What happened
Shares of Sportsman's Warehouse(NASDAQ: SPWH) were trading down 7.9% as of 12:19 p.m. ET on Wednesday after the company reported earnings results for the first quarter.
The company said net sales declined 5.3% year over year due to "lower demand across multiple categories." This translated to lower earnings per share, which came in at $0.05, down from $0.23 in the same quarter last year.
So what
The lower demand was credited to the stimulus checks people received a year ago, when sales were strong across the retail industry.
On the bright side, management is not concerned. Sales landed within the high-end range of management's guidance for the quarter. The company remains in growth mode, opening four new stores recently, bringing the total fleet to 126.
Image source: Getty Images.
Now what
"We remain committed to executing on growing our store footprint and believe we have developed a strategically unique formula for expanding our geographic reach through our flexible store format," CEO Jon Barker said during the earnings call.
For the second quarter, the company expects sales to be in the range of $330 million to $350 million. That would translate to a decrease in same-store sales of 16% to 10% year over year based on management's estimate. Adjusted earnings per share should be in the range of $0.22 to $0.30.
The stock has fallen 48% since the merger agreement was terminated with privately owned Great Outdoors Group last year. Sportsman's Warehouse stock trades at a price-to-earnings ratio of just 6.3 based on this year's earnings estimates, which looks very cheap for a profitable retailer that has seen revenue triple over the last decade.
10 stocks we like better than Sportsmans Warehouse Holdings
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Sportsmans Warehouse Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of April 27, 2022
John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
