Boot Barn Holdings Q2 2017 net sales increased 3.3% to $134.0 million from $129.7 million in the prior-year period.
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Net sales increased due to 13 new stores opened over the past twelve months and a 1.8% increase in same store sales.
Sales growth was partially offset by the planned closure of eight stores over the last 15 months, including six low-volume Sheplers stores that were closed consistent with original expectations.
Gross profit increased 1.6% to $36.4 million, or 27.2% of net sales, compared to gross profit of $35.9 million, or 27.7% of net sales, in the prior-year period.
Excluding the amortization of inventory fair value adjustment, acquisition-related integration costs, and contract termination costs, adjusted gross profit in the prior-year period was $38.4 million or 29.6% of net sales.
The decline in gross profit rate compared to the prior year’s adjusted gross profit rate resulted primarily from increases in store occupancy costs associated with the 13 new stores opened during the last 12 months and additional depreciation expense from the rebranded Sheplers stores that was not included in the prior-year period.
Also contributing to the decline in gross profit rate was an 80 basis point decline in the merchandise margin rate, resulting from higher loyalty rewards redemption, shrink and aged inventory provision.
Income from operations increased $4.8 million to $4.4 million, compared to a loss from operations of $0.4 million in the prior-year period. Excluding the amortization of inventory fair value adjustment, acquisition-related integration costs, and loss on disposal of assets and contract termination costs, adjusted income from operations in the prior-year period was $5.8 million.
The company opened two new stores and ended the quarter with 212 stores in 29 states.
Interest expense decreased $1.3 million to $3.7 million from $5.0 million in the prior-year period. Excluding a $1.4 million write-off of debt issuance costs associated with the refinancing of debt, adjusted interest expense was $3.6 million in the prior-year period.
Net income was $0.5 million, or $0.02 per diluted share, compared to a net loss of $3.3 million or $0.13 per diluted share in the prior-year period.
Excluding the amortization of inventory fair value adjustment, acquisition-related integration costs, loss on disposal of assets and contract termination costs, and write-off of debt issuance costs associated with the refinancing of debt, adjusted net income in the second quarter of the prior year was $1.2 million, or $0.04 per diluted share. ■