Sportsman’s Warehouse (NASDAQ:SPWH) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
Sportsman’s Warehouse reported a 2.8% increase in net sales for Q1 2026, reaching $256.1 million, with same store sales up 2.1%.
Strong performance in hunting and shooting sports with a 6.3% growth, and fishing sales increased by 6%, though other categories saw declines.
Gross margin slightly decreased to 29.6%, primarily due to product mix with higher sales in lower-margin categories like firearms and ammunition.
The company is focusing on inventory efficiency and expects to end the year with less total inventory than 2025, supporting better cash flow and debt reduction.
E-commerce sales grew over 6%, with improvements made to the online fishing experience, and a partnership with Field and Stream to enhance brand exposure.
Sportsman’s Warehouse reiterated its fiscal 2026 guidance, expecting net sales to range between down 1% to up 2%, and adjusted EBITDA between $30 million and $36 million.
Strategic initiatives include refining product assortments, enhancing the omni-channel model, and launching a new loyalty program to improve customer retention.
Full Transcript
OPERATOR
Thank you for standing by and welcome to Sportsman’s Warehouse First Quarter 2026 Earnings Conference Call Currently, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 11 on your telephone to remove yourself from the queue. You may press Star 1-1 again. I would now like to hand the call over to Riley Timmer, Vice President of strategic programs and IR. Please go ahead.
Riley Timmer (Vice President of Strategic Programs and Investor Relations)
Thank you operator. Participating on our Q1 2026 call today is Paul Stone, our Chief Executive Officer, and Jennifer Paul Young, our Chief Financial Officer. I will now take a moment and remind everyone of the Company’s Safe harbor language. The statements we make today contain forward looking statements within the meaning of the Private Securities Litigation Reform act of 1995, which include statements regarding expectations about our future results of operations, demand for our products and growth of our industry. Actual results may differ materially from those suggested in such statements due to a number of risks and uncertainties, including those described in the company’s most recent Form 10K and the company’s other filings made with the SEC. We will also disclose non GAAP financial measures during today’s call. Definitions of such non GAAP measures, as well as reconciliations to the most directly comparable GAAP financial measures are provided as Supplemental Financial Information in our press release, included as Exhibit 99.1 to the Form 8K we furnish to the SEC today, which is also available on the Investor Relations section of our website at sportsmans.com I’ll now turn the call over to Paul.
Paul Stone (Chief Executive Officer)
Thank you Riley and good afternoon everyone. Before we begin, I want to recognize our dedicated outfitters across the country every day they deliver on our promise of great gear and great service, strengthening our connection with customers and supporting the progress to transform Sportsman’s Warehouse. I’m pleased that the same store sales in the first quarter were up just over 2% compared to last year despite ongoing consumer macroeconomic pressure and higher fuel prices. This increase is on top of the 2% growth we achieved in Q1 of last year. We continue to refine our assortment to meet the current needs of the customer with regionally specific products and brands that strategically align to our core pursuits. First quarter sales in our hunting and shooting sports department increased over 7% versus last year. During Q1 we executed a successful Spring Range Days event showcasing pursuit led solutions for the shooting sports customer through curated products and accessories. While Event Driven demand further supported sales of firearms and ammunition during the quarter, we will continue to strategically build on our authority of the leader in both shooting, sports and personal protection. Sales in our fishing department increased nearly 6% in Q1 and is up about 17% on a two year comp stock. Although a softer than expected ice fishing season put pressure on the category in Q1, we are confident in our assortment and position in the market to continue to capture share during the late spring and summer seasons. As we discussed on prior calls last year, we strategically reduced inventory and the assortment in our camping and soft line departments. This decision was intentional to eliminate slow moving and low gross margin return on investment products from our assortment that didn’t align with our core pursuits, causing a short term softening of sales. However, this allowed us to free up working capital dollars to buy into the product and brands these two departments that now align to our core pursuits of hunting, fishing, shooting and personal protection. Newness for the summer season is now landing in our stores with the focus on quality and value with name brands that customers recognize. We will continue to build out these two complementary categories to provide a full solution for our passionate outdoor customers. Our E Commerce business outperformed again with E Comm driven sales up over 6% in the quarter. This underscores the strength of our Omni Channel model and the growth potential in our core pursuits. Because firearms and in certain states ammunition require in store pickup, our E Comm business naturally drives traffic into our stores. We continue to strategically leverage this advantage to support growth across both digital and store sales. We once again saw improvements in both units per transaction and average order value driven by our merchandising strategy, better in stocks and our strategic shift to solution selling. Close management of inventory remains a key priority in our transformation strategy. I’m pleased with how the team is timing our flow of merchandise to ensure we are regionally and seasonally relevant to meet shopper demand. This will continue to be a focus as we expect to improve turns and inventory efficiency in 2026. On our call last quarter we outlined the next phase of our business transformation, centering on strengthening our leadership position in our core pursuits of hunting, fishing and shooting and personal protection. These are the core pursuits that make up the DNA of Sportsman’s Warehouse. During the first quarter, we made meaningful improvements to our website to enhance the online fishing experience. Early results have been encouraging, contributing to strong E Commerce sales growth in the quarter. We will continue to integrate content with commerce to help anglers more easily build their fishing solutions. With participation rates continuing to grow each year, we believe this category represents significant growth upside for the business Additionally, during the first quarter we entered into a partnership with one of the top fishing and hunting lifestyle brands, Field and String. Together, we are working with leading fishing influencers to create shareable content that enhances our brand exposure, showcases trending new products and drives traffic to Sportsman’s Warehouse. While we are in the early stages of this partnership, we are encouraged by the early results. Turning now to our firearms solution bundling strategy, we made solid progress in Q1 on this initiative with a full solution offering now available online for top selling products. Many of our customers are first time firearm owners so offering carefully selected pairings like gun safes, hearing and eye protection and our firearm service plan helping first time buyers feel confident in their initial purchase decisions. That experience then carries into our stores where customers can build on those pairings with support from our experienced outfitters tailored to local needs and pursuits. This experience supports responsible ownership while increasing the attachment and basket size. By combining curated e commerce pairings with in store experience, we believe we can expand gross margins in the hunting and shooting sports category while reinforcing our leadership in these key pursuits. Reinventing our loyalty program is a key step in Sportsman’s Warehouse effort to build a more durable higher value customer model and our partnership with Epsilon, a leading loyalty and personalization consultancy, marks an important move forward in that transformation. The initiative is designed to improve retention, increase customer lifetime value and drive more efficient marketing while supporting stronger repeat purchase behavior and a more disciplined promotional strategy. Looking Ahead the US Consumer remains under pressure with high fuel costs adding additional weight to discretionary spending. We feel optimistic about our position in the market, our curated assortment of iconic American brands, and our summer readiness where we will celebrate and showcase Red, White and blue for America’s 250th anniversary. Our focus remains on driving profitable growth, disciplined management of inventory, generating positive free cash flow to pay down debt, and executing against our strategic priorities. With that, I’ll turn the call over to Jennifer.
Jennifer Paul Young (Chief Financial Officer)
Thank you Paul and good afternoon everyone. Net sales for the first quarter were $256.1 million, a 2.8% increase from 249.1 million in the same period last year. Our same store sales in Q1 increased 2.1% versus last year. This represents a solid start to the year and reflects continued progress against our strategic and operational priorities. Our performance was driven by 6.3% same store sales growth in our hunting, shooting, sports department led by firearms, ammunition and less lethal personal protection. Fishing also continues to perform growing 6% in Q1. This is a key category where we see significant growth upside for the business. Our other categories declined in Q1 partially offset by overall growth. Gross margin for the quarter was 29.6% compared to 30.4% in Q1 last year. The decline was primarily driven by category mix with a higher penetration of firearms and ammunition and lower sales. In our higher margin categories, SGA expenses were 93.9 million or 36.7% of net sales versus 95.3 million or 38.2% in Q1 last year. The decrease in SGA expense was driven by disciplined cost management overall lower payroll expense and decreased depreciation. Net loss for the first quarter was $21.8 million or negative $0.56 per diluted share compared with a net loss of $21.3 million or negative $0.56per diluted share in the first quarter of the prior year. Adjusted net loss in the first quarter was $15.1 million or negative $0.39 per diluted share compared with adjusted net loss of $15.6 million or negative $0.41 per diluted share in the first quarter of last year. Adjusted EBITDA for the first quarter was negative $8.1 million compared with adjusted EBITDA of negative $9 million in the first quarter of 2025, an improvement of $900,000. Turning now to the balance sheet, total inventory at the end of Q1 was $387.1 million, down $25.1 million or 6.1% versus Q1 of last year. The decrease in year over year inventory is part of our ongoing inventory efficiency strategy including the refinement of receipt timing to match seasonal demand. We expect average inventory to be lower throughout the year as we improve seasonal inventory timing and eliminate slow moving inventory resulting in better overall churns. We continue to expect to end the year with less total inventory than 2025. In regards to liquidity, we ended the first quarter with a net debt balance of $148.4 million and a total liquidity of $116.7 million. Our liquidity position remains strong and we continue to actively manage working capital to ensure flexibility as we navigate through the year. Tight manage of variable expenses and inventory efficiency remain a key focus. We remain committed to generating positive free cash flow and using excess cash to reduce debt and strengthen the balance sheet, with debt reduction as our top capital allocation priority. Finally, let me speak to our full year guidance. Despite the continued pressure on the US Consumer which is weighing on our camping and soft line departments and elevated fuel prices, we are reiterating our guidance for the full year, we continue to expect fiscal 2026 net sales to range between down 1% to up 2% compared to last year. Adjusted EBITDA to be between $30 million and $36 million, driven by better gross margin performance, ongoing expense management and improved inventory discipline and capital expenditures between $20 million and $25 million, primarily relating to technology investments to improve store service and merchandising productivity as well as normal store maintenance. To reiterate, our priorities for 2026 are driving profitable comp store sales growth through the execution of our strategic initiatives, managing our inventory efficiently, and using excess free cash flow to pay down our debt and strengthen our balance sheet. That concludes our prepared remarks for today. I will now turn the call back to the operator to facilitate questions.
OPERATOR
Thank you. As a reminder to ask a question, you will need to press Star 11 on your telephone to remove yourself from the queue. You may press Star 1-1 again. Please stand by while we compile the Q and A roster. Our first question comes from the line of Anna Glasson of B. Riley Securities. Your line is open.
Anna Glasson (Equity Analyst)
Anna, hi, good afternoon. Thanks for taking my questions. I’d love to dig a little hey, I’d love to dig a little deeper into the trends you’re seeing. And shooting, obviously you called out, you know there is some event driven demand that’s helping the category. But with the data you have in front of you, could you maybe share to what extent is underlying strengthening of the category? Maybe you guys gaining share versus maybe the event driven benefit.
Jennifer Paul Young (Chief Financial Officer)
Yeah, thanks Anna, this is Jennifer. So what we saw in Q1 as we talked about a little bit on our previous call about February, we did see strength across the quarter in this category. February in and of itself we actually walked away from one of our events to really focus on strategic profitable growth. So February wasn’t as strong as March and April combined. And for March and April we do look at them combined simply because of the Easter shift. So they did outperform prior year in April and March combined. As we’re looking towards May, what we’re seeing is a little bit more of the stabilization. I think as we talked about before, sometimes you see the event driven or external driven demand that we do see a little bit of a stabilization post that and we’re experiencing that right now but feel really good about where the category is, how it performed in Q1 and what it’ll do in Q2.
Anna Glasson (Equity Analyst)
Got it. That makes sense. I guess that leads into the next question. Can you share put a little bit more of a finer point on the trends you’re seeing overall in May.
Jennifer Paul Young (Chief Financial Officer)
Yeah, we’re seeing. We still have a very healthy business. hunting and shooting are really driving our Q1 business. We have a big month of June ahead of us. If you look at our quarters, that’s one of our largest months of the quarter. So with Father’s Day playing into that, that’s who our customer is, and that’s where we have a lot of advertising and promotional events to really make sure we deliver on June as well. Great, thanks. I’ll hop back in the queue.
OPERATOR
Thank you. Our next question comes from the line of Mark Smith of Lake Street. Please go ahead, Mark.
Mark Smith (Equity Analyst)
Hi, guys. I wanted to dig into gross profit margin a little bit more here, down 80bps. Can you just talk about maybe how much of that was driven by Mix and then any other pressures that you’re seeing?
Jennifer Paul Young (Chief Financial Officer)
Yeah, the majority of it was driven by mix. There is a little bit of pressure in some of the other categories as we look across the board, as we’re starting to take our marks a lot sooner than we have historically. So across the other categories, you saw a little bit of pressure, but really it was Mix having so much penetrated in Hunt and Shoot.
Mark Smith (Equity Analyst)
Okay. And then I also wanted to ask about E commerce trends. There look really solid. Just curious if you can give us maybe any more insight about how that’s continuing to trend, how you feel about that progression and maybe where you think it can go over time.
Jennifer Paul Young (Chief Financial Officer)
Yes, we’ve been really putting our elbow against our E commerce business. We feel it’s really well positioned. The team did a lot of work from an experiential perspective on the fish business, and we’re seeing great results from that. We’re also focused on our search engine. We think there’s work to do there, but we have some great plans in place to continue to drive that. I’ll let Paul speak a little bit more to it, but we do have a lot of confidence in our E Comm business. But we do think that some of the initiatives that we’ve put into place are what’s helping drive that business.
Paul Stone (Chief Executive Officer)
Yeah, I think overall, Mark, we know that we need to invest in it and really in a couple different areas. One is fish, and we know that we have a lot of upside there from a penetration and what it looks like and the ease of shop for the consumer. We made some significant changes over the last quarter and even really digging into the fly component, which is extremely. It’s a big part of our business due to Our location where we have the majority of our stores and the team over the last three weeks really went back and refined what that shopping experience can look like for the consumer. So we continue to lean into it. We’ve underinvested in the past in our E Comm business. We’re both, I think looking at it from a fish and then from a solution standpoint on how we attach. And as we get into the hunt season this year, we expect to have a much better product on our E commerce platform to allow us to have solution based selling for the first time to really take pressure off of our outfitters in the stores. Those consumers flow to the stores and will allow for solution based selling online versus transactional selling that we’ve done in the past. So we’ll continue to lean into it. We think the beauty of our business is that 70, 75% of that consumer flows to the store to create traffic and it starts online and the work’s been done in the stores and putting them in a better position and allowing our outfitters to be able to serve the customers better. We’ve got to do a better job on the initial expense. And I think what we’ve seen already from overall fish and then in particular fly with the adjustments we’ve made and then on schedule by the time we get into hunt season to have a solution base for our firearm and our hunt business as well.
Mark Smith (Equity Analyst)
Perfect. The last category I wanted to ask about was just camping. You know, curious if you can kind of rank or talk about kind of the moving parts there, you know, from weather, you know, pressure on the consumer, maybe your planned drawdown on the inventory and competition, kind of what’s happening there and any focus or work that you think you could do to drive camping.
Paul Stone (Chief Executive Officer)
Yeah, inventory’s in a good position. I think I mentioned it last quarter, the way the team has bought. I think we’re positioned well. It’s been soft, the weather and it’s been cold to start the summer as well as wet in comparison to last year and historical data that you see there. So it’s been a little soft to start. And I think as we went and moved out of some of our low gym really subcategories in particular in camp to where we could reinvest those back into our pursuits around hunting, fishing and personal protection shooting, we’ve invested those dollars into the categories that resonate with the customer. So as you’re getting out of some of the subcats, it just didn’t work that we tied up. You know, if you’re Coming against that, you’re comping that. But we feel really good with what the inventory position looks like for summer and with little to no risk as we get out of that product like we’ve had in the last two to three years in the past. Or we just continue to work to try to get out of these categories. I feel really good with what the team’s done to position ourselves well for the future. Thank you.
OPERATOR
Thank you. Our next question comes from the line of Matt Karanda of Roth Capital Partners. Your line is open. Matt.
Joseph
Good afternoon. It’s Joseph on for Matt. I just want to see if you guys could talk about just SG&A here. It’s nice to see the continued leverage on this line. Just want to see how the team’s thinking about further savings on this line item. And it sounds like payroll efficiency was a driver and wanted to know if there’s any other labor efficiencies we should be thinking about.
Jennifer Paul Young (Chief Financial Officer)
Hey, thanks for the question. Yeah, we are continuing always focused on leveraging our SG&A. What you saw in this quarter was really the favorability in the payroll as we’ve gotten more efficient with our inventory as well as we continue to focus on our stored labor. We saw a nice benefit there. That was partially offset by some bonus accrual that we did this quarter that we didn’t have last quarter. And that will be the one headwind as we move through the year from an SGA perspective will be the bonus accrual. Just year over year, assuming we continue to perform. That was really payroll is the biggest component of the savings there. It’s not an sga, but I’ll just go ahead and speak to it. It’s more in the margin component we did see. We’re seeing some headwinds in fuel, but we’re able to offset those with some of our inventory efficiency. So just to kind of keep it straight, that is in margin, not in SG&A. But you know, expense management is all one bucket. So just thought I’d kind of tee on that one too.
Paul Stone (Chief Executive Officer)
And I think anytime the thing I would add to it is, you know, the efficiency of the flow of inventory and whether it’s through distribution center or whether it be in the stores and kind of the ups and downs that we’ve had or front loading or backloading as we come into different seasons. The smoothing of that has allowed us to look at labor a lot differently than we have in the past. And really the operations team in the field did a great job as far as being able to align sales per labor hour to what they were seeing in the business. So feel good. And I think the core of that is how we’re managing inventory and efficiency we’re getting from inventory.
Joseph
Got it. And then if we could just hop onto inventory, then. In your prepared remarks, you mentioned that you’re expecting a year over year decline on the full year in inventory. Just wanted to see where is that coming from. Should we be thinking about it as a quicker seasonal clearance as a factor, or is there anything else driving that tighter inventory management?
Jennifer Paul Young (Chief Financial Officer)
You know, I wouldn’t say it’s one silver bullet. It’s multiple things that are really helping us here. It’s. It’s getting the right inventory into the right stores to the right place that really helps our turns. It is a benefit of us making sure that we are taking our seasonal marks when we should be taking our seasonal marks, which I don’t think historically we’ve been as great at doing so. And then it’s also just looking at, looking at our SKUs, which SKUs aren’t moving quickly and how do we look at the tails and not actually go deep into those, but go deep into the quicker churning categories. So all those things kind of add up to really where we’re getting efficiency. So again, it’s not one thing. It’s just we’re constantly looking at it and we just, you know, we know that that takes up working capital, so we want to be as efficient with it as possible. Got it. We’ll go ahead and take the rest offline.
OPERATOR
Thank you. I would now like to turn the conference back to Paul Stone for closing remarks.
Paul Stone (Chief Executive Officer)
Sir, thank you for joining the call today. And thank you to all the passionate outfitters around the country for their commitment to Sportsman’s Warehouse. Together, we look forward to providing our customers with great gear and exceptional service. Thank you.
OPERATOR
This concludes today’s conference call. Thank you for participating. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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