Q2 2025 Sportsman's Warehouse Holdings Inc Earnings Call

Speaker's presentation, there will be a question and answer session to ask a question. During this session you'll need to press star one on your telephone. If your question has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program.

Speaker #1: Thank you for standing by and welcome to the Sportsman's Warehouse second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode.

Operator: Thank you for standing by and welcome to the Sportsman's Warehouse Holdings second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Riley Timmer, Vice President, Investor Relations. Please go ahead, sir.

Kramer Vice.

<unk> Investor Relations. Please go ahead, Sir Thank you operator participating on our Q2 call today is Paul Stone, our Chief Executive Officer, and Jennifer Fall Young our Chief Financial Officer.

Speaker #1: After this speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press *11 on your telephone.

Speaker #1: If your question has been answered, and you'd like to remove yourself from the queue, simply press *11 again. As a reminder, today's program is being recorded.

I will now remind everyone of the company's safe Harbor language.

The statements we make today contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095, which includes statements regarding expectations about our future results of operations demand for our products and growth of our industry actual results may differ materially from those suggested.

Speaker #1: And now, I'd like to introduce your host for today's program, Riley Timmer, Vice President, Investor Relations. Please go ahead, sir.

Speaker #2: Thank you, Operator. Participating in our Q2 call today are Paul Stone, our Chief Executive Officer, and Jennifer Paul Young, our Chief Financial Officer. I will now remind everyone of the company's Safe Harbor language.

Riley Timmer: Thank you, Operator. Participating on our Q2 call today is Paul Stone, our Chief Executive Officer, and Jennifer Paul Young, our Chief Financial Officer. I will now remind everyone of the company's safe harbor language. The statements we make today contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which includes statements regarding expectations about our future results of operations, demand for our products, and growth of our industry. Actual results may differ materially from those suggested in such statements due to a number of risks and uncertainties, including those described in the company's most recent Form 10-K and on the company's other filings made with the SEC. We will also disclose non-GAAP financial measures during today's call.

In such statements due to a number of risks and uncertainties, including those described in the company's most recent Form 10-K.

Speaker #2: The statements we make today contain forward-looking statements within the meaning of the private securities litigation reform act of 1995, which includes statements regarding expectations about our future results of operations, demand for our products, and growth of our industry.

And on the Companys other filings made with the SEC.

We will also disclose non-GAAP financial measures during today's call definitions of such non-GAAP measures as well as reconciliations to the most directly comparable GAAP financial measures are provided as supplemental financial information in our press release included as exhibit 99, one to the.

Speaker #2: Actual results may differ materially from those suggested in such statements. Due to a number of risks and uncertainties, including those described in the company's most recent Form 10-K, and on the company's other filings made with the SEC.

Form 8-K, we furnished with the SEC today, which is also available on the Investor Relations section of our website at Sportsman's Dot com.

Speaker #2: We will also disclose non-GAAP financial measures during today's call. Definitions of such non-GAAP measures, as well as reconciliations to the most directly comparable GAAP financial measures, are provided as supplemental financial information in our press release included as Exhibit 991 to the Form 8-K we furnished with the SEC today, which is also available on the Investor Relations section of our website at sportsmans.com.

I'll now turn the call over to Paul.

Riley Timmer: Definitions of such non-GAAP measures, as well as reconciliations to the most directly comparable GAAP financial measures, are provided as supplemental financial information in our press release, included as Exhibit 99-1 to the Form 8-K we furnished with the SEC today, which is also available on the Investor Relations section of our website at sportsmans.com. I will now turn the call over to Paul.

Thank you Rami and good afternoon, everyone before we begin I want to recognize our team of dedicated outfitters across the country, each and everyday they deliver on our promise of great gear and exceptional service.

I'd also like to welcome our Chief Financial Officer, Jennifer Fall Jung, who brings more than two decades of experience across both large scale and specialty retail she's a proven financial leader and I look forward to partnering with her to further accelerate the transformation of our business.

Speaker #2: I will now turn the call over to Paul.

Speaker #3: Thank you, Riley, and good afternoon, everyone. Before we begin, I want to recognize our team of dedicated outfitters across the country. Each and every day, they deliver on our promise of great gear and exceptional service.

Paul Stone: Thank you, Riley, and good afternoon, everyone. Before we begin, I want to recognize our team of dedicated outfitters across the country. Each and every day, they deliver on our promise of great gear and exceptional service. I'd also like to welcome our Chief Financial Officer, Jennifer Paul Young, who brings more than two decades of experience across both large-scale and specialty retail. She's a proven financial leader, and I look forward to partnering with her to further accelerate the transformation of our business. Turning now to our second quarter results. I'm encouraged by the strong progress our team continues to make as we advance our transformation strategy in the second quarter. Despite ongoing consumer microeconomic headwinds, we delivered our second consecutive quarter of comp store sales growth. Same-store sales were up 2.1% compared to last year, with positive comps achieved each month of the quarter.

Turning now to our second quarter results.

I'm encouraged by the strong progress our team continues to make as we advanced our transformation strategy in the second quarter.

Speaker #3: I'd also like to welcome our Chief Financial Officer, Jennifer Paul Young, who brings more than two decades of experience across both large-scale and specialty retail.

Despite ongoing consumer microeconomic headwinds, we delivered our second consecutive quarter of comp store sales growth.

Same store sales were up two 1% compared to last year with positive comps achieved each month or quarter.

Speaker #3: She's a proof of financial leader and I look forward to partnering with her to further accelerate the transformation of our business. Turning now to our second quarter results.

Importantly, this growth came even as June faced a difficult comparison due to last year's pull forward of sales in California ahead of the new firearm and ammunition taxes that took effect on July one last year.

Speaker #3: I'm encouraged by the strong progress our team continues to make as we advance our transformation strategy in the second quarter. Despite ongoing consumer microeconomic headwinds, we delivered our second consecutive quarter of comp store sales growth.

Our efforts to localize merchandise Assortments and Geo target our marketing is delivering strong early results for example in Alaska sales in the second quarter grew by high single digits, reflecting how will these initiatives are resonating with customers.

Speaker #3: Same-store sales were up 2.1% compared to last year, with positive comps achieved each month of the quarter. Importantly, this growth came even as June faced a difficult comparison due to last year's pull-forward of sales in California ahead of the new firearm and ammunition taxes that took effect on July 1st last year.

Paul Stone: Importantly, this growth came even as June faced a difficult comparison due to last year's pull forward of sales in California ahead of the new firearm and ammunition taxes that took effect on July 1 last year. Our efforts to localize merchandise assortments and geotarget our marketing are delivering strong early results. For example, in Alaska, sales in the second quarter grew by high single digits, reflecting how well these initiatives are resonating with customers. Aligning our merchandising and marketing to local outdoor pursuits and solution selling is proving to be a critical unlock, not only for driving growth but also for improving inventory productivity and efficiency. Our firearms business once again outperformed the industry. While adjusted NICs checks declined 4.9% in the quarter, our unit sales increased more than 4% versus last year, further evidence that we are capturing market share.

Aligning our merchandising and marketing to local outdoor pursuits and solution selling is proving to be a critical unlock not only for driving growth, but also for improving inventory productivity and efficiency.

Speaker #3: Our efforts to localize merchandise assortments and geotarget our marketing is delivering strong early results. For example, in Alaska, sales in the second quarter grew by high single digits, reflecting how well these initiatives are resonating with customers.

Our firearms business once again outperformed the industry, while adjusted Nix checks declined four 9% in the quarter, our unit sales increased more than 4% versus last year.

Other evidence that we are capturing market share.

Speaker #3: Aligning our merchandising and marketing to local outdoor pursuits and solution selling is proving to be a critical unlock, not only for driving growth, but also for improving inventory productivity and efficiency.

Consistent with broader consumer trends.

We did see some trade down behavior reflected in a 4% decline in average unit retail for firearms again. This quarter. However, attachment remained strong as average order value continues to be at all time highs.

Speaker #3: Our firearms business once again outperformed the industry. While adjusted NICS checks declined 4.9% in the quarter, our unit sales increased more than 4% versus last year, further evidence that we are capturing market share.

Good ammunition, our strategic shift to an everyday low price model on core ammo calibers and improved in stock continues to resonate strongly with our customers ammunition sales grew 10% in the quarter with average unit retail up in the low single digits.

Speaker #3: Consistent with broader consumer trends, we did see some trade-down behavior. Reflected in a 4% decline in average unit retail for firearms again this quarter, however, attachment remained strong as average order value continues to beat all-time highs.

Paul Stone: Consistent with broader consumer trends, we did see some trade-down behavior, reflected in a 4% decline in average unit retail for firearms again this quarter. However, attachment remains strong as average order value continues to be at all-time highs. In ammunition, our strategic shift to an everyday low-price model on core ammo calibers and improved in-stock continues to resonate strongly with our customers. Ammunition sales grew 10% in the quarter, with average unit retail up in low single digits. We are also sharpening and investing in our firearm-related merchandise assortment to drive higher basket attachments and greater overall customer value. Looking now at our key categories, driving our comp increase in the quarter was our hunting and shooting sports and fishing departments. Hunt and shoot increased 4% in Q2, driven by firearms, ammo, and products related to personal protection.

We are also sharpening and investing in our firearm related merchandise assortment to drive higher basket attachment and greater overall customer value.

Looking now at our key categories.

Speaker #3: In ammunition, our strategic shift to an everyday low-price model on core ammo calibers and improved in-stock levels continues to resonate strongly with our customers. Ammunition sales grew 10% in the quarter, with average unit retail up in the low single digits.

Driving our comp increase in the quarter was our hunting and shooting sports and fishing department.

<unk> increased 4% in Q2, driven by firearms ammo and products related to personal protection.

Fishing was up nearly 11% over last year and is up 20% on a two year stack. This is a category with expanding market participation and clear opportunities for us to capture additional share.

Speaker #3: We are also sharpening and investing in our firearm-related merchandise assortment to drive higher basket attachment and greater overall customer value. Looking now at our key categories.

We are well positioned with our late season fishing inventory to sell down and indices are strong with clean inventory.

Speaker #3: Driving our comp increase in the quarter was our hunting and shooting sports and fishing departments. Hunt and shoot increased 4% in Q2 driven by firearms, ammo, and products related to personal protection.

We were disappointed with <unk> performance this quarter as sales were down 10% compared to last year as part of our ongoing transformation. We made a deliberate decision late last year to eliminate certain slow moving categories that were tying up working capital, but we've not yet seen the level of offsetting growth we anticipated in other areas of the department.

Speaker #3: Fishing was up nearly 11% over last year and is up 20% on a two-year stack. This is a category with expanding market participation and clear opportunities for us to capture additional share.

Paul Stone: Fishing was up nearly 11% over last year and is up 20% on a two-year stack. This is a category with expanding market participation and clear opportunities for us to capture additional share. We are well positioned with our late-season fishing inventory to sell down and end the season strong with clean inventory. We were disappointed with camping's performance this quarter, as sales were down 10% compared to last year. As part of our ongoing transformation, we made a deliberate decision late last year to eliminate certain slow-moving categories that were tying up working capital, but we have not yet seen the level of offsetting growth we anticipated in other areas of the department. To address this, we recently implemented an EDLP strategy on core consumables, similar to what has been effective in ammunition, and we are confident this will strengthen the business over time.

Speaker #3: We are well-positioned with our late-season fishing inventory to sell down and into season strong, with clean inventory. We were disappointed with camping's performance this quarter, as sales were down 10% compared to last year. As part of our ongoing transformation, we made a deliberate decision late last year to eliminate certain slow-moving categories that were tying up working capital.

To address this we recently implemented an <unk> strategy on core consumables similar to what has been effective in ammunition and we are confident this will strengthen the business over time.

Additionally, we invested in compelling new assortments, most notably with Yeti and early results indicate that these additions are resonating with our customers.

Speaker #3: But we have not yet seen the level of offsetting growth we anticipated in other areas of the department. To address this, we recently implemented an EDLP strategy on core consumables, similar to what has been effective in ammunition, and we are confident this will strengthen the business over time.

Our ecommerce business grew 3% over last year and continues to be a strength of our omnichannel retail strategy importantly.

Importantly over 70% of online transactions were fulfilled through our buy online pickup in store focus program underscoring how E com drives significant traffic and sales into our brick and mortar location.

Speaker #3: Additionally, we invested in compelling new assortments, most notably with Yeti, and early results indicate that these additions are resonating with our grew 3% over last year, and continues to be a strength of our omnichannel retail strategy.

Paul Stone: Additionally, we invested in compelling new assortments, most notably with Yeti, and early results indicate that these additions are resonating with our customers. Our e-commerce business grew 3% over last year and continues to be a strength of our omnichannel retail strategy. Importantly, over 70% of online transactions were fulfilled through our buy online pick up in-store BOFUS program, underscoring how e-commerce drives significant traffic and sales into our brick-and-mortar location. At the same time, our ship-to-home business remains strong, reflecting our ability to capture consumer demand well beyond our physical store footprint. With these dual strengths, we are uniquely positioned to gain market share as e-commerce continues to outpace traditional retail channels. The improvements we're seeing across the business are directly tied to our strategic focus, which remains centered on our four key priorities. One, inventory precision. Inventory readiness for the critical fall hunting season was foundational in Q2.

At the same time, our ship to home business remained strong, reflecting our ability to capture consumer demand well beyond our physical store footprint with these dual strengths. We are uniquely positioned to gain market share as E. Commerce continues to outpace traditional retail channels.

Speaker #3: Importantly, over 70% of online transactions were fulfilled through our buy online, pick up in store, both as program. Underscoring how e-com drives significant traffic and sales into our brick-and-mortar location.

The improvements we're seeing across the business is directly tied to our strategic focus which remains centered on our four key priorities.

Speaker #3: At the same time, our ship-to-home business remains strong. Reflecting our ability to capture consumer demand, customers are well beyond our physical store footprint. Our e-commerce business positions us uniquely to gain market share as e-commerce continues to outpace traditional retail channels.

One inventory precision inventory readiness for the critical fall hunting season was foundational in Q2 and prior years, we were often late to the season. This year. We are ahead, our inventory is healthier our in stock levels are stronger and we have depth in our core products with Q2, representing our peak inventory build we are now well positioned to <unk>.

Speaker #3: The improvements we're seeing across the business are directly tied to our strategic focus, which remains fitted on our four key priorities. One, inventory precision.

Sell through as we move into the key fall hunting and holiday season.

Two local relevance we continue to strengthen our role as a trusted local destination. This quarter, we launched our partnership with the United States concealed carry association or USEPA to provide in store training and education, they're robust market specific programs are a natural complement to our localization.

Speaker #3: Inventory readiness for the critical fall hunting season was foundational in Q2. In prior years, we were often late to the season. This year, we are ahead.

Paul Stone: In prior years, we were often late to the season. This year, we are ahead. Our inventory is healthier, our in-stock levels are stronger, and we have depth in our core products. With Q2 representing our peak inventory build, we are now well positioned to sell through as we move into the key fall hunting and holiday season. Two, local relevance. We continue to strengthen our role as a trusted local destination. This quarter, we launched our partnership with the United States Concealed Carry Association, or USCCA, to provide in-store training and education. Their robust market-specific programs are a natural complement to our localization strategy. In addition, we are expanding in-store events that leverage the expertise of our outfitters, further strengthening our role as a trusted resource and deepening our connection to the communities we serve. Three, personal protection. This category continues to outpace our total company performance.

Speaker #3: Our inventory is healthier, our in-stock levels are stronger, and we have depth in our core products. With Q2, representing our peak inventory build, we are now well-positioned to sell through as we move into the key fall hunting and holiday season.

In addition, we are expanding in store events that leverage the expertise of our outfitters further strengthening our role as a trusted resource and deepening our connection to the communities we serve.

Speaker #3: Two, local relevance. We continue to strengthen our role as a trusted local destination. This quarter, we launched our partnership with the United States Concealed Carry Association, or USCCA, to provide in-store training and education.

Three personal protection. This category continues to outpace our total company performance, we've expanded the number of stores that carry the burden of product line, where we offer the customer a chance to try before you buy leveraging our archery lines and includes shooting pods.

Speaker #3: Their robust market-specific programs are a natural complement to our localization strategy. In addition, we are expanding in-store events that leverage the expertise of our outfitters.

We also launched Taser, well known less lethal brand earlier this week and our top performing personal protection stores, we will continue to lean into this category as we establish sportsman's warehouse as the authority in personal protection.

Speaker #3: Further strengthening our role as a trusted resource and deepening our connection to the communities we serve. Three, personal protection. This category continues to outpace our total company performance.

For brand awareness has a differentiated omnichannel retailer, we are strengthening brand recognition and trust, our new adventure like a local campaign underscores the expertise and authenticity that set sportsman apart.

Speaker #3: We've expanded the number of stores that carry the burned product line, where we offer the customer a chance to try it before you buy, leveraging our archery lanes and enclosed shooting pods.

Paul Stone: We've expanded the number of stores that carry the Burn It product line, where we offer the customer a chance to try it before you buy, leveraging our archery lanes and enclosed shooting pods. We also launched Taser, a well-known less lethal brand, earlier this week in our top-performing personal protection stores. We will continue to lean into this category as we establish Sportsman's Warehouse Holdings as the authority in personal protection. Four, brand awareness. As a differentiated omnichannel retailer, we are strengthening brand recognition and trust. Our new "Adventure Like a Local" campaign underscores the expertise and authenticity that set Sportsman's apart, while our refined digital strategy is accelerating customer acquisition and positioning us for sustained long-term growth. Despite ongoing consumer microeconomic challenges, I remain confident in both our strategic plan and our team's ability to deliver against it. Our competitive advantage is clear.

Speaker #3: We also launched Taser, a well-known less-lethal brand, earlier this week in our top-performing personal protection stores. We will continue to lean into this category as we establish Sportsman's Warehouse as the authority in personal protection.

While our refined digital strategy is accelerating customer acquisition and positioning us for sustained long term growth.

Despite ongoing consumer macroeconomic challenges I remain confident in both our strategic plan and our team's ability to deliver against.

Speaker #3: Four, brand awareness. As a differentiated omnichannel retailer, we are strengthening brand recognition and trust. Our new Adventure Like a Local campaign underscores the expertise and authenticity that sets Sportsman's apart.

Our competitive advantage of clear we out local the big box retailers announced sort of smaller specialty shops, providing customers with a differentiated combination of value quality breadth of selection and personalized service rooted in the communities we serve.

Speaker #3: While our refined digital strategy is accelerating customer acquisition and positioning us for sustained long-term growth. Despite ongoing consumer microeconomic challenges, I remain confident in both our strategic plan and our team's ability to deliver against it.

We remain disciplined in managing the levers within our control variable cost inventory productivity and merchandise margins as we advance our strategic initiatives. We are confident these efforts will drive sustainable sales growth operating margin improvement and debt reduction in the back half of 2025.

Speaker #3: Our competitive advantage is clear. We outlocal the big box retailers and outsource the smaller specialty shops. Providing customers with a differentiated combination of value, quality, breadth of selection, and personalized service rooted in the communities we serve.

Paul Stone: We outlocal the big box retailers and outsource to smaller specialty shops, providing customers with a differentiated combination of value, quality, breadth of selection, and personalized service rooted in the communities we serve. We remain disciplined in managing the levers within our control: variable cost, inventory productivity, and merchandise margins. As we advance our strategic initiatives, we are confident these efforts will drive sustainable sales growth, operating margin improvement, and debt reduction in the back half of 2025. Finally, we continue to anticipate ending the year with lower total inventory than last year and generating positive free cash flow. I'll now turn the call over to Jennifer.

Finally, we continue to anticipate ending the year with lower total inventory than last year and generating positive free cash flow I will now turn the call over to Jennifer.

Speaker #3: We remain disciplined in managing the levers within our control: variable cost, inventory productivity, and merchandise margins. As we advance our strategic initiatives, we are confident these efforts will drive sustainable sales growth, operating margin improvement, and debt reduction in the back half of 2025.

Thank you Paul and good afternoon, everyone, it's great to be in the call and to be part and a very exciting transformation happening at Sportsman's warehouse.

We delivered our second consecutive quarter as same store sales growth in Q2 with comps up two 1% year over year, representing an improvement from the first quarter trend net.

Speaker #3: Finally, we continue to anticipate ending the year with lower total inventory than last year and generating positive free cash flow. I'll now turn the call over to Jennifer.

Net sales for the quarter was $393 9 million, an increase of one 8% compared to the prior year.

Our sales momentum from Q1 carried into the second quarter led by strength in our hunting and shooting sports Department, which grew 4% and fishing, which increased 10, 9% versus last year.

Speaker #4: Thank you, Paul, and good afternoon, everyone. It's great to be on the call and to be part of a very exciting transformation happening at Sportsman's Warehouse.

Jennifer Paul Young: Thank you, Paul, and good afternoon, everyone. It's great to be on the call and to be part of a very exciting transformation happening at Sportsman's Warehouse Holdings. We delivered our second consecutive quarter of same-store sales growth in Q2 with comps up 2.1% year over year, representing an improvement from the first quarter trend. Net sales for the quarter were $393.9 million, an increase of 1.8% compared to the prior year. Our sales momentum from Q1 carried into the second quarter, led by strength in our hunting and shooting sports department, which grew 4%, and fishing, which increased 10.9% versus last year. These gains were partially offset by softer performance in other departments. Gross margins for the quarter were 32%, an 80 basis point improvement versus Q2 last year.

Speaker #4: We delivered our second consecutive quarter of same-store sales growth in Q2, with comps up 2.1% year over year, representing an improvement from the first quarter trend.

These gains were partially offset by softer performance in other departments.

Based on the quarter was 32% an 80 basis point improvement versus Q2 last year.

The increase was largely driven by improved overall product margins from healthier inventory and higher penetration of sales from our fishing department.

This increase is partially offset by a mix shift to firearms and ammo, which has a lower gross margin a lower penetration in camping, which carry a higher margin rate and increased freight tied to our strategic portfolio and inventory to the store ready for our key hunting season.

The freight expense due to the inventory pull forward resulted in an estimated 40 basis point drag on margin in the quarter.

Jennifer Paul Young: The increase was largely driven by improved overall product margins from healthier inventories and a higher penetration of sales from our fishing department. This increase was partially offset by a mix shift to firearms and ammo, which has a lower gross margin, a lower penetration in camping, which carries a higher margin rate, and increased freight tied to our strategic pull forward of inventory to be store ready for our key hunting season. The freight expense due to the inventory pull forward resulted in an estimated 40 basis point drag on margin in the quarter. SG&A expenses were $97.2 million, or 33.1% of net sales versus 32.7% in the prior year. The increase was driven by a reinvestment in our customer-facing areas of the business, including store labor and digital marketing, to drive sales and omnichannel traffic.

SG&A expenses were $97 2 million or 33, 1% of net sales versus 32, 7% in the prior year. The increase was driven by a reinvestment in our customer facing areas of the business, including store labor and digital marketing to drive sales and Omnichannel traffic.

We will continue to closely manage our variable operating expenses to align with sales trends.

Net loss for the second quarter of fiscal 2025 was $7 1 million or negative <unk> 18 per diluted share compared with a net loss of $5 9 million or negative <unk> 16 per diluted share in the second quarter of last year.

Adjusted net loss in the quarter was $4 7 million or negative <unk> 12 per diluted share compared with adjusted net loss of $5 3 million or negative <unk> 14 per diluted share in the second quarter of last year.

Jennifer Paul Young: We will continue to closely manage our variable operating expenses to align with sales trends. Net loss in the second quarter of fiscal 2025 was $7.1 million, or negative $0.18 per diluted share, compared with a net loss of $5.9 million, or negative $0.16 per diluted share in the second quarter of last year. Adjusted net loss in the quarter was $4.7 million, or negative $0.12 per diluted share, compared with an adjusted net loss of $5.3 million, or negative $0.14 per diluted share in the second quarter of last year. Adjusted EBITDA for the second quarter improved to $8.3 million, compared with an adjusted EBITDA of $7.4 million in the second quarter of last year, an improvement of 20 basis points as a percentage of net sales. Now turning to inventory.

Adjusted EBITDA for the second quarter improved to $8 3 million compared with adjusted EBITDA of $7 4 million in the second quarter of last year, an improvement of 20 basis points as a percentage of net sales.

Now turning to inventory as anticipated total inventory at the end of Q2 was $443 5 million compared to $363 4 million in the same period last year.

As Paul noted earlier this increase was a deliberate and strategic decision to ensure our stores are well prepared and set on time for their key late summer and early fall hunting seasons.

Our focus has been on building depth in core items that are seasonally and regionally relevant faster churning and supported by the predictable customer demand.

Jennifer Paul Young: As anticipated, total inventory at the end of Q2 was $443.5 million, compared to $363.4 million in the same period last year. As Paul noted earlier, this increase was a deliberate and strategic decision to ensure our stores are well prepared and set on time for the key late summer and early fall hunting seasons. Our focus has been on building depth in core items that are seasonally and regionally relevant, fast returning, and supported by the predictable customer demand. We believe our inventory remains healthy and of high quality, as evidenced by cleaner sell-through during the spring and summer seasons. Importantly, Q2 represents our peak inventory position for 2025. We expect a slight sell down in our inventory in Q3 and remain confident in our ability to finish the year with total inventory below last year's level.

We believe our inventory remains healthy and of high quality as evidenced by cleaner sell through during the spring and summer seasons.

Now, turning to inventory, the anticipated total inventory at the end of Q2 was $443.5 million compared to $363.4 million in the same period last year.

Q2 represents our peak inventory position for 2025, we expect a slight fell down and our inventory in Q3 and remain confident in our ability to finish the year with total inventory below last year's level.

As Paul noted earlier, this increase was a deliberate and strategic decision to ensure our stores are well prepared and set on time for the key late summer and early fall hunting seasons.

Looking ahead, we are continuing to simplify our product assortment to drive efficiency in working capital and support margin improvement over time.

Our Focus has been on building depth and core items that are a seasonally and regionally relevant fast, returning, and supported by the predictable. Customer demand.

With new systems processes.

And enhanced buying discipline, our goal is to be in season earlier exit earlier and achieve clean sell throughs across category, which will drive down the working capital investment needed for inventory.

We believe our inventory remains healthy and of high quality, as evidenced by sell-through during the spring and summer seasons.

In regards to liquidity during the second quarter, we exercised our $20 million deferred draw feature on our term loan to strengthen the balance sheet.

Importantly, Q2 represents our peak inventory position for 2025. We expect a slight decline in our inventory in Q3 and remain confident in our ability to finish the year with total inventory below last year's level.

Jennifer Paul Young: Looking ahead, we are continuing to simplify our product assortment to drive efficiency in working capital and support margin improvement over time. With new systems, processes, and enhanced buying discipline, our goal is to be in season earlier, exit earlier, and achieve clean sell-throughs across categories, which will drive down the working capital investment needed for inventory. In regards to liquidity, during the second quarter, we exercised our $20 million deferred draw feature on our term loans to strengthen the balance sheet. We ended the second quarter with a total debt balance of $195.1 million and total liquidity of $109.5 million. We expect that Q2 will be our peak for reported debt balance as we sell down our inventory, generate improved EBITDA, and begin to pay down our debt. Inventory efficiency and tight control of variable expenses will remain top priorities.

We ended the second quarter with total debt balance of $195 1 million and total liquidity of $109 $5 million. We expect that Q2 will be our peak for reported debt balances as we sell down our inventory generate improved EBITDA and begin to pay down our debt.

Looking ahead, We are continuing to simplify our product, assortment to drive efficiency in working capital and support margin improvement over time.

And enhanced buying discipline. Our goal is to be in season earlier exit earlier and Achieve clean. Sell throughs across categories, which will drive down the working capital investment needed for inventory.

Inventory efficiency and tight control of.

Expenses will remain top priorities.

Finally, let me speak to our update on full year guidance.

In regards to liquidity during the second quarter, we exercised our $20 million deferred draw feature on our Term Loan to strengthen the balance sheet.

Our priorities for the back half of 2025, we remain focused on the execution of our strategic priorities to profitably grow sales improved margins and closely manage our variable operating expenses.

We have confidence in our second half strategy to drive profitable sales, despite the macroeconomic headwinds and potential margin pressure from higher tariffs.

We ended the second quarter with a total debt balance of $195.1 million and total liquidity of $109.5 million. We expect that Q2 will be our peak for reporting debt balance as we sell down. Our inventory will generate improved EBITDA and begin to pay down our debt.

For the full fiscal year 2025, we are raising the lower end of our net sales outlet to reflect flat growth versus our prior guide of down 1%, while maintaining the top end of our range at three 5%.

Inventory, efficiency, and tight control of variable expenses will remain top priorities.

Jennifer Paul Young: Finally, let me speak to our update on full-year guidance. Our priorities for the back half of 2025 remain focused on the execution of our strategic priorities to profitably grow sales, improve margins, and closely manage our variable operating expenses. We have confidence in our second half strategy to drive profitable sales despite the macroeconomic headwinds and potential margin pressure from higher tariffs. For the full fiscal year 2025, we are raising the lower end of our net sales outlook to reflect flat growth versus our prior guide of down 1%, while maintaining the top end of our range at up 3.5%. Reiterating our adjusted EBITDA guide to be between $33 million and $45 million, driven by modest gross margin improvement and disciplined expense management.

Finally, let me speak to our update on full-year guidance.

Reiterating our adjusted EBITDA guidance to be between 33, and $45 million driven by modest gross margin improvement and disciplined expense management.

Our priorities for the back half of 2025 remain focused on the execution of our strategic priorities to profitably grow sales, improve margins, and closely manage our variable operating expenses.

Reiterating our capital expenditures target to between 20% and $25 million, primarily related to technology investments to improve store service and merchandising productivity as well as our normal store maintenance.

We have confidence in our second half strategy to drive profitable sales despite the macroeconomic headwinds and potential margin pressure from higher tariffs.

We remain focused on growing sales generating positive free cash flow for the year paying down debt and returning value to all of our stakeholders I will now turn the call back to the operator to facilitate any questions.

For the full fiscal year 2025, we are raising the lower end of our net sales outlook to reflect flat growth versus our prior guide of down 1%, while maintaining the top end of our range at up 3.5%.

Certainly and as a reminder, ladies and gentlemen, if you have a question at this time. Please press star one on your telephone. Our first question comes from the line of Antiquities from.

Jennifer Paul Young: Reiterating our capital expenditures target to between $20 million and $25 million, primarily related to technology investments to improve store service and merchandising productivity, as well as our normal store maintenance. We remain focused on growing sales, generating positive free cash flow for the year, paying down debt, and returning value to all of our stakeholders. I will now turn the call back to the operator to facilitate any questions.

Reiterating, our adjusted EBITDA guide to be between $33 million and $45 million, driven by modest gross margin improvement and disciplined expense management.

From B Riley Securities Your question. Please.

Hey, good afternoon, guys. Thanks for taking my question first I would like to talk sorry.

Reiterating our capital expenditures target to be between $20 million and $25 million, primarily related to technology investments to improve store, service, and merchandising productivity, as well as our normal store maintenance.

With the comp performance and I think we.

Another quarter of positive comps can you talk about.

The drivers of that I know lapping out of stocks has been a really key driver of outperforming the industry as we think about that easing benefit.

We remain focused on growing sales, generating positive free cash flow for the year, paying down debt, and returning value to all of our stakeholders. I will now turn the call back to the operator to facilitate any questions.

Operator: Certainly. As a reminder, ladies and gentlemen, if you have a question at this time, please press star one one on your telephone. Our first question comes from the line of Anna Klesitkin from B Riley Securities. Your question, please.

How should we think about the durability of that growth.

Yes, and I'll take it I think just overall the strategy that we put in place to to start the year really.

Certainly. And as a reminder, ladies and gentlemen, if you have a question at this time, please press star 1, 1 1 on your telephone. Our first question comes from the line of an from B. Riley Securities your question, please.

Anna Klesitkin: Hey, good afternoon, guys. Thanks for taking my question. First, I'd like to talk or start with the comp performance. Really nice to see another quarter of positive comp. When you talked about the drivers of that, I know lapping out of stocks has been a really key driver of outperforming the industry. As we think about that easing benefit into 2026, how should we think about the durability of that growth? Thanks.

Good afternoon, guys. Uh, thanks for taking my question.

Aligned around hunting and shooting fish and personal protection and that's really where we've seen all of our strength and at the same time continued investor inventory dollars to be able to continue.

To see the momentum.

We've seen it from Q1 to Q2 and even if we start Q3, good strong momentum in particular in firearms. So I look at it and think we've got.

First, I I'd like to talk uh, or start with uh, the comp performance Julie and I could see another quarter of positive comp. Can you talk about, you know, the drivers of that? I know, lapping out of stock to send a really key driver of Albert for the industry as we think about that easing benefit into 2026. How should we think about the durability of that growth? Thanks.

Paul Stone: Yeah, I'll take it. I think just overall, the strategy that we put in place to start the year really aligned around hunting and shooting, fish, and personal protection. That's really where we've seen all of our strength. At the same time, continued to invest inventory dollars to be able to continue to see the momentum, as we've seen it from Q1 to Q2. Even as we start Q3, good strong momentum, in particular in firearms. I look at it and think we've positioned ourselves extremely well with the strategy. We have opportunities as we continue to work on our attached categories, as we've pulled small subcategories out of the business that didn't have the ROI that we wanted and reinvested the working capital back into our strategic focus.

<unk>.

We've positioned ourselves extremely well with the strategy.

<unk> opportunities as we continue to work on our types categories. As we pulled small sub cat side of the business that didn't have the <unk> that we wanted and reimbursed the working capital back into our strategic focus.

<unk> will be as we think about it and the merchants really in play from the team humming at this point is putting yourself in a position where we will continue to.

To refine what our inventory mix the long tail that we have in our categories and be able to reinvest that back into the strong and our top performing items, which I still think we have opportunity there as we work through multiple seasons of buys as we go on and.

Yeah, and I, I'll take it. I think just overall the, the strategy that that we put in place to, to start the year really aligned around hunting and shooting fish and personal protection. And that's really where we've seen all of our strength. And at the same time, continue to invest our inventory dollars to be able to continue, uh, to see that the momentum uh, as we've seen it, from q1 to Q2 and even if we start Q3 good strong momentum in particular in Firearms. So, I look at it and think we've got, um,

Paul Stone: Our key will be, as we think about it, and the merchants really in place and the team humming at this point, is putting themselves in a position where we'll continue to refine what our inventory mix, the long tail that we have in our categories, and be able to reinvest that back into the strong and our top performing items, which I still think we have opportunity there as we work through multiple seasons of buys as we go on. I’ll reiterate that I think as we look at fish and our performance overall in fish and our two-year stack, we're not in a position where we're lackadaisical there. We think that we have even more room to grow in fish.

I'll reiterate that I think as we look at fish and our performance overall and fish and our two year stock.

We're not in a position where we're lackadaisical there we think that we have even more room to grow and fish.

We positioned ourselves extremely well with the strategy. Uh, We've opportunities as we continue to work on our attached categories. As we pulled small, subcat out of the business that didn't have the Jim away that we wanted and and reinvested the working capital back into our strategic Focus. Uh, our our key will be as we think about an emergency is really in place in the team humming at this point. Uh, is is putting himself in a position where we'll continue.

We comped last year a lot of.

High end merchandise that we got out of and we were able to see it pick up in the performance will be driven through units and we think we even have more upside as we think about that so.

I would just wrap it up let's say the entire strategy, we love where we're at with Hot to suite. In particular, we are starting the month of August compared to last year, and where our inventory position was for the hunting season, we feel really good with where official B, we think will have.

Paul Stone: We comped last year a lot of high-end merchandise that we got out of, and we were able to see it pick up and the performance really be driven through units. We think we even have more upside as we think about that. I would just wrap it up to say that the entire strategy, we love where we're at with hunt and shoot, in particular where we are starting the month of August compared to last year and where our inventory position was for the hunting season. We feel really good with where fish will be. We think we'll have another strong quarter of fish, due to weather and what's happening there. The newness of personal protection that we continue to add into the business is really outperforming all of our other parts of the business today.

To refine what our inventory, mix, the long tail that we have in our categories, and be able to reinvest that back into the strong and our top performing items. Which I I still think we have opportunity there as as we work through multiple seasons of buys as we go on and um, you know, I'll reiterate that I think as we look at fish and our performance overall and fish and our 2-year stock um we're not in a position where we're laxidasical there. We think that we have even more room to grow and fish. Uh we we comped last year a lot of

Another strong quarter of fish due to weather and what's happening there and then the newness of personal protection that we continue to add into the business. That's really outperforming all of our other parts of the business today.

We have I think continued upside in that as we think about the back half of the year and starting next year.

Great. Thanks, and then turning to the implied back half guide.

It seems to be implying some escalating margin.

Transplant.

While facing a little bit more difficult comps in the back half a little bit about.

The margin ball bearing or puts and takes in the.

Back half of the year.

Paul Stone: We have, I think, continued upside in that as we think about the back half of the year and starting next year.

Yeah, Hi, Ana this is Jennifer and nice to meet you and.

If you think about the margin in the back half of the year just a couple of things you need to keep in mind as Hollywood is mentioning.

And what's happening there and the newness of personal protection that we continue to add into the business is really outperforming all of our other parts of the business today. I think we have continued upside in that as we think about the back half of the year and starting next year.

Anna Klesitkin: Great. Thanks. Turning to the implied back half guide, it seems to be implying some escalating margin improvement while facing a little bit of more difficult comps in the back half. Can you talk a little bit about the margin drivers or pushing pace in the back half of the year?

Hunt continues to be our focus in the back half and it does have lower margins than the rest of our business based on the firearms and ammo and those have been drivers. So those will be putting a mixed component into margin in the back half and then also echoing where fish has actually been a beneficiary to margin in Q2 based on rate and its penetration.

Great. Thanks. And then and then turning to the implied back half guide.

Jennifer Paul Young: Yeah. Hi, Anna. This is Jennifer. Nice to meet you. If you think about the margin in the back half of the year, there's a couple of things you need to keep in mind. As Paul was just mentioning, you know, hunt continues to be a focus in the back half, and it does have lower margins than the rest of our business based on the firearms and the ammo, and those have been drivers. Those will be putting, you know, a mixed component into margin in the back half. Also, echoing where fish has actually been a beneficiary to margin in Q2 based on its rate and its penetration. As that category falls off as we get more into the quarter, that will also have a mixed shift on the margin.

Escalating margin improvement while facing a little bit of more difficult prompts in the back half. Let's talk a little bit about the margin drivers or puts and takes in the back office for the year.

<unk> as that category falls off as we get.

More into the quarter that will also have a mix shift on the margin. So as you think about margin and also keep in mind you as a retailer Q4 is a very promotional time those are just things to contemplate.

We're thinking about it.

Great. Thanks, guys.

Welcome to the team.

Thanks.

Thank you and our next question comes from the line of Matt Koranda from Roth Capital Partners. Your question. Please.

Hey, guys. Thanks for taking the questions and welcome Jennifer.

Jennifer Paul Young: As you think about margin, you know, and also keep in mind, you know, as a retailer, Q4 is a very promotional time. Those are just things to contemplate as you're thinking about it.

I guess, maybe just taking a crack at the.

The comp guide for the back half I guess it implies.

We're up against a little bit of tougher comps, so maybe a little bit of T cell, but still positive for the back half any color on how demand trended through August and I'm, just sort of how we feel about the setup into the back half in terms of comps.

Anna Klesitkin: Great, thanks, guys, and welcome to the team.

Yeah, hi Anna. This is Jennifer nice to meet you. Um if you think about the margin in the back half of the year, there's a couple of things you need to keep in mind as polish is mentioning um, you know, hunt continues to be a focus in the back half and it does have lower margins in the rest of our business based on the firearms and the ammo and those have been drivers. So those will be putting, you know, a mixed component into margin of the back half and then also echoing where fish has actually been a beneficiary to margin in Q2 based on his rate and its penetration. As that category falls off as we get um more into the quarter that will also have a mixed shift on the margin. So as you think about margins you know and also keep in mind you know as a retailer the Q4 is a very promotional time. Those are just things to contemplate um as you're thinking about it. Yeah.

Jennifer Paul Young: Thanks.

Great. Thanks guys. And welcome to the team.

Thanks.

Operator: Thank you. Our next question comes from the line of Matt Koranda from Roth Capital Partners. Your question, please.

Thank you, and our next question.

Comes from the line at Matt.

From Roth C.

Yes.

Question please.

Matt Koranda: Hey, guys. Thanks for taking the questions and welcome, Jennifer. I guess maybe just taking a crack at the comp guide for the back half. I guess it implies we're up against a little bit of tougher comps, so maybe a little bit of decel, but still positive for the back half. Any color on how demand trended through August and just sort of how we feel about the setup into the back half in terms of comps?

Matt we like how August looked weak.

Really liked our mixed performance. So we got back yesterday in August that we saw an acceleration compared to what our Q2 performance look like so good.

Good position they are a good start to Q3, we like the way it looks I think we've shared with you before as we come into Q4, we're clearly going to be in position of Comping apples to apples in from a marketing standpoint.

Hey guys. Uh, thanks for checking the questions and welcome Jennifer. Um, I guess maybe just taking a crack at the, um, the, the comp guide for the back half, guess it implies. Um, we're up against a little bit of tougher comp so maybe a little bit of Del, but still positive for the back half.

any color on how demand trended through August and and just sort of how we feel about the setup into the back half in terms of comps,

Paul Stone: Yeah. Hey, Matt. We like how August looked. We really liked our NICs performance that we got back yesterday in August, and we saw an acceleration compared to what our Q2 performance looked like. Good position there, good start to Q3. We like the way it looks. I think we've shared with you before, as we come into Q4, we're clearly going to be in a position of comping apples to apples, and from a marketing standpoint, we'll be digital to digital. I think Q3, we still have a little bit of a tailwind as we go through Q3 just based on the, I think, more productive ROAS measurement that we're going to have as we close out Q3. Q4, we're going to be an apples to apples comparison with digital to digital is the way I would think about it.

We will be digital to digital.

So I think Q3, we still have a little bit of a tailwind as we go through Q2 Q3, just based on the.

The more productive ROE as measurement that we're going to have as we close out Q3, but Q4, we're going to be an apples to apples comparison with digital digital is the way I would think about it so we.

We like the way August started out and.

I think momentum as we think about Q3 right now.

Okay understood.

And then maybe just.

If you could breakdown the trend a little bit more I think it would be helpful. I know the strategy has been typically that kind of build a larger basket around firearms purchase typically trying to generate more accessories purchases and so while you mentioned lower AUR in firearms I think the <unk>.

Yeah. Hey, Matt, we, we like how August looked. Um, we really liked our, our Nick's performance that we got back yesterday in August, so we saw an acceleration compared to what our our Q2 performance look like. So, a good position there, good start to Q3, uh, we like the way it looks. I think we've shared with you before, as we come into Q4, we're clearly going to be in position of coping Apples to Apples. And from a marketing standpoint, uh, we'll be digital to digital. Um, so I think Q3, we still have a little bit of a Tailwind as we go through to Q3 just based on the the the more productive row ads measurement that we're going to have as we we close out Q3. But Q4 we're going to be an

Paul Stone: We like the way August started out, and I think momentum as we think about Q3 right now.

These have gone up so maybe if you could just break that down a little bit and how much room I guess more room for improvement do we have on that strategy.

Apple's comparison with digital is the way I would think about it. So, um, we like the way August started out, and um, I think momentum as we think about Q3 right now.

Matt Koranda: Okay. Understood. If you could break down the AOV trend a little bit more, I think it would be helpful. I know the strategy has been typically to kind of build a larger basket around a firearms purchase, typically trying to generate more accessories purchases. While you mentioned lower AUR in firearms, I think the AOVs have gone up. If you could just break that down a little bit and how much room, I guess, more room for improvement do we have on that strategy? Have we capped out in terms of AOVs, or is there more room to run? Is there AOV improvement built into the guidance for the back half of the year? Sorry, there's a lot in there, but I just figured it'd be helpful to break it all down.

We capped out in terms of Andas.

Is there more room to run and I guess is that is there improvement built into the guidance for the back half of the year sorry, there's a lot in there, but I just figured it would be helpful to break it all down.

I think we're just really getting started around what we can do about attachment and.

In particular in the firearms and getting loaded in with the inventory that we need and part of this working capital reinvestment out of some of these other sub cuts in our attach categories to put back into attaching too to firearms or even to our ammo basket as we get those customers in that.

We are in.

Paul Stone: I think we're just really getting started around what we can do about attachment, and in particular in the firearms and getting loaded in with the inventory that we need. Part of this working capital reinvestment out of some of these other subcats in our attached categories is to put back into attaching to firearms or even to our ammo basket as we get those customers in. We're in kind of mid-stages of getting that built out, Matt, is the way that I would see it. I will tell you, we're extremely bullish on what we were able to do from an inventory position and be able to get our inventory aligned to start the quarter.

Kind of mid stages of getting that build out and that is the way that I would see it I.

I will tell you.

Okay. Understood. Um and then maybe just um if you could break down the aov trend a little bit more, I think it would be helpful. I know the strategy has been typically to kind of build a a larger basket around a Firearms purchase uh typically trying to generate more accessories purchases. And so while you mentioned lower Aur and Firearms, I think the aovs have gone up. So maybe if you could just break that down a little bit and how much room, I guess more room for improvement. Do we have on that strategy? Uh, and we capped out in terms of aovs uh or is there more room to run? And I guess is that is their aov Improvement built into the guidance for the the back half of the Year. Sorry there's a lot in there but I just figured it would be helpful to break it all down. I think we're just really getting started around.

We're extremely bullish on what we were able to do from an inventory position and be able to get our inventory aligned to start.

What we can do about attachment and, in particular, in the firearms, and getting loaded in with the inventory that we need and part of this.

The Q and in comparison to where.

Really we would've peaked last year in October or closer to the end of October missed a good portion of hunt in particular, the western Hunt.

And just flip sales from a table. So I think to your first question, there's future opportunity from from an <unk> standpoint, and a UPC pregnant team has done a fantastic job on in the stores.

Converting and being able to increase the basket size and I think as we looked at last month.

Paul Stone: In comparison to where we would have peaked last year in October, or closer to the end of October, we missed a good portion of hunt, in particular the Western hunt, and just left sales on the table. I think your first question, there's huge opportunity from an AOV standpoint and a UPT. Craig and the team's done a fantastic job out in the stores, converting and being able to increase the basket size. As we looked at last month, we continue to be above COVID marks there and at all-time highs, both on UPT and AOV, with an opportunity to be more sharp in inventory to continue to grow that.

We continue to be above Covid marks there and at all time highs both on UPC.

<unk> and <unk> with an opportunity to be able to be more sharpened inventory to continue to grow that so.

I think thats part of the business that we continue to put a spotlight on how do we invest more into it to be able to grow and to be able to help help our overall mix since we're growing firearms at the rate we are Matt.

Okay I appreciate all the detail I'll leave it there. Thank you.

There's a huge opportunity from from an aov standpoint and a upt pregnant team has been a fantastic job on in the stores, um, converting and, and being able to increase the basket size. And I think as we looked at last month, we're

Thank you and our next question comes from the line of Ryan <unk> from Craig Hallum Capital markets. Your question. Please.

Paul Stone: I think that's part of the business that we continue to put a spotlight on and how do we invest more into it to be able to grow and to be able to help our overall mix as we're growing firearms at the rate we are, Matt.

Hey, good afternoon.

I wanted to stick on guns in the non lethal so impressive.

You said accelerating next outperformance in August but.

That trend has continued here, but we're also simultaneously leaning in on the non lethal tasers Burnett et cetera, I guess are those two things related that the foot traffic is a similar customer or is it really mixed assortment store lay out all of the things that you can drive growth in both.

We're we continue to be above Co marks there and an all-time highs. Both the 1 on up and aov with an opportunity, to be able to be more sharp and inventory to, to continue to grow that. So um, I I think that's part of the the business that we continue to put a spotlight on and how do we invest more into it, to be able to grow and to be able to help help our overall mix. As we're growing Firearms, at the rate, we are at

Matt Koranda: Okay. Appreciate all the detail. I'll leave it there. Thank you.

Okay, I appreciate all the detail. I'll leave it there. Thank you.

Operator: Thank you. Our next question comes from the line of Ryan Sigdahl from Craig Hallum Capital Markets. Your question, please.

Thank you, thank you. And our next question comes from the line of Ryan Sigdal from Craig-Halam County Capital Markets. Your question, please.

Ryan Sigdahl: Hey, good afternoon. I wanted to stick on guns and the non-lethal. So impressive, you said, accelerating mixed sell performance in August, that trend has continued here. You're also simultaneously leaning in on the non-lethal, Tasers, Burnet, et cetera. I guess, are those two things related, that the foot traffic is a similar customer, or is it really mixed assortment, store layout, all of the things that you can drive kind of growth in both?

Hey, good afternoon. Um,

Yes, I would think.

The best way to say, we think its a new new customer that is really looking at.

Wanted to stick on guns in the non-lethal so impressive.

Less lethal and we've looked at it and done a deep dive pointed on the mix and who it is bringing into the stores. So.

We like what it's doing as we think about it and how we've set the site up to really be able to start the process.

Right and to be able to drive for folks to the store as well as in <unk> case, the way they are able to message with their influencers to get people to the stores. So we like what's happening there.

You said that accelerating nickel performance in August, but that trend has continued here. However, you're also simultaneously leaning in on the non-lethal tasers, burnout, etc. Are those two things related— is the foot traffic a similar customer, or is it really a mixed assortment store layout? All of the things that you can drive kind of grow in both.

Paul Stone: Yeah, I would think the best way to say it is we think it's a new customer that is really looking at the less lethal. We've looked at it and done a deep dive on it, on the mix and who it's bringing into the store. We like what it's doing as we think about it and how we've set the site up to really be able to start the process on the site and to be able to drive the folks to the store, as well as, in Burnett's case, the way they're able to message it with their influencers to get people to the store. We like what's happening there. We feel we've got a lot of upside.

We feel we've got a lot of upside we just build out a larger subset of stores to be able to add inventory into.

Pretty big swath of store count as we get to the back half of the year. So we think we have an opportunity to continue to grow that.

And I like the newness piece of it to where we continue to be able to add new partners tapes were coming in they set the product right. They were able to align get the product empty boxes point of sale have it all wrapped ready to go to the store to be able to set and do it very professional so like the way that that shaping up and we continue as I mentioned to Matt.

Paul Stone: We've just built out a larger subset of stores to be able to add inventory into, a pretty big swath of store count as we get to the back half of the year. We think we have an opportunity to continue to grow that. I like the newness piece of it to where we continue to be able to add new partners. Taser coming in, they set the product right. They were able to align, get the product, empty boxes, point of sale, have it all wrapped, ready to go to the store to be able to set and do it very professional. I like the way that that's shaping up. We continue, as I mentioned to Matt, I think the opportunity around personal protection is not only the non-lethal, but the lethal component of it as well.

I think the opportunity around personal protection is not only the non lethal, but the lethal component of it as well and then how we can.

Really meet the customer where they want to be around the attachment of that in particular from hand guns and ammo.

We saw great performance.

Hunt was really driven as we look at it from a category breakdown from handgun.

Yeah, I would think the best way to say, we think it's a new new customer that that is really looking at the less lethal and and we've looked at it and and done a deep dive 1 of the ones, the mix and who it's bringing into the store. So, um, we like what it's doing as, as we think about it, and how we've set the site up to, really be able to start the process on the site and to be able to drive the focus to the store, as well as and burn his case, the way they're able to message it with their influencers to get people to the store. So we, we like, what's happening there. Um, we feel we've got a lot of upside, we've just built out a a larger subset of stores to be able to add inventory into. Um a pretty big swath of store count as we get to the back half of the year, so we think we have an opportunity to continue to grow that. Um, and I like the newness piece of it to where we continue to be able to add new partners, taser coming in, they set the product, right? They were able to, to align get the product empty boxes for

Hand guns, and ammunition driving that piece of the business and then as I think about the three of the non lethal to personal protection. The newness is what drove that part of the business. So.

Paul Stone: Then how we can really meet the customer where they want to be around the attachment of that, in particular from handguns and ammo. We saw great performance. Our hunt was really driven as we look at it from a category breakdown from handguns and ammunition, driving that piece of the business. As I think about the accessory or the non-lethal, the personal protection, the newness is what drove that part of the business. It's good to see the mixture that we have there.

It's good to see the mixture that we have there.

Alright, and then just as we.

Shift over to.

<unk> I'm sorry.

Me to sell, have it all wrapped ready to go to the store, to be able to set and do it very professional. So like the way that that shaping up and we continue and as I mentioned to Matt, I think the opportunity around personal protection is not only the non-lethal but the lethal component of it as well. And then how we can, you know, really meet the customer where they want to be around. The attachment of that, in particular from hand. Handguns, and ammo that we've saw great performance. Our our

Adding one store in Q3 as you said.

Hunt was really driven as we look at it from a category breakdown from.

Before I guess, how do you think about the portfolio of stores do you have another have been some that were.

Right around four wall breakeven ish, but I think Keith referred to them on life support in the past, but how do you think about adding stores optimizing the existing stores you have just an update there would be helpful. Thanks.

Handguns and ammunition are driving that piece of the business. As I think about the accessories or the non-lethal personal protection items, the newness is what has driven that part of the business. So it's good to see the mixture that we have there.

Ryan Sigdahl: As we shift over to the store comp, yeah, sorry. Adding one store in Q3, as you said before, I guess, how do you think about the portfolio of stores you have? I know there have been some that were right around four-wall break-even-ish, but I think you even referred to them on life support in the past. How do you think about adding stores, optimizing the existing stores you have? Just an update there would be helpful.

Right.

Uh, and then just as we, uh,

Just.

Our real estate focus will continue to be around.

One is ensuring that we are paying down our debt before we get into a position of growth around those stores and that's the commitment that I made in the we've made as a company as we go out but we still think we have a lot of room within our current asset base, we have to be able to sweat the assets to get the performance, where we need to be and continue to be able.

Paul Stone: Thanks. Our real estate focus will continue to be around, one, ensuring that we are paying down our debt before we get into a position of growth around those stores. That's the commitment that I've made and that we've made as a company as we go out. We still think we have a lot of room within our current asset base to be able to sweat the assets to get the performance where we need to be and continue to be able to grow. We have a low, unaided awareness in our 30-mile radius that we actually operate in. We think we have a ton of upside in the markets we actually are in.

To grow I mean, we have a low.

Shift over to um store or the store calling you, I'm sorry. Um, so adding 1 store in Q3, as you said, you know before, because how do you think about the portfolio of stores? You have another have been some that were you know right around 4.

Aided awareness in our 30 mile radius that we actually operate in so we think we have a ton of upside in the markets. We actually are in.

And to the earlier point of the question I mean, we will continue to measure and to look at our nonproductive stores and given an opportunity. If we don't think we're in a position to where.

The store is going to meet the expectation, we're coming implement the leaf and we make a decision to potentially get out of that.

That location I think thats been the direction, we've shared over the last couple of years as we will continue to monitor the four wall, who will do the right thing from a cash flow perspective, as we look at it and we'll make those decisions as we and a lot of cases some of.

Paul Stone: To the earlier point of the question, we'll continue to measure and to look at our non-productive stores, and given an opportunity, if we don't think we're in a position where the store is going to meet the expectation, we're coming up on the end of the lease and we make a decision to potentially get out of that location. I think that's been the direction we've shared over the last couple of years. We'll continue to monitor the four wall. We'll do the right thing from a cash flow perspective as we look at it, and we'll make those decisions as we, in a lot of cases, have a small sample size of stores that we don't like the way they're performing. We'll look at it as those leases come up.

I I just, you know, our real estate Focus will continue to be around, you know, 1 in ensuring that we are paying down our debt before we get into a position of growth around those stores and that's the commitment that I've made and the we've made as a company as we go out that we still think we have a lot of room within our our current asset base. We have to be able to sweat the assets to get the performance where we need to be and continue to be able to grow. But I mean we have a low uh un needed awareness in our 30 mile radius that we actually operate in. So we think we have a ton of upside in the markets we actually are in and to to

Our small.

Sample size for the stores that we have that we don't like the way, they're performing and we'll look at it as those leases come up.

Thanks, Good luck guys.

Thank you and our next question comes from the line of Justin Kleber from Baird. Your question. Please.

Hey, good afternoon, guys and Jennifer welcome to the team.

Was hoping.

If you could break down the comp.

In terms of <unk>.

Transactions versus average ticket Paul you had mentioned.

It seems like that's higher at least in.

In a lot of cases, some of our small um as sample size with stores, that we have that, we don't like the way they're performing and and, and we'll look at it as those those leases come up.

Ryan Sigdahl: Thanks. Good luck, guys.

The firearms category, but I'm curious if your comp transactions are also.

Thanks. Good luck, guys.

Operator: Thank you. Our next question comes from the line of Justin Kleber from Baird. Your question, please.

Now tracking positive.

I think there's a couple of weeks we can look at it is we think of it from <unk>.

Thank you. And our next question comes from the line of Justin Gleber. Please go ahead with your question.

Ryan Sigdahl: Hey, good afternoon, guys. Jennifer, welcome to the team. I was hoping if you could break down the comp in terms of transactions versus average ticket. Paul, you've mentioned UPT. It seems like that's higher, at least in the firearms category. I'm curious if your comp transactions are also now tracking positive.

Overall and based on how.

Hey, good afternoon, guys, and Jennifer. Welcome to the team.

70% of our purchases start online and then end up.

I was hoping um,

if you could break down the the comp,

And the stores that we feel good from a transactional account where.

Is that true <unk> is living today and the performance of that and we continue to get strength, there and as we look at the overall positioning the company from a sales performance on where we actually tracked.

In terms of transactions versus average ticket, Paul, you mentioned UPT. It seems like that's higher, at least in the firearms category, but I'm curious if your comp transactions are also.

Now, tracking positive.

Paul Stone: I think there's a couple of ways we can look at it. As we think of it from overall and based on how, you know, 70% of our purchases start online and then end up in the stores, we feel good from a transactional count where that true BOFUS is living today and the performance of that. We continue to get strength there. As we look at the overall position of the company from a sales performance and where we actually tracked, with e-com driven sales, we outperform there. I think from a transactional count, we like the position we're in. From a growth standpoint and then what it's able to do for the overall performance is kind of how I would share that as we break it down.

With E com driven sales so we outperformed there so.

I think there's a couple of ways we can look at it as we think of it from overall and based on how.

From a transactional account, we like the position we're in.

From a growth standpoint, and then what it's able to do.

you know, 70% of our, our purchases start online and and then end up in in the stores that we feel good from a transactional account where

For the overall performance.

Kind of how it would share that as we break it down but I would say.

Both.

And <unk> are up.

And that's.

That's really saying what the team is working from it from a unit standpoint, and being able to add the basket as we get there.

That true bopis is living today and and the performance of that, and we continue to get strength there. And as we look at, you know, the overall position of the company from a sales performance, and where we actually tracked, um, with, with the ecomm driven cells, so we outperformed their. So I think

Okay that makes sense and good to hear.

You mentioned Jennifer.

Potential for some tariff related margin pressure in the back half of the year I am curious if you could share.

Sure, what's happening with pricing real time.

Paul Stone: I would say, both AOV and UPT are up, and that's really saying what the team is working from a unit standpoint and being able to add the basket as we get there.

In the stores as tariff impacts start to build maybe how much you think retails might go up in the back half of the year and what sort of.

From a transactional account. We like the position we're in and from a, from a growth standpoint. And then what it's able to do, uh, for the overall, uh, performance is kind of how I would share that as we break it down, but I would say uh, both aov and upt are up. Um, and that's

Unit elasticity you're embedding.

Into your outlook.

That's really the thing with the team is working from a from a unit standpoint and being able to add the basket as we get there.

Yes, and thank you for the greetings.

Ryan Sigdahl: Okay. That makes sense. Good to hear. You mentioned, Jennifer, the potential for some tariff-related margin pressure in the back half of the year. I'm curious if you could share what's happening with pricing real-time, in the stores as tariff impacts start to build. Maybe how much you think retails might go up in the back half of the year and what sort of unit elasticity you're embedding into your outlook?

So you have kind of how we're thinking about this is that merchants have really done a great job of getting ahead of this and working with our vendors. So that we have visibility into cost increases that might be coming our way. We are fairly heavily reliant on that pricing. So we do have flexibility to offset some of that is <unk>.

Yep. Okay, that makes sense. And good to hear, uh,

You mentioned, Jennifer, the potential for some tariff-related margin pressure in the back half of the year. I'm curious if you could share what's happening with pricing in real time?

As they come in.

So you saw the notifications to day, there's still so much uncertainty out there on tariffs that we wanted to make sure that we are mindful of them and that we consider then in our back half guide.

uh in the stores as tariff impacts start to build, maybe how much you think retails might go up in the back half of the year and and what sort of

Jennifer Paul Young: Thank you for the greetings. You know, kind of how we're thinking about this is the merchants have really done a great job of getting ahead of this and working with our vendors so that we have visibility into cost increases that might be coming our way. We are fairly heavily reliant on MAP pricing, so we do have flexibility to offset some of those tariffs as they come in. First, you saw the notifications today. There's still so much uncertainty out there on tariffs that we wanted to make sure that we are mindful of them and that we've considered them in our back half guide. There's still a lot that's unknown on what's actually going to happen with those.

Units elasticity, you're embedding into your outlook.

That is.

Still out on what's actually going to happen with those.

And we continue to watch it I think.

What I would add to it as we've seen it in a portion of our pull forward that we had coming into.

The Q to be able to start his strategic decision on inventory to be able to bring into as we started Q3.

And from a timing standpoint to ensure that we were not on the wrong side from a tariff early and to be able to position it to where we were able to bring it in bringing in prior to peak and then be able to kind of ride. This thing down Q3, and Q4 from an inventory standpoint so.

Yeah, um, so uh, thank you for the greetings. Um, so you have kind of how we're thinking about this is the merchants have really done a great job of getting ahead of this and working with our vendors so that we have visibility into cost increases that might be coming our way. We are, um, fairly heavily reliant on that pricing, so we do have flexibility to offset some of those tariffs as they come in. As soon as you saw the notifications today, there's still so much uncertainty out there on tariffs that, you know, we wanted to make sure that we are mindful of them and that we've considered them in our back half guide. Um, but this, you know, cats,

Paul Stone: Yeah. We continue to watch it. I think what I would add to it is we've seen it and a portion of our inventory pull-forward that we had coming into the queue to be able to start a strategic decision on inventory to be able to bring in as we started Q3. From a timing standpoint, to ensure that we were not on the wrong side from a tariff early and to be able to position it to where we were able to bring it in prior to peak, and then be able to kind of ride this thing down Q3 and Q4 from an inventory standpoint. I feel good with what the team has been able to do there.

Still out on what's actually going to happen with those. Yeah.

We feel good with what the team has been able to do there.

The low penetration that we have.

And we continue to watch it. I think it's what I would add to it. Is we've seen it and a portion of our pull forward that we had coming into

Private label right now at a 3% is that we're ringing and the high percentage of map as Jennifer said I think this is positioned to be able to.

To manage it as we go to back half and in particular as we start start 'twenty six.

Okay, if I could sneak just one more and that was helpful. Thank you just one more on gross margin you mentioned that the 40 basis point of headwind.

Paul Stone: The low penetration that we have in private label right now at a 3%-ish that we're ringing and the high percentage of MAP, as Jennifer said, I think is positioned to be able to manage it as we go to back half and in particular as we start 2026.

Did the mix.

Pressure compare to that.

The the queue, uh, to be able to start a strategic decision on inventory, to be able to bring into as we started Q3. Um, and and from a timing standpoint, to ensure that we were not on the wrong side, from a tariff early and to be able to position it to where we were able to bring it in, bring it in, prior to Peak. And then be able to kind of ride this thing down Q3 and Q4 from an inventory standpoint. So, um, it feel good with what the team has been able to do there. And, you know, the, the low penetration that we have and

Freight headwinds.

Yes.

If you look at our margin by category.

All categories were up a margin with exception of hunt.

On a rate basis.

<unk>.

Is one of our lower margin category and due to firearms and ammunition.

You know, private label right now to 3% is that that we're ringing and the the high percentage of math. As Jennifer said, I think gives us a position to be able to, uh, to manage it. So we get a back half. And in particular as we start start 26,

Ryan Sigdahl: If I could sneak just one more in, that was helpful. Thank you. Just one more on gross margin. You mentioned that the 40 basis point of freight headwind. How did the mix pressure compare to that freight headwind?

It did impact margin in a negative way from a mix perspective, so really right across the board. We're up mix was negatively affected just simply because of hunt as well as camping being down on the quarter and Thats one of our higher margin business. So.

Okay, if I can sneak just 1 more in, that was helpful. Thank you. Uh, just 1 more on gross margin. You mentioned that the 40 basis point of freight headwind

How did the mix? Uh,

Jennifer Paul Young: Yeah. If you look at our margin by category, all categories were up in margin with the exception of hunt, on a rate basis. Hunt is one of our lower margin categories, and due to firearms and ammunition, it did impact margin in a negative way from a mix perspective. Really, rates across the board were up. Mix was negatively affected just simply because of hunt, as well as camping being down on the quarter, and that's one of our higher margin business. The mix did not offset the higher rates. It was really all the improvement was driven by rate.

Pressure compared to that that that Freight headwind.

The mix did not offset the higher rates, it's really all of the improvement was driven by rate.

Okay. Thank you both best of luck in the Hall.

Yeah.

Thank you and our next question comes from the line of Mark Smith from Lake Street. Your question. Please.

Hi, guys.

First off Jennifer welcome second I'll apologize if you hit some of these as I've been jumping between calls here.

But I wanted to just to hit on the inventory and kind of inventory levels. Here. If you can quantify or discuss maybe how much was maybe bought ahead of tariffs and if you. It sounds like you feel like you are kind of fully stock maybe a little earlier this year moving into the hunting season, and kind of fall compared to other years.

Yes, so um, if you look at our margin by category, um, all all categories were up in margin with the exception of hunt. Um, on our rate basis hunts, um, is 1 of our lower margin categories and due to firearms and ammunition. Um, it did impact margin in negative way from a mix perspective, so really rates across the board were up. Um, mix was negatively affected, just simply because of hunt, as well as camping being down on the quarter. And that's 1 of our higher margin business. So, um, the mix did not offset the higher rates, it would really all the Improvement was driven by rate.

Ryan Sigdahl: Okay, thank you both. Best of luck in the fall.

Block, uh, in the fall.

Operator: Thank you. Our next question comes from the line of Mark Smith from Lake Street. Your question, please.

Thank you. And our next question comes from the line of Mark Smith from Lake Street. Your question, please?

Mark Smith: Hi, guys. First up, Jennifer, welcome. Second, I'll apologize if you've hit some of these as I've been jumping between calls here. I wanted to just hit on the inventory and kind of inventory levels here. If you can quantify or discuss maybe how much was maybe bought ahead of tariffs. It sounds like you feel like you're kind of fully stocked maybe a little earlier this year moving into the hunting season and kind of fall, compared to other years.

Yes, so the elevated level of inventory was at.

A distinct strategic decision the company had discovered that previously and entering into the market. After the seasons had R&D really kicked off and customers already had their gear said this year, we'll bring it in earlier and that's what you saw in the big bump.

We rent fish and hunt, but then also that we're going to clear out of it earlier and when the season starts to wind down the customer has other gear. So it makes sense for us to kind of shift the inventory.

Jennifer Paul Young: Yeah. The elevated level of inventory was a distinct strategic decision. The company had discovered that previously we'd been entering into the market after the seasons had already really kicked off and customers already had their gear. This year, we're bringing it in earlier, and that's what you saw in the big bump, especially around fishing and hunting, but also that we're going to clear out of it earlier. When the season starts to wind down, the customer has all their gear, so it makes sense for us to kind of just shift the inventory up closer. Since we did invest heavily in hunting and fishing, it paid off. Paul mentioned the comps on the call on how those performed. Feeling it was the right strategy to move.

Hi, guys. Uh, first up, Jennifer, uh, welcome. Uh, second, I apologize if you've hit some of these as I've been jumping between calls here, uh, but I wanted to just hit on the inventory and kind of inventory levels here. You know, if you can quantify or discuss maybe how much was maybe bought ahead of tariffs, and if you— it sounds like you feel like you're kind of fully stocked, maybe a little earlier this year, moving into the hunting season and kind of fall compared to other years.

Closer and since we did invest heavily in hunt and fish.

Paul.

Paul mentioned the comps on a call on how those perform so keenly it was the right strategy to move as we move forward to the rest of the year, we will continue to kind of.

<unk> moved through the inventory and still expect to be below last year's level by the end of the year.

Perfect.

And then I did want to ask you just called out kind of margin in that category being the only one kind of down percentage wise I'm I'm curious just if you can give some insight into consumer behavior within haunt or within primarily firearms and ammo are you seeing better sales momentum on.

Jennifer Paul Young: As we move forward to the rest of the year, we will continue to kind of move through the inventory and still expect to be below last year's level by the end of the year.

Promotion or lower priced items.

In other words did you have to be promotional to drive people or is the consumer continuing to come out even we'll call it regular price levels.

Yeah, so the elevated level of inventory was, um, a distinct strategic decision. Uh, the company had discovered that previously we had been entering into the market after the seasons had already really kicked off and customers already had their gear. So, this year, we're bringing it in earlier, and that's what you saw in the big bump, especially around fish and hunt, but then also that we're going to clear out of it earlier when the season starts to wind down; the customer has all their gear. So, it makes sense for us to kind of just shift the inventory up closer. And since we did invest heavily in hunt and fish, you know, it paid off. Um, you know, Paul mentioned the comps on the call on how those performed, so feeling it was the right strategy to move. As we move forward to the rest of the year, we will continue to kind of move through the inventory and still expect to be able to match last year's level by the end of the year.

Mark Smith: Perfect. I did want to ask, you just called out kind of margin in that hunt category being the only one kind of down percentage-wise. I'm curious if you can give some insight into consumer behavior. Within hunt or within, you know, primarily firearm and ammo, are you seeing better sales momentum on promotion or lower priced items? In other words, do you have to be promotional to drive people, or is the consumer continuing to come out even at, we'll call it, regular price levels?

Yes, so both firearms and ammo do you have.

Lower margins in the hunt category in ammo did outperform the category in and of itself. This year. So that really did put a lot of pressure on it from a mix perspective, there has been some pricing that Judy.

<unk> pricing that we've done in animal that we think is helping drive sales as well. So we're feeling good about that.

And then firearms that we talked a little bit about it before but.

We do have a selection of fire arms, and we do see a little bit of pressure on AUR on there.

Jennifer Paul Young: Yeah. Both firearms and ammo do have lower margins in the hunt category, and ammo did outperform the category in and of itself this year. That really did put a lot of pressure on it from a mixed perspective. There has been some strategic pricing that we've done in ammo that we think is helping drive sales as well. We're feeling good about that. Firearms, you know, we've talked a little bit about it before, but we do have a selection of firearms, and we do see a little bit of pressure in AUR in there.

Perfect. Um, and then I did want to ask you, you just called out kind of margin in that hunt category, being the only 1 kind of down percentage wise. I'm, I'm curious. Just if you can give some insight into consumer Behavior, you know, within hunt or or within, you know, primarily firearm and ammo are, are you seeing better sales momentum on promotion, or lower priced items? You know, in other words do you have to be promotional to drive people? Or is the consumer continuing to come out even at at we'll call it regular, uh, price levels.

Okay, I think the thing Mark I'll, just add to that is I mean, AUR is down about 4% and then units up 4.2 is kind of offsetting each other there, but AUR under under pressure and I think we mentioned that earlier.

Okay.

And then last question I, just wanted to ask I know that it's.

Very small segment I think for you guys, but just as we look at potentially increased demand for suppressors or even short barrel rifles with.

Yeah, so both firearms and ammo do have um, lower margins in the hunt category and ammo did outperform, um, the category in and of itself this year. So that really did put a lot of pressure on it from a mixed perspective. There has been some pricing that we've um, strategic pricing that we've done in that. We think is help helping Drive sales as well. So we're feeling good about that. Um, and then Firearms, you know, we've talked a little bit about it before, but, you know, we do have a selection of firearms and we do see a little bit of pressure in Aur, on their

Paul Stone: Yeah. Okay. I think the thing that Mark just added to that is, I mean, AUR is down about 4%, and then units up 4.2%. Kind of offsetting each other there, but AUR under pressure, and I think we mentioned that earlier.

New tax laws and tax stamp going away in January is there an opportunity as we look at next calendar year to maybe increase sales or inventory in those products.

Okay, I think the thing is, Mark, that's just to add to that. I mean, AUR is down about 4%, and then units are up 4.2%, which is kind of offsetting each other there. But AUR is under pressure, and I think we mentioned that earlier.

Yes, we're definitely going to lean into both of the categories that you just mentioned there, but we think.

Mark Smith: Okay. The last question I just wanted to ask, I know that it's a very small segment, I think, for you guys, but just as we look at potentially increased demand for suppressors or even short-barrel rifles, with new tax laws and tax stamp going away in January, is there an opportunity as we look at next calendar year to maybe increase sales or inventory in those products?

Okay.

Huge opportunity and even as we worked through the back half of the year from a suppressors and working with our partners on how we look at that but I think we wanted to get in a position back half of the year, where we're able to get it shipped in.

And take a little bit of noise kind of waiting till the beginning of next year, but we think we have an opportunity in Q4 to be able to get and get it shipped directly to the home.

Paul Stone: Yeah, we're definitely going to lean into both of the categories that you just mentioned there that we think are a huge opportunity. Even as we work through the back half of the year from a suppressors and working with our partners on how we look at that. I think we want to get in a position back half of the year where we're able to get it shipped and take a little bit of that noise out of waiting till the beginning of next year. We think we have an opportunity in Q4 to be able to get it shipped directly to the home, not carry the working capital as we work with our partners in doing that, and take advantage of what I think will be a hockey stick next year as we think of suppressor sales in particular.

Um, and the last question I just wanted to ask, I know that it's a a very small segment I think for you guys but just as we look at potentially increased demand for suppressors or even short barrel rifles uh with with new tax laws and tax stamp going away in January, you know, is there an opportunity as we look at next calendar year to to maybe increase sales or or inventory in those products.

Not carry the working capital as we worked with our partners in doing that and and take advantage of what I think will be a hockey stick next year, but as we think of suppressor cells in particular.

Yeah, we're definitely going to lean into both of the categories that you just mentioned there, but we think,

Excellent. Thank you.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Paul <unk> for any further remarks.

Thank you for joining the call today and thank you to all our passionate and outfitters around the country for their commitment to Sportsman's warehouse.

Together, we look forward to providing our customers with great gear and especially exceptional service. Thank you.

Huge opportunity and even as we work through the back half of the Year from a suppressors and and, and working with our partners on on how we look at that. But I think we want to get in a position back half of the Year where we're able to get it, get it shipped and and, and take a little bit of that and we've kind of waiting till the beginning of next year. But we think we have an opportunity in Q4 to be able to get and get it shipped directly to the home, not carry the working capital, as we work, with our partners, in doing that and, and take advantage of what I think, will be a hockey stick next year, as we think of suppressor cells in particular,

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Ryan Sigdahl: Excellent. Thank you.

Excellent, thank you.

Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Paul Stone for any further remarks.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Paul Stone for any further remarks.

Paul Stone: Thank you for joining the call today, and thank you to all our passionate outfitters around the country for their commitment to Sportsman's Warehouse Holdings. Together, we look forward to providing our customers with great gear and exceptional service. Thank you.

Thank you for joining the call today, and thank you to our passionate Outfitters around the country for their commitment to Sportsman's Warehouse.

Together, we look forward to providing our customers with great gear and exceptional service. Thank you.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Thank you, ladies and gentlemen, for your participation. In today's conference, this does conclude the program. You may now disconnect. Good day.