Shares of Sportsman's Warehouse Inc. (NASDAQ:SPWH) popped 42.5% in the month of May, according to data provided by S&P Global Market Intelligence, after the company announced better-than-expected first-quarter 2017 results.
Sportsman's Warehouse stock jumped more than 20% the day after its report. In it, the sporting goods retailer revealed that revenue had climbed 3.5% year over year to $156.9 million -- albeit driven entirely by new locations, as same-store sales fell 6.9%. That translated to an adjusted net loss of $3.4 million, or $0.08 per share. By comparison, the company's latest guidance (provided in March) called for lower revenue of $150 million to $155 million, assuming a more severe same-store sales decline of 9% to 11%.
Sportsman's Warehouse CEO John Schaefer noted the company saw continued softness in firearm demand relative to last year's first quarter, as expected in a "highly promotional" retail environment. Sportsman's Warehouse also announced that following the close of the quarter, it reached an agreement with the lender of its term loan to amend certain financial covenants to provide the company additional flexibility.
In the current quarter, the company anticipates revenue of $189 million to $194 million, assuming a same-store sales decline of 8% to 10% given comparisons to the unusually strong year-ago quarter. For perspective, those results were helped by last year's events in Orlando that bolstered demand for firearms and ammunition.
But Schaefer also noted that second-quarter guidance is conservative, and Sportsman's Warehouse continues to expect sales trends to improve in the second half of this year. As a result, management reiterated their full-year guidance for revenue of $825 million to $845 million and adjusted net income per share of $0.60 to $0.68.
In the end, with shares still trading down 35% over the past year even after last month's pop, it was no surprise to see shares of Sportsman's warehouse climbing as investors absorbed the encouraging news.