Inflation and recession concerns hit Sportsman’s Warehouse
Sportsman’s Warehouse is the latest big US retailer to report a fall in quarterly sales, with its net revenue for the third quarter dropping by 10.4% to $359.7m compared to the same period in 2021.
Blaming the decrease on lower demand across most product categories, due to consumer inflationary pressures and recessionary concerns, the company said the situation was partially offset by the opening of 11 new stores since October last year. It also pointed out that sales had increased 48% from $242.5m when compared to the same quarter in 2019.
“We executed our strategic initiatives and reported strong sales and earnings results in the third quarter, despite the environment,” said Jon Barker, President and CEO. “The investments made in the last few years have strengthened the overall foundation of the company. We will continue to closely manage the business with discipline and rigour.”
Sportsman’s Warehouse came close to being acquired by the Great Outdoors Group, the owner of Bass Pro Shops, last year, but the deal collapsed when the Federal Trade Commission failed to give it clearance.
Other headline figures in the third quarter included a drop in same-store sales by 15% (up 19.5% against 2019) and a decrease in net income from $21.9m to $12.9m. A 130-point improvement as a result of net sales was attributed to increased product margins, a favourable product mix and better shipping and logistical expenses.
Net sales for the 39 weeks to October 29th, 2022, were $1.02 billion, a fall of 6.4% against 2021. Same store sales were down 12% (up nearly 30% on 2019). Net income was $29.5m, down from $50m.
The company added that net sales for the fourth quarter are expected to be between $370m to $385m, implying that full-year net sales will be in the range of $1.39 billion to $1.404 billion.
Despite the financial climate, Sportsman’s Warehouse expects to open between 13 and 18 stores in 2022, the highest number it has ever opened in a single year.