What happened
Shares of Sportsman's Warehouse Holdings, Inc. (SPWH -2.53%) were surging today after the retailer of hunting and fishing gear topped low expectations in its second-quarter report. As of 10:52 a.m. EDT, the stock was up 27.6%.
A better-than-expected profit helped to overcome a plunge in same-stores sales due to a tough comparison with the quarter a year ago as firearms sales spiked following the Orlando shooting last year.
Image source: Getty Images.
So what
Comps fell 9% in the quarter as a result, but overall revenue ticked up 0.9% to $191.5 million, slightly below estimates at $191.9 million as the company continues to aggressively open new stores. Retail square footage grew 12.2% from a year ago.
On the bottom line, earnings per share fell from $0.20 to $0.15, but that still beat estimates at $0.13.
CEO John Schaefer said, "Our better than expected bottom line results were driven by stronger gross margins resulting primarily from the higher margin product mix shift that we experienced in the second quarter."
Now what
Schaefer went on to say that the company expected continued softness in the firearms market until it laps the election.
Management guided full-year comparable sales down 5% to 6% with revenue of $825 million to $835 million, which compares to the analyst consensus of $838.1 million. Profit expectations were better as the company sees EPS of $0.60 to $0.66, slightly better than expectations at $0.62.
Sportsman's Warehouse shares had fallen by 65% before today's news, setting up the stock for a bounce as shares look cheap based on this year's expected earnings. However, with the ongoing fallout in sporting goods retail, I wouldn't be surprised if the rally was short-lived.
