What Happened?
Shares of outdoor specialty retailer Sportsman's Warehouse (NASDAQ:SPWH) jumped 29.4% in the morning session after the company reported a "beat and raise" quarter. SPWH blew past analysts' revenue, EPS, and EBITDA expectations. For the full year, its revenue and EBITDA projections exceeded Wall Street's forecasts. These results stand out given management's acknowledgment of challenges, including rising prices reducing shoppers' spending power, fewer store visits, and weaker demand across most product lines. Despite these challenges, the company found bright spots in fishing gear, camping equipment, and optics and accessories, which helped offset the broader declines. Zooming out, we think this was a solid "beat-and-raise" quarter.
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What The Market Is Telling Us
Sportsman's Warehouse’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. But moves this big are rare even for Sportsman's Warehouse and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 22.8% on the news that the company reported fourth-quarter results, which blew past analysts' EPS expectations. The company also reduced its excess inventory and outperformed Wall Street's free cash flow estimates. On the other hand, its revenue missed as same-store sales decreased 12.8% (vs an estimated 8% decrease). That decline was slightly offset by 15 new store openings. Looking ahead, Sportsman's Warehouse expects its demand to remain troubled in 2024, but its forecasted EBITDA profitability was better than expected. Overall, this quarter's results still seemed fairly positive, and shareholders should feel optimistic.
Sportsman's Warehouse is down 32.4% since the beginning of the year, and at $3.02 per share, it is trading 33% below its 52-week high of $4.50 from January 2024. Investors who bought $1,000 worth of Sportsman's Warehouse’s shares 5 years ago would now be looking at an investment worth $384.81.
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