Sportsman's Warehouse Holdings, Inc 10-Q for FY2023 Q2

Sportsman's Warehouse Holdings, Inc. (SPWH)

10-Q 2022-09-02 For: 2022-07-30

Added on April 12, 2026

About this 10-Q

Sportsman's Warehouse Holdings, Inc filed this 10-Q on September 2, 2022, covering the quarter ended July 30, 2022 (FY2023 Q2).

Headline figures

Quarter ended July 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $351.02M; down 3.0% from $361.78M a year earlier
Net income: $14.61M; down 17.5% from net income of $17.72M a year earlier
Diluted EPS: $0.35; down 12.5% from $0.40 a year earlier

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Delaware		39-1975614
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1475 West 9000 South, Suite A, West Jordan, Utah		84088
(Address of principal executive offices)		(Zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $.01 par value	SPWH	The Nasdaq Stock Market LLC


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):	4

	Condensed Consolidated Balance Sheets	4

	Condensed Consolidated Statements of Operations	5

	Condensed Consolidated Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	31

	Signatures	32


	July 30,		January 29,
	2022		2022
Assets
Current assets:
Cash and cash equivalents	$	6,018	$	57,018
Accounts receivable, net		1,911		1,937
Merchandise inventories		437,382		386,560
Prepaid expenses and other		20,855		21,955
Total current assets		466,166		467,470
Operating lease right of use asset		250,936		243,047
Property and equipment, net		137,152		128,304
Goodwill		1,496		1,496
Definite lived intangibles, net		419		264
Total assets	$	856,169	$	840,581

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	98,845	$	58,916
Accrued expenses		91,040		109,012
Income taxes payable		4,852		9,500
Operating lease liability, current		42,195		40,924
Revolving line of credit		90,780		66,054
Total current liabilities		327,712		284,406
Long-term liabilities:
Deferred income taxes		5,009		5,779
Operating lease liability, noncurrent		243,596		236,227
Total long-term liabilities		248,605		242,006
Total liabilities		576,317		526,412

Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 20,000 shares authorized; 0 shares issued and outstanding		—		—
Common stock, $.01 par value; 100,000 shares authorized; 44,215 issued and 38,867 outstanding on July 30, 2022 and 43,880 shares issued and outstanding on January 29, 2022		442		439
Treasury stock, at cost; 5,348 and 0 shares, respectively		(52,057)		—
Additional paid-in capital		91,976		90,851
Accumulated earnings		239,491		222,879
Total stockholders' equity		279,852		314,169
Total liabilities and stockholders' equity	$	856,169	$	840,581


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 30,		July 31,		July 30,		July 31,
	2022		2021		2022		2021
Net sales	$	351,021	$	361,778	$	660,526	$	688,770
Cost of goods sold		233,482		241,724		443,896		464,669
Gross profit		117,539		120,054		216,630		224,101

Selling, general, and administrative expenses		97,023		95,870		193,108		186,289
Income from operations		20,516		24,184		23,522		37,812
Interest expense		767		266		1,334		492
Income before income taxes		19,749		23,918		22,188		37,320
Income tax expense		5,135		6,195		5,576		9,147
Net income	$	14,614	$	17,723	$	16,612	$	28,173
Earnings per share:
Basic	$	0.35	$	0.40	$	0.39	$	0.64
Diluted	$	0.35	$	0.40	$	0.38	$	0.63
Weighted average shares outstanding:
Basic		41,962		43,860		42,950		43,775
Diluted		42,194		44,716		43,180		44,600


For the Thirteen Weeks Ended July 30, 2022 and July 31, 2021
	Common Stock			Restricted nonvoting Common Stock			Treasury Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at May 1, 2021	43,831	$	438	—	$	—	—	$	—	$	88,560	$	124,859	$	213,857
Stock based compensation	—		—	—		—	—		—		1,027		—		1,027
Net Income	—		—	—		—	—		—		—		17,723		17,723
Balance at July 31, 2021	43,831	$	438	—	$	—	—	$	—	$	89,587	$	142,582	$	232,607

Balance at April 30, 2022	44,121	$	441	—	$	—	—	$	—	$	90,362	$	224,877	$	315,680
Repurchase of treasury stock	—		—	—		—	5,348		(52,057)		—		—		(52,057)
Vesting of restricted stock units	30		—	—		—	—		—		—		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(2)		—		(2)
Issuance of common stock for cash per employee stock purchase plan	64		1	—		—	—		—		525		—		526
Stock based compensation	—		—	—		—	—		—		1,091		—		1,091
Net income	—		—	—		—	—		—		—		14,614		14,614
Balance at July 30, 2022	44,215	$	442	—	$	—	5,348	$	(52,057)	$	91,976	$	239,491	$	279,852


For the Twenty-Six Weeks Ended July 30, 2022 and July 31, 2021
	Common Stock			Restricted nonvoting common stock			Treasury Stock			Additional paid-in- capital		Accumulated (deficit) earnings		Total stockholders' equity
	Shares	Amount		Shares	Amount		Shares	Amount		Amount		Amount		Amount

Balance at January 30, 2021	43,623	$	436	—	$	—	—	$	—	$	89,815	$	114,409	$	204,660
Vesting of restricted stock units	208		2	—		—	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(2,269)		—		(2,269)
Stock based compensation	—		—	—		—	—		—		2,043		—		2,043
Net income	—		—	—		—	—		—		—		28,173		28,173
Balance at July 31, 2021	43,831	$	438	—	$	—	—	$	—	$	89,587	$	142,582	$	232,607

Balance at January 29, 2022	43,880	$	439	—	$	—	—	$	—	$	90,851	$	222,879	$	314,169
Repurchase of treasury stock	—		—	—		—	5,348		(52,057)		—		—		(52,057)
Vesting of restricted stock units	271		2	—		—	—		—		(2)		—		—
Payment of withholdings on restricted stock units	—		—	—		—	—		—		(1,847)		—		(1,847)
Issuance of common stock for cash per employee stock purchase plan	64		1	—		—	—		—		525		—		526
Stock based compensation	—		—	—		—	—		—		2,449		—		2,449
Net income	—		—	—		—	—		—		—		16,612		16,612
Balance at July 30, 2022	44,215	$	442	—	$	—	5,348	$	(52,057)	$	91,976	$	239,491	$	279,852
The accompanying notes are an integral part of these condensed consolidated financial statements


	July 30, 2022		January 29, 2022
Right of return assets, which are included in prepaid expenses and other	$	2,438	$	2,142
Estimated gift card contract liability, net of breakage		(20,551)		(23,128)
Estimated loyalty contract liability, net of breakage		(5,400)		(7,211)
Sales return liabilities, which are included in accrued expenses		(3,639)		(3,197)


	Operating
Year Endings:	Leases
2022 (remainder)		32,389
2023		62,579
2024		54,350
2025		47,790
2026		42,625
Thereafter		151,658
Undiscounted cash flows	$	391,391
Reconciliation of lease liabilities:
Present values	$	285,791
Lease liabilities - current		42,195
Lease liabilities - noncurrent		243,596
Lease liabilities - total	$	285,791
Difference between undiscounted and discounted cash flows	$	105,600


		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 29, 2022	487	$	5.13
Grants	188		10.88
Forfeitures	(89)		5.47
Vested	(168)		3.49
Balance at July 30, 2022	418	$	8.31

		Weighted
		average
		grant-date
	Shares	fair value
Balance at January 30, 2021	624	$	5.13
Grants	—		—
Forfeitures	(13)		5.63
Vested	(22)		4.91
Balance at July 31, 2021	589	$	5.13


			Fair Value as of		Fair Value as of
Asset	Type	Measurement Level	July 30, 2022		January 29, 2022
Short-term Investments (1)	Cash and Cash Equivalents (2)	Level 1	$	-	$	55,000


Period	Total # of Shares Purchased	Average Price Paid per Share	Total # of Shares Purchased as Part of a Publicly Announced Program	Maximum Dollar Value of Shares that May yet Be Purchased Under the Program
May 1, 2022 to May 30, 2022	-	N/A	-	$ 75,000
May 31, 2022 to June 29, 2022	4,131,100	$ 9.69	4,131,100	$ 34,964
June 30, 2022 to July 30, 2022	1,216,900	$ 9.88	1,216,900	$ 22,943
Total	5,348,000	$ 9.73	5,348,000	$ 22,943


Exhibit Number		Description

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 and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


	SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

Date: September 2, 2022	By:	/s/ Jon Barker
		Jon Barker
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: September 2, 2022	By:	/s/ Jeff White
		Jeff White
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


/s/ Jeff White
Jeff White
Chief Financial Officer and Secretary


	Twenty-Six Weeks Ended
	July 30,		July 31,
	2022		2021
Cash flows from operating activities:
Net income	$	16,612	$	28,173
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of property and equipment		15,137		12,116
Amortization of deferred financing fees		108		126
Amortization of definite lived intangible		36		20
Noncash lease expense		16,027		7,962
Deferred income taxes		(770)		(238)
Stock-based compensation		2,449		2,043
Change in operating assets and liabilities, net of amounts acquired:
Accounts receivable, net		26		(35)
Operating lease liabilities		(15,276)		(13,926)
Merchandise inventories		(50,822)		(134,919)
Prepaid expenses and other		1,500		2,614
Accounts payable		38,269		32,351
Accrued expenses		(10,681)		(1,403)
Income taxes payable and receivable		(4,648)		(2,666)
Net cash provided by (used in) operating activities		7,967		(67,782)
Cash flows from investing activities:
Purchase of property and equipment, net of amounts acquired		(22,588)		(17,936)
Net cash used in investing activities		(22,588)		(17,936)
Cash flows from financing activities:
Net borrowings on line of credit		24,726		20,191
(Decrease) increase in book overdraft, net		(7,221)		4,891
Proceeds from issuance of common stock per employee stock purchase plan		525		—
Payments to acquire treasury stock		(52,057)		—
Payment of withholdings on restricted stock units		(1,844)		(2,269)
Payment of deferred financing costs		(508)		—
Net cash (used in) provided by financing activities		(36,379)		22,813
Net change in cash and cash equivalents		(51,000)		(62,905)
Cash and cash equivalents at beginning of period		57,018		65,525
Cash and cash equivalents at end of period	$	6,018	$	2,620

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	1,220	$	492


		Thirteen Weeks Ended		Twenty-Six Weeks Ended
		July 30,	July 31,	July 30,	July 31,
Department	Product Offerings	2022	2021	2022	2021
Camping	Backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents and tools	16.9%	17.8%	14.0%	14.7%
Apparel	Camouflage, jackets, hats, outerwear, sportswear, technical gear and work wear	7.1%	6.6%	7.0%	6.5%
Fishing	Bait, electronics, fishing rods, flotation items, fly fishing, lines, lures, reels, tackle and small boats	13.4%	15.1%	12.0%	13.4%
Footwear	Hiking boots, socks, sport sandals, technical footwear, trail shoes, casual shoes, waders and work boots	6.7%	6.6%	6.5%	6.4%
Hunting and Shooting	Ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, reloading equipment and shooting gear	50.5%	48.1%	55.1%	53.1%
Optics, Electronics, Accessories, and Other	Gift items, GPS devices, knives, lighting, optics, two-way radios, and other license revenue, net of revenue discounts	5.4%	5.8%	5.4%	5.9%
Total		100.0%	100.0%	100.0%	100.0%


	July 30,		January 29,
	2022		2022
Furniture, fixtures, and equipment	$	122,815	$	115,597
Leasehold improvements		150,385		143,064
Construction in progress		14,131		5,007
Total property and equipment, gross		287,331		263,668
Less accumulated depreciation and amortization		(150,179)		(135,364)
Total property and equipment, net	$	137,152	$	128,304


	July 30,		January 29,
	2022		2022
Book overdraft	$	9,031	$	16,252
Unearned revenue		37,902		42,058
Accrued payroll and related expenses		18,135		26,309
Sales and use tax payable		7,058		8,788
Accrued construction costs		344		416
Other		18,570		15,189
Total accrued expenses	$	91,040	$	109,012