Boot Barn Holdings, Inc.

Previous wording

The following discussion and analysis of the financial condition and results of our operations should be read together with the unaudited financial statements and related notes of Boot Barn Holdings, Inc. and its subsidiaries included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2025 (the “Fiscal 2025 10-K”). As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Company”, “Boot Barn”, “we”, “our”, and “us” refer to Boot Barn Holdings, Inc. and its subsidiaries.

Current wording

The following discussion and analysis of the financial condition and results of our operations should be read together with the unaudited financial statements and related notes of Boot Barn Holdings, Inc. and its subsidiaries included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on

Previous wording

We believe that Boot Barn is the largest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories in the U.S. As of June 28, 2025, we operated 473 stores in 49 states, as well as our e-commerce websites consisting primarily of bootbarn.com, sheplers.com, countryoutfitter.com, idyllwind.com, and third-party marketplaces, as well as the Boot Barn app. Our product offering is anchored by an extensive selection of western and work boots and is complemented by a wide assortment of coordinating apparel and accessories. Our stores feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable store associates. Many of the items that we offer are basics or necessities for our customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing fashion trends.

Current wording

We believe that Boot Barn is the largest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories in the U.S. As of September 27, 2025, we operated 489 stores in 49 states, as well as our e-commerce websites consisting primarily of bootbarn.com, sheplers.com, countryoutfitter.com, idyllwind.com, and third-party marketplaces, as well as the Boot Barn app. Our product offering is anchored by an extensive selection of western and work boots and is complemented by a wide assortment of coordinating apparel and accessories. Our stores feature a comprehensive assortment of brands and styles, coupled with attentive, knowledgeable store associates. Many of the items that we offer are basics or necessities for our customers’ daily lives and typically represent enduring styles that are not meaningfully impacted by changing fashion trends.

Previous wording

Our gross profit generally follows changes in net sales. We regularly analyze the components of gross profit, as well as gross profit as a percentage of net sales. Specifically, we examine the initial markup on purchases, markdowns and reserves, shrinkage, buying costs, distribution costs, and occupancy costs. Any inability to obtain acceptable levels of initial markups, a significant increase in our use of markdowns or in inventory shrinkage, or a significant increase in freight and other inventory acquisition costs, could have an adverse impact on our gross profit and results of operations.

Current wording

Our gross profit generally follows changes in net sales. We regularly analyze the components of gross profit, as well as gross profit as a percentage of net sales. Specifically, we examine the initial markup on purchases, markdowns and reserves, shrinkage, buying costs, distribution costs, and occupancy costs. Any inability to obtain acceptable levels of

Previous wording

Net sales. Net sales increased $80.7 million, or 19.1%, to $504.1 million for the thirteen weeks ended June 28, 2025 from $423.4 million for the thirteen weeks ended June 29, 2024. Consolidated same store sales increased 9.4%. Excluding the impact of the 9.3% increase in e-commerce same store sales, same store sales increased by 9.5%. The increase in net sales was the result of incremental sales from new stores and the increase in consolidated same store sales.

Current wording

Net sales. Net sales increased $79.6 million, or 18.7%, to $505.4 million for the thirteen weeks ended September 27, 2025 from $425.8 million for the thirteen weeks ended September 28, 2024. Consolidated same store sales increased 8.4%. Excluding the impact of the 14.4% increase in e-commerce same store sales, same store sales increased by 7.8%. The increase in net sales was the result of incremental sales from new stores and the increase in consolidated same store sales.

Previous wording

Gross profit. Gross profit increased $40.5 million, or 25.8%, to $197.2 million for the thirteen weeks ended June 28, 2025 from $156.7 million for the thirteen weeks ended June 29, 2024. As a percentage of net sales, gross profit increased by 210 basis points to 39.1% for the thirteen weeks ended June 28, 2025 from 37.0% for the thirteen weeks ended June 29, 2024. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. The 210 basis-point increase in gross profit rate was driven primarily by a 180 basis-point increase in merchandise margin rate and 30 basis points of leverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was primarily the result of better buying economies of scale, lower freight expense, and growth in exclusive brand penetration. The leverage in buying, occupancy and distribution center costs was driven by lower incentive-based compensation and lower distribution center labor costs in the current-year period partially offset by the occupancy costs of new stores.

Current wording

Gross profit. Gross profit increased $31.3 million, or 20.5%, to $184.1 million for the thirteen weeks ended September 27, 2025 from $152.9 million for the thirteen weeks ended September 28, 2024. As a percentage of net sales, gross profit increased by 50 basis points to 36.4% for the thirteen weeks ended September 27, 2025 from 35.9% for the thirteen weeks ended September 28, 2024. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. The 50 basis-point increase in gross profit rate was driven primarily by an 80 basis-point increase in merchandise margin rate, partially offset by 30 basis points of deleverage in buying, occupancy and distribution center costs. The increase in merchandise margin rate was primarily the result of better buying economies of scale and growth in exclusive brand penetration, partially offset by higher freight expense. The deleverage in buying, occupancy and distribution center costs was primarily driven by the occupancy costs of new stores.

Previous wording

Selling, general and administrative expenses. SG&A expenses increased $20.0 million, or 18.8%, to $126.5 million for the thirteen weeks ended June 28, 2025 from $106.5 million for the thirteen weeks ended June 29, 2024. The increase in SG&A expenses compared to the prior-year period was primarily the result of higher store payroll and store-related expenses associated with operating more stores, marketing expenses, and corporate general and administrative expenses

Current wording

Selling, general and administrative expenses. SG&A expenses increased $14.8 million, or 13.2%, to $127.7 million for the thirteen weeks ended September 27, 2025 from $112.9 million for the thirteen weeks ended September 28, 2024. The increase in SG&A expenses compared to the prior-year period was primarily the result of higher store payroll and store-related expenses associated with operating more stores and marketing expenses in the current-year period. As a percentage of net sales, SG&A decreased by 120 basis points to 25.3% for the thirteen weeks ended September 27, 2025 from 26.5% for the thirteen weeks ended September 28, 2024, primarily as a result of lower corporate general and administrative expenses and legal expenses in the current-year period.

Previous wording

Income from operations. Income from operations increased $20.5 million, or 40.8%, to $70.7 million for the thirteen weeks ended June 28, 2025 from $50.2 million for the thirteen weeks ended June 29, 2024. The increase in income from operations was attributable to the factors noted above. As a percentage of net sales, income from operations was 14.0% and 11.9% for the thirteen weeks ended June 28, 2025 and June 29, 2024, respectively.

Current wording

Income from operat ions. Income from operations increased $16.4 million, or 41.1%, to $56.4 million for the thirteen weeks ended September 27, 2025 from $40.0 million for the thirteen weeks ended September 28, 2024. The increase in income from operations was attributable to the factors noted above. As a percentage of net sales, income from operations was 11.2% and 9.4% for the thirteen weeks ended September 27, 2025 and September 28, 2024, respectively.

Previous wording

Interest expense. Interest expense was $0.3 million and $0.4 million for the thirteen weeks ended June 28, 2025 and June 29, 2024, respectively. The decrease in interest expense in the current-year period was primarily the result of lower interest expense from finance lease liabilities.

Current wording

Interest expense. Interest expense was $0.4 million for both the thirteen weeks ended September 27, 2025 and September 28, 2024.

Previous wording

Income tax expense. Income tax expense was $17.9 million for the thirteen weeks ended June 28, 2025 compared to $11.6 million for the thirteen weeks ended June 29, 2024. Our effective tax rate was 25.1% and 22.9% for the thirteen weeks ended June 28, 2025 and June 29, 2024, respectively. The tax rate for the thirteen weeks ended June 28, 2025 was higher than the tax rate for the thirteen weeks ended June 29, 2024, primarily due to a lower tax benefit from income tax accounting for stock-based compensation in the current-year period.

Current wording

Income tax expense. Income tax expense was $14.7 million for the thirteen weeks ended September 27, 2025 compared to $11.1 million for the thirteen weeks ended September 28, 2024. Our effective tax rate was 25.8% and 27.4% for the thirteen weeks ended September 27, 2025 and September 28, 2024, respectively. The income tax rate for the thirteen weeks ended September 27, 2025 was lower than the income tax rate for the thirteen weeks ended September 28, 2024, primarily due to reductions in nondeductible expenses in the current-year period.

Previous wording

Net income. Net income was $53.4 million for the thirteen weeks ended June 28, 2025 compared to $38.9 million for the thirteen weeks ended June 29, 2024. The increase in net income was primarily attributable to the factors noted above.

Current wording

Net income. Net income was $42.2 million for the thirteen weeks ended September 27, 2025 compared to $29.4 million for the thirteen weeks ended September 28, 2024. The increase in net income was primarily attributable to the factors noted above.

Previous wording

We are planning to continue to open new stores, remodel and refurbish our existing stores, make continued investments in our distribution centers, and make improvements to our e-commerce and information technology infrastructure, which will result in increased capital expenditures. We estimate that our total capital expenditures in fiscal 2026 will be between $115.0 million and $120.0 million (including the capital expenditures made during the thirteen weeks ended June 28, 2025), which is net of estimated landlord tenant allowances of $35.5 million. We anticipate that we will use cash flows from operations to fund these expenditures.

Current wording

We are planning to continue to open new stores, remodel and refurbish our existing stores, make continued investments in our distribution centers, and make improvements to our e-commerce and information technology infrastructure, which will result in increased capital expenditures. We estimate that our total capital expenditures in fiscal 2026 will be between $125.0 million and $130.0 million (including the capital expenditures made during the twenty-six weeks ended September 27, 2025), which is net of estimated landlord tenant allowances of $39.4 million. We anticipate that we will use cash flows from operations to fund these expenditures.

Previous wording

The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of June 28, 2025 and March 29, 2025 were zero and $2.9 million, respectively. Total interest expense incurred on the Wells Fargo Revolver during the thirteen weeks ended June 28, 2025 was $0.2 million, and the weighted average interest rate for the thirteen weeks ended June 28, 2025 was 7.5%. Total interest expense incurred on the Wells Fargo Revolver during the thirteen weeks ended June 29, 2024 was $0.2 million, and the weighted average interest rate for the thirteen weeks ended June 29, 2024 was 8.5%.

Current wording

The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of September 27, 2025 and March 29, 2025 were zero and $2.9 million, respectively. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and twenty-six weeks ended September 27, 2025 was $0.2 million and $0.4 million, respectively, and the weighted average interest rate for the thirteen weeks ended September 27, 2025 was 7.3%. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and twenty-six weeks ended September 28, 2024 was $0.2 million and $0.4 million, respectively, and the weighted average interest rate for the thirteen weeks ended September 28, 2024 was 8.5%.

Previous wording

The Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted payments, voluntary payments, affirmative and negative covenants, and events of default. In addition, the terms of the Wells Fargo Revolver require the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage Ratio (as defined in the Wells Fargo Revolver) of at least 1.00:1.00 during such times as a covenant trigger event shall exist. The Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company to pay a higher interest rate upon an event of default is an embedded derivative. As of June 28, 2025, the fair value of this embedded derivative was estimated and was not significant.

Current wording

The Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted payments, voluntary payments, affirmative and negative covenants, and events of default. In addition, the terms of the Wells Fargo Revolver require the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage Ratio (as defined in the Wells Fargo Revolver) of at least 1.00:1.00 during such times as a covenant trigger event shall exist. The Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company to pay a higher interest rate upon an event of default is an embedded derivative. As of September 27, 2025 and March 29, 2025, the fair value of this embedded derivative was estimated and was not significant.

Previous wording

Cash and cash equivalents were $95.3 million as of June 28, 2025 compared to $69.8 million as of March 29, 2025.

Current wording

Cash and cash equivalents were $64.7 million as of September 27, 2025 compared to $69.8 million as of March 29, 2025.

Previous wording

Net cash provided by operating activities was $73.9 million for the thirteen weeks ended June 28, 2025. The significant components of cash flows provided by operating activities were net income of $53.4 million, the add-back of non-cash lease expense of $17.9 million, depreciation of $17.5 million, and stock-based compensation expense of $3.7 million. Accounts payable and accrued expenses and other current liabilities decreased by $6.5 million due to the timing of payments. Inventory increased by $26.9 million as a result of an increase in purchases.

Current wording

Net cash provided by operating activities was $99.6 million for the twenty-six weeks ended September 27, 2025. The significant components of cash flows provided by operating activities were net income of $95.6 million, the add-back of non-cash lease expense of $36.3 million, depreciation of $37.0 million, and stock-based compensation expense of $8.0 million. Accounts payable and accrued expenses and other current liabilities increased by $48.0 million due to the timing of payments. Inventory increased by $107.9 million as a result of an increase in purchases.

Previous wording

Net cash provided by operating activities was $41.3 million for the thirteen weeks ended June 29, 2024. The significant components of cash flows provided by operating activities were net income of $38.9 million, the add-back of non-cash depreciation and intangible asset amortization expense of $14.3 million, and stock-based compensation expense of $5.8 million. Accounts payable and accrued expenses and other current liabilities decreased by $4.3 million due to the timing of payments. Inventory increased by $28.0 million as a result of an increase in purchases.

Current wording

Net cash provided by operating activities was $33.5 million for the twenty-six weeks ended September 28, 2024. The significant components of cash flows provided by operating activities were net income of $68.3 million, the add-back of non-cash lease expense of $32.2 million, depreciation and intangible asset amortization expense of $29.6 million, and stock-based compensation expense of $10.9 million. Accounts payable and accrued expenses and other current liabilities increased by $29.6 million due to the timing of payments. Inventory increased by $113.9 million as a result of an increase in purchases.

Previous wording

Net cash used in investing activities was $31.5 million for the thirteen weeks ended June 28, 2025, which was primarily attributable to capital expenditures related to store construction and investments in our new Store Support Center.

Current wording

Net cash used in investing activities was $75.0 million for the twenty-six weeks ended September 27, 2025, which was primarily attributable to capital expenditures related to store construction and investments in our new Store Support Center.

Previous wording

Net cash used in investing activities was $27.1 million for the thirteen weeks ended June 29, 2024, which was attributable to capital expenditures related to store construction, continued investments in our Kansas City, Missouri distribution center, improvements to our e-commerce information technology infrastructure, and improvements to our distribution facilities.

Current wording

Net cash used in investing activities was $65.4 million for the twenty-six weeks ended September 28, 2024, which was attributable to capital expenditures related to store construction, investments in our Kansas City, Missouri distribution center, improvements to our e-commerce information technology infrastructure, and improvements to our distribution facilities.

Previous wording

Net cash used in financing activities was $16.8 million for the thirteen weeks ended June 28, 2025. We paid $12.5 million to repurchase shares of our common stock under our authorized Repurchase Program and $4.2 million in taxes related to the vesting of restricted stock.

Current wording

Net cash used in financing activities was $29.6 million for the twenty-six weeks ended September 27, 2025. We paid $25.0 million to repurchase shares of our common stock under our authorized Repurchase Program and $4.3 million in taxes related to the vesting of restricted stock.

Previous wording

Net cash used in financing activities was $6.7 million for the thirteen weeks ended June 29, 2024. We paid $7.4 million in taxes related to the vesting of restricted stock, partially offset by the receipt of $1.0 million related to the exercise of stock options.

Current wording

Net cash used in financing activities was $6.6 million for the twenty-six weeks ended September 28, 2024. We paid $7.6 million in taxes related to the vesting of restricted stock. We also received $1.4 million from the exercise of stock options.