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

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 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.

Previous wording

Our business and opportunities for growth depend on consumer discretionary spending, and as such, our results are particularly sensitive to economic conditions and consumer confidence. Inflation and other challenges affecting the global economy could impact our operations andwill depend on future developments, which are uncertain. For further discussion of the uncertainties and business risks affecting the Company, see Item 1A, Risk Factors, of our Fiscal 2024 10-K.

Current wording

Our business and opportunities for growth depend on consumer discretionary spending, and as such, our results are particularly sensitive to economic conditions and consumer confidence. Inflation, tariff and import/export regulations, and other challenges affecting the global economy could impact our operations andwill depend on future developments, which are uncertain. For further discussion of the uncertainties and business risks affecting the Company, see Item 1A, Risk Factors, of our Fiscal 2025 10-K.

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 December 28, 2024, we operated 438 stores in 46 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 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.

Previous wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators that we use to evaluate the financial condition and operating performance of our business are net sales and gross profit. In addition, we also review other important metrics, such as same store sales, new store openings, and selling, general and administrative (“SG&A”) expenses, and operating income.

Current wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators we use to evaluate the financial condition and operating performance of our business are net sales and gross profit. In addition, we also review other important metrics, such as same store sales, new store openings, selling, general and administrative (“SG&A”) expenses, operating income, and net income.

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

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 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.

Previous wording

The components of our SG&A expenses may not be comparable to those of our competitors and other retailers. We expect our selling, general and administrative expenses will increase in future periods as a result of incremental stock-based compensation, legal, and accounting-related expenses and increases resulting from growth in the number of our stores.

Current wording

The components of our SG&A expenses may not be comparable to those of our competitors and other retailers. We expect our SG&A expenses will increase in future periods as a result of incremental stock-based compensation, legal, and accounting-related expenses and increases resulting from growth in the number of our stores.

Previous wording

Net sales. Net sales increased $87.8 million, or 16.9%, to $608.2 million for the thirteen weeks ended December 28, 2024 from $520.4 million for the thirteen weeks ended December 30, 2023. Consolidated same store sales increased 8.6%. Excluding the impact of the 11.1% increase in e-commerce same store sales, same store sales increased by 8.2%. 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 $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.

Previous wording

Gross profit. Gross profit increased $39.8 million, or 20.0%, to $238.9 million for the thirteen weeks ended December 28, 2024 from $199.1 million for the thirteen weeks ended December 30, 2023. As a percentage of net sales, gross profit increased by 100 basis points to 39.3% for the thirteen weeks ended December 28, 2024 from 38.3% for the thirteen weeks ended December 30, 2023. Gross profit increased primarily due to an increase in sales and merchandise margin, partially offset by the occupancy costs of new stores. The increase in gross profit rate of 100 basis points was driven primarily by a 130 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 supply chain efficiencies, better buying economies of scale, and growth in exclusive brand penetration. The deleverage in buying, occupancy and distribution center costs was driven by the occupancy costs of new stores.

Current 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.

Previous wording

Selling, general and administrative expenses. SG&A expenses increased $43.8 million, or 13.9%, to $358.8 million for the thirty-nine weeks ended December 28, 2024 from $315.0 million for the thirty-nine weeks ended December 30, 2023. The increase in selling, general and administrative expenses as compared to the prior-year period was primarily the result of higher store payroll and store-related expenses associated with operating more stores, corporate general and administrative expenses, and marketing expenses in the current year, partially offset by the Company’s former CEO’s forfeiture of unvested long-term equity incentive compensation and the reversal of fiscal 2025 cash incentive bonus expense as a result of his resignation. As a percentage of net sales, SG&A was 24.6% for both the thirty-nine weeks ended December 28, 2024 and December 30, 2023.

Current 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

Previous wording

Income from operations. Income from operations increased $24.3 million, or 32.4%, to $99.5 million for the thirteen weeks ended December 28, 2024 from $75.1 million for the thirteen weeks ended December 30, 2023. The increase in income from operations was attributable to the factors noted above. As a percentage of net sales, income from operations was 16.4% and 14.4% for the thirteen weeks ended December 28, 2024 and December 30, 2023, respectively.

Current 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.

Previous wording

Interest expense. Interest expense was $0.4 million and $0.5 million for the thirteen weeks ended December 28, 2024 and December 30, 2023, respectively. The decrease in interest expense in the current-year period was primarily the result of a lower average debt balance in the current year.

Current 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.

Previous wording

Income tax expense. Income tax expense was $24.1 million for the thirteen weeks ended December 28, 2024 compared to $19.4 million for the thirteen weeks ended December 30, 2023. Our effective tax rate was 24.3% and 25.8% for the thirteen weeks ended December 28, 2024 and December 30, 2023, respectively. The tax rate for the thirteen weeks ended December 28, 2024 was lower than the tax rate for the thirteen weeks ended December 30, 2023, primarily due to reductions in nondeductible expenses.

Current 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.

Previous wording

Net income. Net income was $75.1 million for the thirteen weeks ended December 28, 2024 compared to $55.6 million for the thirteen weeks ended December 30, 2023. The increase in net income was primarily attributable to the factors noted above.

Current 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.

Previous wording

We rely on cash flows from operating activities and our credit facility as our primary sources of liquidity. Our primary cash needs are for inventories, operating expenses, occupancy expenses, capital expenditures associated with opening new stores and remodeling or refurbishing existing stores, improvements to our distribution facilities, marketing and information technology expenditures, debt service and taxes. We have historically used cash for acquisitions and the subsequent rebranding and integration of the stores acquired in those acquisitions. In addition to cash and cash equivalents, the most significant components of our working capital are accounts receivable, inventories, accounts payable and accrued expenses and other current liabilities. We believe that cash flows from operating activities and the

Current wording

We rely on cash flows from operating activities and our credit facility as our primary sources of liquidity. Our primary cash needs are for inventories, operating expenses, occupancy expenses, capital expenditures associated with opening new stores and remodeling or refurbishing existing stores, improvements to our distribution facilities, marketing and information technology expenditures, debt service, and taxes. We have historically used cash for acquisitions and the subsequent rebranding and integration of the stores acquired in those acquisitions. In addition to cash and cash equivalents, the most significant components of our working capital are accounts receivable, inventories, accounts payable, and accrued expenses and other current liabilities. We also use cash to repurchase shares of our common stock under our authorized Repurchase Program. We believe that cash flows from operating activities and the availability of cash under our credit facility will be sufficient to cover working capital requirements, anticipated capital expenditures, and other anticipated cash needs for at least the next 12 months from the date of this filing.

Previous wording

We are planning to continue to open new stores, remodel and refurbish our existing stores, and make improvements to our e-commerce and information technology infrastructure, which will result in increased capital expenditures. Included in our fiscal 2025 capital expenditures are continued investments in our new distribution center in Kansas City, Missouri. We estimate that our total capital expenditures in fiscal 2025 will be between $115.0 million and $120.0 million (including the capital expenditures made during the thirty-nine weeks ended December 28, 2024), which is net of estimated landlord tenant allowances of $30.2 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 $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.

Previous wording

The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of December 28, 2024 were zero and $2.9 million, respectively. The amounts outstanding under the Wells Fargo Revolver and letter of credit commitments as of March 30, 2024 were zero and $2.3 million, respectively. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and thirty-nine weeks ended December 28, 2024 was $0.2 million and $0.6 million, respectively, and the weighted average interest rate for the thirteen weeks ended December 28, 2024 was 7.8%. Total interest expense incurred on the Wells Fargo Revolver during the thirteen and thirty-nine weeks ended December 30, 2023 was $0.4 million and $1.5 million, respectively, and the weighted average interest rate for the thirteen weeks ended December 30, 2023 was 8.5%.

Current 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%.

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

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 June 28, 2025, the fair value of this embedded derivative was estimated and was not significant.

Previous wording

Cash and cash equivalents were $152.9 million as of December 28, 2024 compared to $75.8 million as of March 30, 2024.

Current wording

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

Previous wording

Net cash provided by operating activities was $190.7 million for the thirty-nine weeks ended December 28, 2024. The significant components of cash flows provided by operating activities were net income of $143.4 million, the add-back of non-cash lease expense of $49.3 million, depreciation and intangible asset amortization expense of $45.8 million, and stock-based compensation expense of $8.2 million. Accounts payable and accrued expenses and other current liabilities increased by $77.3 million due to the timing of payments. Inventory increased by $91.2 million as a result of an increase in purchases.

Current 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.

Previous wording

Net cash provided by operating activities was $240.5 million for the thirty-nine weeks ended December 30, 2023. The significant components of cash flows provided by operating activities were net income of $117.6 million, the add-back of non-cash depreciation and intangible asset amortization expense of $35.8 million, and stock-based compensation expense of $10.4 million. Accounts payable and accrued expenses and other current liabilities increased by $31.1 million due to the timing of payments. Inventory decreased by $26.1 million as a result of a decrease in purchases.

Current 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.

Previous wording

Net cash used in investing activities was $91.3 million for the thirty-nine weeks ended December 30, 2023, 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.

Current 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.

Previous wording

Net cash used in investing activities was $108.3 million for the thirty-nine weeks ended December 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.

Current 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.

Previous wording

Net cash used in financing activities was $60.2 million for the thirty-nine weeks ended December 30, 2023. We paid $66.0 million on our revolving line of credit and paid $2.4 million in taxes related to the vesting of restricted stock. We also received $8.9 million from the exercise of stock options.

Current 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.

Previous wording

Net cash used in financing activities was $5.3 million for the thirty-nine weeks ended December 28, 2024. We paid $7.6 million in taxes related to the vesting of restricted stock. We also received $2.9 million from the exercise of stock options.

Current 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.