Boot Barn Holdings, Inc. (NYSE:BOOT) Q3 2023 Earnings Call Transcript

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Peter Keith: Okay. And then just on that is – so will freight remain a bit of a headwind in fiscal Q1, fiscal Q2 or is it going to pretty quickly reverse as a tailwind?

Jim Watkins: It should quickly reverse a tailwind. And again, as evidenced by the last 12 months, I mean, we guided the year at 100 basis points of freight headwind, it looks like it’s going to come in closer to 140 basis points. We’ve talked about the complication of guiding freight and what goes into that. But assuming that the rates kind of stay where they are today and — we would expect that to reverse pretty quickly into Q1 and then also through the rest of the year.

Peter Keith: Okay that’s great. And then for Jim Conroy, I just want to pivot to a separate topic. So the subject of stretch denim has actually hit my radar for Boot Barn in the Western and work areas. I’m wondering that you do have some stretched denim products and some kind of basic looks. Is the stretched denim trend starting to hit your customer? And I guess what are you seeing there? It seems like there could be like a meaningful refresh cycle, if that’s starting to take hold?

Jim Conroy: Sure, it’s a great question. If I break it down by men’s and ladies, on the ladies side, the vast majority of denim sales are stretched already, and they’ve – we’ve been in that business for several years. And for us, as you know, most of our denim sales on both sides men’s and ladies, are pretty functional in nature. So I think we’ll continue to have a pretty standard replacement cycle. I’d love to say and promise we’re going to get even more sales in denim because there’s been a new trend or something different. But for us, it’s something that we’ve been in quite a bit, particularly on the ladies side. On the men’s side, it’s probably two-third of our sales are stretched with the balance being sort of more rigid denim.

And there’s been a little bit of an uptick there, but nothing meaningfully that will — I don’t think will change our trend going forward. So I think we’re well positioned to take care of that customer. It is a little bit more than it has been in the past, but it’s not such a big number that it’s been a sales driver and nor do I think we can promise it’s going to be a replenishment cycle sales driver going forward.

Operator: Our next question comes from the line of Steven Zaccone with Citi. Please proceed with your question.

Steven Zaccone: Good afternoon. Thanks for taking my question. Wanted to ask on the regional outlook in more detail for the fourth quarter, just given some of the weakness you’ve seen in the West. Is there something specific happening there? Or is it just a function of tough comparisons? And then as we think about this quarter, Texas rodeo season, Jim, what’s your expectation for performance this year versus last year? Just remind us how you performed last year.

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