Sportsman’s Warehouse (NASDAQ:SPWH) said its fourth-quarter and full-year fiscal 2025 results came in ahead of its revised expectations, supported by improving sales trends late in the fourth quarter and continued momentum in several core categories.
Chief Executive Officer Paul Stone said the company faced “a more pressured promotional environment” early in the quarter, but “turned our sales trends positive in the back half of the quarter,” which helped drive better-than-expected performance. Stone also highlighted that the company posted positive same-store sales in each of the first three quarters of 2025, resulting in full-year comparable sales growth of 1%—“our first year of positive comps since 2020,” he said, calling it a “meaningful milestone” in the company’s turnaround.
Sales trends improved after a soft start to the holiday season
On the Q&A portion of the call, Chief Financial Officer Jennifer Fall Jung said trends that began in January “continue through… February and March,” driven primarily by strong growth in firearms and ammunition, while noting the category can be influenced by external events. While the company provided full-year 2026 comparable sales guidance of down 1% to up 2%, she added, “we feel like we’re coming out strong in Q1.”
Core pursuits drove growth; discretionary categories remained pressured
Stone said performance in the quarter was strong across the company’s core pursuits. Hunting and shooting sports grew more than 5%, with firearm units again outperforming adjusted NICS checks, which management viewed as evidence of continued market share gains. Stone added the company believes January demand benefited from “external event driven factors” that accelerated its personal protection category.
Fishing also increased 3.2% in the quarter, although unseasonably warm Western weather drove a double-digit decline in ice fishing. Excluding ice fishing, Stone said the fishing category grew more than 11%. He also said the spring season has started early, with fishing sales “up double digits so far this quarter.”
At the same time, Stone said camping and soft lines “remain challenged” because they are more discretionary. The company said it is working to sharpen assortments in those areas, eliminate lower productivity SKUs, and align the categories more closely with core pursuits.
For the full year, Jung said fishing was the strongest growth driver, increasing 10.3% and nearly 18% on a two-year stack basis. Hunting and shooting sports increased 4.4% for the year, which she attributed to improved in-stocks in core firearms and ammunition, better seasonal alignment, and continued traction in personal protection, including non-lethal alternatives. Other categories declined for the year amid pressure on discretionary spending, though she said inventory reductions in those areas exceeded sales declines.
Margins fell in Q4 as promotions increased and mix shifted
In the fourth quarter, net sales were $334.9 million, down 1.6% year-over-year, with comparable store sales down 1.8%, Jung said. Gross margin was 28.4%, down from 30.4% a year ago. Jung attributed the decline primarily to category mix—specifically higher penetration of firearms and ammunition—along with increased promotional activity and lower sales in higher-margin categories.
Asked about additional drivers of margin pressure, Jung reiterated it was “a combination of mix as well as promotional cadence,” adding that the company leaned into promotions to drive sales and clear seasonal inventory. She also noted ice fishing underperformance weighed on results. Jung said tariff impact was not a major factor in the company’s margin outlook.
SG&A improved to 28.7% of net sales versus 29.4% last year, driven by cost control, “particularly in payroll,” Jung said. The company reported a net loss of $21.7 million, or $0.56 per diluted share, versus a net loss of $8.7 million, or $0.23 per diluted share, a year earlier. Adjusted net loss was $3.9 million, or negative $0.10 per diluted share, compared with adjusted net income of $1.6 million, or $0.04 per diluted share, in the prior-year quarter. Adjusted EBITDA was $9.6 million versus $14.6 million in Q4 of last year.
Looking to the first quarter of 2026, Jung said margins are expected to be down year-over-year due to firearms and ammunition mix, while margins in the remaining quarters are expected to be flat to slightly positive. She also indicated SG&A should be flat to slightly leveraged, supporting the company’s full-year adjusted EBITDA outlook.
Inventory, liquidity, and store fleet actions
Inventory discipline was a recurring theme. Jung said the company ended fiscal 2025 with inventory of $312.9 million, down $29.1 million, or 8.5%, year-over-year, and “better than our expectations exiting Q3.” She said the company worked through most seasonal products and is refining receipt timing, including planning for spring inventory to arrive later to support improved turns and productivity. The company expects to operate with lower average inventory levels throughout 2026 than in 2025 while maintaining enough inventory to reach the top end of its plan.
Jung also reported net debt of $90 million at year-end, a 6.1% reduction versus the prior year, and total liquidity of $107.8 million. The company generated $8.9 million of free cash flow and used it to reduce debt. Debt paydown remains its top capital allocation priority, she said.
Following a review of its store fleet, the company estimated it will close approximately five stores over the next 12 months, with closures expected to occur after the holidays, meaning management does not anticipate a material impact to this year’s results. In response to an analyst question, Jung said the targeted locations are “losing adjusted EBITDA stores,” and the company is working with brokers on options such as renegotiations, subtenants, or buyouts given the long lease terms.
Strategic initiatives for 2026 center on loyalty, firearm bundling, and fishing
Stone said the company is continuing a three-year strategy launched in late 2024 and outlined three key initiatives for 2026 aimed at strengthening its core pursuits: fishing, hunting and shooting sports, and personal protection.
- Loyalty rewards upgrade: Stone said the company is partnering with a strategy and platform design firm to create a program that connects loyalty with its credit card ecosystem, with goals of improving retention, lifetime value, average order value, and purchase frequency. He said testing is expected later this year, with a planned launch in early Q1 next year.
- Firearm solution bundling: With more than 75% of firearm purchases beginning online, Stone said the company sees an opportunity to convert more demand through an improved digital experience and to increase attachment to related products, which he said should help margins.
- Omni-channel fishing experience: Stone said the company believes it has about 1% share in a large, growing category and aims to double that share over the next three to four years. The strategy includes enhancing in-store assortments around local species and seasons and building a region- and species-focused digital platform that integrates content and commerce.
Stone said the company remains “measured” given pressure on the U.S. consumer, citing rising fuel costs and broader macro dynamics. Jung also pointed to consumer health as a key risk in the outlook, while noting variables such as legislation that can influence industry demand. Management additionally cited potential tailwinds, including America’s 250th anniversary, which Jung said “resonates well with our customer.”
For fiscal 2026, Jung guided to same-store sales of down 1% to up 2% and adjusted EBITDA of $30 million to $36 million, with the improvement expected to come from better gross margin performance, inventory discipline, and expense management. Capital expenditures are expected to be $20 million to $25 million, primarily for technology investments and store maintenance.
About Sportsman’s Warehouse (NASDAQ:SPWH)
Sportsman’s Warehouse, Inc (NASDAQ: SPWH) operates as a specialty retailer of hunting, shooting, fishing, camping and related outdoor sports equipment in the United States. The company’s brick-and-mortar footprint comprises over 100 retail locations across more than 20 states, complemented by an e-commerce platform that serves anglers and outdoorsmen nationwide. By focusing on core outdoor activities, Sportsman’s Warehouse delivers a comprehensive shopping experience for enthusiasts of all skill levels.
The retailer’s product assortment includes firearms and ammunition, archery gear, fishing tackle and boats, camping supplies, outdoor apparel and footwear, water sports equipment and pet supplies.
