Boot Barn's (NYSE: BOOT) fiscal second-quarter results hit the headlines this week, but the company's stock was far more affected by a development in its C-suite. By the time the smoke had cleared, Boot Barn's share price had taken a hit of almost 21% across the week, according to data compiled by S&P Global Market Intelligence.
Second-quarter results were published
Monday was the day both pieces of news were released. Boot Barn's second-quarter figures actually weren't bad, with total net sales rising by 12% to over $849 million on the back of an almost 5% rise in same-store sales. Generally accepted accounting principles (GAAP) net income also defied gravity, rising to more than $29 million ($0.95 per share) from the year-ago profit of almost $28 million.
The top-line result was slightly higher than the consensus analyst estimate, while profitability fell just short of the average projection.
Yet, investor eyes were diverted to another section of the earnings release. This was Boot Barn's announcement that long-serving CEO Jim Conroy was stepping down -- and soon. His effective date of departure is Nov. 24. In what's likely an "offer he can't refuse," he's accepted an offer to serve as co-CEO and, soon thereafter, sole CEO of big discount retailer Ross Stores.
Some analysts recommend not being discouraged
It's never easy for investors to accept the resignation of a longtime leader, particularly if the enterprise they guided did well in the past -- as in the case of Boot Barn. They shouldn't get too encouraged, though, as a pack of analysts tracking the stock got more bullish on the company following the earnings release.
Several either reiterated their buy ratings on the shares or raised their price targets, with one -- Baird -- even upgrading its recommendation to outperform (read: buy) from the preceding neutral.
Should you invest $1,000 in Boot Barn right now?
Before you buy stock in Boot Barn, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Boot Barn wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $813,567!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 28, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Boot Barn. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
