The American outdoor sporting goods retailer, Sportsman’s Warehouse (Nasdaq: SPWH) reported strong Q4 earnings that sent shares upwards with a gain of ~90%. The company reported net sales of $340.4 million, down 0.9% year-over-year after adjusting for the extra week in the prior year. Same-store sales decreased 0.5%, an improvement of 520 basis points over the prior quarter.
The company saw positive sales comps in December and January, with fishing up 10.3% and camping up 5.2% in the quarter. Hunting and shooting sports were down 1.7%, but the company saw positive sales trends and illustrated an outperformance in the firearms industry, with double-digit outperformance of NICS data in February. This suggests they are gaining market share in a trade-down environment.
Gross margin improved 360 basis points to 30.4% due to improvements in apparel and footwear. Adjusted EBITDA was $14.6 million, up nearly 300% from the prior year period.
Looking ahead to fiscal 2025, the company expects net sales to be in the range of -1% to +3.5% and adjusted EBITDA of $33 million to $45 million. The company plans to focus on its core hunting and fishing categories, improve inventory management, strengthen its personal protection business, and increase brand awareness. The company expects to open one new store in the late third or early fourth quarter of 2025. The company is prioritizing debt paydown as its primary use of free cash flow and sees opportunities to continue generating positive free cash flow through inventory management and operational improvements.
Sportsman’s expects Q1 2025 to be pressured by a later Easter holiday shift but sees more upside opportunity in Q2-Q4. Additionally, the company has a small exposure to tariffs but is working to mitigate the impact through vendor negotiations and proactive inventory management.
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