All right, well, let's get started in the interest of time. So my name is Peter Keith. I'm the senior analyst at Piper for Hardlines and Broadlines retail. And what better company to have at our national conference than Boot Barn? So most of you probably know the company. They're obviously the country's largest retailer of Western and workwear. And I was pulling up an interesting stat because in about a month and a half, you guys will be public for 10 years. So had you invested in the company on day one of the IPO at about $17 and change, your compounded annual return as of today would be 24%. Is that good? That's it. Yeah. So one of retail's best growth stories over the last ten years, and it feels like you guys are just getting started. Just quickly for introductions, we have John Hazen, normally not doing a lot of investor-facing, Chief Digital Officer and Head of Marketing. You guys probably know Jim Watkins, CFO, and Jim Conroy, CEO. So, there was an exciting announcement last night. You guys updated us on some of the current sales trends. Why don't you just recap that announcement and what you've seen maybe over the last month or so since you had your Q1 earnings print? Sure. Well, good morning, everybody, and thanks for coming to this breakout. When we had our last call, we had said that our business was getting sequentially better, and we talked about broad-based sequential improvement across both channels, across all our geographies, and across all our merchandise categories, virtually all our merchandise categories. Now, we've seen that sequential improvement continue to improve to the point where everything has now turned positive, essentially. Both channels are nicely positive, all the categories are now positive, and we're seeing that broad-based strength across all geographies. In the most recent release that we put out yesterday, you'll see a nicely improved same-store sales line from July into August, and then while we're only two weeks into our fiscal September, that improvement continued for those two weeks. Okay. And, I guess the question would be: what's driving it? So are you seeing any outperformance of categories, outperformance of region, anything you want to call out? Sure. If you think about three chunks of the business, the single thing that's changed the most is our ladies' boots and apparel business was comp eroding and now has become nicely comp positive. All of the businesses have improved, but that has been the single biggest inflection point, going from somewhat significantly negative to strongly positive in just the last six or eight weeks. Okay. And so, one question we are asking every company is just around the core customer. Maybe the press release speaks to it all, but kind of how do you feel about your core customer? I'm coming off of a lot of Q2 earnings, where people were guiding down. They're complaining about the economy. You guys are doing well. So what's unique about the Boot Barn customer? What do you want to call out that you think is helping the spending trends? Sure. Probably the single biggest thing is most of our business continues to attract a functional purchaser, somebody that needs the product, it's nondiscretionary. So all of our work boot business and work apparel business is functional. Most of our men's Western businesses are functional, and a portion of our women's Western business is functional. So I think when the economy goes up or down, our business tends to be a little bit more stable because most of our customers need the product. I do think they probably feel a little bit of the pressure of inflation, but less of the pressure of unemployment, because the unemployment that we're seeing spike up in certain parts of the economy just aren't really hitting our core customer as hard, or at all. And I also, just in the spirit of being fully transparent, we are also up against some soft numbers, so we have the benefit of wrapping or cycling some soft numbers from last year. Yeah. Okay. And so the, I don't want to call it controversy, but you guys have done exceptionally well during COVID, and everyone said, "Well, Boot Barn's a COVID beneficiary, and now you have to normalize." So I always like to just take a step back, because you have kind of accomplished a lot over the last five years. So maybe just talk about how Boot Barn has evolved over the last five years, even using twenty nineteen as a starting point. What do you think is a little bit different that should be flagged? Sure. Great question. One of the things that COVID did is sort of mask what we were doing to the underlying business for the last five years. And if you go back, even prior to that, there was a period of time where when the price of a barrel of oil came down and our comps went to flat, and for us, flat comps was unusual. But what we learned from that was we needed to diversify the business, expand the core customer. We wanted to put stores more broadly across the country. So we kind of transformed Boot Barn substantially. From a brand perspective, we went from really hyper-focused on a Western and work customer, and we opened the aperture to be a little bit more mainstream in feel. We broadened the product assortment. We added more merchandise to all of the stores, so the average inventory per store went up. The new stores got bigger, and the brand aesthetic of the new store improved. When we did all that, if you just looked at the customer count, either in total or on a store-by-store basis, we dramatically increased the customer count, almost doubled it in that period of time, and it's also enabled us to take this sort of broader Boot Barn brand to more geographies. Now we're starting to really expand in the Northeast and the East Coast, or parts of the country that are definitively not, quote-unquote, "Western." That resulted in one particular year where we comped up +54%, which we felt, of course, amazing about. The question had always been, well, are we gonna give all of that back over a period of one year or two years or five years? I think somewhat expectedly, we gave a little bit of it back, so we were flat the immediate year after that 53, and then we were minus six, and now we're, it looks like we're back to sort of growing from this base. I think that is sort of the collective efforts of the marketing team expanding the brand, raising the brand aesthetic, the merchandising team broadening the assortment, the real estate team putting stores now in much more mainstream real estate locations. If you think of that, we're of that 54% comp, we've held on to 40-something% of it, and you know, that feels pretty good right now. And so you are going into a lot of new markets. We should flag you are targeting 15% store growth, so a nice, attractive rate, expanding in the Northeast, new markets. Just to weave John into the conversation, talk about the marketing efforts that you guys make, because it seems like newer stores, even in new markets, are coming out of the gate pretty strong. And that's a bit of a surprise because you wouldn't think maybe the Boot Barn name is known in the Northeast, for example. So, how are you laying the groundwork there and capitalizing on the store growth? Yeah, we break down between the pre-opening, the soft opening, and then the grand opening of new stores in all markets. And pre-opening, if you went to the Boot Barn homepage, you'd see a specific homepage for that store that's coming to that area. We obviously go to our CRM database, send direct mail pieces, as well as emails to those customers that may have bought from us already. And I know this will sound a little strange coming from the head of digital, but we do a lot of billboards, newspapers, and traditional radio. So not Pandora, not Spotify. We have the local radio station come out on site. We get great feedback from our customers that they heard about it through the local radio. Again, not what you typically hear from the digital side, but it really works for us. Yeah. Okay, great. And well, sticking on new stores, get Jim Watkins a question. One thing that was great kind of pre-pandemic, 10% store growth was this new store maturation lift. Now you're at 15% store growth. It's a little tricky to figure out when the comps are kind of flat to slightly down, but how are you feeling about new store maturation now that you have a couple of years under your belt and things are starting to stabilize? Yeah. As the new store volumes have elevated from the IPO ten years ago at $1.7 million in sales for a new store, to now $3 million or $3 million plus, we do have two or three years under our belt at those new elevated levels, and we're starting to see that it looks like the stores are opening so strong that in the first year that they go comp, they're not really comping or outperforming the chain. But as we get into that second year, we are getting more of a sales lift or a comp that's outperforming the chain average. And so, we feel more confident that as we get into year three and year four and year five, we'll start to see that comp waterfall that we saw historically. It's just that first year, as they get out of the gate so strong- Yeah with all of John's high digital marketing that he does, you know, the lapping that initially is a little bit, a little bit tough, and then we get past that and get growth from there. Okay. Any way to frame that up? Because I guess it's technically like year three of the store, year two in the comp base. Is it, are you seeing consistent outperformance that you could quantify? Yeah, not anything that we're ready to quantify now. It's still ear Yeah a little bit early days. Yeah. But we are seeing a single digit comp waterfall lift in that second comp year or that third year. Yeah. Um, so. Okay, good. All right, more to come. Let's talk a little about some sales driving initiatives, Jim, that you talked about earlier in the year. We talked about a bit on the last conference call. You brought in. You have good, better, best. You've brought back some of the good that maybe got priced out with inflation. How has that been working for you? What categories do you think that's resonating the most? And anything you want to highlight that I'm not mentioning? Yeah, sure. From an assortment standpoint, I think we've really focused on trying to find balance between good, better, and best, and that's been probably most prevalent in boots because if a female boot customer wants to buy a $159 or $169 pair of boots, over the last few years, with inflation, we had boots at those prices that then rose to $189 over the course of three or four years. We probably, in the spirit of full transparency, we were probably a little slow to fill in the more opening price points, and we feel better about their position now. I would say a similar sort of analysis has been done around. If I think of the women's business, there's a balance between the functional pieces of that business and the fashionable pieces of that business. Oftentimes, the investment community views our women's business as pure fashion, and it really isn't. Call it fifty/fifty. And we had probably chased the fashion a little bit too strongly and lost a little bit of sight of the more functional pieces. So we feel that we're better in balance there. And then maybe just changing to marketing a little bit. We've over that five-year period that you had alluded to, we were really focused on brand building. We wanted to get the name out there. We wanted to describe Boot Barn as more than just Western. We wanted to raise the aesthetic, and I think that we'll always be doing things like that. But as business got tough last year, we shifted gears a bit and tried to become a little bit more call to action, a little bit more hard-hitting and tactical with some of our marketing messages. Still steering clear of promotional or sales orientation, discounting the product, but trying to create a little bit more sense of urgency with the customer. Those are sort of the bigger things I think we've done. Okay. And maybe probably, John, you want to talk on that, the bottom funnel marketing. Is that about performance marketing? Are you doing social media? How do you attack that to try to drive more conversions? The PPC or the pay-per-click marketing is really solely focused on the e-commerce business, which is a small piece of our business. And then the email, the social, and all the other creative that we do, we're a stores first company, so we're, y ou know, those messages, again, are not using the word sale. They're not promoting a sale, but they're just a little stronger in the call to action, that we've got product that you need, and you should come visit one of our stores. Okay. All right. I did want to address competition, so even though we're coming up on the 10-year anniversary of the IPO, the threat of Amazon always seems to be one question that I'm getting from investors, so you guys have navigated the whole, you know, Amazon threat, if that is a real threat, quite well. Why do you think that's the case for this category, which can be bought online? We have strong competition online, so we've got some brands out there, direct-to-consumer brands, brands that sell to Amazon, and they do a very good job, and they are strong competitors. But as I said a moment ago, 90% of our business happens in stores, and we'll deal with the noise that comes with the, you know, expensive pay-per-click costs, perhaps from certain brands and other brands selling on Amazon. And it's annoying, but again, it's only 10% of our business, and most of our business happens in stores. And that's not where that Amazon, y ou know, the Amazon shopper shopping on Amazon and our customers are shopping in our stores. Okay. We're also leaning more into exclusive brands, right? Yeah. And that's a reason to come to our store more and more, with 40% of our business now being our own brands, that really differentiates us against virtually every other competitor out there. Right. Okay. So I did want to ask about exclusive brands. What’s driving some of the newness there that you think can continue to drive further penetration? And I know you get asked all the time, where do you think exclusive brands could go for the total percent of the mix? Sure, sure. It's about 40 now, and we expect that it'll continue to grow by 2 or 3 points a year over the next several years. We do think 50% is in our future. In terms of where that growth comes from, our strategy with exclusive brands is we'll launch a brand, it'll have a core assortment, we'll see what's working and not working, and then we'll sort of expand it around the successful pieces of it. Cody James is a good example. Cody James has been in the line for a very long period of time, and it used to be boots, jeans, and woven shirts. And now and then it expanded into hats, cowboy hats, and now it's expanded into knit shirts. We've now expanded the meaning of Cody James and launched a brand called Cody James Black, which is a much more higher end price point of boots. Cody James has a work line to it. So every one of the brands has a roadmap for where it kind of starts, and then, based on what we see in the marketplace, how we can expand around that kind of core assortment that it starts with. If you went to a store right now, you'd see Cody James sport jackets, Western-styled sport jackets. And as each of the brands gets stronger, our. It frees us up to do even a broader line, because now the brand has some meaning. I don't expect a lot of new brands in the immediate future, more just kind of growing the brands that are out there. Okay. All right, so the exclusive brands are a gross margin driver, so we'll get a gross margin question into Jim Watkins. Let's just unpack maybe some of the more sustainable, longer term gross margin drivers. I know you're getting some benefits right now from lower shipping supply chains, but just think about the next three to five years. Sure. What, what do you think could drive gross margin higher? Yeah, so you're right. This year, on the merchandise margin guide, we've got 110 basis points of expansion. It'll be our seventh year of roughly 100 basis points of merchandise margin expansion, which has been great. As we look forward, we're not planning that at 100 basis points, but get out of some of the supply chain benefits or improvement that you mentioned. That's 70 of the 110 this year, so 40 of those merchandise margin basis points are coming from better buying economies of scale. And that's our vendor partners providing better discounts, volume discounts. We're bringing in full container loads. we've been able to increase our purchases quite significantly, double or more than double over the last five or six years with many of our vendors, and they've stepped up and offered us some better discounts. So that's helping drive the expansion. So as we look outward and if that's 35-40 basis points a year for the next several years, it's gonna be, as Jim mentioned, two or three points of exclusive brand penetration growth a year. So call it 20 basis points from exclusive brands and another 20 basis points from just better economies of scale as we continue to grow and open stores and grow our comp store sales. Okay, great. One topic that I've always been fascinated with, and I said you guys are the since the IPO, is what you're now looking at is a vendor direct program. So you've had this unique supply chain where it's the supplier ship to store, and I don't think it's broad-based, but you are starting to bring some of that supply chain in-house with your DC build out. Could you talk about that? Is that a longer term initiative? Is this gonna be fairly niche? Seems like if you can execute it, there could be some margin opportunities. Sure. [audio distortion] Yeah. Peter set up the question perfectly. Historically, all of our big brands, actually, all of our brands, would ship directly to a store. So if you bought a pair of boots at a local store that was a Justin pair of boots, Justin would send that store that boot as replenishment. As we've expanded our own brands, our own exclusive brands, we had one and now have two relatively large distribution centers to do the replenishment ourselves for our own brands. As those two facilities have a little bit of excess capacity, which we expected, we now have the ability to go to our bigger vendor partners and truly partner with them. We can give them a hard order for a much larger quantity and import the goods ourselves and bring them into the distribution center, and break down bulk and replenish our stores in the same way that we do it with our exclusive brands. Because we're able to do that, the vendor partners now have the ability to give us a much more attractive price. We tend to do that with items that have been or are expected to be in the line for a fair amount of time, more the basic, more commodity-type items. We wouldn't make a big bet on container loads of product that we would import ourselves for things that have more fashion sensibility or higher markdown risk, so the bull's-eye for something like this is work boots, a lot of men's Western boots, some ladies' Western boots. Carhartt, we do a lot of our own distribution, occasionally Wrangler, so if you think about all that, that's a fair amount of product that's now coming through that we have the ability to drive a higher markup on- Mm-hmm with very limited incremental fashion risk. Yep. And these larger brands, have they been open to it? I think- Yeah some of them, That's sort of how the channel works, is That's right this direct to store. That's right. So them actually going vendor direct is maybe new to Ariat, to simplify it, but has this been pretty well received? It's been very well received. Ariat actually has been a great partner with us and was a relatively early adopter to it. It does. We, we've become a lower cost to serve account to them, too, right? We're zero credit risk. They don't have to bring it through their own distribution center. Almost all of our vendors, ironically, as we went back over the last several years, have had pretty meaningful changes to their own distribution centers, and I think removing some of the burden has helped. And it gives them. I think the other thing, if you think about demand planning for a big vendor, to give them a large upfront order helps them plan out their factory capacities and plan out their business better for all of their accounts. Mm-hmm. So there's some implicit benefits. Okay, great. Looks like we're just in time for one or two more questions. So we have John here today. We don't normally see him, so I'm gonna direct another question your way. Sure. You had this customer segmentation with Western Work, and then you added Just Country. Mm-hmm. And so can you just explain, like, what a Just Country customer is, and then how you're going after and target that customer segmentation? Sure, absolutely. So our Western customer, we always describe as someone who works on a ranch, who rides a horse, who maybe works with cattle, who wears a cowboy hat. They truly are living the Western lifestyle. A Just Country customer is someone you probably know yourself. They're someone who drives an F-150, the best-selling car in America. They wear a baseball cap, maybe not a cowboy hat. Maybe they have never been on a horse, but they're a big fan of country music. They may hunt, they may fish. So they live a rural or a rural-esque lifestyle, but they're not truly Western. And so we have segmented that group of customers as we've kind of opened the aperture to look for new customers, and we'll market to them with creative that represents those things I just talked about. So we'll have dirt bikes creative, we'll have fishing and hunting. They won't be wearing cowboy hats necessarily. So it's really a larger group of rural customers in America who live that lifestyle but truly aren't Western. Okay. We'll tie this up with a Morgan Wallen sponsorship question, so a lot of Just Country customers probably go to Morgan Wallen concert. You've sponsored that. Can you talk about. Has that been a success overall, and would you look to broaden out with other country music stars? We do think it's been a success. He's been a great partner, very down-to-earth, and it is somewhat of a model that we'll be replicating going forward with more country music artists. We're leaning in a little bit more to a Mexican artist called Carín León, so we feel great about that. And this upcoming fall, you'll see a lot more activity around country music and connections with artists in general. Great. Okay. Well, we'll look forward to that. Well, thank you very much to the Boot Barn team for participating in the conference. Thanks, Peter. Take some time. Thank you for the question. Very good. Thank you. Thanks, everybody.