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SPWH
Earnings call · Jul 2026 (Q2 FY27)

SPORTSMAN'S WAREHOUSE HOLDINGS Q2 FY27 earnings call SPWH

Sep 1, 2026 Source

Executive summary

Sportsman's Warehouse Q2 FY27 — Flat Sales Amidst Consumer Headwinds, Strong Inventory Management

Sportsman's Warehouse delivered flat same-store sales in Q2 FY27, meeting expectations despite ongoing consumer pressure from elevated fuel costs. The company demonstrated strong operational execution through disciplined inventory management, reducing total inventory by 10% year-over-year and improving gross margins. Strategic investments in e-commerce and a reinvented loyalty program are underway to enhance the omnichannel experience and drive future growth, while debt reduction remains a top capital allocation priority.

Highlights

7

  • Same-store sales were essentially flat compared to last year, in line with expectations.

  • Hunting and shooting sports sales increased nearly 7% versus last year, led by firearms and ammunition.

  • E-commerce business grew nearly 3% in the quarter, outpacing total sales for the ninth consecutive quarter.

  • Total inventory was down over $44 million (10%) compared to last year, reflecting improved efficiency.

  • Net debt balance decreased by $26 million compared to Q2 of last year.

  • Gross margin improved by 50 basis points to 32.5% compared to Q2 last year.

  • Adjusted net loss improved to -$0.08 per diluted share from -$0.12 in the prior year.

Concerns

4

  • Core customer continues to be pressured by tough macroeconomic conditions, including persistently elevated fuel prices.

  • Fishing sales decreased about 2% in Q2, negatively impacted by drought conditions in key western states.

  • Camping and soft lines departments experienced declines in Q2, though August trends showed improvement.

  • The company implemented a more promotional cadence than originally planned to reinforce value for consumers.

Guidance & targets

CategoryTargetConfidence
Full-year FY26 Net Sales
down 1% to up 2% compared to last year
high materiality
High
Full-year FY26 Adjusted EBITDA
$30 million to $36 million
high materiality
High
Full-year FY26 Capital Expenditures
$20 million and $25 million
medium materiality
High
Year-End Total Inventory
less total inventory than 2025
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Hunting and Shooting Sports
Led by strong demand in firearms and ammunition, partially influenced by event-driven demand. This department mixed higher in Q2, carrying a lower overall margin.
Same-store sales growth: 6.7%Firearms sales growth: 8%Ammunition sales growth: nearly 11%
—nearly 7%——
Fishing
Negatively impacted by drought conditions in key western states. Inventory levels are bought accordingly for the back half, with long-term growth opportunity seen.
Two-year comp stack: up nearly double digits
—decreased about 2%——
Camping and Soft Lines
Experienced declines in Q2. Inventory position is clean, and fall assortment is better aligned. Encouraged by improved August trends, moving in the right direction.
—declines——
Optics, Electronics, Accessories, and Other
Showed positive growth in Q2.
—1%——
Western Stores
Impacted by drought conditions and other regional factors.
—down mid-single digits——
Eastern Stores
Outperformed western stores in the quarter.
—up mid-single digits——

Product announcements

ProductTypeDetails
Loyalty Programroadmap

Risks & headwinds

Tough macroeconomic conditions and elevated fuel prices ongoing

persistently elevated fuel prices

Mitigation:Adjusted promotional cadence, focused on value proposition, optimized assortment and in-stocks.

Drought conditions in key western states Q2 FY27

negatively impacted fishing sales by about 2% in Q2

Mitigation:Inventory levels bought accordingly for the back half, long-term growth opportunity seen in fishing category.

Increased promotional cadence Q2 FY27 and expected to persist through back half

more promotional cadence than originally planned

Mitigation:Strategic decision to use tariff refund to reinvest in value for consumers; disciplined inventory management and freight cost reduction to offset margin impact.

Labor Day shift August/September

Labor Day shift where, you know, that we would have seen that in August. It bumps back into this week as we get to the run-up of Labor Day.

Mitigation:Built into planning for the year.

Macro event affecting prior year comps mid-September last year (affecting current year comps)

nuance of a macro with the [ Charlie Kirk assassination ] that happened mid-September last year

Mitigation:Built into planning for the year, focusing on two-year stack for NICS data.

What to watch in Q3 FY27

Camping and Soft Lines performance

Q3 FY27 and Q4 FY27
Current declines in Q2, improved August trends
Target flattish to positive growth

Why it matters

Indicates successful inventory cleanup and new assortment alignment, contributing to overall sales and margin improvement.

I think expectation is that we see this, you know, we're coming off of, you know, both those categories, inventory being down 11% and 14% as we've ran through, and then finally being able to put ourselves in a position to buy towards, 1, the holiday, and 2, being able to hit newness during the seasonality and the pursuit that's needed. And so I feel comfortable that, you know, our expectation is based on the run rate that we've been running, is that we're able to get that to where it's flattish to positive.

Q&A highlights

How comfortable is management with inventory levels in camping and soft lines, given overall good inventory but past declines in these categories?

Management is very comfortable with inventory levels in camping and soft lines, having spent over a year cleaning up assortments and reducing SKUs. They expect Q3 to show improved performance as new assortments are now in stock and optimized seasonally.

“So we're feeling really good about our inventory levels. We spent the past year plus cleaning up the assortments, making sure that we weren't over-assorted, bigger buys on our core category. So we feel really, you know, Q2, the performance wasn't there, but we didn't expect it to be. You know, Q3 is when we really feel the assortment will be back in check.”

asked by Mark Smith · answered by Unknown Executive

2 min read 6 chapters

Detailed narrative

Q2 Performance Overview

Sportsman's Warehouse reported net sales of $295.6 million in Q2 FY27, a 0.6% increase year-over-year, with same-store sales remaining flat. Gross margin improved by 50 basis points to 32.5%, despite a higher mix of lower-margin hunting and shooting sports sales and increased promotional activity. The company posted an adjusted net loss of $3.1 million, or -$0.08 per diluted share, an improvement from -$0.12 per diluted share in the prior year, and adjusted EBITDA reached $8.7 million.

Inventory Management and Assortment Strategy

A key focus for the quarter was disciplined inventory management, resulting in a 10% ($44.5 million) year-over-year reduction in total inventory to $399 million. Management emphasized that core in-stocks improved significantly from 50% two years ago to over 80% today. The company has largely completed its SKU reduction initiative and cleanup of aged merchandise, allowing for reinvestment into core and new products that align with key pursuits like hunting, fishing, and shooting. This strategy aims to improve turns and inventory efficiency for the balance of 2026.

Category Performance and Consumer Behavior

Hunting and shooting sports departments saw strong growth, with sales up nearly 7% in Q2, driven by firearms (+8%) and ammunition (+11%). Fishing sales declined about 2% due to drought conditions in western states but are up nearly double digits on a two-year stack. Camping and soft lines experienced declines, but August trends showed improvement as new, relevant assortments landed. The company noted consumer pressure from elevated fuel costs, leading to higher penetration in consumables (lures, ammo) and some trade-down behavior in higher-end items like rods and reels.

Omnichannel and Loyalty Program Reinvention

E-commerce continued its strong performance, growing nearly 3% and outpacing total company sales for the ninth consecutive quarter, with over 70% of online orders picked up in-store. The company is upgrading its website search and shop functionality to enhance the online experience. Additionally, the reinvention of the loyalty program is on track for rollout in early 2027, aiming to grow membership, increase loyalty sales, and leverage shopper data for sharper business decisions.

Financial Health and Capital Allocation

The balance sheet was strengthened through a $26 million reduction in net debt, bringing the balance to $169 million, and total liquidity stands at $105 million. The company amended its $45 million ABL term loan and $315 million revolving credit facility, extending maturities to June 2031, providing long-term financial flexibility. Debt reduction remains the top capital allocation priority, with a commitment to generating positive free cash flow.

Outlook and Strategic Positioning

Despite expecting consumer headwinds and elevated fuel prices to persist, management reiterated its full-year FY26 guidance for net sales and adjusted EBITDA. The company expressed optimism about its back-half plan, citing improved in-stocks, healthier inventory, new and relevant merchandise, and continued e-commerce growth. Strategic initiatives are focused on driving long-term profitable growth and strengthening the competitive position by controlling assortment, in-stocks, and channels.

AI-generated summary of the company's earnings call. Not investment advice.