. We estimate that there are thousands of independent specialty stores scattered across the country. We
believe that we compete primarily with smaller regional chains and independent stores on the basis of product quality,
brand recognition, price, customer service and the ability to identify and satisfy consumer demand. In addition, as we
expand our e-commerce sales presence and as a result of consumers’ growing desire to shop online, we are competing to
an increasing degree with online retailers and the e-commerce offerings of traditional competitors. There can be no
assurance that our e-commerce expansion initiatives will be successful. We also compete with farm supply stores and
mass merchants. Competition with some or all of these retailers could require us to lower our prices or risk losing
customers. In addition, significant or unusual promotional activities by our competitors may force us to respond in-kind
and adversely impact our operating cash flow and gross profit. As a result of these factors, current and future competition
could have a material adverse effect on our financial condition and results of operations.
Many of the mass merchants and online retailers that sell some western or work wear products have greater
financial, marketing and other resources than we currently do, and in the case of online retailers, lower overhead and
overall cost structure. Therefore, these competitors may be able to devote greater resources to the marketing and sale of
these products, generate national brand recognition or adopt more aggressive pricing policies than we can, which would
put us at a competitive disadvantage if they decide to expand their offerings of these product lines. Moreover, we do not
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possess exclusive rights to many of the elements that comprise our in-store experience and product offerings. Our
competitors may seek to emulate facets of our business strategy, including our in-store experience, which could result in
a reduction of some competitive advantages or special appeal that we might possess. In addition, most of our suppliers
sell products to us on a non-exclusive basis. As a result, our current and future competitors may be able to duplicate or
improve on some or all of the product offerings that we believe are important in differentiating our stores, our e-
commerce offerings and our customers’ shopping experience. If our competitors were to duplicate or improve on some
or all of our in-store experience, or our in-store and e-commerce product offerings, our competitive position and our
business could suffer.
Our failure to adapt to new challenges that arise when expanding into new geographic markets could adversely affect
our ability to profitably operate those stores and maintain our brand image.
Our expansion into new geographic markets could result in competitive, merchandising, distribution and other
challenges that are different from those we encounter in the geographic markets in which we currently operate. In
addition, to the extent that our store count increases, we may face risks associated with market saturation of our product
offerings and locations. Our suppliers may also restrict their sales to us in new markets to the extent they are already
saturating that market with their products through other retailers or their own stores. There can be no assurance that any
newly opened stores will be received as well as, or achieve net sales or profitability levels comparable to those of, our
existing stores in the time periods estimated by us, or at all. If our stores fail to achieve, or are unable to sustain,
acceptable net sales and profitability levels, our business may be materially harmed, we may incur significant costs
associated with closing those stores and our brand image may be negatively impacted.
Our continued growth depends upon successfully opening new stores, and our failure to successfully open new stores
could negatively affect our business and stock price.
Our ability to successfully open and operate new stores is subject to a variety of risks and uncertainties, such as:
•
identifying suitable store locations, the availability of which is beyond our control;
•
obtaining acceptable lease terms;
•
sourcing sufficient levels of inventory;
•
selecting the appropriate merchandise to appeal to our customers;
•
hiring, training and retaining store employees;
•
assimilating new store employees into our corporate culture;
•
marketing the new stores’ locations and product offerings effectively;
•
avoiding construction delays and cost overruns, and managing supply chain challenges, in connection
with the build out of new stores;
•
avoiding other costs in opening new stores, such as rebranding acquired locations and environmental
liabilities;
•
managing and expanding our infrastructure to accommodate growth; and
•
integrating the new stores with our existing buying, distribution and other support operations.
Our failure to successfully address these challenges could have a material adverse effect on our financial
condition and results of operations. We opened 55 stores in fiscal 2024, 45 stores in fiscal 2023, and 28 stores in fiscal
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2022. We plan to continue to open new stores in the coming years; however, there can be no assurance that we will open
new stores in fiscal 2025 or thereafter, or that any such stores will be profitable. The expansion of our store base will
place increased demands on our operational, managerial and administrative resources. These increased demands could
cause us to operate our existing business less effectively, which in turn could cause the financial performance of our
existing stores to deteriorate. In addition, we plan to open some new stores within existing markets. Some of these new
stores may open close enough to our existing stores that a segment of customers will stop shopping at our existing stores
and instead shop at the new stores, causing sales and profitability at those existing stores to decline. If this were to occur
with a number of our stores, this could have a material adverse effect on our financial condition and results of operations.
In addition to opening new stores, we may acquire and rebrand stores. Acquiring and integrating stores involves
additional risks that could adversely affect our growth and results of operations. Newly acquired stores may be
unprofitable and we may incur significant costs and expenses in connection with any acquisition including systems
integration and costs relating to remerchandising and rebranding the acquired stores. Integrating newly acquired chains
or individual stores may divert our senior management’s attention from our core business. Our ability to integrate newly
acquired stores will depend on the successful expansion of our existing financial controls, distribution model,
information systems, management and human resources and on attracting, training and retaining qualified employees.
Any significant change in our distribution model could initially have an adverse impact on our cash flows and results
of operations.
Our suppliers ship a portion of our in-store merchandise directly to our stores and a portion of our e-commerce
merchandise to our e-commerce customers. In the future, as part of our long-term strategic planning, we may change our
distribution model to increase the amount of merchandise that we self-distribute through a centralized distribution center
or centers. Changing our distribution model to increase distributions from a centralized distribution center or centers to
our stores and customers would initially involve significant capital expenditures, which could increase our borrowings
and interest expense or temporarily reduce the rate at which we open new stores. In addition, if we are unable to
successfully integrate a new distribution model into our operations in a timely manner, our supply chain could
experience significant disruptions, which could reduce our sales and adversely impact our results of operations.
As we expand our business, we may be unable to generate significant amounts of cash from operations.
As we expand our business, we will need significant amounts of cash from operations to pay our existing and
future lease obligations, build out new store space, purchase inventory, pay personnel, and, if necessary, further invest in
our infrastructure and facilities. We primarily rely on cash flow generated from existing stores and our e-commerce
businesses, as well as debt financing, to fund our current operations and our growth. It typically takes several months and
a significant amount of cash to open a new store. For example, our new store model requires an average net cash
investment of approximately $1.5 million. If we continue to open a large number of stores relatively close in time, the
cost of these store openings and the cost of continuing operations could reduce our cash position. An increase in our net
cash outflow for new stores could adversely affect our operations by reducing the amount of cash available to address
other aspects of our business.
We cannot assure you that any new stores that we open will become profitable in the anticipated time frame, or
at all. We cannot assure you that our existing stores, which may be currently profitable, will not cease to be profitable in
the future.
If our business does not generate sufficient cash flow from operations to fund these activities, and sufficient
funds are not otherwise available from our current credit facility or future credit facilities, we may need additional equity
or debt financing. If such financing is not available to us on satisfactory terms, our ability to operate and expand our
business or to respond to competitive pressures would be limited and we could be required to delay, curtail or eliminate
planned store openings. Moreover, if we raise additional capital by issuing equity securities or securities convertible into
equity securities, your ownership may be diluted. Any debt financing we may incur may impose covenants that restrict
our operations, and will require interest payments that would create additional cash demands and financial risk for us.
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If we fail to maintain good relationships with our suppliers or if our suppliers are unable or unwilling to provide us
with sufficient quantities of merchandise at acceptable prices, our business and operations may be adversely affected.
Our business is largely dependent on continued good relationships with our suppliers, including suppliers for
our third-party branded products and manufacturers for our exclusive brand products. During fiscal 2024, merchandise
purchased from our top three suppliers accounted for approximately 24% of our consolidated sales. We operate on a
purchase order basis for our exclusive brand and third-party branded merchandise and do not have long-term written
agreements with our suppliers. Accordingly, our suppliers can refuse to sell us merchandise, limit the type or quantity of
merchandise that they sell to us, enter into exclusivity arrangements with our competitors or raise prices at any time,
which could have an adverse impact on our business. Deterioration in our relationships with our suppliers could have a
material adverse impact on our business, and there can be no assurance that we will be able to acquire desired
merchandise in sufficient quantities on terms acceptable to us in the future. Also, some of our suppliers sell products
directly from their own retail stores or e-commerce websites, and therefore directly compete with us. These suppliers
may decide at some point in the future to discontinue supplying their merchandise to us, supply us less desirable
merchandise or raise prices on the products they do sell us, including as a result of inflationary impacts (which has been
experienced over the last twenty-four months and is continuing). If we lose key suppliers and are unable to find
alternative suppliers to provide us with substitute merchandise for lost products, our business may be adversely affected.
Our efforts to continue to improve and expand our exclusive product offerings may be unsuccessful, and
implementing these efforts may divert our operational, managerial, financial and administrative resources, which
could harm our competitive position and reduce our revenue and profitability.
We seek to continue to grow our business by improving and expanding our exclusive product offerings, which
includes introducing new brands and growing and expanding our existing brands. The principal risks to our ability to
successfully improve and expand our product offering are that:
•
introduction of new products may be delayed, which may allow our competitors to introduce similar
products in a more timely fashion, which could hinder our ability to be viewed as the exclusive provider of
certain western and work apparel brands and items;
•
the third-party suppliers of our exclusive product offerings may not maintain adequate controls with respect
to product specifications and quality, which may lead to costly corrective action and damage to our brand
image;
•
if our expanded exclusive product offerings fail to maintain and enhance our distinctive brand identity, our
brand image may be diminished and our sales may decrease; and
•
these efforts may divert our management’s attention from other aspects of our business and place a strain
on our operational, managerial, financial and administrative resources, as well as our information systems.
In addition, our ability to successfully improve and expand our exclusive product offerings may be affected by
economic and competitive conditions, changes in consumer spending patterns and changes in consumer preferences.
These efforts could be abandoned, cost more than anticipated and divert resources from other areas of our business, any
of which could impact our competitive position and reduce our revenue and profitability.
A rise in the cost of fabric, raw materials, labor or transportation due to inflation or otherwise could increase our cost
of merchandise and cause our results of operations and margins to decline.
Increases in the price, and fluctuations in the availability and quality of fabrics and raw materials, such as cotton
and leather, that our suppliers use to manufacture our products, as well as the cost of labor and transportation, due to
inflation or otherwise, could have adverse impacts on our cost of merchandise and our ability to meet our customers’
demands. In particular, because key components of our products are cotton and leather, any increases in the cost of
cotton or leather may significantly affect the cost of our products and could have an adverse impact on our cost of
merchandise. Inflation, which has been experienced over the last twenty-four months and is continuing, may cause or
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exacerbate these impacts. Additionally, due to competitive labor conditions, we have experienced increases in the cost of
labor, which may continue into the future. We may be unable to pass all or any of these higher costs on to our customers,
which could have a material adverse effect on our profitability.
We purchase merchandise based on sales projections and our purchase of too much or too little inventory may
adversely affect our overall profitability.
We must actively manage our purchase of inventory. We generally order our seasonal and exclusive brand
merchandise several months in advance of it being received and offered for sale. If there is a significant decrease in
demand for these products, or if we fail to accurately predict consumer demand, including by disproportionately
increasing the penetration of our exclusive brand merchandise, we may be forced to rely on markdowns or promotional
sales to dispose of excess inventory. This could have an adverse effect on our margins and operating income.
Conversely, if we fail to purchase a sufficient quantity of merchandise, we may not have an adequate supply of products
to meet consumer demand, thereby causing us to lose sales or adversely affecting our customer relationships. Any failure
on our part to anticipate, identify and respond effectively to changing consumer demand and consumer shopping
preferences could adversely affect our results of operations.
We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us
to potential liability and potentially disrupt our business.
We accept payments using a variety of methods, including cash, checks, credit and debit cards, including our
private-label credit card, gift cards, and various other online payment methods, including pay-over-time options.
Acceptance of these payment methods subjects us to rules, regulations, contractual obligations and compliance
requirements, including payment network rules and operating guidelines, data security standards and certification
requirements, and rules governing electronic funds transfers. These requirements may change over time or be
reinterpreted, making compliance more difficult or costly.
For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may
increase over time and raise our operating costs. We rely on third parties to provide payment processing services,
including the processing of credit cards, debit cards, and other forms of electronic payment. If these companies become
unable to provide these services to us, or if their systems are compromised, it could potentially disrupt our business. The
payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly
more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment
systems. If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-
related data is compromised due to a breach or misuse of data, we may be liable for costs incurred by payment card
issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate
certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types,
which may result in a shift to other payment types or potential changes to our payment systems that may result in higher
costs. As a result, our business and results of operations could be adversely affected.
If our management information systems fail to operate or are unable to support our growth, our operations could be
disrupted.
We rely upon our management information systems in almost every aspect of our daily business operations. For
example, our management information systems serve an integral part in enabling us to order merchandise, process
merchandise at our distribution centers and retail stores, perform and track sales transactions, manage personnel, pay
suppliers and employees, operate our e-commerce businesses and report financial and accounting information to
management. In addition, we rely on our management information systems to enable us to leverage our costs as we grow.
If our management information systems fail to operate or are unable to support our growth, our store operations and e-
commerce businesses could be severely disrupted, and we could be required to make significant additional expenditures
to remediate any such failure.
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We rely on UPS and the United States Postal Service to deliver our e-commerce merchandise to our customers and
our business could be negatively impacted by disruptions in the operations of these third-party service providers.
We rely on UPS and the United States Postal Service to deliver our e-commerce merchandise to our customers.
Relying on these third-party delivery services puts us at risk from disruptions in their operations, such as employee
strikes, inclement weather, shutdowns or other delays and their inability to meet our shipping demands. If we are forced
to use other delivery services, our costs could increase and we may be unable to meet shipment deadlines. Moreover, we
may be unable to obtain terms as favorable as those received from the transportation providers we currently use, which
would further increase our costs. In addition, if our products are not delivered to our customers on time, our customers
may cancel their orders or we may lose business from these customers in the future. These circumstances may negatively
impact our financial condition and results of operations.
Higher wage and benefit costs could adversely affect our business.
Increased labor costs brough about by changes in federal or state minimum wage laws, other laws or regulations
relating to employee benefits or prevailing market conditions, including highly competitive labor markets, could cause us
to incur additional wage and benefit costs. Increased labor costs brought about by these factors would increase our
expenses and have an adverse impact on our profitability, or could negatively impact the quality of our workforce if we
fail to increase our wages competitively.
If we cannot attract, train and retain qualified employees, our business could be adversely affected.
Our success depends upon the quality of the employees we hire. We seek to recruit people who are welcoming,
friendly and service-oriented, and who often live the western lifestyle or have a genuine affinity for it. Employees in
many positions must have knowledge of our merchandise and the skill necessary to excel in a customer service
environment. The turnover rate in the retail industry is typically high and finding qualified candidates to fill positions
may be difficult particularly in the current highly competitive labor markets. Our planned growth will require us to hire
and train even more personnel. If we cannot attract, train and retain corporate employees, district managers, store
managers and store associates with the qualifications we deem necessary, our ability to effectively operate and expand
may be adversely affected. In addition, we rely on temporary and seasonal personnel to staff our distribution centers. We
cannot guarantee that we will be able to find adequate temporary or seasonal personnel to staff our operations when
needed, which may strain our existing personnel and negatively impact our operations.
If we lose key management personnel, our operations could be negatively impacted.
We depend upon the leadership and experience of our executive management team. If we are unable to retain
existing management personnel who are critical to our success, or effectively transition their responsibilities to other
personnel, it could result in harm to our supplier and employee relationships, the loss of key information, expertise or
know-how and unanticipated recruitment and training costs. The loss of the services of any of our key management
personnel could have a material adverse effect on our business and prospects, and could be viewed negatively by
investors and analysts, which could cause the price of our common stock to decline. We may be unable to find qualified
individuals to replace key management personnel on a timely basis, or effectively transition their responsibilities to
others, without incurring increased costs or at all. We do not maintain key person life insurance covering any employee.
If we lose the services of any of our key management personnel or we are unable to attract additional qualified
personnel, we may be unable to successfully manage our business.
Another widespread health epidemic could materially impact our business.
As evidenced by the COVID-19 pandemic, our business could be severely impacted by other widespread
regional, national, or global health epidemics. Such events may cause customers to avoid public gathering places such as
our stores or otherwise change their shopping behaviors. Additionally, these occurrences could adversely impact our
business by disrupting production and delivery of products to our stores and by impacting our ability to appropriately
staff our stores.
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The concentration of our stores and operations in certain geographic locations subjects us to regional economic
conditions and natural disasters that could adversely affect our business.
Our Store Support Center and distribution centers are located in California, Kansas, and Missouri. If we
encounter any disruptions to our operations at these locations or if they were to shut down for any reason, including due
to fire, tornado, earthquake or other natural disaster, then we may be prevented from effectively operating our stores and
our e-commerce businesses. Furthermore, the risk of disruption or shutdown at our buildings in California are greater
than they might be if they were located in another region, as southern California is prone to natural disasters such as
earthquakes and wildfires. Any disruption or shutdown at our locations could significantly impact our operations and
have a material adverse effect on our financial condition and results of operations.
In addition, of the 400 stores that we operated as of March 30, 2024, 167 of these stores were located in
Arizona, California and Texas. The geographic concentration of our stores may expose us to economic downturns or
natural disasters in those states where our stores are located. For example, our stores located in North Dakota, Wyoming,
Colorado, Texas and surrounding areas are likely to be adversely impacted by an economic downturn affecting the oil,
gas, and commodities industries. Any similar events in states where our stores are concentrated could have a material
adverse effect on our financial condition and results of operations.
We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs
our customers would have to pay for our products and adversely affect our operating results.
An increasing number of states have considered or adopted laws that attempt to impose tax collection
obligations on out-of-state retailers. In South Dakota v. Wayfair, Inc. et al (“Wayfair”), a case challenging existing law
that online sellers are not required to collect sales and use tax unless they have a physical presence in the buyer’s state,
the Supreme Court decided that states may adopt laws requiring sellers to collect sales and use tax, even in states where
the seller has no physical presence. As a result of Wayfair, states or the federal government may adopt, or begin to
enforce, laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions. A successful assertion by
one or more states requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction
in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as
well as penalties and interest. The imposition by state governments of sales tax collection obligations on out-of-state
retailers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not
impose similar obligations on our competitors and decrease our future sales, which could have a material adverse impact
on our business and operating results.
The adoption of new tax legislation could affect our financial performance.
We are subject to income and other taxes in the United States. Our effective tax rate in the future could be
adversely affected by changes in the valuation of deferred tax assets and liabilities and changes in tax laws. More
generally, it is possible that U.S. federal income or other tax laws or the interpretation of tax laws will change. It is
difficult to predict whether and when there will be tax law changes having a material adverse effect on our business,
financial condition, results of operations and cash flows.
We are required to make significant lease payments for our stores, Store Support Center and distribution centers,
which may strain our cash flow.
We do not own any real estate. Instead, we lease all of our retail store locations as well as our Store Support
Center and distribution centers. The store leases generally have a base lease term of five or 10 years, with one or more
renewal periods of five years, on average, exercisable at our option. Many of our leases have early cancelation clauses
which permit us to terminate the lease if certain sales thresholds are not met in certain periods of time. Our costs under
these leases are a significant amount of our expenses and are growing rapidly as we expand the number of locations and
the cost of leasing existing locations rises. In fiscal 2024, our total lease expense was $103.4 million, and we expect this
amount to continue to increase as we open more stores. We are required to pay additional rent under some of our lease
agreements based upon achieving certain sales thresholds for each store location. We are generally responsible for the
payment of property taxes and insurance, utilities and common area maintenance fees. Many of our lease agreements
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also contain provisions which increase the rent payments on a set time schedule, causing the cash rent paid for a location
to escalate over the term of the lease. In addition, rent costs could escalate when multi-year leases are renewed at the
expiration of their lease term. These costs are significant, recurring and increasing, which places a consistent strain on
our cash flow.
We depend on cash flows from operations to pay our lease expenses and to fulfill our other cash needs. If our
business does not generate sufficient cash flows from operating activities, and sufficient funds are not otherwise
available to us from borrowings under our current credit facility, future credit facilities or from other sources, we may be
unable to service our operating lease expenses, grow our business, respond to competitive challenges or fund our other
liquidity and capital needs, which would harm our business.
Additional sites that we lease are likely to be subject to similar long-term leases. If an existing or future store is
not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the
applicable lease including, among other things, paying the base rent for the balance of the lease term. We may fail to
identify suitable store locations, the availability of which is beyond our control, to replace such closed stores. In addition,
as our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could
cause us to close stores in desirable locations. Of the store leases that will reach their termination date during fiscal 2025,
thirteen of those leases do not contain an option to automatically extend the lease term. If we are unable to enter into new
leases or renew existing leases on terms acceptable to us or be released from our obligations under leases for stores that
we close, our business, profitability and results of operations may be harmed.
We may be unable to maintain same store sales or net sales per square foot, which may cause our results of
operations to decline.
The investing public may use same store sales or net sales per square foot projections or results, over a certain
period of time, such as on a quarterly or yearly basis, as an indicator of our profitability growth. See Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion of “same
store sales”. Our same store sales can vary significantly from period to period for a variety of reasons, such as the age of
stores, temporary store closures, changing economic factors, including those caused by macroeconomic conditions,
unseasonable weather, pricing, the timing of the release of new merchandise and promotional events and increased
competition. These factors could cause same store sales or net sales per square foot to decline period to period or fail to
grow at expected rates, which could adversely affect our results of operations and cause the price of our common stock
to be volatile during such periods.
Any inability to balance our exclusive brand merchandise with the third-party branded merchandise that we sell may
have an adverse effect on our net sales and gross profit.
In fiscal 2024, sales from our exclusive brand products accounted for approximately 37.7% of our consolidated
sales. As of March 30, 2024, three of our five top selling brands were exclusive brands. Our exclusive brand
merchandise has historically had a higher gross margin than the third-party branded merchandise that we offer. As a
result, we intend to attempt to increase the penetration of our exclusive brands in the future. However, carrying our
exclusive brands limits the amount of third-party branded merchandise we can carry and, therefore, there is a risk that
our customers’ perception that we offer many major brands will decline or that our suppliers of third-party branded
merchandise may decide to discontinue supplying, or reduce the supply of, their merchandise. If this occurs, it could
have a material adverse effect on net sales and profitability.
Our management information systems and databases could be disrupted by system security failures, cyber threats or
by the failure of, or lack of access to, our Enterprise Resource Planning system. These disruptions could negatively
impact our sales, increase our expenses, subject us to liability and/or harm our reputation.
Hackers, computer programmers and internal users may be able to penetrate our network security and create
system disruptions, cause shutdowns and misappropriate our confidential information or that of our employees and third
parties, including our customers. Therefore, we could incur significant expenses addressing problems created by security
breaches to our network. This risk is heightened because we collect and store customer information for marketing
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purposes, as well as debit and credit card information. We must, and do, take precautions to secure customer information
and prevent unauthorized access to our database of confidential information. However, if unauthorized parties, including
external hackers or computer programmers, gain access to our database, they may be able to steal this confidential
information. Our failure to secure this information could result in costly litigation, adverse publicity or regulatory action,
or result in customers discontinuing the use of debit or credit cards in our stores or e-commerce websites, or customers
not shopping in our stores or on our e-commerce websites altogether. While we maintain cyber risk insurance, the costs
relating to certain kinds of security incidents could be substantial, and our insurance may not be sufficient to cover all
losses related to any future incidents involving our data or systems. These consequences could have a material adverse
effect on our financial condition and results of operations. In addition, sophisticated hardware and operating system
software and applications that we procure from third parties may contain defects in design or manufacture that could
unexpectedly interfere with our operations. The cost to alleviate security risks and defects in software and hardware and
to address any problems that occur could negatively impact our sales, distribution and other critical functions, as well as
our financial results.
In recent years, there has been increasing regulatory enforcement and litigation activity in the area of privacy,
data protection and information security in various states in which we operate, including for example, the California
Consumer Privacy Act of 2018 (the “CCPA”), which became effective on January 1, 2020. The CCPA requires certain
companies to satisfy certain requirements regarding the handling of personal and sensitive data, including its use,
protection and the ability of California residents whose data is stored to know specifically what data types each company
has collected on them and, if they so choose, the right to demand that such companies delete their data. Failure to comply
with the CCPA requirements could result in civil penalties. The CCPA also provides a private right of action that allows
consumers to seek, either individually or as a class, statutory or actual damages and injunctive and other relief, if their
sensitive personal information is subject to unauthorized access and exfiltration, theft or disclosure as a result of a
business's failure to implement and maintain required reasonable security procedures. New legislation or regulation such
as the CCPA, including any potential comprehensive federal privacy legislation, as well as any associated inquiries or
investigations or any other government actions, could be costly to comply with, result in negative publicity, increase our
operating costs, require significant management time and attention, and subject us to remedies that may harm our
business, including fines or demands or orders that we modify or cease existing business practices.
We operate Aptos Retail on a software-as-a-service platform, and we use this system for integrated point-of-
sale, merchandising, planning, sales audit, customer relationship management, inventory control, loss prevention,
purchase order management and business intelligence. Accordingly, we depend on this system, and the third-party
provider of this service, for many aspects of our operations. If this service provider or this system fails, or if we are
unable to continue to have access to this system on commercially reasonable terms, or at all, our operations would be
severely disrupted until an equivalent system could be identified, licensed or developed, and integrated into our
operations. This disruption would have a material adverse effect on our business.
If our suppliers and manufacturers fail to use acceptable labor or other practices, our reputation may be harmed,
which could negatively impact our business.
We purchase merchandise from independent third-party suppliers and manufacturers. If any of these suppliers
have practices that are not legal or accepted in the U.S., consumers may develop a negative view of us, our brand image
could be damaged and we could become the subject of boycotts by our customers or interest groups. Further, if the
suppliers violate labor or other laws of their own country, these violations could cause disruptions or delays in their
shipments of merchandise. For example, much of our merchandise is manufactured in China and Mexico, which have
different labor practices than the U.S. We do not independently investigate whether our suppliers are operating in
compliance with all applicable laws and therefore we rely upon the suppliers’ representations set forth in our purchase
orders and supplier agreements concerning the suppliers’ compliance with such laws. In addition, regulatory
developments regarding the use of “conflict minerals,” certain minerals originating from the Democratic Republic of
Congo and adjoining countries, could affect the sourcing and availability of raw materials used by suppliers and subject
us to costs associated with the regulations, including for the diligence pertaining to the presence of any conflict minerals
used in our products, possible changes to products, processes or sources of our inputs, and reporting requirements. If our
goods are manufactured using illegal or unacceptable labor practices in these countries, or other countries from which
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our suppliers source the products we purchase, our ability to supply merchandise for our stores without interruption, our
brand image and, consequently, our sales may be adversely affected.
Our e-commerce businesses subject us to numerous risks that could have an adverse effect on our results of
operations.
Our e-commerce businesses and their continued growth subject us to certain risks that could have an adverse
effect on our results of operations, including:
•
diversion of traffic from our stores;
•
increased e-commerce competition;
•
liability for online content;
•
government regulation of the Internet; and
•
risks related to the computer systems that operate our e-commerce websites and related support
systems, including computer viruses, electronic data theft and similar disruptions.
Our sales could be adversely affected by any disruption or downtime caused by the integration of new software
or software upgrades. In addition, any data loss caused by such integration or upgrade could have a material adverse
effect on our financial condition and results of operations.
As we expand our e-commerce operations, we face the risk of increased losses from credit card fraud. We do
not carry insurance against the risk of credit card fraud, so under current credit card practices, we may be liable for
fraudulent credit card transactions even though the associated financial institution has approved payment of the orders. If
we are unable to deter or control credit card fraud, or if credit card companies require more burdensome terms or refuse
to accept credit card charges from us, our net income could be reduced. A breach of our e-commerce security measures
could also reduce demand for our services, and expose us to potential liabilities. In addition, to the extent the threat of
such attempted attacks and the sophistication thereof grows, we may be required to devote additional resources to
preventative measures.
Our e-commerce operations may also subject us to taxation in jurisdictions where we currently do not collect
sales and other similar taxes. See “--We could be required to collect additional sales taxes or be subject to other tax
liabilities that may increase the costs our customers would have to pay for our products and adversely affect our
operating results” above.
In addition, we rely upon email distributions to advertise our stores and e-commerce businesses and use various
data-mining techniques to effectively target these emails. Spam filters or other blocking applications designed to enable
consumers to limit incoming email from advertisers may inhibit our ability to effectively reach large audiences of
existing and potential customers via email. This may adversely affect our ability to generate new business and acquire
new customers.
The debt outstanding under our revolving credit facility has a variable rate of interest that may increase our cost of
borrowing in the future.
We maintain a senior secured asset-backed revolving credit facility for which Wells Fargo, National
Association, is agent (the “Wells Fargo Revolver”), and the debt outstanding thereunder bears interest at a variable rate
of interest, and we may also incur additional debt in the future which rely on variable interest rates. Increases in these
variable rates have occurred and may continue in the future, which increases our interest costs, which would likely
reduce our cash flows.
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Further, as a result of the discontinuation of the London Interbank Offered Rate, or LIBOR, beginning in 2021,
our variable rate debt is currently indexed to the Secured Overnight Financing Rate, or SOFR. SOFR is a relatively new
reference rate, has a very limited history and is based on short-term repurchase agreements, backed by Treasury
securities. Changes in SOFR can be volatile and difficult to predict, and there can be no assurance that SOFR will
perform similarly to the way LIBOR would have performed at any time. As a result, the amount of interest we may pay
on indebtedness is difficult to predict.
Our revolving credit facility contains restrictions and limitations that could significantly impact our ability to operate
our business.
The Wells Fargo Revolver contains covenants that, among other things, may, under certain circumstances, place
limitations on the dollar amounts paid or other actions relating to:
•
payments in respect of, or redemptions or acquisitions of, debt or equity issued by Boot Barn or its
subsidiaries, including the payment of dividends on our common stock;
•
incurring additional indebtedness;
•
incurring guarantee obligations;
•
creating liens on assets;
•
entering into sale and leaseback transactions;
•
making investments, loans or advances;
•
entering into hedging transactions;
•
engaging in mergers, consolidations or sales of all or substantially all of their respective assets; and
•
engaging in certain transactions with affiliates.
In addition, the Company is required to satisfy a certain fixed charge coverage financial ratio as set forth in this
agreement during such times as a covenant trigger event under this agreement shall exist. Our ability to satisfy this
financial ratio, if in effect, will depend on our ongoing financial and operating performance, which in turn will be subject
to economic conditions and to financial, market and competitive factors, many of which are beyond our control. Our
ability to comply with this ratio in future periods will also depend on our ability to successfully implement our overall
business strategy and realize contemplated synergies.
Various risks, uncertainties and events beyond our control could affect our ability to comply with the covenants
contained in our current credit facility. Failure to comply with any of these covenants could result in a default under the
Wells Fargo Revolver and under other agreements containing cross-default provisions. A default would permit lenders to
accelerate the maturity of the revolving line of credit under this agreement and to foreclose upon any collateral securing
the debt. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our
obligations. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to
take other actions might significantly impair our ability to obtain other financing.
Our leverage may reduce our cash flow available to grow our business.
As of March 30, 2024, we did not have any outstanding indebtedness under the Wells Fargo Revolver. We may
incur debt in the future under the Wells Fargo Revolver. Our obligation to pay interest under the Wells Fargo Revolver
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will reduce our available cash flow, limiting our flexibility to respond to changing business and economic conditions and
increasing any additional borrowing costs.
New accounting guidance or changes in the interpretation or application of existing accounting guidance could
adversely affect our financial performance.
The implementation of new accounting standards could require certain systems, internal processes and controls
and other changes that could increase our operating costs and result in changes to our financial statements.
U.S. generally accepted accounting principles and related accounting pronouncements, implementation
guidelines and interpretations with regard to a wide range of matters that are relevant to our business involve many
subjective assumptions, estimates and judgments by our management. Changes in these rules or their interpretation or in
underlying management assumptions, estimates or judgments could significantly change our reported or expected
financial performance. The outcome of such changes could include litigation or regulatory actions which could adversely
affect our financial condition and results of operations.
Use of social media may adversely impact our reputation or subject us to fines or other penalties.
The use of social media platforms, including blogs, social media websites and other forms of internet-based
communication, which allow individuals access to a broad audience of consumers and other interested persons, has
become commonplace. Negative commentary regarding us or the brands that we sell may be posted on social media
platforms or similar devices at any time and may harm our reputation or business. Consumers value readily available
information concerning retailers and their goods and services and often act on such information without further
investigation and without regard to its accuracy. The harm may be immediate without affording us an opportunity for
redress or correction. In addition, social media platforms provide users with access to such a broad audience that
collective action against our stores, such as boycotts, can be more easily organized. If such actions were organized, we
could suffer reputational damage as well as physical damage to our stores and merchandise.
We also use social media platforms as marketing tools. For example, we maintain Facebook, Instagram, and
Twitter accounts. As laws and regulations rapidly evolve to govern the use of these platforms and devices, the failure by
us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these
platforms and devices could adversely impact our business, financial condition and results of operations or subject us to
fines or other penalties.
Our sales can significantly fluctuate based upon shopping seasons, which may cause our results of operations to
fluctuate disproportionately on a quarterly basis.
Because of a traditionally higher level of sales during the Christmas shopping season, our sales are typically
higher in the third fiscal quarter than they are in the other fiscal quarters. We also incur significant additional costs and
expenses during our third fiscal quarter due to increased staffing levels and higher purchase volumes. Accordingly, the
results of a single fiscal quarter should not be relied on as an indication of our annual results or future performance. In
addition, any factors that harm our third fiscal quarter results of operations could have a disproportionate effect on our
results of operations for the entire fiscal year.
We buy and stock merchandise based upon seasonal weather patterns and therefore unseasonable or extreme weather
could negatively impact our sales, financial condition and results of operations.
We buy and stock merchandise for sale based upon expected seasonal weather patterns. If we encounter
unseasonable weather, such as warmer winters or cooler summers than would be considered typical, these weather
variations could cause some of our merchandise to be inconsistent with what consumers wish to purchase, causing our
sales to decline. In addition, weather conditions affect the demand for our products, which in turn has an impact on
prices. In past years, weather conditions, including unseasonably warm weather in winter months, and extreme weather
conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes, extreme rain and droughts,
have affected our sales and results of operations both positively and negatively. Furthermore, extended unseasonable
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weather conditions, particularly in California or Texas, will likely have a greater impact on our sales because of our store
concentration in those regions. Our strategy is to remain flexible and to react to unseasonable and extreme weather
conditions by adjusting our merchandise assortments and redirecting inventories to stores affected by the weather
conditions. Should such a strategy not be effective, unseasonable or extreme weather may have a material adverse effect
on our financial condition and results of operations.
Litigation costs and the outcome of litigation could have a material adverse effect on our business.
Our business is characterized by a high volume of customer traffic and by transactions involving a wide variety
of product selections, each of which exposes us to a high risk of consumer litigation. From time to time we may be
subject to litigation claims through the ordinary course of our business operations regarding, but not limited to,
employment matters, compliance with the Americans with Disabilities Act of 1990, footwear, apparel and accessory
safety standards, security of customer and employee personal information, contractual relations with suppliers, marketing
and infringement of trademarks and other intellectual property rights. Litigation to defend ourselves against claims by
third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in
substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition,
results of operations or cash flows.
Our failure to maintain adequate internal controls over our financial and management systems may cause errors in
our financial reporting. These errors may cause a loss of investor confidence and result in a decline in the price of
our common stock.
Our public company reporting obligations and our anticipated growth may place additional burdens on our
financial and management systems, internal controls and employees. As a public company, we are required to maintain
internal control over financial reporting. Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to file a
report by management on the effectiveness of our internal control over financial reporting.
Maintaining internal controls is time consuming and costly. If we identify any material weaknesses or
deficiencies that aggregate to a material weakness in our internal controls, we will have to implement appropriate
changes to these controls, which may require specific compliance training for our directors, officers and employees,
require the hiring of additional finance, accounting, legal and other personnel, entail substantial costs to modify our
existing accounting systems and take a significant period of time to complete. Such changes may not, however, be
effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent
inability to produce accurate financial statements on a timely basis, could increase our operating costs and could
materially impair our ability to operate our business. If we are unable to maintain effective internal control over financial
reporting, including because of an inability to remediate any such material weakness, or if our management is unable to
report that our internal control over financial reporting is effective when required, investors may lose confidence in the
accuracy and completeness of our financial reports and the market price of our common stock could be negatively
affected. As a result, our failure to maintain effective internal controls could result in us being subject to regulatory
action and a loss of investor confidence in the reliability of our financial statements, both of which in turn could cause
the market value of our common stock to decline and affect our ability to raise capital.
If we fail to obtain and retain high-visibility sponsorship or endorsement arrangements with celebrities, or if the
reputation of any of the celebrities that we partner with is impaired, our business may suffer.
A component of our marketing program is to partner with well-known country music artists and other
celebrities for sponsorship and endorsement arrangements. Although we have partnered with several well-known
celebrities in this manner, some of these persons may not continue their endorsements, may not continue to succeed in
their fields or may engage in activities which could bring disrepute on themselves and, in turn, on us and our brand
image and products. We also may not be able to attract and partner with new celebrities that may emerge in the future.
Competition for endorsers is significant and adverse publicity regarding us or our industry could make it more difficult
to attract and retain endorsers. Any of these failures by us or the celebrities that we partner with could adversely affect
our business and revenues.
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We may be subject to liability if we, or our suppliers, infringe upon the intellectual property rights of third parties.
We may be subject to claims that our activities or the products that we sell infringe upon the intellectual
property rights of others. Any such claims can be time consuming and costly to defend, and may divert our
management’s attention and resources, even if the claims are meritless. If we were to be found liable for any such
infringement, we could be required to enter into costly settlements or license agreements and could be subject to
injunctions preventing further infringement. Such infringement claims could harm our brand image. In addition, any
payments that we are required to make and any injunction with which we are required to comply as a result of such
infringement actions could adversely affect our financial results.
We purchase merchandise from suppliers that may be subject to design copyrights or design patents, or
otherwise may incorporate protected intellectual property. We are not involved in the manufacture of any of the
merchandise we purchase from our suppliers for sale to our customers, and we do not independently investigate whether
these suppliers legally hold intellectual property rights to merchandise that they are manufacturing or distributing. As a
result, we rely upon the suppliers’ representations set forth in our purchase orders and supplier agreements concerning
their right to sell us the products that we purchase from them. If a third party claims to have licensing rights with respect
to merchandise we purchased from a supplier, or if we acquire unlicensed merchandise, we could be obligated to remove
such merchandise from our stores, incur costs associated with destruction of such merchandise if the distributor or
supplier is unwilling or unable to reimburse us and be subject to liability under various civil and criminal causes of
action, including actions to recover unpaid royalties and other damages and injunctions. Any of these results could harm
our brand image and have a material adverse effect on our business and growth.
If we are unable to protect our intellectual property rights, our financial results may be negatively impacted.
Our success depends in large part on our brand image. Our name, logo, domain names and our exclusive brands
and other intellectual property are valuable assets that differentiate us from our competitors. We currently rely on a
combination of copyright, trademark, trade dress and unfair competition laws to establish and protect our intellectual
property rights, but the steps taken by us to protect our proprietary rights may be inadequate to prevent infringement of
our trademarks and proprietary rights by others, including imitation and misappropriation of our brand. Additional
obstacles may arise as we expand our product lines and geographic scope. Moreover, litigation may be necessary to
protect or enforce these intellectual property rights, which could result in substantial costs and diversion of our resources,
causing a material adverse effect on our business, financial condition, results of operations or cash flows. The
unauthorized use or misappropriation of our intellectual property or our failure to protect our intellectual property rights
could damage our brand image and the goodwill we have created, which could cause our sales to decline.
We have not registered any of our intellectual property outside of the U.S. with the exception of the Boot Barn
tradenames which are registered in China and Hong Kong. We cannot prohibit other companies from using our other
trademarks in foreign countries. Use of these other trademarks in foreign countries could negatively impact our identity
in the U.S. and cause our sales to decline.
Union attempts to organize our employees could negatively affect our business.
Currently, none of our employees are represented by a union. However, if some or all of our workforce were to
unionize and the terms of the collective bargaining agreement were significantly different from our current compensation
arrangements, it could increase our costs and adversely impact our profitability. Moreover, participation in labor unions
could put us at increased risk of labor strikes and disruption of our operations. Responding to unionization attempts may
distract management and our workforce. Any of these changes could adversely affect our business, financial condition,
results of operations or cash flows.
Issues with merchandise safety could damage our reputation, sales and financial results.
Various governmental authorities in the jurisdictions where we do business regulate the safety of the
merchandise we sell to consumers. Regulations and standards in this area, including those related to the U.S. Consumer
Product Safety Improvement Act of 2008, state regulations like California's Proposition 65, and similar legislation,
30
impose restrictions and requirements on the merchandise we sell in our stores and through our e-commerce websites.
These regulations change from time to time as new federal, state or local regulations are enacted. If we or our vendors
are unable to comply with regulatory requirements on a timely basis or at all, significant fines or penalties could be
incurred or we could have to curtail some aspects of our sales or operations, which could have a material adverse effect
on our business, financial condition, results of operations or cash flows.
We rely on our vendors to provide quality merchandise that complies with applicable product safety laws and
other applicable laws, but they may not comply with their obligations to do so. Although our arrangements with our
vendors frequently provide for indemnification for product liabilities, the vendors may fail to honor those obligations to
an extent we consider sufficient or at all. Issues with the safety of merchandise or customer concerns about such issues,
regardless of our fault, could cause damage to our reputation and could result in lost sales, uninsured product liability
claims or losses, merchandise recalls and increased costs, and regulatory, civil or criminal fines or penalties, any of
which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Violations of or changes in laws, including employment laws and laws related to our merchandise, could make
conducting our business more expensive or change the way we do business.
We are subject to numerous regulations, including labor and employment, customs, truth-in-advertising,
consumer protection, environmental and occupational safety requirements and zoning and occupancy laws and
ordinances that regulate retailers generally, that govern the importation, promotion and sale of merchandise and/or that
regulate the operation of stores and distribution centers. If these regulations were violated by our management,
employees or suppliers, the costs of certain goods could increase, or we could experience delays in shipments of our
goods, be subject to fines or penalties or suffer reputational harm, which could reduce demand for our merchandise and
hurt our business and results of operations.
Similarly, changes in laws could make operating our business more expensive or require us to change the way
we do business. In addition, changes in product safety or other consumer protection laws could lead to increased costs
for certain merchandise, or additional labor costs associated with readying merchandise for sale. It may be difficult for us
to foresee regulatory changes impacting our business and our actions needed to respond to changes in the law could be
costly and may negatively impact our operations.
We may engage in strategic transactions that could negatively impact our liquidity, increase our expenses and present
significant distractions to our management.
We have made strategic acquisitions in the past and may in the future consider strategic transactions and
business arrangements, including, but not limited to, acquisitions, asset purchases, partnerships, joint ventures,
restructurings, divestitures and investments. The success of such a transaction is based on our ability to make accurate
assumptions regarding the valuation, operations, growth potential, integration and other factors relating to the respective
business. Acquisitions may result in difficulties in assimilating acquired companies and may result in the diversion of
our capital and our management’s attention from other business issues and opportunities. We may be unable to
successfully integrate operations that we acquire, including their personnel, financial systems, distribution, operations
and general operating procedures. Any such transaction may require us to incur non-recurring or other charges, may
increase our near and long-term expenditures and may pose significant integration challenges or disrupt our management
or business, which could harm our operations and financial results.
Terrorism or civil unrest could negatively affect our business.
Terrorist attacks, threats of terrorist attacks or civil unrest involving public areas could cause people to avoid
visiting some areas where our stores are located. Further, armed conflicts or acts of war throughout the world may create
uncertainty, causing consumers to spend less on discretionary purchases, including on footwear, apparel and accessories,
or disrupt our ability to obtain merchandise for our stores and e-commerce websites. Such decreases in consumer
spending or disruptions in our ability to obtain merchandise would likely decrease our sales and materially adversely
affect our financial condition and results of operations.
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If our goodwill, intangible assets or long-lived assets become impaired, we may be required to record a significant
charge to earnings.
We have a significant amount of goodwill and indefinite-lived intangible assets. Our goodwill balance as of
March 30, 2024 was $197.5 million. Our intangible asset balance as of March 30, 2024 was $58.7 million. We test
goodwill and intangible assets for impairment at least annually or more frequently if indicators of impairment exist.
Long-lived assets are tested for impairment only if indicators of impairment exist, such as significant negative industry
or general economic trends. Goodwill, intangible assets and long-lived assets are considered to be impaired when the net
book value of the asset exceeds its estimated fair value. An impairment of a significant portion of our goodwill,
intangible assets or long-lived assets could materially adversely affect our financial condition and results of operations.
Risks Related to Ownership of Our Common Stock
The market price and trading volume of our common stock have been and may continue to be volatile, which could
result in rapid and substantial losses for our stockholders, who may lose all or part of their investment.
The market for specialty retail stocks can be highly volatile. Since our IPO in October 2014 through May 2024,
our common stock has traded as high as $134.50 and as low as $5.20. An active, liquid and orderly market for our
common stock may not be sustained, which could depress the trading price of our common stock or cause it to be highly
volatile or subject to wide fluctuations. The market price of our common stock has and may continue to fluctuate or may
decline significantly in the future and you could lose all or part of your investment. Some of the factors that could
negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:
•
variations in our quarterly or annual financial results and operating performance and the performance of our
competitors;
•
publication of research reports or recommendations by securities or industry analysts about us, our
competitors or our industry, or a lack of such securities analyst coverage;
•
our failure or our competitors’ failure to meet analysts’ projections or guidance;
•
downgrades by any securities analysts who follow our common stock;
•
our levels of same store sales;
•
sales or anticipated sales of large blocks of our common stock;
•
changes to our management team;
•
regulatory developments negatively affecting our industry;
•
changes in stock market valuations of our competitors;
•
the development and sustainability of an active trading market for our common stock;
•
the public’s response to press releases or other public announcements by us or third parties, including our
filings with the SEC;
•
the performance and successful integration of any new stores that we open or acquire;
•
actions by competitors;
•
announcements by us or our competitors of new product offerings or significant acquisitions;
32
•
short selling of our common stock by investors;
•
limited “public float” in the hands of a small number of persons whose sales or lack of sales of our
common stock could result in positive or negative pricing pressure on the market price for our common
stock;
•
fluctuations in the stock markets generally and in the market for shares in the retail sector particularly; and
•
changes in general market and economic conditions, including as a result of other geopolitical conditions,
such as the ongoing conflict between Russia and the Ukraine.
Further, securities class action litigation has often been initiated against companies following periods of
volatility in their stock price. This type of litigation, should it materialize, could result in substantial costs and divert our
management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to
settle litigation. The threat or filing of class action litigation could cause the price of our common stock to decline.
Anti-takeover provisions in our corporate organizational documents and current credit facility and under Delaware
law may delay, deter or prevent a takeover of us and the replacement or removal of our management, even if such a
change of control would benefit our stockholders.
The anti-takeover provisions under Delaware law, as well as the provisions contained in our corporate
organizational documents, may make an acquisition of us more difficult. For example:
•
our amended and restated certificate of incorporation includes a provision authorizing our board of
directors to issue blank check preferred stock without stockholder approval, which, if issued, would
increase the number of outstanding shares of our capital stock and make it more difficult for a stockholder
to acquire us;
•
our amended and restated bylaws provide that director vacancies and newly created directorships can only
be filled by an affirmative vote of a majority of directors then in office;
•
our amended and restated bylaws require advance notice of stockholder proposals and director
nominations;
•
our amended and restated certificate of incorporation provides that our board of directors may adopt,
amend, add to, modify or repeal our amended and restated bylaws without stockholder approval;
•
our amended and restated bylaws do not permit our stockholders to act by written consent without a
meeting unless that action is taken with regard to a matter that has been approved by our board of directors
or requires the approval only of certain classes or series of our stock;
•
our amended and restated certificate of incorporation contains a requirement that, to the fullest extent
permitted by law, certain proceedings against or involving us or our directors, officers or employees must
be brought exclusively in the Court of Chancery of the State of Delaware unless we consent in writing to an
alternative forum;
•
our amended and restated bylaws do not permit our stockholders to call special meetings; and
•
the General Corporation Law of the State of Delaware, or the DGCL, may prevent any stockholder or
group of stockholders owning at least 15% of our common stock from completing a merger or acquisition
of us.
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Our current credit facility also contains provisions that could have the effect of making it more difficult or less
attractive for a third party to acquire control of us. Our current credit facility provides that a change of control constitutes
an event of default under such credit facility and would permit the lenders to declare the indebtedness incurred
thereunder to be immediately due and payable. Our future credit facilities may contain similar provisions. The need to
repay all such indebtedness may deter potential third parties from acquiring us.
Under these various provisions in our amended and restated certificate of incorporation, amended and restated
bylaws and current credit facility, a takeover attempt or third-party acquisition of us, including a takeover attempt that
may result in a premium over the market price for shares of our common stock, could be delayed, deterred or prevented.
In addition, these provisions may prevent the market price of our common stock from increasing in response to actual or
rumored takeover attempts and may also prevent changes in our management. As a result, these anti-takeover and change
of control provisions may limit the price that investors are willing to pay in the future for shares of our common stock.
If securities or industry analysts do not publish research and reports or publish inaccurate or unfavorable research
and reports about our business, the price and trading volume of our common stock could decline.
The trading market for our common stock is influenced by the research and reports that securities or industry
analysts publish about us or our business. If securities or industry analyst coverage of one or more of the analysts who
covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, the price of
our common stock would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports
on us regularly, demand for our common stock could decrease, which could cause the price of our common stock and
trading volume to decline.
We do not currently intend to pay cash dividends on our common stock, which may make our common stock less
desirable to investors and decrease its value.
Although we regularly evaluate our capital structure and opportunities to create value for our shareholders, we
currently intend to retain all of our available funds for use in the operation and expansion of our business and do not
anticipate paying any cash dividends on our common stock for the foreseeable future. Any future determination to pay
cash dividends on our common stock will be at the discretion of our board of directors and will depend upon many
factors, including our financial condition, results of operations and liquidity, legal requirements and restrictions that may
be imposed by the terms of our current credit facility and in any future financing instruments. Therefore, you may only
receive a return on your investment in our common stock if the market price increases above the price at which you
purchased it, which may never occur.
Our business could be impacted as a result of actions by activist stockholders or others.
We may be subject, from time to time, to legal and business challenges in the operation of our company due to
actions instituted by activist shareholders or others. Responding to such actions, which may include private engagement,
publicity campaigns, proxy contests, efforts to force transactions not supported by our board, and litigation, could be
costly and time-consuming, may not align with our strategic plan and could divert the time and attention of our board
and management from our business. Perceived uncertainties as to our future direction as a result of stockholder activism
may lead to the perception of a change in the direction of the business or other instability and may affect our stock price,
relationships with vendors, customers, prospective and current team members and others.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
We believe cybersecurity is of critical importance to our success. We are susceptible to a number of significant
and persistent cybersecurity threats, including those common to most industries as well as those we face as a retailer,
operating in an industry characterized by a high volume of customer transactions and collection of sensitive data. These
threats, which are constantly evolving, include data breaches, ransomware, and phishing attacks. We, and our vendors
and suppliers, regularly face attempts by malicious actors to breach our security and compromise our information
technology systems, and a cybersecurity incident impacting us or any vendor or supplier could significantly disrupt our
operations and result in damage to our reputation, costly litigation and/or government enforcement action. Accordingly,
we are committed to maintaining robust cybersecurity and data protection and continuously evaluate the impact of
cybersecurity threats, considering both immediate and potential long-term effects of these threats on our business
strategy, operations, and financial condition.
The Audit Committee, under oversight of the Board of Directors, has responsibility for oversight of risks from
cybersecurity threats, and the assessment and management of cybersecurity risks is the responsibility of the Information
Security (“INFOSEC”) team. The INFOSEC team is managed by the Vice President, Information Technology, who
reports to our Chief Executive Officer. Our current Vice President, Information Technology and other members of our
INFOSEC team collectively have more than 60 years of experience in information technology and extensive education
and industry experience managing cybersecurity risks, developing and implementing cybersecurity policies, and
responding to cybersecurity incidents.
Under the oversight of the Audit Committee, our management and the INFOSEC team have established
comprehensive processes for identifying, assessing and managing material risks from cybersecurity threats, and these
processes are integrated into our overall enterprise risk management program. Our approach is proactive and adaptive,
featuring regular security assessments, third-party audits, team member training, and continuous improvement of our
cybersecurity infrastructure. We work to align our practices with industry best practices and regulatory standards. We
continually evaluate our information technology systems to identify new and monitor existing cybersecurity risks based
on observed activity on the systems. We evaluate the nature and severity of identified risks, and whether changes to the
system are necessary. We perform annual cybersecurity training for all employees with access to our systems and
conduct regular test phishing campaigns. We engage a third-party to assist in monitoring, preventing and detecting
potential cybersecurity vulnerabilities and incidents, including performing scans of our information technology systems
and penetration testing. We use the results of the various tests to inform our response plan, update our systems, and train
employees.
Upon the identification of a cybersecurity incident, the Incident Response Team (IRT) initiates our Security
Incident Response Policy. This includes determining the scope and risk level of the incident, the incident response, and
the steps necessary to reduce the likelihood of reoccurrence. Depending on the severity of the incident, the IRT
communicates with the appropriate stakeholders, which may include the Audit Committee. In addition, a summary of
cybersecurity incidents, results of testing, corporate security training and planned enhancements are reported to the Audit
Committee at least quarterly by the Vice President, Information Technology.
Our third-party vendors and service providers also play a role in our cybersecurity. These third parties are
integral to our operations but pose cybersecurity challenges due to their access to our data and our reliance for various
aspects of our operations, including our supply chain. We have developed a third-party vendor risk management program
to assess and manage the risks associated with third-party partnerships, particularly in data security and cybersecurity.
We conduct due diligence before onboarding new vendors and maintain ongoing evaluations to ensure compliance with
our security standards.
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As of the date of this report, no cybersecurity incidents have had, either individually or in the aggregate, nor are
we aware of any cybersecurity risks that are reasonably likely to have, a material adverse impact our business strategy,
results of operations, or financial condition. Notwithstanding the extensive approach we take to cybersecurity, we may
not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. For
additional discussion of the risks we face from cybersecurity threats, see risk factor titled “Our management information
systems and databases could be disrupted by system security failures, cyber threats or by the failure of, or lack of access
to, our Enterprise Resource Planning system. These disruptions could negatively impact our sales, increase our expenses,
subject us to liability and/or harm our reputation.” in Item 1A. “Risk Factors.”
Item 2. Properties
Our Store Support Center, e-commerce operations and distribution centers are located in California, Kansas,
and Missouri. As of March 30, 2024, our Store Support Center is located in Irvine, California, where we currently
occupy an 84,580 square foot building. The existing lease will expire January 31, 2025, and does not contain an option to
renew beyond the current lease term.
We have entered into lease agreements to lease a 116,261 square foot building in Irvine, California. We will be
relocating our Store Support Center during fiscal 2025.
In Fontana, California, we lease a 398,471 square foot distribution center that holds inventory to support our
exclusive brand initiatives, bulk purchasing programs, event sales, new store openings, and our e-commerce business.
Our existing lease expires May 31, 2026, and contains one option to renew, for an additional period of five years.
In Wichita, Kansas, we lease a 133,428 square foot distribution center to support our e-commerce business and
30,000 square feet of office space. This lease expires August 31, 2035 and contains four additional options to renew,
each for a period of five years. We also lease an additional freestanding building in Wichita, Kansas, totaling 21,275
square feet. The building is being used as office and distribution center space to support our e-commerce business. The
lease expires September 30, 2025 and does not contain an option to renew, but we are seeking an additional two year
extension.
In Kansas City, Missouri, we lease a 459,680 square foot distribution center that holds inventory to support our
exclusive brand initiatives, bulk purchasing programs, and our e-commerce business. Our lease expires November 30,
2032 and contains two options to renew, each for an additional five years.
Most of our stores are occupied under operating leases. The store leases generally have a base lease term of five
or 10 years, with one or more renewal periods of five years, on average, exercisable at our option. Of the store leases that
will reach their termination date during fiscal 2025, thirteen of those leases do not contain an option to automatically
extend the lease term. We are generally responsible for the payment of property taxes and insurance, utilities and
common area maintenance fees.
Item 3. Legal Proceedings
We are involved, from time to time, in litigation that is incidental to our business. We have reviewed these
matters to determine if reserves are required for losses that are probable and reasonable to estimate in accordance with
FASB ASC Topic 450, Contingencies. We evaluate such reserves, if any, based upon several criteria, including the
merits of each claim, settlement discussions and advice from outside legal counsel, as well as indemnification of
amounts expended by our insurers or others, if any.
During the normal course of our business, we have made certain indemnifications and commitments under
which we may be required to make payments for certain transactions. These indemnifications include those given to
various lessors in connection with facility leases for certain claims arising from such facility leases, and indemnifications
to our directors and officers to the maximum extent permitted under the laws of the State of Delaware. The majority of
these indemnifications and commitments do not provide for any limitation of the maximum potential future payments we
36
could be obligated to make, and their duration may be indefinite. We have not recorded any liability for these
indemnifications and commitments in the consolidated balance sheets as the impact is expected to be immaterial.
Item 4. Mine Safety Disclosures
Not applicable.
37
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock has been listed on the New York Stock Exchange under the symbol “BOOT” since
October 30, 2014, the day after our initial public offering. As of May 13, 2024, we had 4 stockholders of record. The
number of stockholders of record is based upon the actual number of stockholders registered at such date and does not
include holders of shares in “street names” or persons, partnerships, associations, corporations or other entities identified
in security position listings maintained by depositories.
Dividends
Since our common stock began trading, we have not declared any cash dividends, and we do not anticipate
declaring any cash dividends in the foreseeable future. The agreements governing our indebtedness contain restrictions
on dividends.
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by this Item is incorporated herein by reference to the Company’s Proxy Statement for
the 2024 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after the close of the
fiscal year ended March 30, 2024 (the “2024 Proxy Statement”).
Stock Performance Graph
The graph set forth below compares the cumulative stockholder return on our common stock between
March 30, 2019 and March 30, 2024 to the cumulative return of (i) the NYSE Composite Total Return index and (ii) an
index of peer and comparable companies as determined by the Company (“Peer Group”). The companies currently
comprising the Peer Group are: The Buckle, Inc.; Caleres, Inc.; DBI, Inc. (formerly DSW, Inc.); Foot Locker, Inc.;
Genesco, Inc.; Tractor Supply Co.; Wolverine World Wide, Inc.; and Zumiez, Inc. This graph assumes an initial
investment of $100 on March 30, 2019 in our common stock, the NYSE Composite Total Return index and the Peer
Group, and assumes the reinvestment of dividends, if any. The graph also assumes that the initial price of our common
stock, the NYSE composite Total Return index and the Peer Group on March 30, 2019 were the closing prices on that
trading day.
38
Comparison of Cumulative Total Return
Assumes Initial Investment of $100
March 2018 - April 2023
March 30,
March 28,
March 27,
March 26,
April 1,
March 30,
2019
2020
2021
2022
2023
2024
Boot Barn Holdings, Inc.
$ 100.00
$ 45.41
$ 215.01
$ 327.89
$ 260.33
$ 323.20
NYSE Composite—Total Return
$ 100.00
$ 82.31
$ 129.68
$ 141.84
$ 133.21
$ 161.69
Peer Group
$ 100.00
$ 71.71
$ 161.11
$ 211.80
$ 220.59
$ 259.08
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with the consolidated financial statements and the
accompanying notes included elsewhere in this annual report. The statements in the following discussion and analysis
regarding expectations about our future performance, liquidity and capital resources and any other non-historical
statements in this discussion and analysis are forward-looking statements. These forward-looking statements are subject
to numerous risks and uncertainties, including, but not limited to, those described under “Risk Factors” and
“Forward-Looking Statements” elsewhere in this annual report. Our actual results could differ materially from those
contained in or implied by any forward-looking statements.
39
We have omitted discussion of our fiscal 2023 results where it would be redundant of information previously
disclosed. For a comparison of our fiscal 2023 versus fiscal 2022 results, please see the discussion previously included
in Part II, Item 7 of our fiscal 2023 Annual Report on Form 10-K filed with the SEC on May 18, 2023.
Overview
We are the largest lifestyle retail chain devoted to western and work-related footwear, apparel and accessories
in the United States. As of March 30, 2024, we operated 400 stores in 45 states, as well as an e-commerce channel,
consisting primarily of bootbarn.com, sheplers.com, countryoutfitter.com, idyllwind.com and third-party marketplaces.
Our stores feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable store
associates. Our product offering is anchored by an extensive selection of western and work boots and is complemented
by a wide assortment of coordinating apparel and accessories. Many of the items that we offer are basics or necessities
for our customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing
fashion trends.
We strive to offer an authentic, one-stop shopping experience that fulfills the everyday lifestyle needs of our
customers, and as a result, many of our customers make purchases in both the western and work wear sections of our
stores. We target a broad and growing demographic, ranging from passionate western and country enthusiasts, to
workers seeking dependable, high-quality footwear and clothing. Our broad geographic footprint, which comprises more
than four times as many stores as our nearest direct competitor that sells primarily western and work wear, provides us
with significant economies of scale, enhanced supplier relationships, the ability to recruit and retain high quality store
associates and the ability to reinvest in our business at levels that we believe exceed those of our competition.
Growth Strategies and Outlook
Over the long-term we plan to continue to expand our business, increase our sales growth and profitability and
enhance our competitive position by executing the following strategies:
•
continuing omni-channel leadership;
•
driving same store sales growth;
•
building our exclusive brand portfolio; and
•
expanding our store base
Since the founding of Boot Barn in 1978, we have grown both organically and through successful strategic
acquisitions of competing chains. We have rebranded and remerchandised the acquired chains under the Boot Barn
banner, resulting in sales increases over their original concepts. We believe that our business model and scale provide us
with competitive advantages that have contributed to our consistent financial performance, generating sufficient cash
flow to support national growth.
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of performance and financial measures. The
key indicators we use to evaluate the financial condition and operating performance of our business are net sales and
gross profit. In addition, we also review other important metrics, such as same store sales, new store openings, selling,
general and administrative (“SG&A”) expenses, and operating income.
Net sales
Net sales reflect revenue from the sale of our merchandise at retail locations, as well as sales of merchandise
through our e-commerce websites. We recognize revenue upon the purchase of merchandise by customers at our stores
40
and upon delivery of the product in the case of our e-commerce websites. Net sales also include shipping and handling
fees for e-commerce shipments that have been delivered to our customers. Net sales are net of returns on sales during the
period as well as an estimate of returns and award redemptions expected in the future stemming from current period
sales. Revenue from the sale of gift cards is deferred until the gift cards are used to purchase merchandise.
Our business is moderately seasonal and as a result our revenues fluctuate from quarter to quarter. In addition,
our revenues in any given quarter can be affected by a number of factors including the timing of holidays and weather
patterns. The third quarter of our fiscal year, which includes the Christmas shopping season, has historically produced
higher sales and disproportionately higher operating results than the other quarters of our fiscal year. In fiscal 2024,
fiscal 2023 and fiscal 2022 we generated approximately 31%, 31% and 33% of our net sales during our third fiscal
quarter, respectively. In addition, neither the western nor the work component of our business has been meaningfully
impacted by fashion trends or seasonality historically. We believe that many of our customers are driven primarily by
utility and brand, and our best-selling styles.
Same store sales
The term “same store sales” generally refers to net sales from stores that have been open at least 13 full fiscal
months (“comparable stores”) as of the end of the current reporting period, although we include or exclude stores from
our calculation of same store sales in accordance with the following additional criteria:
•
stores that are closed for five or fewer consecutive days in any fiscal month are included in same store
sales;
•
stores that are closed temporarily, but for more than five consecutive days in any fiscal month, are excluded
from same store sales beginning in the fiscal month in which the temporary closure begins (and for the
comparable periods of the prior or subsequent fiscal periods for comparative purposes); until the first full
month of operation once the store re-opens;
•
stores that are closed temporarily and relocated within their respective trade areas are included in same
store sales;
•
stores that are permanently closed are excluded from same store sales beginning in the month preceding
closure (and for the comparable periods of the prior or subsequent fiscal periods for comparative purposes);
and
•
acquired stores are added to same store sales beginning on the later of (a) the applicable acquisition date
and (b) the first day of the first fiscal month after the store has been open for at least 13 full fiscal months
regardless of whether the store has been operated under our management or predecessor management.
If the criteria described with respect to acquired stores above are met, then all net sales of an acquired store,
excluding those net sales before our acquisition of that store, are included for the period presented. However, when an
acquired store is included for the period presented, the net sales of such acquired store for periods before its acquisition
are included (to the extent relevant) for purposes of calculating “same stores sales growth” and illustrating the
comparison between the applicable periods. Pre-acquisition net sales numbers are derived from the books and records of
the acquired company, as prepared prior to the acquisition, and have not been independently verified by us.
In addition to retail store sales, same store sales also includes e-commerce sales, e-commerce shipping and
handling revenue and actual retail store or e-commerce sales returns. Sales as a result of an e-commerce asset acquisition
are excluded from same store sales until the 13th full fiscal month subsequent to the Company’s acquisition of such
assets.
41
Measuring the change in year-over-year same store sales allows us to evaluate how our store base is performing.
Numerous factors affect our same store sales, including:
•
national and regional economic trends;
•
our ability to identify and respond effectively to regional consumer preferences;
•
changes in our product mix;
•
changes in pricing;
•
competition;
•
changes in the timing of promotional and advertising efforts;
•
holidays or seasonal periods; and
•
weather.
Opening new stores is an important part of our growth strategy. We opened 55, 45, and 28 stores in fiscal 2024,
2023 and 2022, respectively. We also closed one store in fiscal 2022 (and none in fiscal 2024 or 2023). Accordingly,
same store sales are only one measure we use to assess the success of our business and growth strategy. Some of our
competitors and other retailers may calculate “same” or “comparable” store sales differently than we do. As a result, data
in this annual report regarding our same store sales may not be comparable to similar data made available by other
retailers.
New store openings
New store openings reflect the number of stores, excluding acquired stores, that are opened during a particular
reporting period. In connection with opening new stores, we incur pre-opening costs. Pre-opening costs consist of costs
incurred prior to opening a new store and primarily consist of manager and other employee payroll, travel and training
costs, marketing expenses, initial opening supplies and costs of transporting initial inventory and certain fixtures to store
locations, as well as occupancy costs incurred from the time that we take possession of a store site to the opening of that
store. Occupancy costs are included in cost of goods sold and the other pre-opening costs are included in SG&A
expenses. All of these costs are expensed as incurred.
New stores often open with a period of high sales levels, which subsequently decrease to normalized sales
volumes. In addition, we experience typical inefficiencies in the form of higher labor, advertising and other direct
operating expenses, and as a result, store-level profit margins at our new stores are generally lower during the start-up
period of operation. The number and timing of store openings have had, and are expected to continue to have, a
significant impact on our results of operations. In assessing the performance of a new store, we review its actual sales
against the sales that we projected that store to achieve at the time we initially approved its opening. We also review the
actual number of stores opened in a fiscal year against the number of store openings that we included in our budget at the
beginning of that fiscal year.
Gross profit
Gross profit is equal to our net sales less our cost of goods sold. Cost of goods sold includes the cost of
merchandise, obsolescence and shrinkage provisions, store and distribution center occupancy costs (including rent,
depreciation and utilities), inbound and outbound freight, supplier allowances, occupancy-related taxes, inventory
acquisition-related costs, and compensation costs for merchandise purchasing, exclusive brand design and development
and distribution center personnel. These costs are significant and can be expected to continue to increase as we grow.
42
The components of our reported cost of goods sold may not be comparable to those of other retail companies, including
our competitors.
Our gross profit generally follows changes in net sales. We regularly analyze the components of gross profit, as
well as gross profit as a percentage of net sales. Specifically, we examine the initial markup on purchases, markdowns
and reserves, shrinkage, buying costs, distribution costs and occupancy costs. Any inability to obtain acceptable levels of
initial markups, or a significant increase in our use of markdowns or in inventory shrinkage, or a significant increase in
freight and other inventory acquisition costs could have an adverse impact on our gross profit and results of operations.
Gross profit is also impacted by shifts in the proportion of sales of our exclusive brand products compared to
third-party brand products, as well as by sales mix shifts within and between brands and between major product
categories such as footwear, apparel or accessories.
Selling, general and administrative expenses
Our selling, general and administrative (“SG&A”) expenses are composed of labor and related expenses, other
operating expenses, and general and administrative expenses not included in cost of goods sold. Specifically, our SG&A
expenses include the following:
•
Labor and related expenses—Labor and related expenses include all store-level salaries and hourly labor
costs, including salaries, wages, benefits and performance incentives, labor taxes and other indirect labor
costs.
•
Other operating expenses—Other operating expenses include all operating costs, including those for
advertising, pay-per-click, marketing campaigns, operating supplies, and repairs and maintenance, as well
as credit card fees and costs of third-party services.
•
General and administrative expenses—General and administrative expenses comprise expenses associated
with corporate and administrative functions that support the development and operations of our stores,
including compensation and benefits, travel expenses, corporate occupancy costs, stock compensation
costs, legal and professional fees, insurance and other related corporate costs.
The components of our SG&A expenses may not be comparable to those of our competitors and other retailers.
We expect our selling, general and administrative expenses will increase in future periods as a result of incremental
share-based compensation, legal, accounting and other compliance-related expenses and increases resulting from growth
in the number of our stores.
Fiscal Year
We operate on a fiscal calendar which results in a 52- or 53-week fiscal year ending on the last Saturday of
March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. In a 52-week fiscal year, each
quarter includes thirteen weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include
thirteen weeks of operations and the fourth quarter includes fourteen weeks of operations. Fiscal 2024 was a 52-week
period, fiscal 2023 was a 53-week period and fiscal 2022 was a 52-week period. For ease of reference, we identify our
fiscal years by reference to the calendar year in which the fiscal year ends.
Results of Operations
The following table summarizes key components of our results of operations for the periods indicated, both in
dollars and as a percentage of our net sales. The following discussion contains references to fiscal 2024, fiscal 2023, and
43
fiscal 2022, which represent our fiscal years ended March 30, 2024, April 1, 2023 and March 26, 2022. Fiscal 2024 was
a 52-week period, fiscal 2023 was a 53-week period and fiscal 2022 was a 52-week period.
Fiscal Year Ended
March 30,
April 1,
March 26,
(dollars in thousands)
2024
2023
2022
Consolidated Statements of Operations Data:
Net sales
$ 1,667,009
$ 1,657,615
$ 1,488,256
Cost of goods sold
1,052,585
1,047,043
913,183
Gross profit
614,424
610,572
575,073
Selling, general and administrative expenses
416,210
378,785
316,735
Income from operations
198,214
231,787
258,338
Interest expense
2,238
5,880
5,780
Other (loss)/income, net
1,396
(29)
35
Income before income taxes
197,372
225,878
252,593
Income tax expense
50,376
55,325
60,143
Net income
$
146,996
$
170,553
$
192,450
Percentage of Net Sales(1):
Net sales
100.0 %
100.0 %
100.0 %
Cost of goods sold
63.1 %
63.2 %
61.4 %
Gross profit
36.9 %
36.8 %
38.6 %
Selling, general and administrative expenses
25.0 %
22.9 %
21.3 %
Income from operations
11.9 %
14.0 %
17.4 %
Interest expense
0.1 %
0.4 %
0.4 %
Other (loss)/income, net
0.1 %
— %
— %
Income before income taxes
11.8 %
13.6 %
17.0 %
Income tax expense
3.0 %
3.3 %
4.0 %
Net income
8.8 %
10.3 %
12.9 %
(1) Percentages may not total 100% due to rounding.
Fiscal 2024 compared to Fiscal 2023
Net sales. Net sales in fiscal 2024 increased by $9.4 million, or 0.6%, to $1.667 billion compared to
$1.658 billion in fiscal 2023. Consolidated same store sales decreased 6.2%. Excluding the impact of the 10.6% decrease
in e-commerce same store sales, same store sales decreased by 5.6%. Net sales increased primarily due to the
incremental sales from new stores opened over the past twelve months partially offset by the decrease in consolidated
same store sales and sales from the 53rd week in the prior year.
Gross profit. Gross profit increased by $3.8 million, or 0.6%, to $614.4 million in fiscal 2024 from
$610.6 million in fiscal 2023. As a percentage of net sales, gross profit was 36.9% and 36.8% for fiscal 2024 and fiscal
2023, respectively. Gross profit increased primarily due to merchandise margin expansion and sales growth. As a
percentage of net sales, gross profit rate was approximately flat driven primarily by a 160 basis-point increase in
merchandise margin rate offset by 160 basis points of deleverage in buying, occupancy and distribution center costs. The
increase in merchandise margin rate was driven primarily by a 120 basis-point improvement in freight expense as a
percentage of net sales and 40 basis points of product margin expansion resulting primarily from growth in exclusive
brand penetration and buying economies of scale. The deleverage in buying, occupancy and distribution center costs was
driven primarily by the higher occupancy costs of new stores, depreciation expense related to the opening of the new
Kansas City distribution center and the impact of a 52-week year when compared to a 53-week year last year.
Selling, general and administrative expenses. SG&A expenses increased by $37.4 million, or 9.9%, to $416.2
million in fiscal 2024 from $378.8 million in fiscal 2023. As a percentage of net sales, SG&A expenses were 25.0% for
fiscal 2024 compared to 22.9% for fiscal 2023. SG&A expenses increased primarily as a result of higher general and
44
administrative expenses, store payroll associated with operating 55 new stores and other operating expenses in the
current year. SG&A expenses as a percentage of net sales increased by approximately 210 basis points primarily as a
result of higher general and administrative expenses and store payroll costs.
Income from operations. Income from operations decreased by $33.6 million, or 14.5%, to $198.2 million for
fiscal 2024 from $231.8 million for fiscal 2023. As a percentage of net sales, income from operations was 11.9% and
14.0% for fiscal 2024 and fiscal 2023, respectively. The change in income from operations was attributable to the factors
noted above.
Interest expense. Interest expense decreased by $3.6 million, or 61.9%, to $2.2 million in fiscal 2024 from
$5.9 million in fiscal 2023. The decrease in interest expense was primarily the result of a lower debt balance, partially
offset by a higher weighted average interest rate compared to the prior year.
Income tax expense. Income tax expense was $50.4 million in fiscal 2024 compared to $55.3 million in fiscal
2023. Our effective tax rate was 25.5% and 24.5% for fiscal 2024 and fiscal 2023, respectively. The effective tax rate for
fiscal 2024 is higher than fiscal 2023 primarily due to changes to state enacted tax rates, partially offset by a higher tax
benefit due to income tax accounting for share-based compensation compared to the prior year.
Net income. Net income decreased by $23.6 million, or 13.8%, to $147.0 million in fiscal 2024 from net income
of $170.6 million in fiscal 2023. The change in net income was attributable to the factors noted above.
Store Operating Data
The following table presents store operating data for the periods indicated:
Fiscal Year Ended
March 30,
April 1,
March 26,
2024
2023
2022
Selected Store Data (unaudited):
Same Store Sales (decline)/growth
(6.2)%
(0.1)%
53.7 %
Stores operating at end of period
400
345
300
Comparable stores open at end of period
335
290
265
Total retail store square footage, end of period (in thousands)
4,371
3,735
3,194
Average store square footage, end of period
10,929
10,825
10,648
Average sales per comparable store (in thousands)(1)
$
4,081
$
4,554
$
4,449
(1) Average sales per comparable store is calculated by dividing comparable store trailing twelve-month sales for the
applicable period by the number of comparable stores operating at the end of the period.
Liquidity and Capital Resources
We rely on cash flows from operating activities and our credit facility as our primary sources of liquidity. Our
primary cash needs are for inventories, operating expenses, occupancy expenses, capital expenditures associated with
opening new stores and remodeling or refurbishing existing stores, improvements to our distribution facilities, marketing
and information technology expenditures, debt service and taxes. We have historically used cash for acquisitions and the
subsequent rebranding and integration of the stores acquired in those acquisitions. In addition to cash and cash
equivalents, the most significant components of our working capital are accounts receivable, inventories, accounts
payable and accrued expenses and other current liabilities. We believe that cash flows from operating activities and the
availability of cash under our credit facility will be sufficient to cover working capital requirements, anticipated capital
expenditures and other anticipated cash needs for at least the next 12 months.
Our liquidity is moderately seasonal. Our cash requirements generally increase in our third fiscal quarter as we
incur additional marketing expenses and increase our inventory in advance of the Christmas shopping season. Our cash
flows from operations increased in fiscal 2024 compared to fiscal 2023, primarily as a result of a $105.6 million decrease
45
in cash paid for inventories year-over-year, a $14.8 million decrease in cash paid for prepaid expenses and other current
assets, and a $15.4 million increase in cash provided by accounts payable and accrued expenses and other current
liabilities.
As of the end of fiscal 2024, we did not have any material capital expenditure commitments. As of March 30,
2024, we did not have an amount outstanding under the Wells Fargo Revolver. We had $250.0 million of remaining
availability under the Wells Fargo Revolver and $75.8 million of cash on hand as of March 30, 2024. Our primary
ongoing sources of liquidity include funds provided by operations and borrowings under our revolving credit facility. We
expect our cash from operations will continue to be sufficient to support our operations and anticipated capital
expenditures for the foreseeable future. We estimate that our capital expenditures in fiscal 2025 will be between
approximately $115.0 million and $120.0 million, which is net of estimated landlord tenant allowances of $30.2 million.
We anticipate that we will use cash flows from operations to fund these expenditures.
Current Credit Facility
The Company currently has a $250.0 million syndicated senior secured asset-based revolving credit facility for
which Wells Fargo Bank, National Association is agent (“Wells Fargo Revolver”). Under the Wells Fargo Revolver, the
sublimit for letters of credit is $10.0 million and the current maturity date is July 11, 2027. The Company previously had
a $200.0 million syndicated senior secured term loan for which GCI Capital Markets LLC was agent (“2015 Golub Term
Loan”).
Revolving credit loans under the Wells Fargo Revolver bear interest at per annum rates equal to, at the
Company’s option, either (i) Adjusted Term Secured Overnight Financing Rate (defined as “Term SOFR” for the
applicable interest period plus a fixed credit spread adjustment of 0.10%) plus an applicable margin for Term SOFR
loans, or (ii) the base rate plus an applicable margin for base rate loans. The base rate is calculated at the highest of
(a) the federal funds rate plus 0.5%, (b) the Wells Fargo prime rate and (c) Term SOFR for a one-month tenor in effect
on such day plus 1.0%. The applicable margin is calculated based on a pricing grid that in each case is linked to quarterly
average excess availability. For Term SOFR loans, the applicable margin ranges from 1.00% to 1.25% and for base rate
loans it ranges from 0.00% to 0.25%. The interest on base rate loans under the Wells Fargo Revolver is payable in
quarterly installments ending on the maturity date and for Term SOFR loans is payable on the earlier of the last day of
each interest period applicable thereto, or on each three-month interval of such interest period. The Company also pays a
commitment fee of 0.25% per annum of the actual daily amount of the unutilized revolving loans.
The borrowing base of the Wells Fargo Revolver is calculated on a monthly basis and is based on the amount of
eligible credit card receivables, commercial accounts, inventory, and available reserves.
The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of March 30,
2024 were zero and $2.3 million, respectively. The amounts outstanding under the Wells Fargo Revolver and letter of
credit commitments as of April 1, 2023 were $66.0 million and $0.8 million, respectively. Total interest expense incurred
in fiscal 2024 on the Wells Fargo Revolver was $1.7 million and the weighted average interest rate for fiscal 2024 was
7.0%. Total interest expense incurred in fiscal 2023 on the Wells Fargo Revolver was $5.2 million and the weighted
average interest rate for fiscal 2023 was 4.3%. Total interest expense incurred in fiscal 2022 on the Wells Fargo
Revolver was $0.7 million and the weighted average interest rate for fiscal 2022 was 3.4%.
All obligations under the Wells Fargo Revolver are unconditionally guaranteed by the Company and each of its
direct and indirect domestic subsidiaries (other than certain immaterial subsidiaries) which are not named as borrowers
under the Wells Fargo Revolver.
The Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted
payments, voluntary payments, affirmative and negative covenants, and events of default. In addition, the terms of the
Wells Fargo Revolver require the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage
Ratio (as defined in the Wells Fargo Revolver) of at least 1.00:1.00 during such times as a covenant trigger event shall
exist. The Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering
certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company
46
to pay a higher interest rate upon an event of default is an embedded derivative. As of March 30, 2024, the fair value of
this embedded derivative was estimated and was not significant.
As of March 30, 2024, the Company was in compliance with the Wells Fargo Revolver debt covenants.
Cash Position and Cash Flow
Cash and cash equivalents were $75.8 million as of March 30, 2024 compared to $18.2 million as of April 1,
2023.
The following table presents summary cash flow information for the periods indicated:
Fiscal Year Ended
March 30,
April 1,
March 26,
2024
2023
2022
(In thousands)
Net cash provided by/(used in):
Operating activities
$
236,080 $ 88,887 $
88,864
Investing activities
(118,782)
(124,534)
(60,443)
Financing activities
(59,644)
33,166
(80,895)
Net (decrease)/increase in cash
$
57,654 $
(2,481) $ (52,474)
Operating activities
Cash provided by operating activities consists primarily of net income adjusted for non-cash items including
depreciation, amortization and stock-based compensation, plus the effect on cash of changes during the year in our assets
and liabilities.
Net cash provided by operating activities was $236.1 million for the fiscal year ended March 30, 2024. The
significant components of cash flows provided by operating activities were net income of $147.0 million, the add-back
of non-cash depreciation and amortization expense of $49.5 million and stock-based compensation expense of $12.9
million. Inventories increased $9.6 million as a result of an increase in purchases. Accounts payable and accrued
expenses and other current liabilities decreased by $5.8 million due to the timing of payments.
Net cash provided by operating activities was $88.9 million for the fiscal year ended April 1, 2023. The
significant components of cash flows provided by operating activities were net income of $170.6 million, the add-back
of non-cash depreciation and amortization expense of $35.9 million and stock-based compensation expense of $9.7
million. Inventories increased $115.2 million as a result of an increase in purchases. Accounts payable and accrued
expenses and other current liabilities decreased by $21.2 million due to the timing of payments.
Investing activities
Cash used in investing activities consists primarily of purchases of property and equipment.
Net cash used in investing activities was $118.8 million for fiscal 2024, which was primarily attributable to
capital expenditures related to store construction, investments in our Kansas City, Missouri distribution center,
improvements to our e-commerce information technology infrastructure, and improvements to our distribution facilities.
Net cash used in investing activities was $124.5 million for fiscal 2023, which was primarily attributable to
capital expenditures related to store construction, investments in a new distribution center in Kansas City, Missouri,
improvements to our e-commerce information technology infrastructure, and improvements to our stores and distribution
facilities.
47
Financing activities
Cash used in financing activities consists primarily of repayments on our line of credit borrowings.
Net cash used in financing activities was $59.6 million for fiscal 2024. We paid $66.0 million on our revolving
line of credit and paid $2.5 million in taxes related to the vesting of restricted stock. We also received $9.7 million from
the exercise of stock options.
Net cash provided by financing activities was $33.2 million for fiscal 2023. We increased our line of credit
borrowings by $37.5 million and repaid $0.8 million on our debt and capital lease obligations during the period. We also
received $1.2 million from the exercise of stock options.
Other obligations
Contractual obligations. We enter into long-term contractual obligations and commitments in the normal course
of business, primarily non-cancelable operating and finance leases.
As of March 30, 2024, our contractual cash obligations over the next several periods are set forth below.
Payments Due by Period
(In thousands)
Total
Less Than 1
Year
1 - 2
Years
3 - 5
Years
More Than
5 Years
Operating lease obligations
$ 554,488
$
74,848
$ 154,542
$ 171,177
$ 153,921
Finance lease obligations
19,181
1,515
3,142
5,007
9,517
Line of credit
—
—
—
—
—
Unutilized line of credit fees
2,055
625
1,250
180
—
Total
$ 575,724
$
76,988
$ 158,934
$ 176,364
$ 163,438
We lease our stores, facilities and certain other equipment under non-cancelable operating leases. These
operating leases expire at various dates through fiscal 2043, and contain various provisions for rental adjustments,
including, in certain cases, adjustments based on increases in the Consumer Price Index. They also generally contain
renewal provisions for varying periods. Our future operating lease obligations would change if we were to exercise these
renewal provisions or if we were willing to enter into additional operating leases.
Finance lease obligations primarily relate to the acquisition of two retail stores, two office buildings, one
distribution center facility and land as part of our acquisition of Sheplers, Inc. and Sheplers Holding Corporation in
June of fiscal 2016. The lease related to these finance lease obligations expires in fiscal 2036.
As of March 30, 2024, we did not have an amount outstanding under the Wells Fargo Revolver. The maturity
date of the Wells Fargo Revolver is July 11, 2027.
Interest expense on line of credit relates to our Wells Fargo Revolver and was determined using an interest rate
of 0.25% applied to the unutilized portion of the $250.0 million revolving line of credit on March 30, 2024, the last day
of the fiscal year.
Off-balance sheet arrangements. We are not a party to any off-balance sheet arrangements, except for purchase
obligations.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States (“GAAP”) requires the appropriate application of certain accounting policies, some of which require us to
make estimates and assumptions about future events and their impact on amounts reported in our financial statements.
48
Since future events and their impact cannot be determined with absolute certainty, our actual results will inevitably differ
from our estimates.
We believe that the application of our accounting policies, and the estimates inherently required therein, are
reasonable. Our accounting policies and estimates are re-evaluated on an ongoing basis and adjustments are made when
facts and circumstances dictate a change.
The policies and estimates discussed below involve the selection or application of alternative accounting
policies that are material to our financial statements. With respect to critical accounting policies, even a relatively minor
variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on
subsequent results of operations. However, our historical results for the periods presented in our financial statements
have not been materially impacted by such variances. Our accounting policies are more fully described in Note 2 to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Management has
discussed the development and selection of these critical accounting policies and estimates with our board of directors.
We have certain accounting policies that require more significant management judgment and estimates than
others. These include our accounting policies with respect to revenue recognition, inventories, goodwill, intangible and
long-lived assets, leases, stock-based compensation and income taxes, which are more fully described below.
Revenue recognition
Sales are recognized at the time of purchase by customers at our retail store locations. Sales are recorded net of
taxes collected from customers. Transfer of control takes place at the point at which the customer receives and pays for
the merchandise at the register. For e-commerce sales, revenue is recognized when control transfers to the customer,
which generally occurs upon delivery of the product. On average, customers receive goods within approximately five
days of being ordered. The estimate of the transit times for these shipments is based on shipping terms and historical
delivery times. Shipping and handling fees billed to customers for online sales are included in net sales and the related
shipping and handling costs are classified as cost of goods sold in the consolidated statements of operations.
We reserve for projected merchandise returns based upon historical experience and various other assumptions
that we believe to be reasonable. Customers can return merchandise purchased in-store within 30 days of the original
purchase date and can return merchandise purchased at bootbarn.com, countryoutfitter.com, sheplers.com and
idyllwind.com within 60 days of the original purchase date. Merchandise returns are often resalable merchandise and the
purchase price is generally refunded by issuing the same tender used in the original purchase. Merchandise exchanges of
the same product and price are not considered merchandise returns and, therefore, are not included in the population
when calculating our sales returns reserve. We record the impact of adjustments to our sales returns reserve quarterly
within total net sales. Should the returns rate as a percentage of net sales significantly change in future periods, it could
have a material impact on our results of operations.
We maintain a customer loyalty program at the stores and bootbarn.com. Under the program, customers
accumulate points based on purchase activity. For customers to maintain their active point balance, they must make a
qualifying purchase of merchandise at least once in a 365-day period. Once a loyalty program member achieves a certain
point level, the member earns awards that may be redeemed for credits on merchandise purchases. To redeem awards,
the member must make a qualifying purchase of merchandise within 60 days of the date the award was granted.
Unredeemed awards and accumulated partial points are accrued as unearned revenue until redemption or expiration and,
upon redemption and expiration, as an adjustment to net sales using the relative standalone selling price method. If actual
redemptions ultimately differ from accrued redemption levels, or if we further modify the terms of the program in a way
that affects expected redemption value and levels, we could record adjustments to the unearned revenue accrual, which
would affect net sales.
We recognize the sales from gift cards, gift certificates and store credits as they are redeemed for merchandise.
Prior to redemption, we maintain an unearned revenue liability for gift cards, gift certificates and store credits until we
are released from such liability, including potential obligations arising under state escheatment laws. Our gift cards, gift
certificates and store credits do not have expiration dates, and unredeemed gift cards, gift certificates and store credits are
49
subject to state escheatment laws. Amounts remaining after escheatment are recognized in net sales in the period
escheatment occurs and the liability is considered to be extinguished.
Leases
Operating and finance lease liabilities are recognized at the lease commencement date based on the present
value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. The
Company does not separate lease and non-lease components for all of its leases, and leases with an initial term of 12
months or less are excluded from balance sheet capitalization. Related operating and finance lease right-of-use assets are
recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from
landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both
operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense
in cost of goods sold and selling, general and administrative expenses on the consolidated statements of operations. The
majority of total lease costs is recorded as part of cost of goods sold, with the balance recorded in selling, general and
administrative expenses on the consolidated statements of operations. The interest expense amortization component of
the finance lease liabilities is recorded within interest expense on the consolidated statements of operations.
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes
lease expense for these leases on a straight-line basis over the lease term. Variable lease payments are recognized as
lease expense as they are incurred.
Inventories
Inventories, which consist primarily of general consumer merchandise held for sale, are valued at the lower of
cost or net realizable value. Cost is determined using the weighted-average cost method and includes the cost of
merchandise and import related costs, including freight, duty and agent commissions.
During each accounting period, we record adjustments to our inventories, which are reflected in cost of goods
sold, if the cost of specific inventory items on hand exceeds the amount that we expect to realize from the ultimate sale
or disposal of the inventory. A periodic review of inventory is performed in order to determine if inventory is properly
stated at the lower of cost or net realizable value. This adjustment calculation requires us to make assumptions and
estimates, which are based on factors such as average selling cycle and seasonality of merchandise, the historical rate at
which merchandise has sold below cost during the average selling cycle, and the value and nature of merchandise
currently priced below original cost. A provision is recorded to reduce the cost of inventories to the estimated net
realizable values, if appropriate.
To the extent that management’s estimates differ from actual results, additional markdowns may be required
that could reduce our gross profit, operating income and the carrying value of inventories.
We also record an inventory shrinkage reserve calculated as a percentage of net sales for estimated merchandise
losses for the period between the last physical inventory count and the balance sheet date. These estimates are based on
historical percentages and can be affected by changes in merchandise mix and changes in shrinkage trends. We perform
periodic physical inventory counts for our entire chain of stores and our distribution centers and adjust the inventory
shrinkage reserve accordingly. If actual physical inventory losses differ significantly from the estimate, our results of
operations could be adversely impacted. The inventory shrinkage reserve reduces the value of total inventory and is a
component of inventories on the consolidated balance sheets.
Goodwill, intangible and long-lived assets
Goodwill and indefinite-lived intangible assets. Goodwill is recorded as the difference, if any, between the
aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets.
Intangible assets with indefinite lives include the Boot Barn trademark that was acquired as part of the recapitalization
with Freeman Spogli & Co. on December 12, 2011, the Sheplers trademark acquired as part of our acquisition of
Sheplers, Inc. and Sheplers Holding Corporation in June of fiscal 2016, the cost to register the Boot Barn trademark in
Hong Kong, and the www.countryoutfitter.com website trademark we acquired as part of our asset acquisition in
50
February of fiscal 2017. We test goodwill and indefinite-lived intangible assets for impairment at least annually on the
first day of the fourth quarter or more frequently if indicators of impairment exist, in accordance with the provisions of
Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other. This guidance provides us the option to
first assess qualitative factors such as macroeconomic conditions, industry and market considerations, cost factors,
overall financial performance and other relevant entity-specific events to determine whether it is more likely than not
that the fair value of a reporting unit is less than its carrying value.
GAAP has established guidance for reporting information about a company’s operating segments, including
disclosures related to a company’s products and services, geographic areas and major customers. We monitor and review
our segment reporting structure in accordance with authoritative guidance to determine whether any changes have
occurred that would impact our reportable segments. Our retail stores and e-commerce websites represent two operating
segments. Given the similar qualitative and economic characteristics of the two operating segments, our retail stores and
e-commerce websites were aggregated into one reporting segment in accordance with guidance under Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting
(“ASC 280”). As a result of this, our operations represent two reporting units, retail stores and e-commerce, for the
purpose of our goodwill impairment analysis.
If, based on a review of qualitative factors it is more likely than not that the fair value of a reporting unit is less
than its carrying value, we proceed to compare the fair value of the reporting unit with its carrying amount. We evaluate
the fair value of the reporting unit by using market-based analysis to review market capitalization and by reviewing a
discounted cash flow analysis using management’s assumptions. We determine the fair value of our reporting unit using
the income approach and market approach to valuation, as well as other generally accepted valuation methodologies. If
the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we recognize an impairment loss equal
to the difference between the carrying amount and the estimated fair value of the reporting unit.
Definite-lived intangible assets and long-lived assets. Definite-lived intangible assets consist of certain
customer lists. Customer lists are amortized over a five-year useful life based on their estimated attrition rate.
Long-lived assets consist of leasehold improvements, machinery and equipment, furniture and fixtures, software
and vehicles. Long-lived assets are subject to depreciation and amortization. We assess potential impairment of our
definite-lived intangible assets and long-lived assets whenever events or changes in circumstances indicate that the
asset’s carrying value may not be recoverable. Factors that are considered important that could trigger an impairment
review include a current-period operating or cash flow loss combined with a history of operating or cash flow losses and
a projection or forecast that demonstrates continuing losses or insufficient income associated with the use of a long-lived
asset or asset group. Other factors include a significant change in the manner of the use of the asset or a significant
negative industry or economic trend. This evaluation is performed based on estimated undiscounted future cash flows
from operating activities compared with the carrying value of the related assets. If the undiscounted future cash flows are
less than the carrying value, an impairment loss is recognized, measured by the difference between the carrying value
and the estimated fair value of the assets, with such estimated fair values determined using the best information available
and in accordance with FASB ASC Topic 820, Fair Value Measurements (“ASC 820”).
We do not believe there is a reasonable likelihood that there will be a material change in the estimates or
assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our
estimates and assumptions, our operating results could be adversely affected by additional impairment charges.
Stock-based compensation
We account for employee stock options, restricted stock units and performance share units in accordance with
relevant authoritative literature. Stock options are granted with exercise prices equal to or greater than the market value,
as reported on the New York Stock Exchange (or on any other national securities exchange on which our common stock
is then listed) on the date of grant as authorized by our board of directors. Stock option grants are generally subject to
forfeiture if employment terminates prior to vesting. We have selected the Black-Scholes option pricing model for
estimating the grant date fair value of stock option awards granted with only service conditions. We have considered the
retirement and forfeiture provisions of the options and utilized the simplified method to estimate the expected life of the
options. We base the risk-free interest rate on the yield of a zero-coupon U.S. Treasury security with a maturity equal to
51
the expected life of the option from the date of the grant. Stock volatility for each grant is measured using historical daily
price changes of our stock and our competitors’ common stock over the most recent period equal to the expected option
term of the awards. The fair value of stock options granted with both service and market vesting conditions is estimated
using a Monte Carlo simulation model. Stock-based compensation cost is measured at the grant date based on the fair
value of the award and is recognized as expense over the requisite service period based on the number of years for which
the requisite service is expected to be rendered. Forfeitures are recognized as incurred.
The fair value of our restricted stock units and performance share units is the closing price of our common stock
on the grant date.
Income taxes
We account for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”), which
requires the asset and liability approach for financial accounting and reporting of income taxes. Deferred tax assets and
liabilities are attributable to differences between financial statement and income tax reporting. Deferred tax assets, net of
any valuation allowances, represent the future tax return consequences of those differences and for operating loss and tax
credit carryforwards, which will be deductible when the assets are recovered. Deferred tax assets are reduced by a
valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. In
assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. We
consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in
making this assessment.
We account for uncertain tax positions in accordance with ASC 740, which clarifies the accounting for
uncertainty in income taxes recognized in an enterprise’s financial statements. It prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. Such changes in recognition or measurement might result in the recognition
of a tax benefit or an additional charge to the tax provision in the period.
We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in
the accompanying statement of operations. See Note 12 to our consolidated financial statements included in Part II, Item
8 of this Annual Report on Form 10-K for further information regarding our tax disclosures.
Item 7A. Quantitative and Qualitative Disclosures About Market Risks
Interest rate risk
We are subject to interest rate risk in connection with borrowings under our credit facility, which bears interest
at variable rates. As of March 30, 2024, we did not have an amount outstanding on our revolving credit facility.
Foreign exchange rate risk
We currently purchase all of our merchandise through domestic and international suppliers on a U.S.
dollar-denominated basis. We do not hedge using any derivative instruments and historically have not been impacted by
changes in exchange rates.
Impact of inflation
Our results of operations and financial condition are presented based on historical cost. While it is difficult to
accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe that the
effects of inflation, if any, on our results of operations and financial condition have been immaterial.
52
Item 8. Consolidated Financial Statements and Supplementary Data
Boot Barn Holdings, Inc. and Subsidiaries
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)
53
Consolidated Balance Sheets as of March 30, 2024 and April 1, 2023
55
Consolidated Statements of Operations for the Fiscal Years Ended March 30, 2024, April 1, 2023 and March 26,
2022
56
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended March 30, 2024, April 1, 2023
and March 26, 2022
57
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 30, 2024, April 1, 2023 and March 26,
2022
58
Notes to Consolidated Financial Statements
59
53
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Boot Barn Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Boot Barn Holdings, Inc. and subsidiaries (the
"Company") as of March 30, 2024 and April 1, 2023, the related consolidated statements of operations, stockholders'
equity, and cash flows, for each of the three years in the period ended March 30, 2024, and the related notes (collectively
referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of March 30, 2024 and April 1, 2023, and the results of its operations and its
cash flows for each of the three years in the period ended March 30, 2024, in conformity with accounting principles
generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of March 30, 2024, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission and our report dated May 14, 2024, expressed an unqualified opinion on the Company's
internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or
disclosures that is material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Inventories – Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company’s inventories consist primarily of purchased merchandise and are valued at the lower of cost or net
realizable value. Cost is determined using the weighted-average cost method (which approximates the first in, first out
method) and includes the cost of merchandise and import related costs, including freight, duty and agent commissions. A
periodic review of inventories is performed in order to determine if inventories are properly stated at the lower of cost or
net realizable value. This adjustment calculation requires the Company to make assumptions and estimates, which are
54
based on factors such as average selling cycle and seasonality of merchandise, the historical rate at which merchandise
has sold below cost during the average selling cycle, and the value and nature of merchandise currently priced below
original cost. A provision is recorded to reduce the cost of inventories to the estimated net realizable values, if
appropriate.
Given the judgments made by management to estimate the net realizable value of inventories, such as estimating future
sales prices and foreseeable demand, auditing the adjustments to inventories for obsolescence involved a higher degree
of auditor judgment and the involvement of more senior members of the engagement team in executing, supervising, and
reviewing the results of the procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of inventories included the following, among others:
•
We tested the effectiveness of controls over the inventory valuation process, including controls over the inputs,
such as the historical rate at which merchandise has sold below cost during the average selling cycle and the
value of merchandise currently priced below original cost, that are used in management’s estimate.
•
We evaluated the appropriateness and consistency of management’s methods and assumptions used in
developing its estimate of the inventory valuation adjustment calculation.
•
We evaluated the appropriateness, completeness, and accuracy of the specific inputs supporting management’s
estimate, including the age of on-hand inventory levels, the historical rate at which merchandise has sold below
cost, and the value and nature of merchandise currently priced to sell below cost.
•
We tested the mathematical accuracy of the Company’s inventory valuation adjustment calculation.
•
We performed a retrospective review of the adjustment rate used in the prior year inventory adjustment
calculation compared to current year sales of aged inventories in order to evaluate management’s ability to
accurately estimate the valuation of inventories.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
May 14, 2024
We have served as the Company's auditor since 2012.
55
Boot Barn Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
March 30,
April 1,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
75,847 $
18,193
Accounts receivable, net
9,964
13,145
Inventories
599,120
589,494
Prepaid expenses and other current assets
44,718
48,341
Total current assets
729,649
669,173
Property and equipment, net
323,667
257,143
Right-of-use assets, net
390,501
326,623
Goodwill
197,502
197,502
Intangible assets, net
58,697
60,751
Other assets
5,576
6,189
Total assets
$ 1,705,592 $ 1,517,381
Liabilities and stockholders’ equity
Current liabilities:
Line of credit
$
— $
66,043
Accounts payable
132,877
134,246
Accrued expenses and other current liabilities
116,477
122,958
Short-term lease liabilities
63,454
51,595
Total current liabilities
312,808
374,842
Deferred taxes
42,033
33,260
Long-term lease liabilities
403,303
330,081
Other liabilities
3,805
2,748
Total liabilities
761,949
740,931
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.0001 par value; March 30, 2024 - 100,000 shares authorized, 30,572
shares issued; April 1, 2023 - 100,000 shares authorized, 30,072 shares issued
3
3
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or
outstanding
—
—
Additional paid-in capital
232,636
209,964
Retained earnings
723,026
576,030
Less: Common stock held in treasury, at cost, 228 and 192 shares at March 30, 2024 and
April 1, 2023, respectively
(12,022)
(9,547)
Total stockholders’ equity
943,643
776,450
Total liabilities and stockholders’ equity
$ 1,705,592 $ 1,517,381
The accompanying notes are an integral part of these consolidated financial statements.
56
Boot Barn Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
Fiscal Year Ended
March 30,
April 1,
March 26,
2024
2023
2022
Net sales
$ 1,667,009
$ 1,657,615 $ 1,488,256
Cost of goods sold
1,052,585
1,047,043
913,183
Gross profit
614,424
610,572
575,073
Selling, general and administrative expenses
416,210
378,785
316,735
Income from operations
198,214
231,787
258,338
Interest expense
2,238
5,880
5,780
Other income/(loss) net
1,396
(29)
35
Income before income taxes
197,372
225,878
252,593
Income tax expense
50,376
55,325
60,143
Net income
$
146,996
$ 170,553 $
192,450
Earnings per share:
Basic
$
4.87
$
5.72 $
6.51
Diluted
$
4.80
$
5.62 $
6.33
Weighted average shares outstanding:
Basic
30,167
29,805
29,556
Diluted
30,611
30,370
30,391
The accompanying notes are an integral part of these consolidated financial statements.
57
Boot Barn Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
(In thousands)
Additional
Common Stock
Paid-In
Retained
Treasury Shares
Shares Amount
Capital
Earnings
Shares
Amount
Total
Balance at March 27, 2021
29,348 $
3
$ 183,815
$ 213,027
(96) $ (1,954)
$ 394,891
Net income
—
—
—
192,450
—
—
192,450
Issuance of common stock
related to stock-based
compensation
472
—
5,764
—
—
—
5,764
Tax withholding for net
share settlement
—
—
—
—
(39)
(2,904)
(2,904)
Stock-based compensation
expense
—
—
9,475
—
—
—
9,475
Balance at March 26, 2022
29,820 $
3
$ 199,054
$ 405,477
(135) $ (4,858)
$ 599,676
Net income
—
—
—
170,553
—
—
170,553
Issuance of common stock
related to stock-based
compensation
252
—
1,199
—
—
—
1,199
Tax withholding for net
share settlement
—
—
—
—
(57)
(4,689)
(4,689)
Stock-based compensation
expense
—
—
9,711
—
—
—
9,711
Balance at April 1, 2023
30,072 $
3
$ 209,964
$ 576,030
(192) $ (9,547)
$ 776,450
Net income
—
—
—
146,996
—
—
146,996
Issuance of common stock
related to stock-based
compensation
500
—
9,737
—
—
—
9,737
Tax withholding for net
share settlement
—
—
—
—
(36)
(2,475)
(2,475)
Stock-based compensation
expense
—
—
12,935
—
—
—
12,935
Balance at March 30, 2024
30,572 $
3
$ 232,636
$ 723,026
(228) $ (12,022)
$ 943,643
The accompanying notes are an integral part of these consolidated financial statements.
58
Boot Barn Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Fiscal Year Ended
March 30,
April 1,
March 26,
2024
2023
2022
Cash flows from operating activities
Net income
$ 146,996 $ 170,553
$ 192,450
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
49,531
35,883
27,280
Stock-based compensation
12,935
9,711
9,475
Amortization of intangible assets
54
62
72
Impairment of intangible assets
2,000
—
—
Noncash lease expense
55,148
47,869
39,286
Amortization and write-off of debt issuance fees and debt discount
108
130
1,878
Loss on disposal of property and equipment
660
334
175
(Gain)/loss on adjustment of right-of-use assets and lease liabilities
—
—
(259)
Deferred taxes
8,773
6,365
4,902
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net
3,282
(2,716)
5,222
Inventories
(9,626) (115,194)
(198,540)
Prepaid expenses and other current assets
3,515 (11,276)
(24,577)
Other assets
613
(2,874)
(236)
Accounts payable
425
(2,636)
25,502
Accrued expenses and other current liabilities
(6,208) (18,541)
45,229
Other liabilities
1,057
516
(1,192)
Operating leases
(33,183) (29,299)
(37,803)
Net cash provided by operating activities
$ 236,080 $
88,887
$
88,864
Cash flows from investing activities
Purchases of property and equipment
(118,782) (124,534)
(60,443)
Net cash used in investing activities
$ (118,782) $ (124,534)
$
(60,443)
Cash flows from financing activities
Borrowings/(payments) on line of credit - net
(66,043)
37,494
28,549
Repayments on debt and finance lease obligations
(863)
(838)
(112,304)
Tax withholding payments for net share settlement
(2,475)
(4,689)
(2,904)
Proceeds from the exercise of stock options
9,737
1,199
5,764
Net cash (used in)/provided by financing activities
$
(59,644) $
33,166
$
(80,895)
Net increase/(decrease) in cash and cash equivalents
57,654
(2,481)
(52,474)
Cash and cash equivalents, beginning of period
18,193
20,674
73,148
Cash and cash equivalents, end of period
$
75,847 $
18,193
$
20,674
Supplemental disclosures of cash flow information:
Cash paid for income taxes
$
57,157 $
60,171
$
41,684
Cash paid for interest
$
2,385 $
5,835
$
3,808
Supplemental disclosure of non-cash activities:
Unpaid purchases of property and equipment
$
17,269 $
21,487
$
14,963
The accompanying notes are an integral part of these consolidated financial statements.
59
Boot Barn Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Business Operations
Boot Barn Holdings, Inc. (the “Company”), the parent holding company of the group of operating subsidiaries
that conduct the Boot Barn business, was formed on November 17, 2011, and is incorporated in the State of Delaware.
The equity of the Company consists of 100,000,000 authorized shares and 30,343,690 and 29,879,611 outstanding shares
of common stock as of March 30, 2024 and April 1, 2023, respectively. The shares of common stock have voting rights
of one vote per share.
The Company operates specialty retail stores that sell western and work boots and related apparel and
accessories. The Company operates retail locations throughout the U.S. and sells its merchandise via the Internet. The
Company operated a total of 400 stores in 45 states as of March 30, 2024, 345 stores in 43 states as of April 1, 2023 and
300 stores in 38 states as of March 26, 2022. As of the fiscal year ending March 30, 2024, all stores operate under the
Boot Barn name.
Basis of Presentation
The Company’s consolidated financial statements, prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”), include the accounts of the Company and each of its subsidiaries, including
Boot Barn Holdings, Inc., Boot Barn, Inc., RCC Western Stores, Inc. (“RCC”), Baskins Acquisition Holdings, LLC
(“Baskins”), Sheplers, LLC and Sheplers Holding, LLC (collectively with Sheplers, LLC, “Sheplers”). All intercompany
accounts and transactions among the Company and its subsidiaries have been eliminated in consolidation. The vast
majority of the Company’s identifiable assets are in the United States.
Fiscal Year
The Company reports its results of operations and cash flows on a 52- or 53-week basis, and its fiscal year ends
on the last Saturday of March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. The year
ended March 30, 2024 (“fiscal 2024”) was a 52-week period, the year ended April 1, 2023 (“fiscal 2023”) was a 53-week
period and the year ended March 26, 2022 (“fiscal 2022”) was a 52-week period.
2. Summary of Significant Accounting Policies
Comprehensive Income
The Company does not have any components of other comprehensive income recorded within its consolidated
financial statements and, therefore, does not separately present a statement of comprehensive income in its consolidated
financial statements.
Segment Reporting
GAAP has established guidance for reporting information about a company’s operating segments, including
disclosures related to a company’s products and services, geographic areas and major customers. The Company monitors
and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes
have occurred that would impact its reportable segments. The Company’s retail stores and e-commerce websites
represent two operating segments. Given the similar qualitative and economic characteristics of the two operating
segments, the Company’s retail stores and e-commerce websites are aggregated into one reporting segment in
accordance with guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 280, Segment Reporting (ASC 280). Further, the Company’s operations represent two reporting units,
retail stores and e-commerce, for the purpose of its goodwill impairment analysis.
60
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
Among the significant estimates affecting the Company’s consolidated financial statements are those relating to revenue
recognition, lease accounting, inventories, goodwill, intangible and long-lived assets, stock-based compensation and
income taxes. Management regularly evaluates its estimates and assumptions based upon historical experience and
various other factors that management believes to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. To the extent actual results differ from those estimates, the Company’s future results of operations may be
affected.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents. Cash equivalents also include receivables from credit card sales. The carrying amounts of
cash and cash equivalents represent their fair values.
Accounts Receivable
The Company’s accounts receivable consist of amounts due from commercial customers for merchandise sold,
as well as receivables from suppliers under co-operative arrangements. The Company’s allowance for doubtful accounts
was $0.6 million and $0.4 million as of March 30, 2024 and April 1, 2023, respectively.
Inventories
Inventories consist primarily of purchased merchandise and are valued at the lower of cost or net realizable
value. Cost is determined using the weighted-average cost method and includes the cost of merchandise and import
related costs, including freight, duty and agent commissions. The Company assesses the recoverability of inventory
through a periodic review of historical usage and present demand. When the inventory on hand exceeds the foreseeable
demand, the value of inventory that, at the time of the review, is not expected to be sold is written down to its estimated
net realizable value.
Debt Issuance Costs and Debt Discounts
Debt issuance costs are capitalized and amortized to interest expense over the terms of the applicable loan
agreements using the effective interest method. Those costs related to the issuance of debt are presented as a reduction to
the principal amount of the debt. Debt issuance costs incurred with the issuance of revolving credit lines are included in
prepaid expenses and other current assets.
Debt discounts arise when transaction fees are paid to the lending institution. Debt discounts are recorded as a
reduction to the principal amount of the debt. Amortization of debt discounts is recorded as an increase to the net
principal amount of the debt and as a charge to interest expense over the term of the applicable loan agreement using the
effective interest method.
Property and Equipment, net
Property and equipment consists of leasehold improvements, machinery and equipment, furniture and fixtures,
software and vehicles. Property and equipment is subject to depreciation and is recorded at cost less accumulated
depreciation. Expenditures for major remodels and improvements are capitalized while minor replacements, maintenance
and repairs that do not improve or extend the life of such assets are charged to expense. Gains or losses on disposal of
fixed assets, when applicable, are reflected in operations. Depreciation is computed using the straight-line method over
the estimated useful lives, ranging from five to ten years. Machinery and equipment is depreciated over five years.
61
Furniture and fixtures are depreciated over seven years. Software and vehicles are depreciated over five years. Leasehold
improvements are depreciated over the shorter of the terms of the leases or ten years.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill is recorded as the difference between the aggregate consideration paid for an acquisition and the fair
value of the acquired net tangible and intangible assets. Goodwill is tested for impairment at least annually as of the first
day of the fourth fiscal quarter or more frequently if indicators of impairment exist, in accordance with the provisions of
FASB ASC Topic 350, Goodwill and Other. This guidance provides the option to first assess qualitative factors such as
macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other
relevant entity-specific events to determine whether it is more likely than not that the fair value of a reporting unit is less
than its carrying value.
GAAP has established guidance for reporting information about a company’s operating segments, including
disclosures related to a company’s products and services, geographic areas and major customers. The Company monitors
and reviews its segment reporting structure in accordance with authoritative guidance to determine whether any changes
have occurred that would impact its reportable segments, as well as the Company’s reporting units. As previously stated
above, the Company’s operations represent two reporting units, retail stores and e-commerce, for the purpose of its
goodwill impairment analysis.
If, based on a review of qualitative factors it is more likely than not that the fair value of a reporting unit is less
than its carrying value, we proceed to compare the fair value of the reporting unit with its carrying amount. We evaluate
the fair value of the reporting unit by using market-based analysis to review market capitalization and by reviewing a
discounted cash flow analysis using management’s assumptions. We determine the fair value of our reporting unit using
the income approach and market approach to valuation, as well as other generally accepted valuation methodologies. If
the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we recognize an impairment loss equal
to the difference between the carrying amount and the estimated fair value of the reporting unit. The Company concluded
that there was no impairment of goodwill during fiscal 2024, 2023, or 2022.
Intangible assets with indefinite lives, which include the Boot Barn, Sheplers and Country Outfitter trademarks,
are not amortized but instead are measured for impairment at least annually, or when events indicate that impairment
may exist. The Company calculates impairment as the excess of the carrying value of indefinite-lived intangible assets
over their estimated fair value. If the carrying value exceeds the estimate of fair value, an impairment charge is recorded.
During fiscal 2024, the Company recognized an impairment related to the Sheplers indefinite lived trademark of $2.0
million. The remaining Sheplers trademark value is $7.2 million as of March 30, 2024. The Company concluded there
was no impairment of intangible assets with indefinite lives during fiscal 2023 or 2022.
Definite-Lived Intangible Assets
Definite-lived intangible assets consist of certain customer lists. Customer lists are amortized over a five-year
useful life based on their estimated attrition rate.
Long-Lived Assets
Long-lived assets consist of property and equipment and definite-lived intangible assets. The Company assesses
potential impairment of its long-lived assets whenever events or changes in circumstances indicate that an asset or asset
group’s carrying value may not be recoverable. Factors that are considered important that could trigger an impairment
review include a current period operating or cash flow loss combined with a history of operating or cash flow losses and
a projection or forecast that demonstrates continuing losses or insufficient income associated with the use of a long-lived
asset or asset group. Other factors include a significant change in the manner of the use of the asset or a significant
negative industry or economic trend. This evaluation is performed based on estimated undiscounted future cash flows
from operating activities compared with the carrying value of the related assets. If the undiscounted future cash flows are
less than the carrying value, an impairment loss is recognized, measured by the difference between the carrying value,
and the estimated fair value of the assets, with such estimated fair values determined using the best information available
62
and in accordance with FASB ASC Topic 820, Fair Value Measurements. During fiscal 2024, fiscal 2023 and fiscal
2022, the Company did not record asset impairment charges related to its stores.
Stock-Based Compensation
Stock-based compensation is accounted for under FASB ASC Topic 718, Compensation—Stock Compensation
(“ASC 718”). The Company accounts for all stock-based compensation transactions using a fair-value method and
recognizes the fair value of each award as an expense over the service period. The Company estimates the fair value of
stock options granted with service conditions using the Black-Scholes option pricing model. The use of the
Black-Scholes model requires a number of estimates, including the expected option term, the expected volatility in the
price of the Company’s common stock, the risk-free rate of interest and the dividend yield on the Company’s common
stock. The fair value of stock options granted with both service and market vesting conditions is estimated using a Monte
Carlo simulation model. The fair value of the Company’s restricted stock units and performance share units is the closing
price of the Company’s common stock on the grant date. The consolidated financial statements include amounts that are
based on the Company’s best estimates and judgments. The Company classifies compensation expense related to these
awards in the consolidated statements of operations based on the department to which the recipient reports.
Revenue Recognition
Revenue is recorded for store sales upon the purchase of merchandise by customers. Transfer of control takes
place at the point at which the customer receives and pays for the merchandise at the register. E-commerce sales are
recorded when control transfers to the customer, which generally occurs upon delivery of the product. Shipping and
handling revenues are included in total net sales. Shipping costs incurred by the Company are included as cost of goods
sold. Sales taxes that are collected in connection with revenue transactions are withheld and remitted to the respective
taxing authorities. As such, these taxes are excluded from revenue.
Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions, estimated
future award redemption and other promotions. The sales returns reserve reflects an estimate of sales returns based on
projected merchandise returns determined through the use of historical average return percentages. The total reserve for
returns was $7.5 million and $8.4 million as of March 30, 2024 and April 1, 2023, respectively and is recorded in
accrued expenses and other current liabilities in the accompanying consolidated balance sheets. The Company accounts
for the return asset and liability separately on a gross basis.
The Company maintains a customer loyalty program. Under the program, customers accumulate points based
on purchase activity. For customers to maintain their active point balance, they must make a qualifying purchase of
merchandise at least once in a 365-day period. Once a loyalty program member achieves a certain point level, the
member earns awards that may be redeemed for credits on merchandise purchases. To redeem awards, the member must
make a qualifying purchase of merchandise within 60 days of the date the award was granted. Unredeemed awards and
accumulated partial points are accrued as unearned revenue until redemption or expiration and, upon redemption and
expiration, recorded as an adjustment to net sales using the relative standalone selling price method. The unearned
revenue for this program is recorded in accrued expenses and other current liabilities on the consolidated balance sheets
and was $5.0 million, $4.1 million, and $3.5 million as of March 30, 2024, April 1, 2023, and March 26, 2022,
respectively. The following table provides a reconciliation of the activity related to the Company’s customer loyalty
program:
63
Customer Loyalty Program
Fiscal Year Ended
March 30,
April 1,
March 26,
(In thousands)
2024
2023
2022
Beginning balance
$
4,145
$
3,504 $
2,485
Current year provisions
17,694
18,731 13,794
Current year award redemptions
(16,789)
(18,090) (12,775)
Ending balance
$
5,050
$
4,145 $
3,504
Proceeds from the sale of gift cards are deferred until the customers use the cards to acquire merchandise. Gift
cards, gift certificates and store credits do not have expiration dates, and unredeemed gift cards, gift certificates and store
credits are subject to state escheatment laws. Amounts remaining after escheatment are recognized in net sales in the
period escheatment occurs and the liability is considered to be extinguished. The Company defers recognition of a
layaway sale and its related profit to the accounting period when the customer receives the layaway merchandise. Income
from the redemption of gift cards, gift card breakage, and the sale of layaway merchandise is included in net sales. The
following table provides a reconciliation of the activity related to the Company’s gift card program:
Gift Card Program
Fiscal Year Ended
March 30,
April 1,
March 26,
(In thousands)
2024
2023
2022
Beginning balance
$ 19,855
$ 15,392 $ 11,569
Current year issuances
44,193
42,117 32,893
Current year redemptions
(39,533)
(36,787) (27,702)
Current year breakage and escheatment
(866)
(867) (1,368)
Ending balance
$ 23,649
$ 19,855 $ 15,392
Disaggregated Revenue
The Company disaggregates net sales into the following major merchandise categories:
Fiscal Year Ended
% of Net Sales
March 30, 2024
April 1, 2023
March 26, 2022
Footwear
47%
47%
48%
Apparel
36%
37%
36%
Hats, accessories and other
17%
16%
16%
Total
100%
100%
100%
The Company also disaggregates net sales between stores and e-commerce:
Fiscal Year Ended
% of Net Sales
March 30, 2024
April 1, 2023
March 26, 2022
Stores
89%
87%
85%
E-commerce
11%
13%
15%
Total
100%
100%
100%
Cost of Goods Sold
Cost of goods sold includes the cost of merchandise, obsolescence and shrink provisions, store and distribution
center occupancy costs (including rent, depreciation and utilities), inbound and outbound freight, supplier allowances,
occupancy-related taxes, inventory acquisition-related costs, and compensation costs for merchandise purchasing,
exclusive brand design and development and distribution center personnel.
64
Store Opening Costs
Store opening costs consist of costs incurred prior to opening a new store and primarily consist of manager and
other employee payroll, travel and training costs, marketing expenses, initial opening supplies and costs of transporting
initial inventory and certain fixtures to store locations, as well as occupancy costs incurred from the time that we take
possession of a store site to the opening of that store. Occupancy costs are included in cost of goods sold and the other
store opening costs are included in selling, general and administrative (“SG&A”) expenses. All of these costs are
expensed as incurred.
Advertising Costs
Certain advertising costs, including pay-per-click, direct mail, television and radio promotions, event
sponsorship, in-store photographs and other promotional advertising are expensed when the marketing campaign
commences. The Company had prepaid advertising costs of $2.4 million and $1.4 million as of March 30, 2024 and
April 1, 2023, respectively. All other advertising costs are expensed as incurred. The Company recognized $44.0 million,
$40.7 million, and $34.5 million in advertising costs during fiscal 2024, 2023, and 2022, respectively.
Leases
The Company accounts for leases in accordance with FASB ASC Topic 842, Leases. Operating and finance
lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments
using the Company's incremental borrowing rates for its population of leases. Related operating and finance lease right-
of-use (“ROU”) assets are recognized based on the initial present value of the fixed lease payments, reduced by cash
payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the
leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and
recorded as part of rent expense in cost of goods sold and selling, general and administrative expenses on the
consolidated statements of operations. The majority of total lease costs is recorded as part of cost of goods sold, with the
balance recorded in selling, general and administrative expenses on the consolidated statements of operations. The
interest expense amortization component of the finance lease liabilities is recorded within interest expense on the
consolidated statements of operations.
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes
lease expense for these leases on a straight-line basis over the lease term. Variable lease payments are recognized as
lease expense as they are incurred.
Income Taxes
The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC
740”), which requires the asset and liability approach for financial accounting and reporting of income taxes. Deferred
tax assets and liabilities are attributable to differences between financial statement and income tax reporting. Deferred
tax assets, net of any valuation allowances, represent the future tax return consequences of those differences and for
operating loss and tax credit carryforwards, which will be deductible when the assets are recovered. Deferred tax assets
are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will
not be realized. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than
not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of future taxable income during the periods in which those temporary differences
become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable
income and tax planning strategies in making this assessment.
The Company accounts for uncertain tax positions in accordance with ASC 740, which clarifies the accounting
for uncertainty in income taxes recognized in an enterprise’s financial statements. It prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to
be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties,
65
accounting in interim periods, disclosure and transition. Such changes in recognition or measurement might result in the
recognition of a tax benefit or an additional charge to the tax provision in the period.
The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax
expense line in the consolidated statements of operations. Accrued interest and penalties, if incurred, are included within
accrued expenses and other current liabilities in the consolidated balance sheets. There were no accrued interest or
penalties for the fiscal years ended March 30, 2024 or April 1, 2023.
Per Share Information
Basic earnings per share is computed by dividing net income by the weighted average number of outstanding
shares of common stock. In computing diluted earnings per share, the weighted average number of common shares
outstanding is adjusted to reflect the effect of potentially dilutive securities such as stock options and restricted stock. In
accordance with ASC 718, the Company utilizes the treasury stock method to compute the dilutive effect of stock
options, restricted stock units and performance share units.
Fair Value of Certain Financial Assets and Liabilities
The Company follows FASB ASC Topic 820, Fair Value Measurements and Disclosures, (“ASC 820”) which
requires disclosure of the estimated fair value of certain assets and liabilities defined by the guidance as financial
instruments. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable,
accounts payable and debt. ASC 820 defines the fair value of financial instruments as the price that would be received
from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a
three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of
assets and liabilities.
•
Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.
•
Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly
observable through correlation with market data. These include quoted prices for similar assets or liabilities
in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active;
and inputs to valuation models or other pricing methodologies that do not require significant judgment
because the inputs used in the model, such as interest rates, incremental borrowing rates and volatility, can
be corroborated by readily observable market data.
•
Level 3 uses one or more significant inputs that are unobservable and supported by little or no market
activity, and reflect the use of significant management judgment. Level 3 assets and liabilities include those
whose fair value measurements are determined using pricing models, discounted cash flow methodologies
or similar valuation techniques and significant management judgment or estimation. The Company’s
Level 3 assets include certain acquired businesses and the evaluation of store impairment.
Cash and cash equivalents, accounts receivable and accounts payable are classified according to the lowest level
input that is significant to the fair value measurement. As a result, the asset or liability could be classified as Level 2 or
Level 3 even though there may be certain significant inputs that are readily observable. The Company believes that the
recorded values of its financial instruments approximate their current fair values because of their nature and respective
relatively short maturity dates or duration.
Although a market quote for the fair value of its outstanding debt arrangement discussed in Note 7 “Revolving
credit facilities and long-term debt” is not readily available, the Company believes its carrying value approximates fair
value due to the variable interest rates, which are Level 2 inputs. There were no material financial assets or liabilities
requiring fair value measurements as of March 30, 2024 on a recurring basis.
66
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash
equivalents. At times, such amounts held at banks may be in excess of Federal Deposit Insurance Corporation insurance
limits, and the Company mitigates such risk by utilizing multiple banks.
Supplier Concentration Risk
The Company purchases merchandise inventories from several hundred suppliers worldwide. Sales of products
from the Company’s three largest suppliers totaled approximately 24% of net sales in fiscal 2024, 24% of net sales in
fiscal 2023, and 27% of net sales in fiscal 2022.
Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update (“ASU’) No. 2023-09, Income Taxes (Topic
740): Improvements to Income Tax Disclosures. The ASU requires disaggregated information about an entity’s effective
tax rate reconciliation as well as information on income taxes paid. The amendments in this ASU are required to be
adopted for fiscal years beginning after December 15, 2024. The amendments should be applied on a prospective basis
although retrospective application is permitted. The Company is currently evaluating the impact of adoption on its
financial disclosures.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures. The amendment improves reportable segment disclosure requirements, primarily
through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for fiscal
years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024,
and should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact
of adoption on its financial disclosures.
3. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
March 30,
April 1,
2024
2023
Prepaid advertising
$
2,398 $ 1,375
Prepaid insurance
2,549 2,335
Income tax receivable
10,268
—
Returns Allowance
3,444 3,808
Prepaid merchandise
18,989 33,707
Other
7,070 7,116
Total prepaid expenses and other current assets
$ 44,718 $ 48,341
67
4. Property and Equipment, Net
Property and equipment, net, consisted of the following (in thousands):
March 30,
April 1,
2024
2023
Leasehold improvements
$ 211,508 $ 136,490
Machinery and equipment
70,845
54,522
Furniture and fixtures
196,478 141,085
Construction in progress
27,743
61,489
Vehicles
3,201
1,896
509,775 395,482
Less: Accumulated depreciation
(186,108) (138,339)
Property and equipment, net
$ 323,667 $ 257,143
Depreciation expense was $49.5 million, $35.9 million, and $27.3 million for fiscal years 2024, 2023, and 2022,
respectively.
5. Goodwill and Intangible Assets, Net
Our goodwill balance totaled $197.5 million for fiscal 2024. There were no changes to the carrying amount of
goodwill for fiscal 2024, 2023, and 2022.
Net intangible assets consisted of the following:
March 30, 2024
Gross
Weighted
Carrying Accumulated
Average
Amount Amortization
Net
Useful Life
(in thousands, except for weighted average useful life)
Customer lists—definite lived
$
345
$
(325) $
20
5.0
Trademarks—indefinite lived
58,677
—
58,677
Total intangible assets
$ 59,022
$
(325) $ 58,697
April 1, 2023
Gross
Weighted
Carrying Accumulated
Average
Amount Amortization
Net
Useful Life
(in thousands, except for weighted average useful life)
Customer lists—definite lived
$
345
$
(271) $
74
5.0
Trademarks—indefinite lived
60,677
—
60,677
Total intangible assets
$ 61,022
$
(271) $ 60,751
Amortization expense for intangible assets totaled $0.1 million for each of fiscal 2024, 2023 and 2022, and is
included in selling, general and administrative expenses.
The company recognized an impairment of $2.0 million related to the Sheplers indefinite lived trademark in
fiscal 2024, and none in fiscal 2023 and 2022, which is included in selling, general and administrative expenses in the
consolidated statements of operations. The remaining value of the Sheplers trademark is $7.2 million as of March 30,
2024.
68
As of March 30, 2024, estimated future amortization of intangible assets was as follows:
Fiscal year
(in thousands)
2025
$
20
Thereafter
—
Total
$
20
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
March 30,
April 1,
2024
2023
Accrued compensation
$
26,033 $ 24,711
Deferred revenue
26,378 22,272
Sales tax liability
13,472 14,928
Income taxes payable
—
5,301
Accrued occupancy expense
5,909
8,738
Accrued interest
161
195
Sales reward redemption liability
5,050
4,145
Accrued expenses
15,722 18,458
Accrued property and equipment
11,448 13,872
Sales returns reserve
7,549
8,372
Other
4,755
1,966
Total accrued expenses and other current liabilities
$ 116,477 $ 122,958
7. Revolving Credit Facility and Long-Term Debt
The Company currently has a $250.0 million syndicated senior secured asset-based revolving credit facility for
which Wells Fargo Bank, National Association is agent (“Wells Fargo Revolver”). Under the Wells Fargo Revolver, the
sublimit for letters of credit is $10.0 million and the current maturity date is July 11, 2027. The Company previously had
a $200.0 million syndicated senior secured term loan for which GCI Capital Markets LLC was agent (“2015 Golub Term
Loan”).
Revolving credit loans under the Wells Fargo Revolver bear interest at per annum rates equal to, at the
Company’s option, either (i) Adjusted Term Secured Overnight Financing Rate (defined as “Term SOFR” for the
applicable interest period plus a fixed credit spread adjustment of 0.10%) plus an applicable margin for Term SOFR
loans, or (ii) the base rate plus an applicable margin for base rate loans. The base rate is calculated at the highest of
(a) the federal funds rate plus 0.5%, (b) the Wells Fargo prime rate and (c) Term SOFR for a one-month tenor in effect
on such day plus 1.0%. The applicable margin is calculated based on a pricing grid that in each case is linked to quarterly
average excess availability. For Term SOFR loans, the applicable margin ranges from 1.00% to 1.25% and for base rate
loans it ranges from 0.00% to 0.25%. The interest on base rate loans under the Wells Fargo Revolver is payable in
quarterly installments ending on the maturity date and for Term SOFR loans is payable on the earlier of the last day of
each interest period applicable thereto, or on each three-month interval of such interest period. The Company also pays a
commitment fee of 0.25% per annum of the actual daily amount of the unutilized revolving loans.
The borrowing base of the Wells Fargo Revolver is calculated on a monthly basis and is based on the amount of
eligible credit card receivables, commercial accounts, inventory, and available reserves.
The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of March 30,
2024 were zero and $2.3 million, respectively. The amounts outstanding under the Wells Fargo Revolver and letter of
credit commitments as of April 1, 2023 were $66.0 million and $0.8 million, respectively. Total interest expense incurred
in fiscal 2024 on the Wells Fargo Revolver was $1.7 million and the weighted average interest rate for fiscal 2024 was
7.0%. Total interest expense incurred in fiscal 2023 on the Wells Fargo Revolver was $5.2 million and the weighted
69
average interest rate for fiscal 2023 was 4.3%. Total interest expense incurred in fiscal 2022 on the Wells Fargo
Revolver was $0.7 million and the weighted average interest rate for fiscal 2022 was 3.4%.
All obligations under the Wells Fargo Revolver are unconditionally guaranteed by the Company and each of its
direct and indirect domestic subsidiaries (other than certain immaterial subsidiaries) which are not named as borrowers
under the Wells Fargo Revolver.
The Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted
payments, voluntary payments, affirmative and negative covenants, and events of default. In addition, the terms of the
Wells Fargo Revolver require the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage
Ratio (as defined in the Wells Fargo Revolver) of at least 1.00:1.00 during such times as a covenant trigger event shall
exist. The Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering
certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company
to pay a higher interest rate upon an event of default is an embedded derivative. As of March 30, 2024, the fair value of
this embedded derivative was estimated and was not significant.
As of March 30, 2024, the Company was in compliance with the Wells Fargo Revolver debt covenants.
Debt Issuance Costs
Debt issuance costs totaling $1.7 million were incurred under the Wells Fargo Revolver and are included as
assets on the consolidated balance sheets in prepaid expenses and other current assets. Total unamortized debt issuance
costs were $0.4 million and $0.5 million as of March 30, 2024 and April 1, 2023, respectively. These amounts are being
amortized to interest expense over the term of the Wells Fargo Revolver.
Total amortization expense of $0.1 million, $0.1 million and $0.4 million related to the Wells Fargo Revolver
and 2015 Golub Term Loan is included as a component of interest expense in fiscal 2024, 2023 and 2022, respectively.
Interest expenses in fiscal 2022 also includes the write-off of $1.4 million of debt issuance costs and debt discount
associated with the paydown of the 2015 Golub Term Loan.
8. Stock-Based Compensation
Equity Incentive Plans
On October 19, 2014, the Company approved the 2014 Equity Incentive Plan, which was amended as of
August 24, 2016 (as amended, the “2014 Plan”). The 2014 Plan authorizes the Company to issue awards to employees,
consultants and directors for up to a total of 3,600,000 shares of common stock, par value $0.0001 per share. All awards
granted by the Company under the 2014 Plan were nonqualified stock options, restricted stock awards, restricted stock
units or performance share units. Options granted under the 2014 Plan have a life of eight to ten years and vest over
service periods of four or five years or in connection with certain events as defined by the 2014 Plan and as determined
by the Compensation Committee of our board of directors. Restricted stock awards granted under the 2014 Plan vested
over one or four years, as determined by the Compensation Committee of our board of directors. Restricted stock units
granted under the 2014 Plan vest over service periods of one, four or five years, as determined by the Compensation
Committee of our board of directors. Performance share units are subject to the vesting criteria discussed further below.
On August 26, 2020, the Company approved the 2020 Equity Incentive Plan (the “2020 Plan”). Following the
approval of the 2020 Plan, no further grants have been made under the 2014 Plan. The 2020 Plan authorizes the
Company to issue awards to employees and directors for up to a total of 2,000,000 shares of common stock, par value
$0.0001 per share. As of March 30, 2024, all awards granted by the Company under the 2020 Plan to date have been
market-based stock options, restricted stock units or performance share units. Market-based stock options granted under
the 2020 Plan are subject to the vesting criteria discussed further below. Restricted stock units vest over service periods
of one, three or four years, as determined by the Compensation Committee of our board of directors. Performance share
units granted under the 2020 Plan are subject to the vesting criteria discussed further below.
70
Stock Options
During fiscal 2024, the Company did not grant options to purchase shares.
During fiscal 2023, the Company granted its Chief Executive Officer ("CEO") an option to
purchase 86,189 shares of common stock under the 2020 Plan. This option contains both service and market vesting
conditions. Vesting of this option is contingent upon the market price of the Company's common stock
achieving three stated price targets for 30 consecutive trading days through the third anniversary of the date of grant. If
the first market price target is met, 33% of the option granted will cliff vest on the third anniversary of the date of grant,
with an additional 33% of the option vesting on the third anniversary of the date of grant if the second market price target
is met, and the last 34% of the option vesting on the third anniversary of the date of grant if the final market price target
is met. The total grant date fair value of this option was $4.0 million, with a grant date fair value of $46.41 per share. The
Company is recognizing the expense relating to this stock option on a straight-line basis over the three-year service
period. The exercise price of this award is $86.96 per share. The fair value of the option was estimated using a Monte
Carlo simulation model. The following significant assumptions were used as of May 12, 2022, the date of grant:
Stock price
$ 86.96
Exercise price
$ 86.96
Expected option term(1)
6.5 years
Expected volatility(2)
65.9 %
Risk-free interest rate(3)
2.8 %
Expected annual dividend yield
0 %
(1) The Company has limited historical information regarding the expected option term. Accordingly, the Company
determined the expected life of the options using the simplified method.
(2) Stock volatility for each grant is measured using the weighted average of historical daily price changes of the
Company’s stock over the most recent period equal to the expected option term of the Company’s awards.
(3) The risk-free interest rate is determined using the rate on treasury securities with the same term.
During fiscal 2023, the Company did not grant any other options to purchase shares.
During fiscal 2022, the Company did not grant options to purchase shares.
Intrinsic value for stock options is defined as the difference between the market price of the Company’s
common stock on the last business day of the fiscal year and the weighted average exercise price of in-the-money stock
options outstanding at the end of each fiscal period. The following table summarizes the stock award activity for the
fiscal year ended March 30, 2024:
Weighted
Grant Date
Average
Weighted
Remaining
Aggregate
Stock
Average
Contractual
Intrinsic
Options Exercise Price Life (in Years)
Value
(in thousands)
Outstanding at April 1, 2023
739,480
$
31.60
Granted
—
$
—
Exercised
(398,875)
$
24.41
$
26,774
Cancelled, forfeited or expired
—
$
—
Outstanding at March 30, 2024
340,605
$
40.00
5.5 $
18,783
Vested and expected to vest after March 30, 2024
340,605
$
40.00
5.5 $
18,783
Exercisable at March 30, 2024
186,118
$
24.67
4.3 $
13,117
71
A summary of the status of non-vested stock options as of March 30, 2024 and changes during fiscal 2024 is
presented below:
Weighted-
Average
Grant Date
Shares
Fair Value
Nonvested at April 1, 2023
480,252 $ 16.26
Granted
— $
—
Vested
(325,765) $ 9.37
Nonvested shares forfeited
— $
—
Nonvested at March 30, 2024
154,487 $ 30.63
Restricted Stock Units
During fiscal 2024, the Company granted 132,713 restricted stock units to various directors and employees
under the 2020 Plan. The shares granted to employees vest in three equal annual installments beginning on the grant
date, provided that the respective award recipient continues to be employed by the Company through each of those dates
(subject to certain exceptions). The shares granted to the Company’s directors vest on the first day following the first
anniversary of the date of grant. The grant date fair value of these awards for fiscal 2024 totaled $8.6 million. The
Company is recognizing the expense relating to these awards on a straight-line basis over the service period of each
award (subject to certain exceptions), commencing on the date of grant.
During fiscal 2023, the Company granted 94,262 restricted stock units to various directors and employees under
the 2020 Plan. The shares granted to employees vest in three equal annual installments beginning on the grant date,
provided that the respective award recipient continues to be employed by the Company through each of those dates
(subject to certain exceptions). The shares granted to the Company’s directors vest on the first day following the first
anniversary of the date of grant. The grant date fair value of these awards for fiscal 2023 totaled $8.2 million. The
Company is recognizing the expense relating to these awards on a straight-line basis over the service period of each
award (subject to certain exceptions), commencing on the date of grant.
During fiscal 2022, the Company granted 65,662 restricted stock units to various directors and employees under
the 2014 Plan. The shares granted to employees vest in four equal annual installments beginning on the grant date,
provided that the respective award recipient continues to be employed by the Company through each of those dates
(subject to certain exceptions). The shares granted to the Company’s directors vest on the first day following the first
anniversary of the date of grant. The grant date fair value of these awards for fiscal 2022 totaled $5.2 million. The
Company is recognizing the expense relating to these awards on a straight-line basis over the service period of each
award (subject to certain exceptions), commencing on the date of grant.
72
Performance Share Units
During fiscal 2024, 2023 and 2022, the Company granted 112,740, 57,843 and 33,571 performance share units,
respectively, to various employees under the 2020 Plan with grant date fair values of $7.3 million, $5.0 million and $2.6
million, respectively. Performance share units are stock-based awards in which the number of shares ultimately received
depends on the Company's performance against its cumulative earnings per share target over a three-year performance
period. The performance period for fiscal 2024 awards began April 2, 2023 and ends March 28, 2026, fiscal 2023 awards
began March 27, 2022 and ends March 29, 2025, and fiscal 2022 awards began March 28, 2021 and ended March 30,
2024.
The performance metrics for these awards were established by the Company at the beginning of the
performance period. At the end of the performance period, the number of performance share units to be issued is fixed
based upon the degree of achievement of the performance goals. If the cumulative three-year performance goals are
below the threshold level, the number of performance share units to vest will be 0%, if the performance goals are at the
threshold level, the number of performance share units to vest will be 50% of the target amounts, if the performance
goals are at the target level, the number of performance share units to vest will be 100% of the target amounts, and if the
performance goals are at the maximum level, the number of performance share units to vest will be 200% of the target
amounts, each subject to continued service by the applicable award recipient through the last day of the performance
period (subject to certain exceptions). If performance is between threshold and target goals or between target and
maximum goals, the number of performance share units to vest will be determined by linear interpolation. The number of
shares ultimately issued can range from 0% to 200% of the participant's target award.
The grant date fair values of the performance share units granted during fiscal 2024, 2023 and 2022 were
initially measured using the Company's closing stock price on the date of grant with the resulting stock compensation
expense recognized on a straight-line basis over the three-year vesting period, subject to certain exceptions. The expense
recognized over the vesting period is adjusted up or down on a quarterly basis based on the anticipated performance level
during the performance period. If the performance metrics are not probable of achievement during the performance
period, any previously recognized stock compensation expense is reversed. The awards are forfeited if the threshold
performance goals are not achieved as of the end of the performance period.
Stock-Based Compensation Expense
Stock-based compensation expense was $12.9 million, $9.7 million, and $9.5 million for fiscal 2024, 2023, and
2022, respectively. Stock-based compensation expense of $2.4 million, $1.3 million, and $2.6 million was recorded in
cost of goods sold in the consolidated statements of operations for fiscal 2024, 2023, and 2022, respectively. All other
stock-based compensation expense is included in selling, general and administrative expenses in the consolidated
statements of operations.
As of March 30, 2024, there was $1.6 million of total unrecognized stock-based compensation expense related
to unvested stock options, with a weighted-average remaining recognition period of 1.07 years. As of March 30, 2024,
there was $7.8 million of total unrecognized stock-based compensation expense related to restricted stock units, with a
weighted-average remaining recognition period of 1.69 years. As of March 30, 2024, there was $3.8 million of total
unrecognized stock-based compensation expense related to performance share units, with a weighted-average remaining
recognition period of 2.13 years.
9. Commitments and Contingencies
The Company is involved, from time to time, in litigation that is incidental to its business. The Company has
reviewed these matters to determine if reserves are required for losses that are probable and reasonable to estimate in
accordance with FASB ASC Topic 450, Contingencies. The Company evaluates such reserves, if any, based upon
several criteria, including the merits of each claim, settlement discussions and advice from outside legal counsel, as well
as indemnification of amounts expended by the Company’s insurers or others, if any.
73
On February 27, 2020, one employee, on behalf of themself and all other similarly situated employees, filed a
class action lawsuit against the Company, which includes claims for penalties under California’s Private Attorney
General Act, in the Sacramento County Superior Court, alleging violations of California’s wage and hour, overtime,
meal periods and rest breaks, and an alleged violation of the suitable seating requirement as per California Labor Law
among other things. The Company reached a settlement for an amount that is not material to the consolidated financial
statements, and all settlement amounts were paid in July 2023, and there were no outstanding amounts as of March 30,
2024.
The Company is also subject to certain other pending or threatened litigation matters incidental to its business.
In management’s opinion, none of these legal matters, individually or in the aggregate, will have a material effect on the
Company’s financial position, results of operations, or liquidity.
During the normal course of its business, the Company has made certain indemnifications and commitments
under which the Company may be required to make payments for certain transactions. These indemnifications include
those given to various lessors in connection with facility leases for certain claims arising from such facility leases, and
indemnifications to directors and officers of the Company to the maximum extent permitted under the laws of the State
of Delaware. The majority of these indemnifications and commitments do not provide for any limitation of the maximum
potential future payments the Company could be obligated to make, and their duration may be indefinite. The Company
has not recorded any liability for these indemnifications and commitments in the consolidated balance sheets as the
impact is expected to be immaterial.
10. Leases
The Company does not own any real estate. Instead, most of its retail store locations are occupied under
operating leases. The store leases generally have a base lease term of five or 10 years, with one or more renewal periods
of five years, on average, exercisable at the Company’s option. The Company is generally responsible for the payment of
property taxes and insurance, utilities and common area maintenance fees. Some leases also require additional payments
based on percentage of sales. Lease terms include the non-cancellable portion of the underlying leases along with any
reasonably certain lease periods associated with available renewal periods, termination options and purchase options.
ROU assets are tested for impairment in the same manner as long-lived assets. During fiscal 2024, 2023 and
2022, the Company did not record ROU asset impairment charges related to its stores.
ROU assets and lease liabilities as of March 30, 2024 and April 1, 2023 consist of the following (in thousands):
Balance Sheet Classification
March 30, 2024
April 1, 2023
Assets
Finance lease assets
Right-of-use assets, net
$
8,537 $
9,357
Operating lease assets
Right-of-use assets, net
381,964
317,266
Total lease assets
$
390,501 $
326,623
Liabilities
Current
Finance
Short-term lease liabilities
$
873 $
863
Operating
Short-term lease liabilities
62,581
50,732
Total short-term lease liabilities
$
63,454 $
51,595
Non-Current
Finance
Long-term lease liabilities
$
14,428 $
15,301
Operating
Long-term lease liabilities
388,875
314,780
Total long-term lease liabilities
$
403,303 $
330,081
Total lease liabilities
$
466,757 $
381,676
74
Total lease costs for each of fiscal 2024, 2023 and 2022 were:
Fiscal Year Ended
(in thousands)
March 30, 2024
April 1, 2023
March 26, 2022
Finance lease cost
Amortization of right-of-use
assets
$
805
$
886
$
930
Interest on lease liabilities
672
713
774
Total finance lease cost
$
1,477
$
1,599
$
1,704
Operating lease cost
$
73,577
$
61,600
$
50,197
Short-term lease cost
4,403
5,085
3,934
Variable lease cost
23,920
22,305
20,286
Sublease income
—
—
—
Total lease cost
$
103,377
$
90,589
$
76,121
The following table summarizes future lease payments as of March 30, 2024:
Operating Leases Finance Leases
Fiscal Year
(in thousands) (in thousands)
2025
$
74,848 $
1,515
2026
81,750
1,552
2027
72,792
1,590
2028
64,838
1,629
2029
57,275
1,669
Thereafter
202,985
11,226
Total
554,488
19,181
Less: Imputed interest
(103,031)
(3,881)
Present value of net lease payments
$
451,457 $
15,300
As of March 30, 2024, the Company’s minimum lease commitment for operating leases signed but not yet
commenced was $88.7 million.
75
The following table includes supplemental lease information:
Fiscal Year Ended
Supplemental Cash Flow Information (dollars in thousands)
March 30, 2024
April 1, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases
$
77,270 $
61,783
Operating cash flows from finance leases
663
522
Financing cash flows from finance leases
880
1,038
$
78,813 $
63,343
Lease liabilities arising from new right-of-use assets
Operating leases
$
119,026 $
133,356
Finance leases
$
— $
—
Weighted average remaining lease term (in years)
Operating leases
7.9
8.1
Finance leases
11.4
12.4
Weighted average discount rate
Operating leases
5.0 %
4.7 %
Finance leases
10.9 %
10.9 %
11. Defined Contribution Plan
The Boot Barn 401(k) Plan (the “401(k) Plan”) is a qualified plan under Section 401(k) of the Internal Revenue
Code. The 401(k) Plan provides a matching contribution for all employees that work a minimum of 1,000 hours per year.
Contributions to the plan are based on certain criteria as defined in the agreement governing the 401(k) Plan.
Participating employees are allowed to contribute up to the statutory maximum set by the Internal Revenue Service. The
Company provides a safe harbor matching contribution that matches 100% of employee contributions up to 3% of their
respective wages and then 50% of further contributions up to 5% of their respective wages. Contributions to the plan and
charges to selling, general and administrative expenses were $2.3 million, $2.1 million, and $1.6 million for fiscal 2024,
2023, and 2022, respectively.
12. Income Taxes
Income tax expense consisted of the following:
Fiscal Year Ended
March 30,
April 1,
March 26,
(in thousands)
2024
2023
2022
Current:
Federal
$ 32,160
$ 37,404 $ 43,883
State
9,442
11,556 11,358
Foreign
—
—
—
Total current
41,602
48,960 55,241
Deferred:
Federal
5,774
6,927 3,942
State
3,000
(562)
960
Foreign
—
—
—
Total deferred
8,774
6,365 4,902
Total income tax expense
$ 50,376
$ 55,325 $ 60,143
76
The reconciliation between the Company’s effective tax rate on income from operations and the statutory tax
rate is as follows:
Fiscal Year Ended
March 30,
April 1,
March 26,
2024
2023
2022
Expected provision at statutory U.S. federal tax rate
21.0 %
21.0 %
21.0 %
State and local income taxes, net of federal tax benefit
4.2
4.0
4.0
Permanent items
0.1
0.1
—
Excess tax benefit of stock-based compensation
(3.2)
(1.5)
(2.9)
IRC Section 162(M)
3.1
1.3
1.7
Other
0.2
(0.4)
—
Effective tax rate
25.4 %
24.5 %
23.8 %
Differences between the effective tax rate and the statutory rate relate primarily to excess tax benefits due to
income tax accounting for share-based compensation, IRC Section 162(M) and state taxes.
Deferred taxes reflect the net tax effects of the temporary differences between the carrying amount of assets and
liabilities for financial reporting and the amount used for income tax purposes. Significant components of the Company’s
net deferred tax liabilities as of March 30, 2024 and April 1, 2023 consisted of the following (in thousands):
March 30
April 1,
2024
2023
Deferred tax assets:
State taxes
$
937 $
1,324
Accrued liabilities
2,980
2,037
Award program liabilities
632
466
Deferred revenue
2,902
2,131
Inventories
6,382
5,950
Stock options
2,811
2,165
Lease liabilities
111,813
84,731
Other, net
1,964
2,896
Total deferred tax assets
130,421 101,700
Deferred tax liabilities:
Depreciation and amortization
(75,295) (53,917)
Prepaid expenses
(934)
(782)
Right-of-use assets
(96,225) (80,261)
Total deferred tax liabilities
(172,454) (134,960)
Valuation allowance
—
—
Net deferred tax liabilities
$
(42,033) $ (33,260)
As of March 30, 2024, the Company had no net operating loss carryforwards for federal and state tax purposes.
Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts
expected to be realized. To this end, the Company has considered and evaluated its sources of taxable income, including
forecasted future taxable income, and the Company has concluded that a valuation allowance is not necessary as of
March 30, 2024.
The Company applies ASC 740, which contains a two-step approach to recognizing and measuring uncertain
tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available
evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related
appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more
than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and
77
estimating its tax positions and tax benefits, which may require periodic adjustments. At March 30, 2024 and April 1,
2023, no material amounts were recorded for any uncertain tax positions.
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a
component of income tax expense. To the extent that accrued interest and penalties do not ultimately become payable,
amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such
determination is made. The Company does not have any accrued interest or penalties associated with any unrecognized
tax benefits as of March 30, 2024 and April 1, 2023.
The Company does not anticipate a significant change in its uncertain tax benefits over the next 12 months.
The major jurisdictions in which the Company files income tax returns include the U.S. federal jurisdiction, as
well as various state jurisdictions within the U.S. The Company’s fiscal years 2019 through 2023 returns are subject to
examination by the U.S. federal and various state tax authorities.
13. Related Party Transactions
The Company had capital expenditures with Floor & Decor Holdings, Inc., a specialty retail vendor in the
flooring market. These capital expenditures amounted to less than $0.1 million, $0.1 million, and $0.6 million in fiscal
2024, fiscal 2023, and fiscal 2022, respectively, and were recorded as property and equipment, net on the consolidated
balance sheets. During these fiscal years, certain members of the Company’s board of directors either served on the
board of directors or as an executive officer at Floor & Decor Holdings, Inc.
John Grijalva, the husband of Laurie Grijalva, Chief Merchandising Officer, works as an independent sales
representative primarily for Dan Post Boot Company, Outback Trading Company, LTD and KS Marketing LLC.
Mr. Grijalva conducts his business as an independent sales representative through a limited liability company of which
he and Ms. Grijalva are members. We purchased merchandise from these suppliers in the aggregate approximate
amounts of $32.8 million, $45.0 million, and $39.5 million in fiscal 2024, fiscal 2023, and fiscal 2022, respectively.
Mr. Grijalva was paid commissions by the companies he represents amounting to approximately $2.2 million,
$3.2 million, and $2.4 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively, a portion of which were passed on
to other sales representatives working for Mr. Grijalva.
14. Earnings Per Share
Earnings per share is computed under the provisions of FASB ASC Topic 260, Earnings Per Share. Basic
earnings per share is computed based on the weighted average number of outstanding shares of common stock during the
period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus
the effect of dilutive potential common shares outstanding during the period using the treasury stock method, whereby
proceeds from such exercise and unamortized compensation, if any, on share-based awards are assumed to be used by
the Company to purchase the shares of common stock at the average market price during the period. The dilutive effect
of stock options and restricted stock is applicable only in periods of net income. Performance share units and market-
based stock option awards are excluded from the calculation of diluted earnings per share until their respective
performance or market criteria has been achieved.
78
The components of basic and diluted earnings per share of common stock, in aggregate, for fiscal 2024, 2023,
and 2022 are as follows:
Fiscal Year Ended
March 30,
April 1,
March 26,
(in thousands, except per share data)
2024
2023
2022
Net income
$ 146,996
$ 170,553 $ 192,450
Weighted average basic shares outstanding
30,167
29,805 29,556
Dilutive effect of options and restricted stock
444
565
835
Weighted average diluted shares outstanding
30,611
30,370 30,391
Basic earnings per share
$
4.87
$
5.72 $
6.51
Diluted earnings per share
$
4.80
$
5.62 $
6.33
During fiscal 2024, fiscal 2023 and fiscal 2022, securities outstanding totaling approximately 86,882, 198,511,
and 1,387 shares, comprised of options and restricted stock, were excluded from the computation of weighted average
diluted common shares outstanding, as the effect of doing so would have been anti-dilutive.
79
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act) designed to ensure that the information required to be disclosed by us in the reports that we file or
submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the
rules and forms of the SEC, and is accumulated and communicated to our management, including our Chief Executive
Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer and principal
accounting officer), as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has
evaluated the effectiveness of our disclosure controls and procedures under the Exchange Act as of March 30, 2024, the
end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that, as of March 30, 2024, our disclosure controls and procedures were effective.
Management’s Annual Report on Internal Control Over Financial Reporting
We are responsible for establishing and maintaining internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, assessed the effectiveness of our internal control over financial reporting as of March 30, 2024. In
making this assessment, our management used the Internal Control – Integrated Framework (2013) as issued by the
Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on this assessment, management
concluded that our internal control over financial reporting was effective as of March 30, 2024.
The effectiveness of our internal control over financial reporting as of March 30, 2024 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears
immediately below.
80
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Boot Barn Holdings, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Boot Barn Holdings, Inc. and subsidiaries (the
“Company”) as of March 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of March 30, 2024,
based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements as of and for the year ended March 30, 2024, of the Company
and our report dated May 14, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
May 14, 2024
81
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarterly period
ended March 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
Item 9B. Other Information
Insider Trading Policy
We are committed to promoting high standards of ethical business conduct and compliance with applicable
laws, rules and regulations. As part of this commitment, we have adopted our Insider Trading Policy governing the
purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees, that we believe is
reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing
standards applicable to us. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on
Form 10-K.
Rule 10b5-1 Trading Arrangements
During the quarter ended March 30, 2024, none of our directors or executive officers adopted or terminated any
contract, instruction or written plan for the purchase or sale of our common stock intended to satisfy the affirmative
defense conditions of Rule 10b5-1(c) under the Exchange Act, or any “non-Rule 10b5-1 trading arrangement” (as
defined in Item 408(c) of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Present Inspections
Not applicable.
82
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item will be contained in our 2024 Proxy Statement, which is expected to be
filed not later than 120 days after the end of our fiscal year ended March 30, 2024, and is incorporated herein by
reference.
In addition, our Board of Directors has adopted a Code of Business Ethics that applies to all of our directors,
employees and officers, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting
Officer. The current version of the Code of Business Ethics is available on our website under the Investor Relations
section at www.bootbarn.com. In accordance with the rules adopted by the SEC and the New York Stock Exchange, we
intend to promptly disclose any amendments to certain provisions of the Code of Business Ethics, or waivers of such
provisions granted to executive officers and directors, on our website under the Investor Relations section at
www.bootbarn.com. The information contained on or accessible through our website is not incorporated by reference
into this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by this Item will be set forth in the 2024 Proxy Statement and is incorporated herein
by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item will be set forth in the 2024 Proxy Statement and is incorporated herein
by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be set forth in the 2024 Proxy Statement and is incorporated herein
by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item will be set forth in the 2024 Proxy Statement and is incorporated herein
by reference.
PART IV
Item 15. Exhibits and Financial Statement Schedules
Financial Statements and Financial Statement Schedules
See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K.
Financial statement schedules have been omitted because they are not required or are not applicable or because the
information required in those schedules either is not material or is included in the consolidated financial statements or the
accompanying notes.
Exhibits
The exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10-K.
83
Exhibit
Number
Description
2.1(1)
Agreement and Plan of Merger by and among Boot Barn, Inc., Rodeo Acquisition Corp., Sheplers
Holding Corporation and Gryphon Partners III, L.P. as Guarantor and the Sellers’ Representative, dated as
of May 29, 2015
3.1(2) Second Amended and Restated Certificate of Incorporation of the Registrant
3.2(3) Amended and Restated Bylaws of the Registrant
3.2.1(4) Amendment, effective March 23, 2015, to Amended and Restated Bylaws of the Registrant
4.1(3) Specimen Common Stock Certificate
4.2(5) Description of Capital Stock
10.1†(6) Amended and Restated Boot Barn Holdings, Inc. 2014 Equity Incentive Plan
10.1.1†(7)
Form of Employee Restricted Stock Unit Issuance Agreement under the Boot Barn Holdings, Inc. 2014
Equity Incentive Plan
10.1.2†(7) Form of Stock Option Agreement under Boot Barn Holdings, Inc. 2014 Equity Incentive Plan
10.2†(8) Boot Barn Holdings, Inc. 2020 Equity Incentive Plan
10.2.1†(9) Amendment 2021-1 to the Boot Barn Holdings, Inc. 2020 Equity Incentive Plan
10.2.2†
Form of Employee Restricted Stock Unit Issuance Agreement under Boot Barn Holdings, Inc. 2020
Equity Incentive Plan
10.2.3†
Form of Performance Unit Issuance Agreement under Boot Barn Holdings, Inc. 2020 Equity Incentive
Plan
10.2.4†
Form of Market-Based Stock Option Agreement, by and between Boot Barn Holdings, Inc. and James G.
Conroy
10.3†(8) Boot Barn Holdings, Inc. Amended and Restated Cash Incentive Plan for Executives
10.4†(10)
Amended and Restated Employment Agreement, dated April 7, 2015, by and between Boot Barn, Inc. and
James G. Conroy
10.5†(11)
Continued Employment Agreement, effective as of January 26, 2015, by and between Boot Barn, Inc. and
Paul Iacono
10.6†(2)
Employment Agreement, effective as of May 11, 2014, by and between Boot Barn, Inc. and Laurie
Grijalva
10.7†(2) Letter Agreement, dated July 2, 2014, by and between Boot Barn, Inc. and Laurie Grijalva
10.8†(12) Employment Agreement, dated October 26, 2021, by and between Boot Barn, Inc. and James Watkins
10.9†(8) Boot Barn Holdings, Inc. Cash Incentive Plan for Executives
10.10(3)
NSB Software as a Service Master Agreement, dated February 26, 2008, by and between Boot Barn, Inc.
and NSB Retail Solutions Inc.
10.11 (3) Form of Amended and Restated Indemnification Agreement
10.12(13)
Amendment No. 4 to Credit Agreement (which amends and restates the Credit Agreement in its entirety),
dated as of July 11, 2022, by and among the Company, Boot Barn, Inc., Sheplers Holding, LLC (f/k/a
Sheplers Holding Corporation), Sheplers, LLC (f/k/a Sheplers, Inc.), Wells Fargo Bank, National
Association, as Administrative Agent, Swingline Lender and Issuing Lender, Wells Fargo Bank, National
Association, as Sole Lead Arranger and Sole Bookrunner, and the other Lenders named therein
10.13(14)
Guaranty Agreement dated as of June 29, 2015 by and among Boot Barn, Inc. and Sheplers, Inc. as
Borrowers, Boot Barn Holdings, Inc., Sheplers Holdings Corporation and certain of their Subsidiaries as
Guarantors, in favor of Wells Fargo Bank, National Association, as Administrative Agent.
10.14(14)
Collateral Agreement dated as of June 29, 2015, by and among Boot Barn Holdings, Inc., Boot Barn, Inc.,
Sheplers Holding Corporation, Sheplers, Inc. and certain of their Subsidiaries as Grantors, in favor of
Wells Fargo Bank, National Association, as Administrative Agent.
10.15(14)
Trademark Security Agreement, dated as of June 29, 2015, by Sheplers, Inc., in favor of Wells Fargo
Bank, National Association, as Administrative Agent.
10.16(14)
Trademark Security Agreement, dated as of June 29, 2015, by Boot Barn, Inc., in favor of Wells Fargo
Bank, National Association, as Administrative Agent.
84
Exhibit
Number
Description
10.17(15)
Employment Agreement, effective on or around April 2, 2018, by and between Boot Barn, Inc. and John
Hazen.
10.18(15) Employment Agreement, effective on May 5, 2014, by and between Boot Barn, Inc. and Michael A. Love.
10.18.1(15)
Supplemental Employment Letter Agreement, effective on April 1, 2017, by and between Boot Barn, Inc.
and Michael A. Love.
10.18.2(15)
Supplemental Employment Letter Agreement, effective on or around June 12, 2018, by and between Boot
Barn, Inc. and Michael A. Love.
19.1 Boot Barn Holdings, Inc. Insider Trading Policy
21.1 List of subsidiaries
23.1 Consent of Deloitte & Touche LLP
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
97.1 Boot Barn Holdings, Inc. Compensation Recoupment Policy adopted November 14, 2023
101
Pursuant to Rules 405 and 406 of Regulation S-T, the following information from the Company’s Annual
Report on Form 10-K for the fiscal year ended March 30, 2024 is formatted in iXBRL (Inline eXtensible
Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of
Operations; (iii) the Consolidated Statement of Stockholders’ Equity; (iv) the Consolidated Statements of
Cash Flows and (v) Notes to the Consolidated Financial Statements.
104
The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended March 30,
2024, formatted in iXBRL in Exhibit 101.
†
Indicates management contract or compensation plan.
+
Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment
and the omitted portions have been filed separately with the SEC.
(1) Incorporated by reference to our Current Report on Form 8-K filed on June 3, 2015.
(2) Incorporated by reference to our Quarterly Report on Form 10-Q filed on December 9, 2014.
(3) Incorporated by reference to our Registration Statement on Form S-1, File No. 333-199008.
(4) Incorporated by reference to our Current Report on Form 8-K filed on March 26, 2015.
(5) Incorporated by reference to our Annual Report on Form 10-K filed on May 24, 2019
(6) Incorporated by reference to our Current Report on Form 8-K filed on August 25, 2016.
85
(7) Incorporated by reference to our Quarterly Report on Form 10-Q filed on August 2, 2019.
(8) Incorporated by reference to Current Report on Form 8-K filed on September 1, 2020
(9) Incorporated by reference to our Current Report on Form 8-K filed on August 26, 2021.
(10) Incorporated by reference to our Current Report on Form 8-K filed on April 8, 2015.
(11) Incorporated by reference to our Current Report on Form 8-K filed on January 9, 2015.
(12) Incorporated by reference to our Current Report on Form 8-K filed on October 27, 2021.
(13) Incorporated by reference to our Current Report on Form 8-K filed on July 14, 2022.
(14) Incorporated by reference to our Current Report on Form 8-K filed on July 2, 2015.
(15) Incorporated by reference to our Annual Report on Form 10-K filed on May 24, 2019.
86
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BOOT BARN HOLDINGS, INC.
Date: May 14, 2024
By:/s/ JAMES G. CONROY
Name: James G. Conroy
Title:
President, CEO and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ JAMES G. CONROY
President, CEO and Director (Principal Executive
Officer)
May 14, 2024
James G. Conroy
/s/ JAMES M. WATKINS
Chief Financial Officer and Secretary (Principal Financial
Officer and Principal Accounting Officer)
May 14, 2024
James M. Watkins
/s/ CHRIS BRUZZO
Director
May 14, 2024
Chris Bruzzo
/s/ GENE EDDIE BURT
Director
May 14, 2024
Gene Eddie Burt
/s/ LISA G. LAUBE
Director
May 14, 2024
Lisa G. Laube
/s/ BRENDA I. MORRIS
Director
May 14, 2024
Brenda I. Morris
/s/ ANNE MACDONALD
Director
May 14, 2024
Anne MacDonald
/s/ PETER STARRETT
Director
May 14, 2024
Peter Starrett
/s/ BRADLEY M. WESTON
Director
May 14, 2024
Bradley M. Weston
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