Is Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH) Signalling Danger?


Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH) reported a mixed 1Q2016 in which EPS surpassed expectations but the topline number missed. But that wasn’t a major issue until the management of Sportsman’s sounded as if the going was getting tough for the company. When it came to guiding for 2Q2016 and fiscal 2016, the numbers disappointed when read against what analysts expected on the average.

Although Sportsman’s CEO, John Schaefer, tried to project an image of a management in control of the situation, the outlook didn’t seem to back his claims.

What is guided for 2Q2016?

Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH) is looking for 2Q2016 EPS in the range of $0.15 to $0.17. That is against the consensus estimate for EPS of $0.16 for the quarter, which means that Sportsman’s lower-end guidance is already short of expectation. As for the topline, the company is hoping for revenue in the band of $178 to $183 million. Comparing that with the consensus estimate of $192.1 million you see that Sportsman’s guidance misses expectations on both ends.

But the story doesn’t end there. Management guided for full-year 2016 EPS in the band of $0.65 to $0.73. Revenue is expected to come in the range of $770 to $790 million. However, analysts are looking for EPS of at least $0.71, with that, Sportsman’s lower-end guidance of $0.65 is already short of target. When it comes to topline, analysts are modeling full-year 2016 revenue of $814.54 million, firmly ahead of Sportsman’s guidance on both ends.

Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH)’s tepid 2Q2016 and 2016 guidance left investors with a sour test in the mouth.

What about 1Q2016 for Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH)?

The disappointing guidance aside, Sportsman’s Warehouse Holdings Inc. (NASDAQ: SPWH) didn’t impress in 1Q2016 either. Although the adjusted breakeven bottom-line for the quarter was better than the expected loss of $0.02, revenue of $151.6 million missed the target of $158.5 million despite growing 9% YoY.

But Sportsman’s had more disappointing narrative to report. Its comp sales fell 2.2%, steeper than a decline of 1% that analysts expected for the quarter.


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