D.A. Davidson Sees Compelling Earnings Growth And Valuation For Sportsman's Warehouse Holdings

In a report published Friday, D.A. Davidson analyst Andrew Burns reiterated a Buy rating and $13.00 price target on Sportsman's Warehouse Holdings (NASDAQ: SPWH).

In the report, D.A. Davidson noted, “Revenue falls short, but EPS exceeds consensus. SPWH reported comps, revenue, and EPS of -6.2%, $182.5 million, and $0.21, which compares to consensus of -4.9%, $186.2 million, and $0.20, and our estimates of -5.0%, $186.2 million, and $0.19. Guidance called for a 4%-6% comp decline, revenue of $183-$188 million, and diluted EPS of $0.19-$0.20. Excluding firearms & ammunition, comps declined 3.2% y/y; excluding all shooting-related categories, comps decreased 1.6%. Gross margin was up 168bp y/y to 33.2%, primarily reflecting a 90bp mix benefit and 70bp lift compared to prior year liquidation sales. SG&A grew 10.8% to $42.0 million, which represents 23.0% of sales (vs. 21.7% in 3Q13).”

Sportsman's Warehouse Holdings closed on Thursday at $7.69.