The abrupt departure of its CEO has sent the stock of U.S. clothing retailer Boot Barn (BOOT) plunging 20% lower.
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Shares of the California-based company that specializes in cowboy boots and hats are reeling after longtime CEO Jim Conroy announced during the company’s third-quarter earnings call that he is leaving Boot Barn in November to become the new head of off-price retailer Ross Stores (ROST).
John Hazen, Boot Barn’s current chief digital officer, will serve as interim CEO while a permanent replacement for Conroy is found. Conroy led Boot Barn for more than a decade. Under his leadership, the company grew its store count, went public, and saw its share price rise on the back of robust sales.
Even with today’s (October 29) plunge, BOOT stock is still up nearly 70% this year and more than 330% over five years.
Boot Barn’s Results
News of Conroy’s departure is overshadowing Boot Barn’s latest financial results. The company, which also sells denim jackets, announced Fiscal second-quarter earnings per share (EPS) of $0.95, which slightly missed consensus forecasts of $0.96.
Revenue in the quarter was up 14% from a year earlier at $425.8 million. Same-store sales increased 4.9% year-over-year and surpassed the 3.9% consensus estimate of analysts. Boot Barn also raised its forward guidance, saying it expects full-year earnings of $5.30 to $5.60 a share on revenue of $1.87 billion to $1.91 billion.
Analysts were quick to say that the selloff in BOOT stock is an overreaction and may present a buying opportunity. Barron’s quoted analysts at Jeffries Financial Group (JEF) saying that Boot Barn’s stock should trade at $170 per share, which is 30% higher than current levels.
Is BOOT Stock a Buy?
Boot Barn stock has a consensus Moderate Buy rating among 13 Wall Street analysts. That rating is based on nine Buy and four Hold recommendations made in the last three months. The average BOOT price target of $177.50 implies 38.08% upside from current levels.
