Sportsmans 2026 Q1 Earnings Wider Losses as Net Income Drops 17.6%

Sportsman's Warehouse Holdings, Inc. reported its fiscal 2026 Q1 earnings on June 4th, 2025. The company experienced a net loss of $21.3 million, marking a 17.6% decline compared to the previous year. Despite positive same-store sales growth, Sportsman's losses were higher than expected, resulting in earnings per share (EPS) of -$0.56, missing analysts' expectations. The company maintained its full-year guidance, projecting net sales growth between -1% and 3.5%, and adjusted EBITDA between $33 million and $45 million, showing commitment to financial discipline amid challenging market conditions.

Revenue
Sportsman's Warehouse achieved total revenue growth of 2% in the first quarter of fiscal 2026, totaling $249.10 million, compared to $244.24 million in the same quarter of 2025. The primary revenue segment, net sales, contributed significantly to this growth, with the company maintaining a consistent figure of $249.10 million across all key segments.

Earnings/Net Income
Sportsman's Warehouse reported a net loss of $21.25 million for Q1 2026, an increase from the $18.07 million loss in Q1 2025, translating to a loss of $0.56 per share, up from $0.48 per share. The EPS results reflect a challenging quarter for the company.

Post-Earnings Price Action Review
The post-earnings strategy involving investing in SPWH following a revenue miss proved detrimental, resulting in substantial losses. This approach yielded a return of -87.45%, starkly underperforming the benchmark by 166.32%. The strategy's poor performance is underscored by a Sharpe ratio of -0.49 and a maximum drawdown of -94.64%, indicating high risk and minimal returns. These figures highlight the volatility and unpredictability associated with this investment strategy, urging caution and reevaluation of the approach. The adverse results emphasize the need for a more prudent investment strategy to mitigate risks and enhance returns in the future.

CEO Commentary
Paul Stone, President and CEO, expressed optimism about Sportsman's Warehouse's performance, highlighting a 2% year-over-year sales increase, marking the first positive comp in nearly four years. Key growth drivers include improved inventory precision, local relevance, and brand awareness. Stone emphasized the importance of executing their turnaround plan, particularly in personal protection and seasonal readiness, noting significant gains in firearms and fishing categories. He acknowledged challenges from macroeconomic pressures and a later spring season but maintained confidence in the team's ability to deliver results through disciplined execution and local expertise, stating, "Despite the ongoing consumer macroeconomic challenges, I remain confident in our strategic plan."

Guidance
The company reiterated its fiscal 2025 guidance, expecting net sales to range from a decline of 1% to an increase of 3.5% compared to 2024. Adjusted EBITDA is projected between $33 million and $45 million, supported by modest gross margin improvement and disciplined expense management. Capital expenditures are anticipated to be between $20 million and $25 million, primarily for technology investments aimed at enhancing store service and productivity. The leadership remains focused on generating positive free cash flow and reducing debt throughout the year.

Additional News
Recently, Sportsman's Warehouse announced a strategic move to expand its footprint by opening a new store in Surprise, Arizona, during fiscal year 2025. The company aims to leverage local expertise and enhance service offerings to boost customer engagement and loyalty. Additionally, there have been significant advancements in their digital-first marketing strategy, designed to elevate brand awareness and customer reach. This initiative aligns with their focus on transforming the business for sustained growth. Meanwhile, Sportsman's Warehouse has also been actively managing its inventory by pulling forward $20 million worth of critical products to mitigate tariff impacts, ensuring product availability in key categories ahead of seasonal demand.