Boot Barn Holdings: Heavily Shorted With a Double Bottom


Small cap apparel retailerBoot Barn Holdings (NYSE: BOOT) is the 4th most shorted stock on theNYSE with short interest of 54.59% according to Highshortinterest.com. Boot Barn Holdings is the nations leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company operates 219 stores in 31 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nations leading pure play online western and work retailer. Sheplers has been part of the western, outdoor, and work lifestyle for over 100 years. Beginning in February 2017, the Company has operated www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle.


Boot Barn Holdings has seen shares fall off since the end of last year, but there is also a double bottom on the technical chart with support at the $6 level:

At the beginning of August, Boot Barn Holdings reportedthat fiscal Q1 2018 net sales increased 4.5% to $139.4 million due to the opening of 11 new stores over the past twelve months, a 1.3% increase in same store sales and sales from the recently acquired Country Outfitter site. Cashstood at$7.3 million as of July 1, 2017 versus $8.035 million as of April 1, 2017 whiletotal net debtwas $245.2 million, including $62.8 million outstanding on therevolving credit facility. Net income was $0.8 millionversus net income of $0.6 million. The CEO commented:


We are encouraged with our start to fiscal 2018 as sales and earnings per share both exceeded expectations. Same store sales increased 1.3% as low single-digit growth in our physical stores and a strong double-digit gain in our bootbarn.com business more than offset a decline at sheplers.com. We believe our commitment and focus on the store business have helped return us to positive store comps during the quarter, a trend that has carried into the second quarter. Importantly, our stores in oil and gas markets also continued to improve, highlighted by a low single-digit sales increase for our stores in Texas. Meanwhile, we continue to make progress on improving organic search and increasing the site speed at sheplers.com following the technical problems we encountered upon transition of the e-commerce site to a new software platform in February. Despite this temporary setback, we believe an upgraded e-commerce platform was a necessary investment, and will position us wel l for the next level of omni-channel leadership and contribute to future earnings growth.


Given Hurricanes Harvey and Irene, investors might want to consider the following map showing where Boot Barn Holdings has its stores concentrated:

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