Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 25, 2022 | Jul. 26, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 25, 2022 | |
Entity File Number | 001-36711 | |
Entity Registrant Name | Boot Barn Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0776290 | |
Entity Address, Address Line One | 15345 Barranca Pkwy | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | 949 | |
Local Phone Number | 453-4400 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | BOOT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,806,461 | |
Current Fiscal Year End Date | --04-01 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001610250 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 25, 2022 | Mar. 26, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 16,014 | $ 20,674 |
Accounts receivable, net | 9,240 | 9,662 |
Inventories | 534,380 | 474,300 |
Prepaid expenses and other current assets | 57,781 | 37,195 |
Total current assets | 617,415 | 541,831 |
Property and equipment, net | 177,447 | 155,247 |
Right-of-use assets, net | 264,569 | 241,147 |
Goodwill | 197,502 | 197,502 |
Intangible assets, net | 60,797 | 60,813 |
Other assets | 3,488 | 3,315 |
Total assets | 1,321,218 | 1,199,855 |
Current liabilities: | ||
Line of credit | 74,873 | 28,549 |
Accounts payable | 151,638 | 131,394 |
Accrued expenses and other current liabilities | 119,229 | 133,408 |
Short-term lease liabilities | 45,116 | 43,117 |
Total current liabilities | 390,856 | 336,468 |
Deferred taxes | 28,470 | 26,895 |
Long-term lease liabilities | 259,976 | 234,584 |
Other liabilities | 2,382 | 2,232 |
Total liabilities | 681,684 | 600,179 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; June 25, 2022 - 100,000 shares authorized, 29,995 shares issued; March 26, 2022 - 100,000 shares authorized, 29,820 shares issued | 3 | 3 |
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | 204,002 | 199,054 |
Retained earnings | 444,795 | 405,477 |
Less: Common stock held in treasury, at cost, 188 and 135 shares at June 25, 2022 and March 26, 2022, respectively | (9,266) | (4,858) |
Total stockholders' equity | 639,534 | 599,676 |
Total liabilities and stockholders' equity | $ 1,321,218 | $ 1,199,855 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 25, 2022 | Mar. 26, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, shares issued (in shares) | 29,994,885 | 29,820,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, shares held in treasury (in shares) | 188,000 | 135,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 365,856 | $ 306,327 |
Type of Revenue | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of goods sold | $ 228,026 | $ 189,900 |
Type of Cost of Service | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 137,830 | $ 116,427 |
Selling, general and administrative expenses | 85,405 | 62,784 |
Income from operations | 52,425 | 53,643 |
Interest expense | 725 | 2,563 |
Other (loss)/income, net | (273) | 104 |
Income before income taxes | 51,427 | 51,184 |
Income tax expense | 12,109 | 10,539 |
Net income | $ 39,318 | $ 40,645 |
Earnings per share: | ||
Basic (in dollars per share) | $ 1.32 | $ 1.38 |
Diluted (in dollars per share) | $ 1.29 | $ 1.35 |
Weighted average shares outstanding: | ||
Basic (in shares) | 29,747 | 29,361 |
Diluted (in shares) | 30,386 | 30,213 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Shares | Total |
Balance at Mar. 27, 2021 | $ 3 | $ 183,815 | $ 213,027 | $ (1,954) | $ 394,891 |
Balance (in shares) at Mar. 27, 2021 | 29,348,000 | (96,000) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 40,645 | 40,645 | |||
Issuance of common stock related to stock-based compensation | 3,616 | 3,616 | |||
Issuance of common stock related to stock-based compensation (in shares) | 313,000 | ||||
Tax withholding for net share settlement | $ (2,476) | (2,476) | |||
Tax withholding for net share settlement (in shares) | (34,000) | ||||
Stock-based compensation expense | 3,201 | 3,201 | |||
Balance at Jun. 26, 2021 | $ 3 | 190,632 | 253,672 | $ (4,430) | 439,877 |
Balance (in shares) at Jun. 26, 2021 | 29,661,000 | (130,000) | |||
Balance at Mar. 26, 2022 | $ 3 | 199,054 | 405,477 | $ (4,858) | 599,676 |
Balance (in shares) at Mar. 26, 2022 | 29,820,000 | (135,000) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 39,318 | 39,318 | |||
Issuance of common stock related to stock-based compensation | 247 | 247 | |||
Issuance of common stock related to stock-based compensation (in shares) | 175,000 | ||||
Tax withholding for net share settlement | $ (4,408) | (4,408) | |||
Tax withholding for net share settlement (in shares) | (53,000) | ||||
Stock-based compensation expense | 4,701 | 4,701 | |||
Balance at Jun. 25, 2022 | $ 3 | $ 204,002 | $ 444,795 | $ (9,266) | $ 639,534 |
Balance (in shares) at Jun. 25, 2022 | 29,995,000 | (188,000) | 29,806,461 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Cash flows from operating activities | ||
Net income | $ 39,318 | $ 40,645 |
Adjustments to reconcile net income to net cash (used in)/provided by operating activities: | ||
Depreciation | 8,022 | 6,152 |
Stock-based compensation | 4,701 | 3,201 |
Amortization of intangible assets | 16 | 18 |
Noncash lease expense | 11,119 | 9,221 |
Amortization and write-off of debt issuance fees and debt discount | 44 | 1,064 |
Loss/(gain) on disposal of assets | 177 | (4) |
Gain on adjustment of right-of-use assets and lease liabilities | (33) | |
Deferred taxes | 1,575 | (5,891) |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable, net | 600 | 4,912 |
Inventories | (60,080) | (21,002) |
Prepaid expenses and other current assets | (20,630) | (7,309) |
Other assets | (173) | (457) |
Accounts payable | 18,024 | 5,252 |
Accrued expenses and other current liabilities | (21,523) | 19,071 |
Other liabilities | 150 | 568 |
Operating leases | (7,108) | (9,080) |
Net cash (used in)/provided by operating activities | (25,768) | 46,328 |
Cash flows from investing activities | ||
Purchases of property and equipment | (20,835) | (9,294) |
Net cash used in investing activities | (20,835) | (9,294) |
Cash flows from financing activities | ||
Borrowings on line of credit - net | 46,324 | |
Repayments on debt and finance lease obligations | (220) | (61,682) |
Tax withholding payments for net share settlement | (4,408) | (2,476) |
Proceeds from the exercise of stock options | 247 | 3,616 |
Net cash provided by/(used in) financing activities | 41,943 | (60,542) |
Net decrease in cash and cash equivalents | (4,660) | (23,508) |
Cash and cash equivalents, beginning of period | 20,674 | 73,148 |
Cash and cash equivalents, end of period | 16,014 | 49,640 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 19,226 | |
Cash paid for interest | 534 | 1,496 |
Supplemental disclosure of non-cash activities: | ||
Unpaid purchases of property and equipment | $ 17,473 | $ 4,130 |
Description of the Company, Rec
Description of the Company, Recent Developments and Basis of Presentation | 3 Months Ended |
Jun. 25, 2022 | |
Business Operations | |
Description of the Company, Recent Developments and Basis of Presentation | 1. Description of the Company, Recent Developments and Basis of Presentation Boot Barn Holdings, Inc. (the “Company”), the parent holding company of the group of operating subsidiaries that conduct the Boot Barn business, was formed on November 17, 2011, and is incorporated in the State of Delaware. The equity of the Company consists of 100,000,000 authorized shares and 29,994,885 issued and 29,806,461 outstanding shares of common stock as of June 25, 2022. The shares of common stock have voting rights of one vote per share. The Company operates specialty retail stores and e-commerce websites that sell western and work boots and related apparel and accessories. The Company operates retail locations throughout the United States and sells its merchandise via the internet. The Company operated a total of 311 stores in 38 states as of June 25, 2022 and 300 stores in 38 states as of March 26, 2022. As of June 25, 2022, all stores operate under the Boot Barn name, with the exception of two stores that operate under the “American Worker” name. Recent Developments Our business and opportunities for growth depend on consumer discretionary spending, and as such, our results are particularly sensitive to economic conditions and consumer confidence. I nflation (which has occurred over the past twelve months and is continuing) and other challenges affecting the global economy could impact our operations and Basis of Presentation The Company’s condensed consolidated financial statements as of and for the thirteen weeks ended June 25, 2022 and June 26, 2021 are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and include the accounts of the Company and each of its subsidiaries, consisting of Boot Barn, Inc., RCC Western Stores, Inc., Baskins Acquisition Holdings, LLC, Sheplers, LLC and Sheplers Holding LLC (collectively with Sheplers, LLC, “Sheplers”). On September 26, 2021, Sheplers, Inc. and Sheplers Holding Corporation each were converted to limited liability companies, Sheplers, LLC and Sheplers Holding LLC, respectively. All intercompany accounts and transactions among the Company and its subsidiaries have been eliminated in consolidation. The vast majority of the Company’s identifiable assets are in the United States. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments that are of a normal and recurring nature necessary to fairly present the Company’s financial position and results of operations and cash flows in all material respects as of the dates and for the periods presented. The results of operations presented in the interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the fiscal year ending April 1, 2023. Fiscal Periods The Company reports its results of operations and cash flows on a 52- or 53-week basis ending on the last Saturday of March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. In a 52-week year, each quarter includes thirteen weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include thirteen weeks of operations and the fourth quarter includes fourteen weeks of operations. The current fiscal year ending on April 1, 2023 (“fiscal 2023”) will consist of 53 weeks; whereas, the fiscal year ended on March 26, 2022 (“fiscal 2022”) consisted of 52 weeks. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 25, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Information regarding the Company’s significant accounting policies is contained in Note 2, “Summary of Significant Accounting Policies”, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on May 12, 2022. Presented below in the following notes is supplemental information that should be read in conjunction with those consolidated financial statements. Comprehensive Income The Company does not have any components of other comprehensive income recorded within its condensed consolidated financial statements and, therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. Segment Reporting GAAP has established guidance for reporting information about a company’s operating segments, including disclosures related to a company’s products and services, geographic areas and major customers. The Company’s retail stores and e-commerce websites represent two operating segments. Given the similar qualitative and economic characteristics of the two operating segments, the Company’s retail stores and e-commerce websites are aggregated into one reporting segment in accordance with guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Among the significant estimates affecting the Company’s condensed consolidated financial statements are those relating to revenue recognition, lease accounting, inventories, goodwill, intangible and long-lived assets, stock-based compensation and income taxes. Management regularly evaluates its estimates and assumptions based upon historical experience and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent actual results differ from those estimates, the Company’s future results of operations may be affected. Inventories Inventory consists primarily of purchased merchandise and is valued at the lower of cost or net realizable value. Cost is determined using the weighted-average cost method (which approximates the first-in, first-out method) and includes the cost of merchandise and import-related costs, including freight, duty and agent commissions. The Company assesses the recoverability of inventory through a periodic review of historical usage and present demand. When the inventory on hand exceeds the foreseeable demand, the value of inventory that, at the time of the review, is not expected to be sold at or above cost is written down to its estimated net realizable value. Leases Operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. Related operating and finance lease right-of-use (“ROU”) assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense. The majority of total lease costs is recorded as part of cost of goods sold, with the balance recorded in selling, general and administrative expenses on the condensed consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the condensed consolidated statements of operations. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease payments are recognized as lease expense as they are incurred. Fair Value of Certain Financial Assets and Liabilities The Company follows FASB ASC Topic 820, Fair Value Measurements and Disclosures ● Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. ● Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates, incremental borrowing rates, and volatility, can be corroborated by readily observable market data. ● Level 3 uses one or more significant inputs that are unobservable and supported by little or no market activity, and reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. The Company’s Level 3 assets include certain acquired businesses and the evaluation of store impairment. Cash and cash equivalents, accounts receivable and accounts payable are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified as Level 2 or Level 3 even though there may be certain significant inputs that are readily observable. The Company believes that the recorded value of its financial instruments approximates their current fair values because of their nature and respective relatively short maturity dates or duration. Although market quotes for the fair value of the outstanding debt arrangements discussed in Note 4, “Revolving Credit Facilities and Long-Term Debt” are not readily available, the Company believes its carrying value approximates fair value due to the variable interest rates, which are Level 2 inputs. There were no financial assets or liabilities Recent Accounting Pronouncements In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which clarifies some of its guidance around reference rate reform activities as global market participants undertake efforts to transition from using or referencing the London Interbank Offered Rate (LIBOR) and other interbank offered rates to using or referencing alternative reference rates. The amendments in this ASU if elected by an entity, are effective immediately. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. The Company does not expect the revised standard to have an impact on its consolidated financial statements. Revenue Recognition Revenue is recorded for store sales upon the purchase of merchandise by customers. Sales are recorded net of taxes collected from customers. Transfer of control takes place at the point at which the customer receives and pays for the merchandise at the register. E-commerce sales are recorded when control transfers to the customer, which generally occurs upon delivery of the product. Shipping and handling revenues are included in total net sales. Shipping costs incurred by the Company are included in cost of goods sold. Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions, estimated future award redemption and other promotions. The sales returns reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages. The total reserve for returns is recorded in accrued expenses and other current liabilities in the consolidated balance sheets. The Company accounts for the return asset and liability separately on a gross basis. The Company maintains a customer loyalty program. Under the program, customers accumulate points based on purchase activity. For customers to maintain their active point balance, they must make a qualifying purchase of merchandise at least once in a 365-day period. Once a loyalty program member achieves a certain point level, the member earns awards that may be redeemed for credits on merchandise purchases. To redeem awards, the member must make a qualifying purchase of merchandise within 60 days of the date the award was granted. Unredeemed awards and accumulated partial points are accrued as unearned revenue until redemption or expiration and, upon redemption and expiration, as an adjustment to net sales using the relative standalone selling price method. The unearned revenue for this program is recorded in accrued expenses and other current liabilities on the consolidated balance sheets and was $3.7 million as of June 25, 2022 and $2.9 million as of June 26, 2021. The following table provides a reconciliation of the activity related to the Company’s customer loyalty program: Customer Loyalty Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 3,504 $ 2,485 Year-to-date provisions 4,235 2,890 Year-to-date award redemptions (4,040) (2,515) Ending balance $ 3,699 $ 2,860 Proceeds from the sale of gift cards are deferred until the customers use the cards to acquire merchandise. Gift cards, gift certificates and store credits do not have expiration dates, and unredeemed gift cards, gift certificates and store credits are subject to state escheatment laws. Amounts remaining after escheatment are recognized in net sales in the period escheatment occurs and the liability is considered to be extinguished. The Company defers recognition of a layaway sale and its related profit to the accounting period when the customer receives the layaway merchandise. Income from the redemption of gift cards, gift card breakage, and the sale of layaway merchandise is included in net sales. Deferred revenue is recorded in accrued expenses and other current liabilities in the consolidated balance sheets. The following table provides a reconciliation of the activity related to the Company’s gift card program: Gift Card Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 15,392 $ 11,569 Year-to-date issued 6,167 4,340 Year-to-date redemptions (6,399) (4,284) Ending balance $ 15,160 $ 11,625 Disaggregated Revenue The Company disaggregates net sales into the following major merchandise categories: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Footwear 48% 51% Apparel 34% 32% Hats, accessories and other 18% 17% Total 100% 100% The Company further disaggregates net sales between stores and e-commerce: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Stores 88% 87% E-commerce 12% 13% Total 100% 100% |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 3 Months Ended |
Jun. 25, 2022 | |
Intangible Assets, Net and Goodwill | |
Intangible Assets, Net and Goodwill | 3. Intangible Assets, Net and Goodwill Net intangible assets as of June 25, 2022 and March 26, 2022 consisted of the following (in thousands, except for weighted average useful life): June 25, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (225) $ 120 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (225) $ 60,797 March 26, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (209) $ 136 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (209) $ 60,813 Amortization expense for intangible assets totaled less than $0.1 million for both the thirteen weeks ended June 25, 2022 and June 26, 2021, and is included in selling, general and administrative expenses. As of June 25, 2022, estimated future amortization of intangible assets was as follows: Fiscal Year (in thousands) 2023 $ 46 2024 54 2025 20 2026 - 2027 - Thereafter - Total $ 120 The Company performs its annual goodwill impairment assessment on the first day of the fourth fiscal quarter, or more frequently if it believes that indicators of impairment exist. The Company’s goodwill balance was $197.5 million as of both June 25, 2022 and March 26, 2022. As of June 25, 2022, the Company had identified no indicators of impairment with respect to its goodwill and intangible asset balances. During both the thirteen weeks ended June 25, 2022 and June 26, 2021, the Company did not record any long-lived asset impairment charges. |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 3 Months Ended |
Jun. 25, 2022 | |
Revolving Credit Facility and Long-Term Debt | |
Revolving Credit Facility and Long-Term Debt | 4. Revolving Credit Facility and Long-Term Debt On June 29, 2015, the Company, as guarantor, and its wholly-owned primary operating subsidiary, Boot Barn, Inc., refinanced a previous Wells Fargo credit facility with the $125.0 million syndicated senior secured asset-based revolving credit facility for which Wells Fargo Bank, National Association (“June 2015 Wells Fargo Revolver”), is agent, and the $200.0 million syndicated senior secured term loan for which GCI Capital Markets LLC (“2015 Golub Term Loan”) was agent. The borrowing base of the June 2015 Wells Fargo Revolver is calculated on a monthly basis and is based on the amount of eligible credit card receivables, commercial accounts, inventory, and available reserves. Borrowings under the June 2015 Wells Fargo Revolver bear interest at per annum rates equal to, at the Company’s option, either (i) London Interbank Offered Rate (“LIBOR”) plus an applicable margin for LIBOR Loans, or (ii) the base rate plus an applicable margin for base rate loans. The base rate is calculated as the highest of (a) the federal funds rate plus 0.5%, (b) the Wells Fargo prime rate and (c) one-month LIBOR plus 1.0%. The applicable margin is calculated based on a pricing grid that in each case is linked to quarterly average excess availability. For LIBOR Loans, the applicable margin ranges from 1.00% to 1.25%, and for base rate loans it ranges from 0.00% to 0.25%. The Company also pays a commitment fee of 0.25% per annum of the actual daily amount of the unutilized revolving loans. The interest on the June 2015 Wells Fargo Revolver is payable in quarterly installments ending on the maturity date. On May 26, 2017, the Company entered into an amendment to the June 2015 Wells Fargo Revolver (the “2017 Wells Amendment”), increasing the aggregate revolving credit facility to $135.0 million and extending the maturity date to the earlier of May 26, 2022 or 90 days prior to the previous maturity of the 2015 Golub Term Loan, which was then scheduled to mature on June 29, 2021. On June 6, 2019, the Company entered into Amendment No. 3 to the Credit Agreement (the “2019 Wells Amendment”), further increasing the aggregate revolving credit facility to $165.0 million and extending the maturity date to June 6, 2024. The 2019 Wells Amendment further made changes to the 2015 Wells Fargo Revolver in connection with the transition away from LIBOR as the benchmark rate. On July 26, 2021, the Company entered into an amendment (the “2021 Wells Amendment”), increasing the aggregate revolving credit facility to $180.0 million. The amount outstanding under the June 2015 Wells Fargo Revolver as of June 25, 2022 and March 26, 2022 was $74.9 million On December 14, 2021, the Company repaid the remaining outstanding principal under the 2015 Golub Term Loan and terminated the agreement. Total interest expense incurred in the thirteen weeks ended June 26, 2021 on the 2015 Golub Term Loan was $1.2 million and the weighted average interest rate for the thirteen weeks ended June 26, 2021 was 5.5% . All obligations under the June 2015 Wells Fargo Revolver are unconditionally guaranteed by the Company and each of its direct and indirect domestic subsidiaries (other than certain immaterial subsidiaries) which are not named as borrowers under the June 2015 Wells Fargo Revolver. The June 2015 Wells Fargo Revolver contains customary provisions relating to mandatory prepayments, restricted payments, voluntary payments, affirmative and negative covenants, and events of default, and requires the Company to maintain, on a consolidated basis, a Consolidated Fixed Charge Coverage Ratio of at least 1.00:1.00 during such times as a covenant trigger event shall exist. The June 2015 Wells Fargo Revolver also requires the Company to pay additional interest of 2.0% per annum upon triggering certain specified events of default set forth therein. For financial accounting purposes, the requirement for the Company to pay a higher interest rate upon an event of default is an embedded derivative. As of June 25, 2022, the fair value of this embedded derivative was estimated and was not significant. As of June 25, 2022, the Company was in compliance with the June 2015 Wells Fargo Revolver debt covenant. Subsequent to the thirteen weeks ended June 25, 2022, on July 11, 2022, the Company entered into Amendment No. 4 to the Credit Agreement (the “2022 Wells Amendment”), increasing the aggregate revolving credit facility to $250.0 million. The 2022 Wells Amendment also extends the maturity date to July 11, 2027. The 2022 Wells Amendment also makes other changes to the June 2015 Wells Fargo Revolver, replacing all LIBOR based provisions with provisions reflecting Term Secured Overnight Financing Rate (“SOFR”), including, without limitation, the use of Term SOFR as the benchmark rate. Following the 2022 Wells Amendment, Revolving Credit Loans bear interest at per annum rates equal to, at the Company’s option, either (i) Adjusted Term SOFR (defined as Term SOFR plus 0.10%) plus an applicable margin for Term SOFR loans, or (ii) the base rate plus an applicable margin for base rate loans. The base rate is calculated as the highest of (a) the federal funds rate plus 0.5%, (b) the Wells Fargo prime rate and (c) Term SOFR for a one month tenor in effect on such day plus 1.0%. The applicable margin is calculated based on a pricing grid that in each case is linked to quarterly average excess availability. For SOFR loans, the applicable margin ranges from 1.00% to 1.25% and for base rate loans it ranges from 0.00% to 0.25%. Debt Issuance Costs Debt issuance costs totaling $1.2 million were incurred under the June 2015 Wells Fargo Revolver, 2017 Wells Amendment, 2019 Wells Amendment and 2021 Wells Amendment and are included as assets on the condensed consolidated balance sheets in prepaid expenses and other current assets. Total unamortized debt issuance costs were $0.1 million and $0.2 million as of June 25, 2022 and March 26, 2022, respectively. These amounts are being amortized to interest expense over the term of the June 2015 Wells Fargo Revolver. Total amortization expense of less than $0.1 million related to the June 2015 Wells Fargo Revolver is included as a component of interest expense in the thirteen weeks ended June 25, 2022. Total amortization expense of $0.2 million related to the June 2015 Wells Fargo Revolver and 2015 Golub Term Loan is included as a component of interest expense in the thirteen weeks ended June 26, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jun. 25, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 5. Stock-Based Compensation Equity Incentive Plans On January 27, 2012, the Company approved the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan authorized the Company to issue options to employees, consultants and directors exercisable for up to a total of 3,750,000 shares of common stock, par value $0.0001 per share On October 19, 2014, the Company approved the 2014 Equity Incentive Plan, which was amended as of August 24, 2016 (as amended, the “2014 Plan”). Following the approval of the 2014 Plan, no further grants have been made under the 2011 Plan. The 2014 Plan authorizes the Company to issue awards to employees, consultants and directors for up to a total of 3,600,000 shares of common stock, par value $0.0001 per share eight four one one four On August 26, 2020, the Company approved the 2020 Equity Incentive Plan (the “2020 Plan”). Following the approval of the 2020 Plan, no further grants have been made under the 2014 Plan. The 2020 Plan authorizes the Company to issue awards to employees and directors for up to a total of 2,000,000 shares of common stock, par value $0.0001 per share one three Stock Options During the thirteen weeks ended June 25, 2022, the Company granted its Chief Executive Officer ("CEO") an option to purchase 86,189 shares of common stock under the 2020 Plan. This option contains both service and market vesting conditions. Vesting of this option is contingent upon the market price of the Company's common stock achieving three stated price targets for 30 consecutive trading days through the third anniversary of the date of grant. If the first market price target is met, 33% of the option granted will cliff vest on the third anniversary of the date of grant, with an additional 33% of the option vesting on the third anniversary of the date of grant if the second market price target is met, and the last 34% of the option vesting on the third anniversary of the date of grant if the final market price target is met. The total grant date fair value of this option was $4.0 million, with a grant date fair value of $46.41 per share. The Company is recognizing the expense relating to this stock option on a straight-line basis over the three-year service period. The exercise price of this award is $86.96 per share. The fair value of the option was estimated using a Monte Carlo simulation model. The following significant assumptions were used as of May 12, 2022, the date of grant: Stock price $ 86.96 Exercise price $ 86.96 Expected option term (1) 6.5 years Expected volatility (2) 65.9 % Risk-free interest rate (3) 2.8 % Expected annual dividend yield 0 % (1) The Company has limited historical information regarding expected option term. Accordingly, the Company determined the expected life of the options using the simplified method. (2) Stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company’s stock over the most recent period equal to the expected option term of the Company’s awards. (3) The risk-free interest rate is determined using the rate on treasury securities with the same term. During the thirteen weeks ended June 26, 2021, the Company did no t grant options to purchase shares. Intrinsic value for stock options is defined as the difference between the market price of the Company’s common stock on the last business day of the fiscal quarter and the weighted average exercise price of in-the-money stock options outstanding at the end of each fiscal period. The following table summarizes the stock award activity for the thirteen weeks ended June 25, 2022: Grant Date Weighted Weighted Average Aggregate Stock Average Remaining Intrinsic Options Exercise Price Contractual Life Value (in years) (in thousands) Outstanding at March 26, 2022 728,079 $ 23.44 Granted 86,189 $ 86.96 Exercised (11,212) $ 22.03 $ 610 Cancelled, forfeited or expired — $ — Outstanding at June 25, 2022 803,056 $ 30.28 6.6 $ 39,189 Vested and expected to vest after June 25, 2022 803,056 $ 30.28 6.6 $ 39,189 Exercisable at June 25, 2022 293,267 $ 19.49 5.0 $ 17,196 A summary of the status of non-vested stock options as of June 25, 2022 including changes during the thirteen weeks ended June 25, 2022 is presented below: Weighted- Average Grant Date Shares Fair Value Nonvested at March 26, 2022 626,976 $ 9.14 Granted 86,189 $ 46.41 Vested (203,376) $ 8.04 Nonvested shares forfeited — $ — Nonvested at June 25, 2022 509,789 $ 15.88 Restricted Stock Units During the thirteen weeks ended June 25, 2022, the Company granted 94,262 restricted stock units to various directors and employees under the 2020 Plan. The shares granted to employees vest in three first During the thirteen weeks ended June 26, 2021, the Company granted 59,842 restricted stock units to various directors and employees under the 2020 Plan. The shares granted to employees vest in four first Performance Share Units During the thirteen weeks ended June 25, 2022, the Company granted 57,843 performance share units to various employees under the 2020 Plan with a grant date fair value of $5.0 million. During the thirteen weeks ended June 26, 2021, the Company granted 33,571 performance share units to various employees under the 2020 Plan with a grant date fair value of $2.6 million. The performance share units granted in both the thirteen weeks ended June 25, 2022 and June 26, 2021 are stock-based awards in which the number of shares ultimately received depends on the Company's performance against its cumulative earnings per share target over a three-year performance period. The performance period for the performance share units granted during the thirteen weeks ended June 25, 2022 began on March 27, 2022 and ends on March 29, 2025. The performance period for the performance share units granted during the thirteen weeks ended June 26, 2021 began on March 28, 2021 and ends on March 30, 2024. The performance metrics were established by the Company at the beginning of the performance periods. At the end of the performance periods, the number of performance shares to be issued is fixed based upon the degree of achievement of the performance goals. If the cumulative three-year performance goals are below the threshold level, the number of performance share units to vest will be 0%, if the performance goals are at the threshold level, the number of performance share units to vest will be 50% of the target amounts, if the performance goals are at the target level, the number of performance share units to vest will be 100% of the target amounts, and if the performance goals are at the maximum level, the number of performance share units to vest will be 200% of the target amounts, each subject to continued service through the last day of the performance periods (subject to certain exceptions). If performance is between threshold and target goals or between target and maximum goals, the number of performance share units to vest will be determined by linear interpolation. The number of shares ultimately issued can range from 0% to 200% of the participant's target award. The grant date fair value of the performance share units granted during both the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively, was initially measured using the Company's closing stock price on the dates of grant with the resulting stock compensation expense recognized on a straight-line basis over the three-year vesting periods, subject to certain exceptions. The expense recognized over the vesting periods is adjusted up or down on a quarterly basis based on the anticipated performance level during the performance period. If the performance metrics are not probable of achievement during the performance periods, stock compensation expense would be reversed. The awards are forfeited if the threshold performance goals are not achieved as of the end of the performance periods. Stock-Based Compensation Expense Stock-based compensation expense was $4.7 million and $3.2 million for the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively. Stock-based compensation expense of $1.0 million and $0.7 million was recorded in cost of goods sold in the condensed consolidated statements of operations for the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively. All other stock-based compensation expense is included in selling, general and administrative expenses in the condensed consolidated statements of operations. As of June 25, 2022, there was $5.5 million of total unrecognized stock-based compensation expense related to unvested stock options, with a weighted-average remaining recognition period of 2.45 years. As of June 25, 2022, there was $10.4 million of total unrecognized stock-based compensation expense related to restricted stock units, with a weighted-average remaining recognition period of 2.54 years. As of June 25, 2022, there was $5.6 million of total unrecognized stock-based compensation expense related to performance share units, with a weighted-average remaining recognition period of 2.48 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 25, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies The Company is involved, from time to time, in litigation that is incidental to its business. The Company has reviewed these matters to determine if reserves are required for losses that are probable and reasonable to estimate in accordance with FASB ASC Topic 450, Contingencies as indemnification of amounts expended by the Company’s insurers or others pursuant to indemnification policies or agreements, if any. On May 8, 2019, Sheplers, LLC (formerly known as Sheplers, Inc. prior to September 26, 2021), a wholly-owned subsidiary of the Company, was named as defendant in a class-action complaint filed in the Superior Court of California, County of Los Angeles. Among other things, the complaint generally alleges deceptive pricing on merchandise sold in Sheplers’ e-commerce site. The estimated cost of the matter has been accrued as of June 25, 2022. On February 27, 2020, one employee, on behalf of themself and all other similarly situated employees, filed a class action lawsuit against the Company, which includes claims for penalties under California’s Private Attorney General Act, in the Sacramento County Superior Court, Case No. 34-2019-00272000-CU-OE-GDS, alleging violations of California’s wage and hour, overtime, meal periods and rest breaks, and an alleged violation of the suitable seating requirement as per California Labor Law among other things. The complaint seeks an unspecified amount of damages and penalties. The Company intends to defend this claim vigorously. As of June 25, 2022, the Company has recorded an amount for the estimated probable loss, which is not material to the condensed consolidated financial statements. Depending on the actual outcome of pending litigation, charges in excess of such recorded amount could be recorded in the future, which may have a material adverse effect on the Company’s financial position, results of operations or liquidity. The Company is also subject to certain other pending or threatened litigation matters incidental to its business. In management's opinion, none of these legal matters, individually or in the aggregate, will have a material effect on the Company's financial position, results of operations, or liquidity. During the normal course of its business, the Company has made certain indemnifications and commitments under which the Company may be required to make payments for certain transactions. These indemnifications include those given to various lessors in connection with facility leases for certain claims arising from such facility leases, and indemnifications to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The majority of these indemnifications and commitments do not provide for any limitation of the maximum potential future payments the Company could be obligated to make, and their duration may be indefinite. The Company has not recorded any liability for these indemnifications and commitments in the condensed consolidated balance sheets as the impact is expected to be immaterial. |
Leases
Leases | 3 Months Ended |
Jun. 25, 2022 | |
Leases | |
Leases | 7. Leases The Company does not own any real estate. Instead, most of its retail store locations are occupied under operating leases. The store leases generally have a base lease term of five , on average, exercisable at the Company’s option. The Company is generally responsible for the payment of property taxes and insurance, utilities and common area maintenance fees. Some leases also require additional payments based on percentage of sales. Lease terms include the non-cancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods, termination options and purchase options. Operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. Related operating and finance lease ROU assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease ROU assets is performed on a straight-line basis and recorded as part of rent expense. The majority of total lease costs is recorded as part of cost of goods sold, with the balance recorded in selling, general and administrative expenses on the condensed consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the condensed consolidated statements of operations. ROU assets are tested for impairment in the same manner as long-lived assets. During both the thirteen weeks ended June 25, 2022 and June 26, 2021, the Company did not record ROU asset impairment charges related to its stores. ROU assets and lease liabilities as of June 25, 2022 and March 26, 2022 consist of the following: Balance Sheet Classification June 25, 2022 (in thousands) March 26, 2022 (in thousands) Assets Finance lease assets Right-of-use assets, net $ 10,000 $ 10,254 Operating lease assets Right-of-use assets, net 254,569 230,893 Total lease assets $ 264,569 $ 241,147 Liabilities Current Finance Short-term lease liabilities $ 830 $ 838 Operating Short-term lease liabilities 44,286 42,279 Total short-term lease liabilities $ 45,116 $ 43,117 Non-Current Finance Long-term lease liabilities $ 15,951 $ 16,164 Operating Long-term lease liabilities 244,025 218,420 Total long-term lease liabilities $ 259,976 $ 234,584 Total lease liabilities $ 305,092 $ 277,701 Total lease costs for the thirteen weeks ended June 25, 2022 and June 26, 2021 were: Thirteen Weeks Ended (in thousands) June 25, 2022 June 26, 2021 Finance lease cost Amortization of right-of-use assets $ 255 $ 200 Interest on lease liabilities 182 202 Total finance lease cost $ 437 $ 402 Operating lease cost $ 14,023 $ 11,934 Short-term lease cost 897 581 Variable lease cost 5,469 4,407 * Sublease income — — Total lease cost $ 20,826 $ 17,324 *Amount previously disclosed above for variable lease cost in the thirteen weeks ended June 26, 2021 has been corrected from the amount previously reported of $1.0 million. The following table summarizes future lease payments as of June 25, 2022: Operating Leases Finance Leases Fiscal Year (in thousands) (in thousands) 2023 $ 33,773 $ 1,157 2024 58,798 1,544 2025 52,467 1,515 2026 45,301 1,552 2027 36,573 1,590 Thereafter 109,332 14,525 Total 336,244 21,883 Less: Imputed interest (47,933) (5,102) Present value of net lease payments $ 288,311 $ 16,781 The following table includes supplemental lease information: Thirteen Weeks Ended Thirteen Weeks Ended Supplemental Cash Flow Information (dollars in thousands) June 25, 2022 June 26, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 13,881 $ 11,997 Operating cash flows from finance leases — — Financing cash flows from finance leases 403 385 $ 14,284 $ 12,382 Lease liabilities arising from new right-of-use assets Operating leases $ 34,540 $ 20,519 Finance leases $ — $ 14 Weighted average remaining lease term (in years) Operating leases 6.8 6.4 Finance leases 13.1 13.9 Weighted average discount rate Operating leases 4.5 % 5.3 % Finance leases 10.9 % 12.1 % |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 25, 2022 | |
Income Taxes | |
Income Taxes | 8. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes The income tax rate was 23.5% and 20.6% for the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively. The tax rate for the thirteen weeks ended June 25, 2022 was higher than the tax rate for the thirteen weeks ended June 26, 2021, primarily due to a lower tax benefit due to income tax accounting for share-based compensation compared to a higher tax benefit in the thirteen weeks ended June 26, 2021. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized. To this end, the Company has considered and evaluated its sources of taxable income, including forecasted future taxable income, and has concluded that a valuation allowance is not required as of June 25, 2022. The Company will continue to evaluate the need for a valuation allowance at each period end. The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense. At June 25, 2022 and March 26, 2022, the Company had no accrued liability for penalties and interest. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As of June 25, 2022, the Company is not aware of tax examinations (current or potential) in any tax jurisdictions. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 25, 2022 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions During the thirteen weeks ended June 25, 2022 and June 26, 2021, the Company had capital expenditures with Floor & Decor Holdings, Inc., a specialty retail vendor in the flooring market. These capital expenditures amounted to $0.1 million and $0.2 million in the thirteen weeks ended June 25, 2022 and June 26, 2021, respectively, and were recorded as property and equipment, net on the condensed consolidated balance sheets. One member of the Company’s board of directors currently serves on the board of directors at Floor & Decor Holdings, Inc. Additionally, one member of the Company’s board of directors served as an executive officer at Floor & Decor Holdings, Inc. through April 2022. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jun. 25, 2022 | |
Earnings Per Share | |
Earnings Per Share | 10. Earnings Per Share Earnings per share is computed under the provisions of FASB ASC Topic 260, Earnings Per Share The components of basic and diluted earnings Thirteen Weeks Ended June 25, June 26, (in thousands, except per share data) 2022 2021 Net income $ 39,318 $ 40,645 Weighted average basic shares outstanding 29,747 29,361 Dilutive effect of options and restricted stock 639 852 Weighted average diluted shares outstanding 30,386 30,213 Basic earnings per share $ 1.32 $ 1.38 Diluted earnings per share $ 1.29 $ 1.35 During the thirteen weeks ended June 25, 2022 and June 26, 2021, securities outstanding totaling approximately 87,576 and zero shares, respectively, comprised of options and restricted stock, were excluded from the computation of weighted average diluted common shares outstanding, as the effect of doing so would have been anti-dilutive. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 25, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements as of and for the thirteen weeks ended June 25, 2022 and June 26, 2021 are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), and include the accounts of the Company and each of its subsidiaries, consisting of Boot Barn, Inc., RCC Western Stores, Inc., Baskins Acquisition Holdings, LLC, Sheplers, LLC and Sheplers Holding LLC (collectively with Sheplers, LLC, “Sheplers”). On September 26, 2021, Sheplers, Inc. and Sheplers Holding Corporation each were converted to limited liability companies, Sheplers, LLC and Sheplers Holding LLC, respectively. All intercompany accounts and transactions among the Company and its subsidiaries have been eliminated in consolidation. The vast majority of the Company’s identifiable assets are in the United States. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments that are of a normal and recurring nature necessary to fairly present the Company’s financial position and results of operations and cash flows in all material respects as of the dates and for the periods presented. The results of operations presented in the interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the fiscal year ending April 1, 2023. |
Fiscal Periods | Fiscal Periods The Company reports its results of operations and cash flows on a 52- or 53-week basis ending on the last Saturday of March unless April 1st is a Saturday, in which case the fiscal year ends on April 1st. In a 52-week year, each quarter includes thirteen weeks of operations; in a 53-week fiscal year, the first, second and third quarters each include thirteen weeks of operations and the fourth quarter includes fourteen weeks of operations. The current fiscal year ending on April 1, 2023 (“fiscal 2023”) will consist of 53 weeks; whereas, the fiscal year ended on March 26, 2022 (“fiscal 2022”) consisted of 52 weeks. |
Comprehensive Income | Comprehensive Income The Company does not have any components of other comprehensive income recorded within its condensed consolidated financial statements and, therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements. |
Segment Reporting | Segment Reporting GAAP has established guidance for reporting information about a company’s operating segments, including disclosures related to a company’s products and services, geographic areas and major customers. The Company’s retail stores and e-commerce websites represent two operating segments. Given the similar qualitative and economic characteristics of the two operating segments, the Company’s retail stores and e-commerce websites are aggregated into one reporting segment in accordance with guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Among the significant estimates affecting the Company’s condensed consolidated financial statements are those relating to revenue recognition, lease accounting, inventories, goodwill, intangible and long-lived assets, stock-based compensation and income taxes. Management regularly evaluates its estimates and assumptions based upon historical experience and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the extent actual results differ from those estimates, the Company’s future results of operations may be affected. |
Inventories | Inventories Inventory consists primarily of purchased merchandise and is valued at the lower of cost or net realizable value. Cost is determined using the weighted-average cost method (which approximates the first-in, first-out method) and includes the cost of merchandise and import-related costs, including freight, duty and agent commissions. The Company assesses the recoverability of inventory through a periodic review of historical usage and present demand. When the inventory on hand exceeds the foreseeable demand, the value of inventory that, at the time of the review, is not expected to be sold at or above cost is written down to its estimated net realizable value. |
Leases | Leases Operating and finance lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company's incremental borrowing rates for its population of leases. Related operating and finance lease right-of-use (“ROU”) assets are recognized based on the initial present value of the fixed lease payments, reduced by cash payments received from landlords as lease incentives, plus any prepaid rent and other direct costs from executing the leases. Amortization of both operating and finance lease right-of-use assets is performed on a straight-line basis and recorded as part of rent expense. The majority of total lease costs is recorded as part of cost of goods sold, with the balance recorded in selling, general and administrative expenses on the condensed consolidated statements of operations. The interest expense amortization component of the finance lease liabilities is recorded within interest expense on the condensed consolidated statements of operations. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease payments are recognized as lease expense as they are incurred. |
Fair Value of Certain Financial Assets and Liabilities | Fair Value of Certain Financial Assets and Liabilities The Company follows FASB ASC Topic 820, Fair Value Measurements and Disclosures ● Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. ● Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates, incremental borrowing rates, and volatility, can be corroborated by readily observable market data. ● Level 3 uses one or more significant inputs that are unobservable and supported by little or no market activity, and reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. The Company’s Level 3 assets include certain acquired businesses and the evaluation of store impairment. Cash and cash equivalents, accounts receivable and accounts payable are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified as Level 2 or Level 3 even though there may be certain significant inputs that are readily observable. The Company believes that the recorded value of its financial instruments approximates their current fair values because of their nature and respective relatively short maturity dates or duration. Although market quotes for the fair value of the outstanding debt arrangements discussed in Note 4, “Revolving Credit Facilities and Long-Term Debt” are not readily available, the Company believes its carrying value approximates fair value due to the variable interest rates, which are Level 2 inputs. There were no financial assets or liabilities |
Recent Accounting Pronouncements and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which clarifies some of its guidance around reference rate reform activities as global market participants undertake efforts to transition from using or referencing the London Interbank Offered Rate (LIBOR) and other interbank offered rates to using or referencing alternative reference rates. The amendments in this ASU if elected by an entity, are effective immediately. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. The Company does not expect the revised standard to have an impact on its consolidated financial statements. |
Revenue Recognition | Revenue Recognition Revenue is recorded for store sales upon the purchase of merchandise by customers. Sales are recorded net of taxes collected from customers. Transfer of control takes place at the point at which the customer receives and pays for the merchandise at the register. E-commerce sales are recorded when control transfers to the customer, which generally occurs upon delivery of the product. Shipping and handling revenues are included in total net sales. Shipping costs incurred by the Company are included in cost of goods sold. Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions, estimated future award redemption and other promotions. The sales returns reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages. The total reserve for returns is recorded in accrued expenses and other current liabilities in the consolidated balance sheets. The Company accounts for the return asset and liability separately on a gross basis. The Company maintains a customer loyalty program. Under the program, customers accumulate points based on purchase activity. For customers to maintain their active point balance, they must make a qualifying purchase of merchandise at least once in a 365-day period. Once a loyalty program member achieves a certain point level, the member earns awards that may be redeemed for credits on merchandise purchases. To redeem awards, the member must make a qualifying purchase of merchandise within 60 days of the date the award was granted. Unredeemed awards and accumulated partial points are accrued as unearned revenue until redemption or expiration and, upon redemption and expiration, as an adjustment to net sales using the relative standalone selling price method. The unearned revenue for this program is recorded in accrued expenses and other current liabilities on the consolidated balance sheets and was $3.7 million as of June 25, 2022 and $2.9 million as of June 26, 2021. The following table provides a reconciliation of the activity related to the Company’s customer loyalty program: Customer Loyalty Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 3,504 $ 2,485 Year-to-date provisions 4,235 2,890 Year-to-date award redemptions (4,040) (2,515) Ending balance $ 3,699 $ 2,860 Proceeds from the sale of gift cards are deferred until the customers use the cards to acquire merchandise. Gift cards, gift certificates and store credits do not have expiration dates, and unredeemed gift cards, gift certificates and store credits are subject to state escheatment laws. Amounts remaining after escheatment are recognized in net sales in the period escheatment occurs and the liability is considered to be extinguished. The Company defers recognition of a layaway sale and its related profit to the accounting period when the customer receives the layaway merchandise. Income from the redemption of gift cards, gift card breakage, and the sale of layaway merchandise is included in net sales. Deferred revenue is recorded in accrued expenses and other current liabilities in the consolidated balance sheets. The following table provides a reconciliation of the activity related to the Company’s gift card program: Gift Card Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 15,392 $ 11,569 Year-to-date issued 6,167 4,340 Year-to-date redemptions (6,399) (4,284) Ending balance $ 15,160 $ 11,625 Disaggregated Revenue The Company disaggregates net sales into the following major merchandise categories: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Footwear 48% 51% Apparel 34% 32% Hats, accessories and other 18% 17% Total 100% 100% The Company further disaggregates net sales between stores and e-commerce: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Stores 88% 87% E-commerce 12% 13% Total 100% 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 25, 2022 | |
Schedule of disaggregated revenue | The Company disaggregates net sales into the following major merchandise categories: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Footwear 48% 51% Apparel 34% 32% Hats, accessories and other 18% 17% Total 100% 100% The Company further disaggregates net sales between stores and e-commerce: Thirteen Weeks Ended % of Net Sales June 25, 2022 June 26, 2021 Stores 88% 87% E-commerce 12% 13% Total 100% 100% |
Customer Loyalty Program | |
Schedule of reconciliation of the activity related to contracts with customers | Customer Loyalty Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 3,504 $ 2,485 Year-to-date provisions 4,235 2,890 Year-to-date award redemptions (4,040) (2,515) Ending balance $ 3,699 $ 2,860 |
Gift Card Program | |
Schedule of reconciliation of the activity related to contracts with customers | Gift Card Program (in thousands) June 25, 2022 June 26, 2021 Beginning balance as of March 26, 2022 and March 27, 2021, respectively $ 15,392 $ 11,569 Year-to-date issued 6,167 4,340 Year-to-date redemptions (6,399) (4,284) Ending balance $ 15,160 $ 11,625 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 3 Months Ended |
Jun. 25, 2022 | |
Intangible Assets, Net and Goodwill | |
Schedule of net finite-lived intangible assets | Net intangible assets as of June 25, 2022 and March 26, 2022 consisted of the following (in thousands, except for weighted average useful life): June 25, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (225) $ 120 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (225) $ 60,797 March 26, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (209) $ 136 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (209) $ 60,813 |
Schedule of net indefinite-lived intangible assets | Net intangible assets as of June 25, 2022 and March 26, 2022 consisted of the following (in thousands, except for weighted average useful life): June 25, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (225) $ 120 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (225) $ 60,797 March 26, 2022 Gross Weighted Carrying Accumulated Average Amount Amortization Net Useful Life Customer lists—definite lived $ 345 $ (209) $ 136 5.0 Trademarks—indefinite lived 60,677 — 60,677 Total intangible assets $ 61,022 $ (209) $ 60,813 |
Schedule of estimated future amortization of intangible assets | As of June 25, 2022, estimated future amortization of intangible assets was as follows: Fiscal Year (in thousands) 2023 $ 46 2024 54 2025 20 2026 - 2027 - Thereafter - Total $ 120 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jun. 25, 2022 | |
Stock-Based Compensation | |
Schedule of stock award activity | The following table summarizes the stock award activity for the thirteen weeks ended June 25, 2022: Grant Date Weighted Weighted Average Aggregate Stock Average Remaining Intrinsic Options Exercise Price Contractual Life Value (in years) (in thousands) Outstanding at March 26, 2022 728,079 $ 23.44 Granted 86,189 $ 86.96 Exercised (11,212) $ 22.03 $ 610 Cancelled, forfeited or expired — $ — Outstanding at June 25, 2022 803,056 $ 30.28 6.6 $ 39,189 Vested and expected to vest after June 25, 2022 803,056 $ 30.28 6.6 $ 39,189 Exercisable at June 25, 2022 293,267 $ 19.49 5.0 $ 17,196 |
Schedule of non-vested stock options | A summary of the status of non-vested stock options as of June 25, 2022 including changes during the thirteen weeks ended June 25, 2022 is presented below: Weighted- Average Grant Date Shares Fair Value Nonvested at March 26, 2022 626,976 $ 9.14 Granted 86,189 $ 46.41 Vested (203,376) $ 8.04 Nonvested shares forfeited — $ — Nonvested at June 25, 2022 509,789 $ 15.88 |
CEO | |
Stock-Based Compensation | |
Schedule of assumptions used to determine fair value of stock options | The following significant assumptions were used as of May 12, 2022, the date of grant: Stock price $ 86.96 Exercise price $ 86.96 Expected option term (1) 6.5 years Expected volatility (2) 65.9 % Risk-free interest rate (3) 2.8 % Expected annual dividend yield 0 % (1) The Company has limited historical information regarding expected option term. Accordingly, the Company determined the expected life of the options using the simplified method. (2) Stock volatility for each grant is measured using the weighted average of historical daily price changes of the Company’s stock over the most recent period equal to the expected option term of the Company’s awards. (3) The risk-free interest rate is determined using the rate on treasury securities with the same term. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jun. 25, 2022 | |
Leases | |
Schedule of ROU assets and liabilities | ROU assets and lease liabilities as of June 25, 2022 and March 26, 2022 consist of the following: Balance Sheet Classification June 25, 2022 (in thousands) March 26, 2022 (in thousands) Assets Finance lease assets Right-of-use assets, net $ 10,000 $ 10,254 Operating lease assets Right-of-use assets, net 254,569 230,893 Total lease assets $ 264,569 $ 241,147 Liabilities Current Finance Short-term lease liabilities $ 830 $ 838 Operating Short-term lease liabilities 44,286 42,279 Total short-term lease liabilities $ 45,116 $ 43,117 Non-Current Finance Long-term lease liabilities $ 15,951 $ 16,164 Operating Long-term lease liabilities 244,025 218,420 Total long-term lease liabilities $ 259,976 $ 234,584 Total lease liabilities $ 305,092 $ 277,701 |
Schedule of total lease cost | Total lease costs for the thirteen weeks ended June 25, 2022 and June 26, 2021 were: Thirteen Weeks Ended (in thousands) June 25, 2022 June 26, 2021 Finance lease cost Amortization of right-of-use assets $ 255 $ 200 Interest on lease liabilities 182 202 Total finance lease cost $ 437 $ 402 Operating lease cost $ 14,023 $ 11,934 Short-term lease cost 897 581 Variable lease cost 5,469 4,407 * Sublease income — — Total lease cost $ 20,826 $ 17,324 *Amount previously disclosed above for variable lease cost in the thirteen weeks ended June 26, 2021 has been corrected from the amount previously reported of $1.0 million. |
Schedule of future lease payments | The following table summarizes future lease payments as of June 25, 2022: Operating Leases Finance Leases Fiscal Year (in thousands) (in thousands) 2023 $ 33,773 $ 1,157 2024 58,798 1,544 2025 52,467 1,515 2026 45,301 1,552 2027 36,573 1,590 Thereafter 109,332 14,525 Total 336,244 21,883 Less: Imputed interest (47,933) (5,102) Present value of net lease payments $ 288,311 $ 16,781 |
Schedule of supplemental lease information | The following table includes supplemental lease information: Thirteen Weeks Ended Thirteen Weeks Ended Supplemental Cash Flow Information (dollars in thousands) June 25, 2022 June 26, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 13,881 $ 11,997 Operating cash flows from finance leases — — Financing cash flows from finance leases 403 385 $ 14,284 $ 12,382 Lease liabilities arising from new right-of-use assets Operating leases $ 34,540 $ 20,519 Finance leases $ — $ 14 Weighted average remaining lease term (in years) Operating leases 6.8 6.4 Finance leases 13.1 13.9 Weighted average discount rate Operating leases 4.5 % 5.3 % Finance leases 10.9 % 12.1 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Jun. 25, 2022 | |
Earnings Per Share | |
Schedule of the components of basic and diluted (loss)/earnings per share of common stock | The components of basic and diluted earnings Thirteen Weeks Ended June 25, June 26, (in thousands, except per share data) 2022 2021 Net income $ 39,318 $ 40,645 Weighted average basic shares outstanding 29,747 29,361 Dilutive effect of options and restricted stock 639 852 Weighted average diluted shares outstanding 30,386 30,213 Basic earnings per share $ 1.32 $ 1.38 Diluted earnings per share $ 1.29 $ 1.35 |
Description of the Company, R_2
Description of the Company, Recent Developments and Basis of Presentation (Details) | 12 Months Ended | ||
Apr. 01, 2023 | Mar. 26, 2022 store state shares | Jun. 25, 2022 store Vote state shares | |
Business Operations | |||
Number of shares authorized | 100,000,000 | 100,000,000 | |
Number of shares issued | 29,820,000 | 29,994,885 | |
Number of shares outstanding | 29,806,461 | ||
Number of votes per common share | Vote | 1 | ||
Number of stores | store | 300 | 311 | |
Number of states in which the Company operates | state | 38 | 38 | |
Fiscal Year | |||
Fiscal year period | 364 days | ||
Subsequent Event | |||
Fiscal Year | |||
Fiscal year period | 371 days | ||
American Worker | |||
Business Operations | |||
Number of stores | store | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended |
Jun. 25, 2022 USD ($) segment item | |
Segment Reporting | |
Operating segments | segment | 2 |
Reportable segments | segment | 1 |
Number of reporting units | item | 2 |
Fair Value of Certain Financial Assets and Liabilities | |
Financial assets requiring fair value measurements on a recurring basis | $ | $ 0 |
Financial liabilities requiring fair value measurements on a recurring basis | $ | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Customer Loyalty Program (Details) - Customer Loyalty Program - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Customer Loyalty Program | ||
Number of days in which customers must make a qualifying purchase in order to maintain an active point balance | 365 days | |
Number of days from award grant date in which the customer has to make a qualifying purchase to redeem the awards | 60 days | |
Reserve for Returns | $ 3,699 | $ 2,860 |
Reconciliation of Activity in Program | ||
Beginning balance | 3,504 | 2,485 |
Year-to-date provisions | 4,235 | 2,890 |
Current year redemptions | (4,040) | (2,515) |
Ending balance | $ 3,699 | $ 2,860 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Gift Card Program (Details) - Gift Card Program - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Reconciliation of Activity in Program | ||
Beginning balance | $ 15,392 | $ 11,569 |
Current year issuances | 6,167 | 4,340 |
Current year redemptions | (6,399) | (4,284) |
Ending balance | $ 15,160 | $ 11,625 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Disaggregated Revenue (Details) | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Disaggregation Of Revenue | ||
Net sales percentage | 100% | 100% |
Stores | ||
Disaggregation Of Revenue | ||
Net sales percentage | 88% | 87% |
E-commerce | ||
Disaggregation Of Revenue | ||
Net sales percentage | 12% | 13% |
Footwear | ||
Disaggregation Of Revenue | ||
Net sales percentage | 48% | 51% |
Apparel | ||
Disaggregation Of Revenue | ||
Net sales percentage | 34% | 32% |
Hats, accessories and other | ||
Disaggregation Of Revenue | ||
Net sales percentage | 18% | 17% |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | Mar. 26, 2022 | |
Intangible assets, net | |||
Accumulated Amortization | $ (225) | $ (209) | |
Gross carrying amount | 61,022 | 61,022 | |
Intangible assets, net | 60,797 | 60,813 | |
Amortization of intangible assets | 16 | $ 18 | |
Fiscal year | |||
2023 | 46 | ||
2024 | 54 | ||
2025 | 20 | ||
Total | 120 | ||
Trademarks | |||
Intangible assets, net | |||
Indefinite-lived intangible assets | 60,677 | 60,677 | |
Maximum | |||
Intangible assets, net | |||
Amortization of intangible assets | 100 | $ 100 | |
Customer lists | |||
Intangible assets, net | |||
Gross Carrying Amount | 345 | 345 | |
Accumulated Amortization | (225) | (209) | |
Net | $ 120 | $ 136 | |
Weighted Average Useful Life | 5 years | 5 years |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill - Change in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended | ||
Jun. 25, 2022 USD ($) item | Jun. 26, 2021 USD ($) | Mar. 26, 2022 USD ($) | |
Intangible Assets, Net and Goodwill | |||
Goodwill | $ 197,502 | $ 197,502 | |
Number of indicators of impairment for goodwill | item | 0 | ||
Impairments of long lived assets | $ 0 | $ 0 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt - Revolving Credit Facilities and Long-Term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |||||||
Jul. 11, 2022 | Jun. 29, 2015 | Jun. 25, 2022 | Jun. 26, 2021 | Mar. 26, 2022 | Jul. 26, 2021 | Jun. 06, 2019 | May 26, 2017 | |
Interest expense | ||||||||
Revolving credit facility and long-term debt | ||||||||
Amortization of deferred loan fees | $ 0.1 | $ 0.2 | ||||||
Golub Term Loan | ||||||||
Revolving credit facility and long-term debt | ||||||||
Principal amount | $ 200 | |||||||
Weighted average interest rate (as a percent) | 5.50% | |||||||
Repayments of loan | $ 1.2 | |||||||
Wells Fargo Revolver | ||||||||
Revolving credit facility and long-term debt | ||||||||
Borrowing capacity | $ 125 | $ 180 | $ 165 | $ 135 | ||||
Commitment fee on unused capacity (as a percentage) | 0.25% | |||||||
Amount outstanding under 2015 Wells Fargo Revolver | 74.9 | $ 28.5 | ||||||
Interest expense | $ 0.5 | $ 0.1 | ||||||
Weighted average interest rate (as a percent) | 2.30% | |||||||
Additional interest rate required if certain triggering events come into existence (as a percent) | 2% | |||||||
Deferred loan fees | $ 1.2 | |||||||
Unamortized value of the debt issuance costs and debt discount | $ (0.1) | $ (0.2) | ||||||
Wells Fargo Revolver | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Borrowing capacity | $ 250 | |||||||
Wells Fargo Revolver | Federal funds rate | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0.50% | |||||||
Wells Fargo Revolver | Federal funds rate | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0.50% | |||||||
Wells Fargo Revolver | One-month LIBOR rate | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1% | |||||||
Wells Fargo Revolver | Adjusted Term SOFR | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0.10% | |||||||
Wells Fargo Revolver | SOFR | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1% | |||||||
Wells Fargo Revolver | Minimum | ||||||||
Revolving credit facility and long-term debt | ||||||||
Consolidated fixed charge coverage ratio | 1 | |||||||
Wells Fargo Revolver | Minimum | Base rate | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0% | |||||||
Wells Fargo Revolver | Minimum | Base rate | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0% | |||||||
Wells Fargo Revolver | Minimum | LIBOR | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1% | |||||||
Wells Fargo Revolver | Minimum | SOFR | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1% | |||||||
Wells Fargo Revolver | Maximum | Base rate | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0.25% | |||||||
Wells Fargo Revolver | Maximum | Base rate | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 0.25% | |||||||
Wells Fargo Revolver | Maximum | LIBOR | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1.25% | |||||||
Wells Fargo Revolver | Maximum | SOFR | Subsequent Event | ||||||||
Revolving credit facility and long-term debt | ||||||||
Basis margin (as a percent) | 1.25% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |||||
Jun. 25, 2022 USD ($) item $ / shares shares | Jun. 26, 2021 USD ($) shares | Mar. 26, 2022 $ / shares | Aug. 26, 2020 $ / shares shares | Oct. 19, 2014 $ / shares shares | Jan. 27, 2012 $ / shares shares | |
Stock-Based Compensation | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Restricted stock or performance share units granted fair value | $ 5 | |||||
Stock-based compensation expense | 4.7 | $ 3.2 | ||||
Cost of goods sold | ||||||
Stock-Based Compensation | ||||||
Stock-based compensation expense | $ 1 | $ 0.7 | ||||
Options | ||||||
Stock-Based Compensation | ||||||
Stock options granted | shares | 86,189 | 0 | ||||
Grant date fair value (in dollars per share) | $ / shares | $ 46.41 | |||||
Unrecognized stock-based compensation expense for option | $ 5.5 | |||||
Weighted-average recognition period | 2 years 5 months 12 days | |||||
Restricted Stock Awards | ||||||
Stock-Based Compensation | ||||||
Unrecognized stock-based compensation expense for other than option | $ 10.4 | |||||
Weighted-average recognition period | 2 years 6 months 14 days | |||||
Performance share units | ||||||
Stock-Based Compensation | ||||||
Unrecognized stock-based compensation expense | $ 5.6 | |||||
Weighted-average recognition period | 2 years 5 months 23 days | |||||
2011 Plan | ||||||
Stock-Based Compensation | ||||||
Shares authorized | shares | 3,750,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
2011 Plan | Options | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Vesting period | 5 years | |||||
2014 Plan | ||||||
Stock-Based Compensation | ||||||
Shares authorized | shares | 3,600,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
2014 Plan | Options | Minimum | ||||||
Stock-Based Compensation | ||||||
Expiration period | 8 years | |||||
Vesting period | 4 years | |||||
2014 Plan | Options | Maximum | ||||||
Stock-Based Compensation | ||||||
Expiration period | 10 years | |||||
Vesting period | 5 years | |||||
2014 Plan | Restricted Stock Awards | Minimum | ||||||
Stock-Based Compensation | ||||||
Vesting period | 1 year | |||||
2014 Plan | Restricted Stock Awards | Maximum | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years | |||||
2014 Plan | Restricted Stock Units | Tranche One | ||||||
Stock-Based Compensation | ||||||
Vesting period | 1 year | |||||
2014 Plan | Restricted Stock Units | Tranche Two | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years | |||||
2014 Plan | Restricted Stock Units | Tranche Three | ||||||
Stock-Based Compensation | ||||||
Vesting period | 5 years | |||||
2020 Plan | ||||||
Stock-Based Compensation | ||||||
Shares authorized | shares | 2,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
2020 Plan | CEO | ||||||
Stock-Based Compensation | ||||||
Stock options granted | shares | 86,189 | |||||
Aggregate grant date fair value | $ 4 | |||||
Grant date fair value (in dollars per share) | $ / shares | $ 46.41 | |||||
Exercise price (in dollars per share) | $ / shares | $ 86.96 | |||||
Stated market price targets for company stock | item | 3 | |||||
Service period | 3 years | |||||
2020 Plan | CEO | Tranche One | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 33% | |||||
2020 Plan | CEO | Tranche Two | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 33% | |||||
2020 Plan | CEO | Tranche Three | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 34% | |||||
2020 Plan | Restricted Stock Units | ||||||
Stock-Based Compensation | ||||||
Restricted stock or performance share units granted | shares | 94,262 | 59,842 | ||||
Restricted stock or performance share units granted fair value | $ 8.2 | $ 4.7 | ||||
2020 Plan | Restricted Stock Units | Employees | ||||||
Stock-Based Compensation | ||||||
Vesting period | 3 years | 4 years | ||||
2020 Plan | Restricted Stock Units | Director | ||||||
Stock-Based Compensation | ||||||
Vesting period | 1 year | 1 year | ||||
2020 Plan | Restricted Stock Units | Tranche One | ||||||
Stock-Based Compensation | ||||||
Vesting period | 1 year | |||||
2020 Plan | Restricted Stock Units | Tranche Two | ||||||
Stock-Based Compensation | ||||||
Vesting period | 3 years | |||||
2020 Plan | Restricted Stock Units | Tranche Three | ||||||
Stock-Based Compensation | ||||||
Vesting period | 4 years | |||||
2020 Plan | Performance share units | ||||||
Stock-Based Compensation | ||||||
Vesting period | 3 years | 3 years | ||||
Restricted stock or performance share units granted | shares | 57,843 | 33,571 | ||||
Restricted stock or performance share units granted fair value | $ 2.6 | |||||
2020 Plan | Performance share units | Minimum | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 0% | 0% | ||||
2020 Plan | Performance share units | Maximum | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 200% | 200% | ||||
2020 Plan | Performance share units | Below Threshold | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 0% | 0% | ||||
2020 Plan | Performance share units | Threshold | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 50% | 50% | ||||
2020 Plan | Performance share units | Target | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 100% | 100% | ||||
2020 Plan | Performance share units | Maximum Level | ||||||
Stock-Based Compensation | ||||||
Vesting percentage | 200% | 200% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options and Significant Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Options | ||
Stock Options | ||
Outstanding at the beginning of period | 728,079 | |
Granted | 86,189 | 0 |
Exercised | (11,212) | |
Outstanding at the end of period | 803,056 | |
Vested and expected to vest after end of period | 803,056 | |
Exercisable at end of period | 293,267 | |
Grant Date Weighted-Average Exercise Price | ||
Outstanding at the beginning of period | $ 23.44 | |
Granted | 86.96 | |
Exercise price (in dollars per share) | 22.03 | |
Outstanding at the end of period | 30.28 | |
Vested and expected to vest at end of period | 30.28 | |
Exercisable at end of period | $ 19.49 | |
Weighted Average Remaining Contractual Life | ||
Weighted average remaining contractual life, awards outstanding | 6 years 7 months 6 days | |
Weighted average remaining contractual life, awards vested and expected to vest | 6 years 7 months 6 days | |
Weighted average remaining contractual life, awards exercisable | 5 years | |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value, awards exercised | $ 610 | |
Aggregate intrinsic value, awards outstanding | 39,189 | |
Aggregate intrinsic value, awards vested and expected to vest | 39,189 | |
Aggregate intrinsic value, awards exercisable | $ 17,196 | |
CEO | 2020 Plan | ||
Assumptions used | ||
Stock price (in dollars per share) | $ 86.96 | |
Exercise price (in dollars per share) | $ 86.96 | |
Expected option term | 6 years 6 months | |
Expected volatility factor | 65.90% | |
Risk-free interest rate | 2.80% | |
Expected annual dividend yield | 0% | |
Stock Options | ||
Granted | 86,189 |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-vested Options (Details) - Options - $ / shares | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Shares | ||
Nonvested at beginning of period | 626,976 | |
Granted | 86,189 | 0 |
Vested | (203,376) | |
Nonvested at end of period | 509,789 | |
Weighted-Average Grant Date Fair Value | ||
Nonvested at beginning of period | $ 9.14 | |
Granted | 46.41 | |
Vested | 8.04 | |
Nonvested at end of period | $ 15.88 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Leases | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |
Operating lease renewal term | 5 years | |
ROU asset impairment charge | $ 0 | $ 0 |
Minimum | ||
Leases | ||
Operating lease term | 5 years | |
Maximum | ||
Leases | ||
Operating lease term | 10 years |
Leases - ROU assets and liabili
Leases - ROU assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 25, 2022 | Mar. 26, 2022 |
ROU assets and liabilities | ||
Finance lease assets | $ 10,000 | $ 10,254 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Total lease assets | Total lease assets |
Operating lease assets | $ 254,569 | $ 230,893 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Total lease assets | Total lease assets |
Total lease assets | $ 264,569 | $ 241,147 |
Current finance lease liabilities | $ 830 | $ 838 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total short-term lease liabilities | Total short-term lease liabilities |
Current operating lease liabilities | $ 44,286 | $ 42,279 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total short-term lease liabilities | Total short-term lease liabilities |
Total short-term lease liabilities | $ 45,116 | $ 43,117 |
Finance Lease, Liability, Noncurrent | $ 15,951 | $ 16,164 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total long-term lease liabilities | Total long-term lease liabilities |
Operating Lease, Liability, Noncurrent | $ 244,025 | $ 218,420 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Total long-term lease liabilities | Total long-term lease liabilities |
Total long-term lease liabilities | $ 259,976 | $ 234,584 |
Total lease liabilities | $ 305,092 | $ 277,701 |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Lease cost | ||
Amortization of right-of-use assets | $ 255 | $ 200 |
Interest on lease liabilities | 182 | 202 |
Total finance lease cost | 437 | 402 |
Operating lease cost | 14,023 | 11,934 |
Short-term lease cost | 897 | 581 |
Variable lease cost | 5,469 | 4,407 |
Total lease cost | $ 20,826 | 17,324 |
Previously Reported | ||
Lease cost | ||
Variable lease cost | $ 1,000 |
Leases - Future lease payments
Leases - Future lease payments (Details) $ in Thousands | Jun. 25, 2022 USD ($) |
Operating Leases | |
2023 | $ 33,773 |
2024 | 58,798 |
2025 | 52,467 |
2026 | 45,301 |
2027 | 36,573 |
Thereafter | 109,332 |
Total | 336,244 |
Less: Imputed interest | (47,933) |
Present value of net lease payments | 288,311 |
Finance Leases | |
2023 | 1,157 |
2024 | 1,544 |
2025 | 1,515 |
2026 | 1,552 |
2027 | 1,590 |
Thereafter | 14,525 |
Total | 21,883 |
Less: Imputed interest | (5,102) |
Present value of net lease payments | $ 16,781 |
Leases - Supplemental lease inf
Leases - Supplemental lease information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Supplemental Lease Information | ||
Operating cash flows from operating leases | $ 13,881 | $ 11,997 |
Financing cash flows from finance leases | 403 | 385 |
Cash paid for amounts included in the measurement of lease liabilities | 14,284 | 12,382 |
Lease liabilities arising from new right-of-use assets-Operating leases | $ 34,540 | 20,519 |
Lease liabilities arising from new right-of-use assets-Finance leases | $ 14 | |
Weighted average remaining lease term (in years)-Operating leases | 6 years 9 months 18 days | 6 years 4 months 24 days |
Weighted average remaining lease term (in years)-Finance leases | 13 years 1 month 6 days | 13 years 10 months 24 days |
Weighted average discount rate-Operating leases | 4.50% | 5.30% |
Weighted average discount rate-Finance leases | 10.90% | 12.10% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 25, 2022 | Jun. 26, 2021 | Mar. 26, 2022 | |
Income Taxes | |||
Effective tax rate | 23.50% | 20.60% | |
Accrued interest and penalties | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Floor & Decor Holdings, Inc | ||
Related Party Transactions | ||
Capital expenditures related to specialty retail vendor | $ 0.1 | $ 0.2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Earnings Per Share | ||
Net income | $ 39,318 | $ 40,645 |
Weighted average basic shares outstanding | 29,747,000 | 29,361,000 |
Dilutive effect of options and restricted stock | 639,000 | 852,000 |
Weighted average diluted shares outstanding | 30,386,000 | 30,213,000 |
Basic earnings per share | $ 1.32 | $ 1.38 |
Diluted earnings per share | $ 1.29 | $ 1.35 |
Shares that were not included in the computation of weighted average diluted common shares amounts | 87,576 | 0 |