All right. Thanks, everyone. Good morning. We will kick it off. My name is Peter Keith, Senior Research Analyst at Piper Sandler, covering consumer hard lines and broad lines. Very happy to have one of my favorite companies, Boot Barn, with us today. You guys have been at our national conference a couple of different times. You are a great fit for here, and we have got a couple of great stores here as well. Great. Thanks for having us. Thanks for being here. Yes. Immediately to my right, we have John Hazen, CEO, and Jim Watkins, CFO, is also on stage, and Mark Dedovesh, SVP of Finance and IR. Why do not we just kick it off with the update you guys put out on Monday night. You gave an update on the current quarter, raised certain portions of the guidance, but why do not you just recap some of those metrics for us? Yeah, sure. I will rewind the tape just a little bit more. This was an intra-quarter update for Q2. We ended our first quarter with same-store sales up 5%, and we are 11 weeks through our second quarter. We gave the update earlier in the week that we were going to come in at the high end of the sales guidance, high end of the EPS guidance, and within guidance from a same-store sales standpoint. We thought it would be helpful to give that update given at the end of our first quarter and on the last call, we were through July, which was the first month of our second quarter, and business had been flat with a lot of different things going on in July. Yep. Okay. Some of the things going on in July, World Cup. So that canceled out some of the big stadium country concerts that can have some small regional impact. How has that played out, though, with August? I think I was reading that maybe there's just generally feSwer U.S. tours this year. Maybe the World Cup has kind of pushed some stuff out to next year. Do you think reduced amount of country concerts has had any impact on the quarter overall? I think it most definitely had an impact in July. Ironically, the day after our call, Live Nation reported, and they said on their call that domestically, attendance was down 14% because of stadium availability. They corroborated what we knew and believed to be true around the stadiums. We have already seen announcements start for next year's stadium tours. Kenny Chesney just announced, I think, a 15 or 20-stop stadium tour for next summer. We are seeing those announcements start to ramp up now. I think it was a component of July and August. As the World Cup ended, it took several weeks to unwind what they had done to the stadiums to prepare for the World Cup. I think we saw certain artists, Luke Combs as an example, just decide to tour in Europe versus touring domestically. There were other components. The customer, and we have traffic counters in our stores in July, were distracted by the World Cup. We do not talk about weather often, and we do not like to blame weather, but it was the hottest July on record in the United States A bit of a wacky month. As we got into August and September, we saw comps improve to a +2 consolidated and saw the business kind of get back to normal after all that noise in July. Yeah. I think in the couple of September quarter to date, or excuse me, month- to- date, still kind of running at that two. What do you think with gas prices this being so top of mind with both consumers and investors? Ironically, it used to be gas prices go up, Boot Barn does well. I am old enough to remember that. How do the gas prices today impact the business and your customer? Yeah. Many years ago, as Peter noted, we were much more dependent on oil and gas during the fracking boom back in 2016. We still have, I'd say, roughly 10% of our stores are affected by refining and the oil and gas business. But the macro of diesel prices, and if you imagine a Boot Barn customer, they're more apt to own a pickup truck that runs on diesel, and we've all seen what happened with diesel prices. It does put pressure on the consumer. We have not seen it in our data yet, though. Our customer continues to shop both at the low and the high income. We're doing well across price points. We're not seeing any trading down. We run this data once a quarter, so this is all at the end of Q1. We'll do the same thing at the end of Q2, but everything we've seen has shown our customer to be resilient and not a K-shaped customer, as people refer to. Yep. One of the things that's helpful also, we believe, is our tie to the blue-collar employment. Blue-collar employment, whether it's from oil and gas or construction or data center builds, is something that is good for our customer who is working outside and needs our product to protect them from the elements. Yeah. Right. Okay, great. Maybe one last one just on the release. I think you did cite broad-based strength was across categories. Anything you want to flag there that's particularly good or weak? I'll do one of each. We've talked about the strength. One of the adjustments I made coming in as CEO was to reinvigorate the work business, and we've seen five quarters of improving comps in the work business and continue to see that strength. As Jim said, much of our business, the majority of our business, we like to say, is needs-based. There's sometimes the perception that we're a fashion business and we do sell some fashionable product in both boots and apparel, but much of what we sell is needs-based, and we're quite happy with the work boot business. We've also said that conversely, that the ladies Western boot business was down mid-single digits in Q1 and continues to be a bit challenged. The merchandising team is doing some great work on trying to reinvigorate that business and bring more color and new styles in as we prepare for the holiday and Christmas season. Okay. I'll stick on the work boot comment because I think the last quarter call, the comment, which I don't know if I've ever heard it, was that you expect exclusive brand penetration, maybe it comes down a little bit this year, and we're going on 10, 12 years of being public- Sure. ..it's almost gone up every year. I think the point was that work boots on the third-party side are actually pretty strong. Maybe just unpack that a little bit for us. Do you think it's a temporary dynamic? Is it helping comp if people are maybe buying higher priced work boots? Yeah. With work boots comping high single digits or low double digits, it's a nice tailwind to the business. As you said, EB penetration tends to go up and to the right, and we had guided 50 basis points of EB penetration growth this year. We lowered that to a flat guidance after Q1. If I had any reason to explain it, this is the best of reasons that we're having such success with work apparel and work boots. With work boots, there is a tendency to buy those third-party brands. People know the work boot that they have worn for years, and they tend to walk into our stores and say, "I'd like another pair of these." We're also seeing nice success with some newer brands and some new styles from other third-party brands that we've carried in the past. I'm thrilled with the work boot business. Yes, it'll put some short-term pressure on exclusive brand penetration, but I'm confident and fully believe we can get to that 50% EB penetration. I think that's the right balance for the brand. I don't think it should exceed 50%. We will always be a house of brands, but we're going to keep marching towards that 50% penetration. Okay, great. I'll give a question to Jim on the product margins, which have been good. You still expect product margins to be up this year. Clearly, exclusive brands aren't a driver. Maybe what are some of the other drivers on product margins that continue to work for you? Yeah. As we look back over the last six years or so, we have grown the merchandise margin rate more than 600 basis points. Exclusive brands has been about 1/4 of that. As we look forward, some of those other drivers that have helped us over the last several years, we continue to expect to see, particularly around the buying economies of scale and just using our size and our scale to get some better discounts with our third-party vendors, the exclusive brand factories and manufacturers. We have our sourcing department that is working overseas and working with our partners to try to get the best rate and the best deals that we can. That is all contributing to the improvement on the merchandise margin and the product margin side of things. Also, reducing the amount of markdowns or creating a shallower markdown to move through clearance product helps that margin rate. All those things working together are part of what is included in our product margin expansion for the year. We have got merchandise margin guided to be up 60 basis points when you exclude the tariff refunds. Yep. Okay. You do not have guidance for next year, but you would expect in ongoing years, continued product margin expansion. You have some visibility to that? Yes, we do. We continue to expect that. We typically say somewhere in that 30 to 50 basis point- Yep. ...of product margin expansion. One of the things that John's talked a lot about is the sourcing department and can we get better margin with our exclusive brands, and talked about next year really being the year where we'll see more of that benefit from the sourcing team, maybe a little bit this year. As we get into the third and fourth quarter, we have a line of sight into some improved margin there. That's impacting the margin the second half of this year a little bit, but more fully into next year. Nothing that would lead us to believe that we're not going to continue to see really nice product margin expansion. Okay. All right, great. John, you've done some nice merchandise changes as you've taken over as CEO. You talked about work boots as one thing you wanted to reinvigorate. I think you made some adjustments to denim as well. Maybe what learnings from those experiences can you apply to other parts of the store? What are you working on now as sort of next merchandising change? Sure. The big change we made to the merchandising of work boots was to merchandise the boots by size, not by style. In the past, we had a whole run of a particular style, then a run of another particular style. The challenge was for our sales team is, I'll use that example again, that the tradesman comes in and says, "I want another pair of these boots." If we don't have that boot in his size in that store, they have to know about the next boot over and the boot next to that one, and have something to tell that customer. I've sold or tried to sell work boots in our stores, and it is an intimidating process for someone who may be a seasonal partner or just started working at Boot Barn, no matter how much training we give them. When the boots are assorted by size, it changes that whole conversation where you can go, "We can't find that particular boot, but here are all the other size nines that meet your needs in a soft toe or a pull-on boot," whatever the technical specification may be. We've heard from our store partners that they are so much more comfortable selling work boots, and so we're thrilled with how that work boot remerchandising has gone. The reason I explain all of that is there are many similarities to what we're doing now with cowboy hats. Cowboy hats is another more technical selling process than you would think. We have felt fur hats. We have wool hats. We have straw hats. We have price ranges from $39 up to $2,400 in some cases for a cowboy hat. The sizing, of course, is a challenge around how snug should it fit, what does brand matter, right? There's some iconic brands such as Stetson that are very important. We're re-merchandising cowboy hats in a similar way, not by size directly as we had by work boots, but making the size much more apparent, differentiating between the different price points, showing how great a well-made quality cowboy hat can be, and the difference between that and some of the other value hats that are still important, but right now they're merchandised by color. Instead, we're going to merchandise them by quality and price and brand. Okay. That's interesting. It's also interesting a Western hat can be $2,400. But- We have one that fits you, Peter. Yeah. How about on the denim side? I thought that was an interesting change, and maybe that was over a year ago, but is denim still working for you? I think you went a little bit deeper on inventory. Maybe talk about the initiative there. Yeah. The change in denim a year ago is we went much deeper in inventory, first in men's and then in women's as we went through a holiday season two years ago and gained confidence from a buying perspective on how well denim was performing. The latest changes we've made from a merchandising standpoint is we've moved our value and core denim more to the back wall and brought the premium denim forward. So if you're in the men's and women's section of the store, and this is new in the last 60 days, you'll see more of our premium denim to inspire the customer, show them how great some of our more premium styles are, and if you're still looking for value and you want our two for $88 Cody or our two for $99 on our Shyanne denim, we'll have some way finding to help you find that in the back wall. So we're putting the better and the best upfront and putting that core denim into the back wall. So that's the merchandising change on the denim side. Okay. Interesting. All right. Well, let's see. I was going to get a question to Jim, but it was a good segue back to exclusive brands. You mentioned Cody James, Shyanne, so you've launched exclusive brand websites- Yes. ...in the last year focusing on those. What do you think as a strategy on that? Can you ultimately bring people into Boot Barn when you are getting to a Cody James website as their opening research on the products? Absolutely. Cody James on its own, using that particular site as an example, would be one of the largest brands in Western. It is our largest exclusive brand. Every time I am at a rodeo or a country concert, I can spot Cody James out in the wild. People know the brand. The path to discovering the brand and bringing new customers into Boot Barn stores, we are a stores first organization, and the goal is not to get them to buy on codyjames.com or bootbarn.com. It is to get them into a Boot Barn store where 90% of our sales happen. It is hard to tell that story on bootbarn.com. You will see a Cody James style, a shirt, or a boot, and yes, we can make a product detail page look elevated and add videos and photos, and whatever it may be to it, but it does not really tell the story of the brand, and that is the purpose of these sites. Codyjames.com and all the other sites are there for storytelling more than anything, and that is going incredibly well, where we get millions of sessions, each quarter to those sites. The main funnel in terms of product discovery is using Meta and TikTok. People, we all do this, of course, as you are scrolling through social, you will discover brands or products that you go, "Huh, that looks kind of interesting. I should take a peek at what that brand or that product might be." The algorithm is incredibly powerful. It is not just the algorithm. If the algorithm was to solve, this would work just as well on YouTube, as an example. The difference is people do not want to be interrupted when they are on YouTube. They want to watch the video that they are watching. But on Instagram or TikTok, people enjoy the ads because they are so targeted, right? I always kind of joke around, you would rather have targeted advertising than untargeted advertising, at least it is things that I am interested in. I think it is the combination of the audience building and just the mechanism of how people use social versus other digital mediums. Okay. So it has been a big success for you thus far with these? Absolutely. Yes. Yeah. Okay. Couldn't be happier with, more so with the sessions. The path in is you have to see the ad, and then you have to click through that ad and show up on codyjames.com, and it registers as a session. So for me and for the team, that is the biggest measure of success. Any sales, and we are getting some nice sales off the site, are just a side benefit. It will introduce them to the brand. We want people to go, "I like this brand. I like what it represents." And then quickly, if they search for where they can buy it, you will see it is Boot Barn stores or one of our websites, but hopefully they show up at one of our stores. Great. Okay. For Jim, it does not sound like you are seeing much impact on consumer spending, and you did reference data center build-out, CapEx cycle. I guess if you could expand upon that dynamic, do you tend to see some regional strength in your business? You also do have a B2B component. Is that something that you are also trying to ramp up with some of these larger CapEx building projects? It is. The timing is working well. It is something that John felt strongly about as he was talking earlier about reinvigorating the work business and also the team, our sales team, really digitizing that and really putting some more money into that business and making it more user-friendly for the safety managers who are really the customers of this B2B business. That is something that we have taken advantage of as we are building new stores, and they are in the vicinity of the data center builds. We are seeing a nice uptick in business as those folks are coming into the stores. But really going after the business from a Boot Barn WORKFORCE is what we have rebranded that part of our business to, and they are able to more strategically target those folks and most of the data centers are in that construction phase and working with those companies that are working on that build. Okay. All right. Nice driver for you. Maybe we will take that then to the unit growth. You have been tracking towards, we will call it kind of a low double digit, 12%-15%-ish percent growth on unit growth. How do you feel about that run rate, finding real estate, and what types of real estate are you guys going after these days? Yeah, we feel great about the 12%-15% that we're targeting, probably the high end of that for this year. As we get into next year, I envision it'll be somewhere within that 12%-15%. We're always mindful of real estate availability, and we want to make sure that we've got good real estate that we're acquiring and not just trying to hit a number. That target's still there. As far as the type of real estate that we're looking at, it's very similar to what we've seen over the past, where we're looking at sites across the country. Don't like to get into too much detail what specifically we're targeting and what geographies we're targeting in the public venue here, but it's more of the same, and we've been happy with what we've been able to do. Okay. All right. Great. One element of the Boot Barn story, because I helped you guys come public, but I would say the last five, six years that's been really interesting is how the company has widened the aperture of the brand to bring in a broader audience. Are there ongoing efforts and opportunities to do that? Then I guess I was thinking you could probably track the success with your B Rewarded program. So kind of, A, what are you doing to continue to expand the brand? Then, B, what's the result that's showing up in maybe your loyalty program? Sure. So to take a step backwards, Boot Barn was, it used to say Boot Barn Western & Work on the outside of our stores, and now Boot Barn, the brand has gotten so well-known, it kind of stands on its own. But we still primarily started as a western. We started as a western and work brand. We added in fashion as a customer segment several years ago. Then what Peter's referring to is the country lifestyle customer. So country lifestyle is somebody who may drive a pickup truck, they may have a baseball cap instead of a cowboy hat. They may not work on a ranch or in agriculture, but they enjoy a more rural lifestyle. There was an article in The Times last weekend talking about this ruralization shift that is happening and people kind of embracing that lifestyle. We market to those customers a little bit differently than a core Western rodeo customer. It's the reason we have partnerships with NASCAR as an example. PBR is a great example of something that is accessible to many more people than just traditional core rodeos. There was recently two or three nights of PBR in Anaheim, California, and saw lots of coverage of that on social media. The country lifestyle customer continues to be a focus for us, and again, they hunt, they fish, they go to NASCAR, they listen to country music, they drive a pickup truck, but they're not a core Western customer in the traditional sense. From a B Rewarded standpoint, we've recently upgraded the program to a tiered program. We have 11.1 million members now. So we have a black, gold, and standard membership to the program. Early results from an NPS standpoint are that people are very happy with the tiered program. Our most loyal customers, of course, are in the higher tiers, and you'd expect that, but we're happy with how we've broken out the tiers and added some benefits around ticket discounts to rodeos and things of that sort at the top tier, which is kind of cool. Oh, that's great. Okay. The tiered dynamic, is that relatively new? That is relatively new in the last quarter. Right. Okay. All right. We'll look for future updates on that. Last, I guess I would just wrap up with digital and your strategy on that. You've mentioned it's about 10% of your sales, but it's growing nicely. How do you think your e-com business continues to penetrate the overall business, going forward, particularly with some of these exclusive brand websites as well? Yeah, sure. For someone who grew up as a chief digital officer and has spent my entire career in digital, it's a little ironic, but we anticipated it staying flat to declining slightly. Now the comps are, we've had nice double-digit comps for several quarters now. But the reality is we're opening so many new stores. Averaging a volume of $3.2 million, 80 stores last year, it's roughly the equivalent of a bootbarn.com in new stores. So while the e-com business is growing nicely, its penetration is not anticipated to increase and potentially even slightly decrease given the success of new stores being added to the chain. One last note on the e-commerce business, what I love is many of those customers turn into stores customers. We have over 35% of bootbarn.com customers who will ship their order to the store or pick it up in the store. Over 70% of returns happen in stores. So at every possible turn, we're trying to take that bootbarn.com customer and turn them into an omni-channel customer. All right. That's great stats. Okay. Well, thank you very much, John and Jim. It's always a pleasure catching up with you. Thank you. Appreciate it, Peter being here. Appreciate it.