Founded since 1978, and currently with 273 stores in 36 states, Boot Barn Holdings Inc. (NYSE:BOOT) is currently United States’ largest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories.

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has close to 2000 followers.

Some of the brands (which Singaporeans are probably familiar with) you can find in the company’s retail and online stores include Carhartt, Dickies, Wrangler, and Timberland Pro.

In this post, you’ll learn about some of the key performances by the company over the past 8 years (between FY2014/15 and FY2021/22 – the company has a financial year ending every last Saturday of March), such as its financial performances and its debt profile. I’ll also be sharing whether or not the company’s current traded price is considered ‘cheap’ or ‘expensive’ based on its current vs. its 8-year valuation.

Let’s begin:

Total Revenue & Net Profit:

• Total revenue grew every year, and recording a compound annual growth rate (CAGR) of 17.7% over 8 years.
• Its net profit declined only in FY2015/16 (due to a pro-forma adjusted interest expense incurred), and grew at a very impressive CAGR of 38.7% in the same timeframe.

Gross & Net Profit Margin:

• Gross profit margin was at 30+% throughout the entire period; but since FY2016/17, it has been on a gradual upward climb – and at 38.6% in FY2021/22, it is the highest in 8 years.
• Net profit margin, apart from in FY2015/16, have also improved over the years; its net profit margin at 32.0% in FY2021/22, is also the highest in 8 years.

Return on Equity:

• Apart from in FY2015/16, its Return on Equity have also improved over the years; at 32.0% in FY2021/22, it is also the best in 8 years.

Net Cash/Debt Position:

• Company is in a net cash position throughout the entire 8-year period; however, due to a slump in its cash & cash equivalent (to US$21m in FY2021/22 compared to US$73m in the previous year), its net cash position also tumbled. 

Free Cash Flow Per Share: 

• If there’s one slight con about the company, it will be its irregular free cash flow/share growth over the years (which is negative in 4 out of 8 years I have looked at.) 

Is Boot Barn’s Current Price ‘Cheap’/’Expensive’?

• Its current traded price of US$69.13 neither ‘cheap’ nor ‘expensive.’

Closing Thoughts

• Positives: Easy to understand business, consistent growth in its financial performance, and company in a net cash position
• Negatives: Irregular free cash flow per share growth over the years; company does not pay out any dividend to its shareholders 

Disclaimer: At the time of writing,I am not a shareholder of Boot Barn Holdings Inc.

Once again, this article is a guest post and was originally posted on ljunyuan‘s profile on InvestingNote. 

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