Jim Watkins - VP, IR James Conroy - CEO Gregory Hackman - CFO

Matthew Boss - JPMorgan Peter Keith - Piper Jaffray Jonathan Komp - Robert W. Baird Tracy Kogan - Citigroup Randy Konik - Jefferies Tom Nikic - Wells Fargo

Thank you. Good afternoon everyone.

Thank you for joining us today to discuss Boot Barn's first quarter fiscal 2018 earnings results. With me on today's call are Jim Conroy, President and Chief Executive Officer; and Greg Hackman, Chief Financial Officer.

A copy of today's press release is available on the Investor Relations section of Boot Barn's website at bootbarn.com. Shortly after we end this call, a recording of the call will be available as a replay for 30 days in the Investor Relations section of the company's website.

I would like to remind you that certain statements we will make in this presentation are forward-looking statements and these forward-looking statements reflect Boot Barn's judgment and analysis only as of today and actual results may differ materially from current expectation, based on a number of factors affecting Boot Barn's business. Accordingly, you should not place undue reliance on these forward-looking statements.

For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made on this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our first quarter fiscal 2018 earnings release, as well as our fillings with the SEC referenced in that disclaimer. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

I'll now turn the call over to Jim Conroy, Boot Barn's President and Chief Executive Officer. Jim?

Thanks, Jim. We're encourage with our start to fiscal 2018 as first quarter results exceeded our expectations, reflecting the success of the strategies we put in place over the past several quarters and a more favorable macro environment for our stores.

Retail store sales grew more than anticipated contributing to a consolidated same-store sales increase of 1.3% compared to guidance of flat sales. And we achieved earnings per share of $0.03 versus our guidance for breakeven.

Looking at our sales performance in more detail, net sales increased 4.5% driven by the sales contribution of 11 new Boot Barn stores opened over the past to 12 months, 1.3% same-store sales growth and sales from the recently acquired contracts that are signed. Same-store sales and our stores business returned to positive territory in the first quarter increasing by low single-digits.

We saw growth in Texas increased sales in the commodity impacted group of states which includes North Dakota, Wyoming and Colorado. As well as sequential improvement in the balance of the country, which continues to comp positively.

In February, we migrated the Sheplers.com business onto an upgraded e-commerce platform, consisting of a new frontend site and order management system and backend fulfillment operations. The disruption from this migration resulted in a negative mid-single-digit decline in same-store sales for our e-commerce business during the first quarter.

A strong double-digit increase in bootbarn.com sales and the addition of the newly purchased countryoutfitter.com site offset the decline at sheplers.com bringing our total e-commerce business to flat compared to the prior year period. The two challenges that had developed after site migration were a decline in traffic generated from organic search coupled with lower conversion on our mobile site.

Our internal team partnering with external resources has been working to accelerate solutions to these challenges. While still in process we have seen some progress in our metrics and have experienced sequential improvement in the sheplers.com business.

While we are disappointed that sales have been negatively impacted post conversion, we believe that the new platform will benefit us long-term and we will continue to work hard to improve the site performance and return sheplers.com to positive sales growth. While forecasting sales of sheplers.com is difficult, we expect to achieve positive comps in that business in the third quarter of this year.

During the quarter we also continue to achieve progress each of our four growth initiatives, which I would like to highlight for you now. Let's begin with strengthening our omni-channel leadership.

While the Sheplers site migration has been difficult, we have made progress in other areas relative to our omni-channel capabilities. During the first quarter, we completed the successful marketing and relaunch of the Country Outfitter e-commerce site.

The Country Outfitter customers have received the relaunch site well, which is encouraging as we leverage the brand for more online sales targeting a slightly different consumer. In fact based on a customer overlap analysis, we estimate that approximately two-thirds of Country Outfitter sales have come from new customers.

Country Outfitter is performing well on our new e-commerce operating platform and we are pleased with the early financial performance of this growing business. In July we also migrated our in-store sales portal or WHIP to our new e-commerce operating platform which further expand the assortment available to our in-store customers and improve the site functionality and user interface.

Sales of bootbarn.com continue to grow double-digits during the quarter. While we are proceeding cautiously with the bootbarn.com migration to the e-commerce operating platform, we are looking forward to the operational benefits of having all three e-commerce sites plus WHIP leverage the same e-commerce team a common fulfillment center, one customer service call center, and a consolidated inventory.

Moving to our second initiative, driving same-store sales growth. We are encouraged by the same-store sales growth in the first quarter including growth at stores and markets impacted by oil and other commodities.

Same-store sales at stores in Texas grew low single-digits a sequential improvement from a mid-single-digit same-store sales decline in the fourth quarter. As the group same-store sales in North Dakota, Wyoming and Colorado were slightly positive, which was a sequential increase from the fourth quarter mid-single-digit same-store sales decline.

We also saw sales improvement across the balance of the store base in the first quarter. From a merchandizing standpoint, we continue to see strong sales of work boots and work apparel including flame resistant clothing, the sales being strong both in our stores and online.

The growth in sales of work boots and work apparel was driven by a broader assortment of work wear, healthy growth in our commercial accounts business and in expansion of the work department in several stores. We also saw a modest increase in men's western boots.

From an operational perspective, our store associates continue to work hard to serve the needs of our customers, by enhancing customer events and experience in our stores. Improving our labor schedule to ensure appropriate staffing levels and increasing our focus on Hispanic customers, which we believe has been paying dividends.

From a marketing perspective, we changed our approach to radio advertising during the first quarter, by beginning of our radio spot on a national rather than solely on a local market basis. We believe that the extended reach of this marketing will drive sales in a more cost effective manner and continue to build our brand on a national basis.

Not only do we think this will help our online business, but it may help pave away for store expansion in new geographies in the future by raising awareness of the Boot Barn brand. Finally this week we are completing the launch of a Boot Barn branded proprietary credit card, which we expect to increase customer loyalty and drive top-line sales performance.

Now to our first strategic initiative increasing the penetration of our private brand portfolio. We continue to work extremely hard at expanding our private brand offering to our customers by developing high quality product to complement the great assortment offered by our branded vendor partners.

For the first quarter, our private brand penetration increased by more than 150 basis points year-over-year and represented over 12% of our total sales. We're optimistic about the expanded products and the newness we have introduced over the past couple of months including strong growth in our Cody James Work Boots, Shyanne festival boots and Cody James exotic boots.

Additional styles and a growing assortment are also being introduced on our Sheplers and Country Outfitter e-commerce sites. In addition to Cody James and Shyanne, we continue to develop the business with Moonshine Spirit by Brad Paisley and have recent signed a multi-year renewal of that agreement.

The partnership with Brad is healthy and we're looking forward to ongoing merchandising and marketing opportunities with him and his team. Finally, in an effort to round out our portfolio of private brands and to drive additional growth in our ladies western business, we are thrilled to announce a new partnership with Country Music artist Miranda Lambert.

We recently finalized an agreement with Miranda to develop a lifestyle brand inspired by her music and her creative talent, which includes boots, apparel and accessories. Miranda has won the Academy of Country Music's Female Vocals of the Year Award each of the last eight years.

We view Miranda as a number one female country music star in the world and feel that her brand coupled with her personal authenticity are a natural fit Boot Barn and our customer base. We expect the merchandise line to be launched chain wide in the fall of calendar of 2018.

Finally, our fourth initiative expanding our store base. We opened one new store and relocate one existing store during the first quarter bringing our total store count to 220 stores in 31 states.

We plan to remodel one existing store and relocate another during the second quarter. We continue to believe that new store development is a great opportunity for us to grow sales and profitability going forward.

Turning our attention to current business. For the month of July same-store sales were positive as sales in our retail stores continued their strength across the country including our stores in oil and commodity impacted states, as well as the balance of the chain.

E-commerce sales have continued to improve sequentially compared to the sales in the first quarter. Bootbarn.com have continued its strong growth and sheplers.com improved sequentially.

Today about a month into our second quarter, same-store sales of our overall e-commerce business have improved to approximately flat with the growth at bootbarn.com offsetting more modest declines in sheplers.com. As we look ahead to the remainder of the second quarter and the balance of fiscal 2018, we are optimistic that the return to positive same-store sales growth in our retail stores continued with growth of private brands, the opportunity to reaccelerate growth of sheplers.com and the opening of new stores have us well positioned to achieve our full year top and bottom-line targets.

And now I would like turn the call over to Greg Hackman.

Thank you, Jim. Good afternoon, everyone.

In the first quarter, net sales increased 4.5% to $139.4 million. As Jim mentioned, sales growth was driven by the sales contributions of 11 new stores, a 1.3% increase in same-store sales and sales from the recently acquired Country Outfitter site.

Gross profit increased 1.6% to $41.4 million or 29.7% of net sales compared to gross profit of $40.8 million or 30.5% of net sales in the prior year period. The 80 basis points decrease [ph] in gross profit resulted primarily from deleveraged in volume and occupancy cost of 70 basis points.

But our promotional spends remained in line with the prior year. We continue to expect to drive merchandise margin improvement in fiscal 2018 by increasing our private brand penetration and volume purchases from our third-party vendors.

Operating expense for the quarter was $36.5 million or 26.2% of net sales compared to $36.3 million or 27.2% of net sales in the prior year period. Our income from operations was $4.9 million, or 3.5% of net sales in the first quarter of fiscal 2018, compared to $4.5 million, or 3.3% in the prior-year period.

Interest expense in the first quarter was $3.7 million compared to $3.6 million in the prior year period. Net income for the quarter was $0.8 million or $0.03 per diluted share compared to net income of $0.6 million or $0.02 per diluted share in the prior year period, and compared to our guidance of breakeven.

Turning to the balance sheet, our inventory decreased approximately 4% on an average store basis compared to last year. On a consolidated basis, inventory rose 7% to $192 million compared to a year ago.

The increase was primarily driven by an increase in our warehouse inventory used to support our merchandise purchased at a volume discount and our private brand initiatives, as well as the inventory for our new stores added in the last 12 months. As of July 1, 2017, we had a total of $245 million of debt outstanding, including $63 million drawn on our $135 million revolving credit facility.

We have $7.3 million of cash and our net debt leverage ratio was 4 times. During the quarter we lowered our cost of capital by drawing an additional $10 million from our revolving credit facility to prepay $10 million on our term loan.

Now, I would like to turn to our outlook for fiscal 2018. We continue to expect same-store sales to be flat to slightly positive, and earrings per diluted share in the range of $0.52 to $0.57 per share based on an estimated weighted average diluted share account of 27.1 million shares for the full fiscal year.

This represent income from operations of $37.8 million to $40.0 million. We continue to expect net income for fiscal 2018 to be between $14 million and $15.4 million.

As we look at the second quarter of fiscal 2018, we expect same-store sales to be roughly in line with the first quarter. We also expect to drive gross margin expansion in the second quarter as a result of improved merchandised margins and lower buying and occupancy costs.

We estimate our second quarter net earnings, our net income per diluted share to be in the range of $0.0 to $0.02 per share. Now, I would like to turn the call back to Jim for some closing remarks.

Thanks, Greg. We are encouraged by our first quarter results and the positive moment that has continued into our current quarter.

We continue to be confident in our ability to execute on our four strategic growth initiatives and drive profitable growth in the current fiscal year and over the long-term. I would like to extend my personal appreciations to the more than 3,000 Boot Barn associates across our stores and our store support center offices for continuing to take care of our customers and drive the business forward.

Now I'd like to open the call to your questions. Hector?

Thanks, guys. So can you just breakdown merchandise margins versus the buying and occupancy deleverage that you saw within the gross margin in the first quarter?

I guess how should we think about these components of gross margin as we move into the second quarter and beyond? And more specifically, what's the comp needed to leverage buying an occupancy today?

Matt its Greg. Of the 80 basis points decline, 10 basis points was from the merchandise margin line and 70 basis points was from buying an occupancy.

And as we think about the merchandise margin 10 basis points decline, that was really comprised of improvement in margin from our private brand and vendor direct initiatives. However, that was more than offset by increased freight and duty cost.

And if we break that down a little bit, in general we've seen some increase in freight cost, and I think some other retailers have called that out as well. So we've seen a little bit of pressure on the freight line.

In addition to that, our duty cost was higher this year in Q1 versus last year and that was really driven by heavier apparel penetration this year, which has a higher duty cost associated with it compared to how much apparel we bought in last year in Q1. As we look at the balance of the year the remaining receipts for the balance of the year lines up pretty similar to the balance of the year last year Q2 through Q4.

So we don't expect to see that outsized duty mix that we had in the first quarter. And in terms of the occupancy and buying line, in Q1 this year we had an unfavorable comparison to last year, in the prior year there were some lumpiness between Q1 and Q2.

So this year in Q2, we think we'll see - we expect to see favorable comparison in occupancy and buying. So as we get to a year-to-date Q2 we should see relatively normal comparison and will carry out in Q3 and Q4 as well.

And as we said on our last quarterly call, we need about 1.5% comp on the year to leverage occupancy in buying. So it's really a lumpiness issue Q1 to Q2 in the prior year that's causing a little bit of distortion this quarter.

Great, that's helpful. And then if you broke down your same-store sales performance in the first quarter, what did you see in the oil and gas region I guess maybe from the beginning of the quarter until the end of the quarter?

And what's the expectation that you've embedded for these parts of the country for the balance of the year?

This is Jim. We saw a sequential improvement across the chain of stores between April and May, May into June, July so we have had a nice kind of ascending business, frankly across the whole company or at least on the store side and within Texas and the other three states.

So all three portions of the business have gotten sequentially better and frankly it's not how we modeled it for the second quarter and it's not what we necessarily were expecting for the balance of the year. Having said that it does seem that the business in the oil and commodity impacted states had minimum stabilized if not returned to a decent growth rate.

When you look at it from a merchandizing standpoint and we think about some of the categories that were under pressure when oil prices were declining and would likely be candidates in a recovery. We kind of triangulate to more strength and stability in oil patch because we've seen a nice improvement in flame resistant product, we've seen a nice improvement in Steel Toe Work Boots that are used in the oil patch.

So I would say it's kind of yet another month or another quarter and a month of increased stability in that part of business and it feels good to have that as a positive part of our business and not a mid-single-digits for a good portion of our chain.

That's great to hear. Good luck.

Thank you.

Hey, thanks everyone. Good afternoon.

I had some questions around sheplers.com performance. Jim, I think you said it was negative mid-single through - for Q1.

Could you remind us on where that was last quarter when you faced the initial problems?

Yes, it's a little complicated. What we called out specifically was our e-commerce business, same-store sales for the first quarter was negative mid-single, but if you were to think about the two pieces of our business, bootbarn.com comping strongly positive again, double-digits positive, that would imply that sheplers.com was more significantly negative than a mid-single.

So I would think about roughly a minus 10 sheplers.com for the first quarter that has gotten sequentially better into July and as that improved in July that coupled with another strong month of bootbarn.com for our same-store sales for the e-commerce business to flat for July, which again will certainly not saying we're completely out of the woods with the site migration but it feels a lot better to have that part of our business flat and not a drag. Does that help answer your question?

Yes, it does. And so then the follow up, so I believe you said you now would expect the sheplers.com to be positive in Q3, but this is a business that was coming double-digit positive.

So, maybe with the benefit of two extra months now since you last spoke to us, when do you think the sheplers.com is fully back to normal if you care to give any projection at this point?

It's very difficult as called out in the script and visibility is challenging. I think if we look at what we've seen over the last few months, we've been each month chipping away in getting a bit better and we still have a couple of thing in front of us that the teams are working on that we expect will further improve the mobile site conversion by increasing speed and further improve organic search traffic.

So, if we were to take another 90 days, I think that business should be back to normal and we're going to continue to work on it, we're going to continue to keep you and the investors apprised of it. But I would say as we go into the third quarter we'll be back to a nice growth in sheplers.com and add that to bootbarn.com and the other e-commerce businesses specifically Country Outfitter and I think we'll continue to grow our e-commerce business nicely as we approach the important third quarter and holiday period.

Okay, that's good to hear. And maybe the final question to round it out, so from what I remembered the bootbarn.com and Country Outfitters also need to transition to the new software platform, has that been done at this point and now what's the timing around those?

So Country Outfitter is on a new platform and is working well. Our in-store WHIP tablet which is powered by our e-commerce engine is on the new platform and is working well.

And bootbarn.com is the one remaining piece that hasn't yet converted over. Right now we're planning to that by the end of the quarter.

So, maybe the first week of September, what we like to do is as I quickly pointed out a minute ago there is a couple of things that we continue to work on that we think will further help the sheplers.com business. And we would like to get those put in before we convert bootbarn.com.

But currently the plan is to get back to before the end of the second quarter.

Okay, thanks for the feedback and good luck with the upcoming quarter.

Thanks, Peter.

Yes, hi thanks. Jim, first just want to follow-up on the e-commerce business and maybe specifically on Sheplers, but I know you're indeed deep and driving improvements for that business, I'm just wondering if you could share any more details on some of the metrics where you mentioned seen improvement just any more specific color on any metrics you're willing to share?

Well the two issues that we had called out that we continue to focus on are traffic generated by organic search and while that most of traffic is still down year-over-year and less than it had been for the past couple of months leading up to I'd call it may be either out into June, into July the amount of the decline or the magnitude of the decline narrowed, it's nice to see the traffic piece that sequentially better again still declining, but sequentially better. The second piece is around conversion and just to give the full picture we are pleased with the conversion, when we look at desktop and tablet combined version on the new site is better than last year.

So, from that perspective it's a good story more and more traffic for our site and for most e-commerce businesses are now going to the mobile site. Now, mobile conversion declined year-over-year.

Having said that, while still down that has also improved sequentially. So, if we look at the sheplers.com business in total, the last eight weeks versus the prior call it 16 weeks again we're not quite ready to say we are out of the woods, but it's significantly better than it was - or significantly better over the last eight weeks than it was for the kind of four months prior to that, but still down.

Okay, great. And then maybe following up on the Q2, early Q2 same-store sales you are seeing I think it clearly implied total tracking above what you did for the first quarter overall, and you're guiding somewhat similar to the first quarter.

So, is there anything that you are looking to the next couple of months that would suggest the trend should slowdown or how are you coming up with the comps projection for the full quarter?

Sure, you called it out right our second quarter thus far has been better than our first quarter from a stores comps prospective is bigger change to a pretty significant promotion that we brought our stinky boot promotion earlier out of August into July. And that helped improve our business in July.

Having said that, so we expect that we might have a little bit more difficult August, which is what's kind of wrapped up in the guidance for the second quarter. Having said that though just so everybody is clear, leading into stinky boot in July our business was very solid and better than our first quarter business.

So I think we then got further increase in sales when we went on promotion further two weeks of stinky boot buy and then as we go into August and that promotion unwind we're up against the last and we're up against for the entire month of August. So, that's why the guidance is considers all of that, but again I think we all feel pretty good about the pretty consistent strength now in the stores business several months in our own.

Got it. And maybe just more broadly for the year on the comps guidance, I know you're still kind of saying flat to up slightly and certainly seems like it could be on a better trajectory than that even be low singles if the other website comes back as you expect it to so just curious to hear your reasoning on the full year outlook?

So, I think in overarching in today's retail environment visibility is very complicated. I think for us as we got into Q3, commerce becomes disproportionately larger as a percent of sales than it's for the other three quarters.

And with our biggest e-commerce business, we got more improving skill and a little bit difficulty, it's hard to be overly optimistic until we are certain [ph] that, that business in back on solid ground and is growing. So, I guess as we think about going into Christmas, it will be critical for sheplers.com to be moving and growing and if that's the case then we probably feel better about more optimistic point for the full year.

Okay, great. That's helpful.

Then the last one from me Greg, more of a modeling question on the SG&A. It looked a little unusual to see the dollar spend quite a bit below what you spend in the fourth quarter, I can't recall seeing that historically.

And I'm just wondered if there is anything unique in Q1 for the SG&A spend and any thoughts on how to model the next few quarters would be helpful.

Jonathan, we had a little bit lower corporate overheads and a little bit lower stock comp. So, much like there is a little bit of lumpiness in the Q1 to Q2 compare those are a little bit it ahead in SG&A and then more specifically to your Q4 question.

The other thing is Q4 last year would have had 14th week or the 53rd week. So that maybe playing havoc with your model.

Okay, that's helpful. Thank you.

Thanks. It's Tracy filling in for Paul.

I had one follow-up on guidance, on the EPS line I believe you didn't change your full year guidance, but you said you beat your first quarter EPS number. So, I'm wondering if there was a shift in any other items between 1Q and maybe the balance of the year and maybe additional marketing that made you not raise your full year or you just being conservative.

And then I have a follow-up.

Yes, Tracy, it has more to do with the fact that Q1 is - was our lowest planned quarter and so while we beat and we're and pleased with that. There's a lot of business to do in Q2, Q3, and Q4.

So we just felt like flowing that through was a little bit premature at this point, given how much business we have to do.

Got you. And then my other question was on the gross margin really by concept, I was wondering what your core gross margin at the Boot Barn concept is?

And then really I guess more importantly at the Sheplers brand, how you're seeing the gross margins improve, which is really turned it more over to boots private brands and things like that?

Well, if you think about just the stores part of the business and then I'll come back to online grocery stores, but the legacy Boot Barn and legacy Sheplers stores are all run essentially the same way. So the margin rate by store origin is pretty consistent across the country with some regional pricing mixed in there.

When we look at gross margin come online to stores, online businesses is a little bit more difficult from a margin rate perspective, but we're making some improvements there in adding private brands, in reducing the number of products, number of shipments that we had to ship from our vendors because of associated up charge with that. We've invested and are in the process of finalizing the investment in the sheplers.com for really the e-commerce fulfillment center in Wichita.

So by the end of this quarter, we expect that to have new material handling, and a new warehouse management system up and running. And with those two changes, we should be more efficient from an operational expense standpoint so the cost to pick should come down.

And then finally given the fact that we'd been shipping from the center of the country rather than from Irwin for bootborn.com, I think the freight rate will come down. So I think when we put all those things together we should be able to improve the profitability or the margin to your point of our e-commerce business to get closer to where the stores are for most of the year, the stores tend to have a profitability advantage as we get into December as the December or the Christmas business leverages the fixed cost of occupancy.

And we don't see quite as much leverage on e-commerce side that's more of the expenses variable. So long way to answer to perhaps to your question, but that's the way we're thinking about it.

Got it, thank you. Good luck guys.

Thank you. [Operator Instructions] Our next question comes from Randy Konik with Jefferies.

Please proceed with your question.

Hey, how are you guys? How are you doing?

Hey Randy, how are you?

I am good. Quick question, just want to really clarify here so, just back on the sheplers.com just so we can clarify this.

So are you comfortable with the functionality of the sites are we have full functionality in all kind of processes are have been kind of fixed on the frontend and backend and there is just some site speed issues and just driving traffic to the site. I just want to clarify where we are in the functionality versus getting people to the site and so forth.

It's a very good question and I appreciate it you're asking it. The good news in all of it is when we launch the new site it truly did work well and it's more than just for everybody benefit it's more than just the frontend store front.

Right it's frontend store front the order management system, it's all the connectivity to our inventory pricing, payments, credit cards is there all of that effectively works day one. So, there has been some silver lining in all this but we got the site up and running and it was operational from the get go.

And another thing that works better than expected was the conversion. So number of people that were buying versus those that got to the site from desktop or tablet got better.

You're - the way you recapped is exacted right we have two issues that are impacting the demand line, one is these number of folks that come to the site based on organic search so this is typing boots or western boots into Google and having Google prioritize Sheplers on the page not the paper quick site. But the free site that immediately after we launched the site we expected to see a slight decline in organic search unfortunately it was more than a slight decline and it lasted longer than we had anticipated and frankly than anyone including the consultants and outside parties and demand aware, et cetera had called out or more than anyone expected.

So, it's the traffic coming to the site of organic search and the second is from a conversion standpoint purely on a handheld device that conversion declined and most of the decline in handheld we believe is due to site speed. We've identified a couple of pretty specific things that we believe are fixable and over the next call it three to four weeks we expect to get those up and running and that should improve the site speed and accordingly improve the conversion of the mobile experience.

And that would be big deal in getting that business back to growth.

And then have you done some math calculation to think about how much of a drag on the hole that we are seeing from a revenue line item respective? And then also some margin I guess dilution or added expense that's being incurred on the income statement for the quarter that we can be thinking about?

Yes, the expenses associated with fixing the site is relatively immaterial and it's cooperated in our guidance of $0.52 to $0.57 and I'm not sure I caught the revenue question so I apologize.

Just would you have expected the revenue kind of growth rate be similar in trend to bootbarn.com assuming all else equal, just didn't happen?

No, I think a better benchmark is what was sheplers.com growing prior to the conversion, bootbarn.com is just starting with a much smaller base right a fourth roughly of what Sheplers business is. And have a higher growth rate typically for the past few quarters.

I think the other thing driving the growth rate of bootbarn.com is not only is that a smaller business, but it also benefits from all the marking across out for Boot Barn stores. So, I think from a pure rate perspective bootbarn.com should - has grown more than sheplers.com and probably that will continue for a while.

But Sheplers is still the bigger business and if we can get that to a positive comp, we take a low single-digit stores comp and add to it and we would be mid-single-digits for the company and it would be a much better place to be.

Understood. So let me get off this topic for my last question, just very interested about this Miranda Lambert partnership, so can you give us some - I felt like what you said in terms of the categories is going to encompass is a believe wider than the categories that the Brad Paisley partnership encompasses can you clarify that if that's the case or not?

And then as you think about this opportunity, do you think about changing your long-term forecast or the long-term potential of driving a higher private label business, which would obviously also have a positive margin implication for the company. Just any color further around that would be very helpful.

Thanks guys.

Sure. Well first take the Miranda new agreement is a great addition to the company we are thrilled with the partnership we look forward to the launch of the line, she is just a tremendous person.

And I think together with her will be great for the lifestyle and great for our customer and hopefully great also for her fans. I think just to compare her line to Brad Paisley's line we'll have boots, we'll have apparel, we'll have hates, we'll have accessories, I think the breadth of the line will be pretty much the same.

We also intend to give Miranda a dedicated part of the store, whether that's a fixture or a well presentation or both depending on the store. She has just an incredible following.

She is truly a remarkable artist. She has got more than 8 million Facebook likes or fans, she has got 3 million plus Instagram fans.

So when we combine her following, which - with ours and ours tails in comparison to her if I'm honest, I just think those groups will combine and help grow our business in private brands help grow traffic to our stores. And again hopefully we can return the favor to her and help build her brand because she truly is a fantastic artist and just a great person.

We likely will get an acceleration in private brand with that new line. So we'll - I think it's premature to give a real estimate for that because it would be second half of next year.

So as we get further into this year or probably more likely when we outline our guidance for next fiscal year, we'll kind built that in. But I think you can anticipate that will grow our private brand business a bit, just help everybody scale that.

I think everybody realizes that while ladies boots is about a third of our boots business, ladies apparel is smaller than men's apparel. So this is not going to completely change the trajectory of the business from a private brand perspective, but I do think it will add a bit and add some more interest to the store, drive traffic to Boot Barn stores and to bootbarn.com as well as our other e-commerce businesses.

And again of course, it will exclusive to her. So it's something that our customers and her fans will have to shop with us to enjoy that new merchandize line.

Great, thank you.

Thanks, Randy.

Hey, guys thanks for taking my question. I was wondering did you quantify the contribution from Country Outfitters in the quarter and can you just sort of generally talk about the strategy there I think you talked about trying to target a slightly different customer?

Is that relative to your existing Boot Barn business or is it relative to Country Outfitter used to cater to and just general strategies to sort of improved that business. Thanks.

Tom, I'll take the first part of your question then I'll turn it over to Jim. We did not specifically say how much Country Outfitters contributed to the sales, but we typically place these things in order of magnitude.

So the 11 new stores which is the biggest contributor of the increase in sales than a 1.3% sales - same-store sales growth in the Country Outfitters. So you can deduce from that but it was under call it $1.5 million.

And just to add to that the nice thing about that business is most of it is net new business for us. So it's customers that we didn't have any in our overall database, including bootbarn.com, Boot Barn store and sheplers.com.

So, it's nice to be able to expand kind of in a concentric circle around our core business and add the Country Outfitters customer to our overall portfolio of customers and have it the net new business and while it doesn't roll into our comp, it feels exactly like a comp dollar on sheplers.com or bootbarn.com, it's equivalent to specific runs through the same backend and the same fulfillment center. So the flow through a Country Outfitter dollar is similar to the flow through of another dollar on either of our other sites, even though we don't get credit for it in same-store sales until next year.

Does that help answer your question.

That does. Thank you, guys.

Thanks, Tom.

Hector I think that's all the covering analysts.

Sure. Thank you everyone for joining the call today.

We look forward to speaking with you all again on our second quarter earnings call in November. Take care.