SPWH - Sportsman's Warehouse: Cheap But Risky After Weak Q1 And Strategic Shift

2024-06-05 10:30:31 ET

Summary

• Sportsman's Warehouse Holdings reported weak Q1 results as macro and industry pressures continued, missing estimates slightly despite already low earnings anticipations.
• Yet, Sportsman's Warehouse reaffirmed its FY2024 outlook, expecting weak sales, but a significant profitability improvement as inventory management starts to show results.
• In April, Sportsman's Warehouse Holdings announced a new strategic plan, and has shifted the strategic focus on operational improvements instead of aggressive store expansion. I believe that the shift is highly welcome.
• SPWH stock valuation continues to be attractive if the strategic shift bears fruit and an eventual partly recovery is made. The stock is still at an incredibly high-risk level, though, making the investment case volatile.

Sportsman's Warehouse Holdings, Inc. ( SPWH ), the sporting goods retailer, reported the company’s Q1 results on the 4 ^th of June after market hours. The stock quickly fell by up to -20% in the following day's market open as the results showed continued weakness....

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