What Happened?
Shares of outdoor specialty retailer Sportsman's Warehouse (NASDAQ: SPWH) jumped 12% in the afternoon session after the company reported strong first quarter 2025 results which blew past analysts' revenue, EPS, and EBITDA expectations. Same-store sales rose 2%, marking the first positive comp in nearly four years. Management credited the gain to improved inventory timing, local assortment relevance, and a sharper digital-first marketing strategy.
On the other hand, its gross margin missed. Zooming out, we think this was a good print with some key areas of upside.
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What The Market Is Telling Us
Sportsman's Warehouse’s shares are extremely volatile and have had 78 moves greater than 5% over the last year. But moves this big are rare even for Sportsman's Warehouse and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 109% on the news that the company reported impressive fourth quarter 2024 results, which blew past analysts' revenue, EPS, and EBITDA expectations. The key highlight was the turnaround in same-store sales, which were essentially flat, a sharp recovery from the nearly 13% drop in the same quarter last year.
The financial outlook was also encouraging as its full-year EBITDA guidance outperformed Wall Street's estimates. The broader retail environment remained challenging, but the company's focus on local and seasonal demand and a leaner inventory should provide a cushion. Zooming out, we think this quarter featured some important positives.
Sportsman's Warehouse is up 0.9% since the beginning of the year, but at $2.59 per share, it is still trading 32.1% below its 52-week high of $3.82 from June 2024. Investors who bought $1,000 worth of Sportsman's Warehouse’s shares 5 years ago would now be looking at an investment worth $219.56.
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