Tuesday, Craig-Hallum adjusted its price target on Boot Barn (NYSE: NYSE:BOOT) to $160 from $162, while keeping a Hold rating on the stock. The firm's analyst cited the company's strong second fiscal quarter results, with same-store sales (SSS) growth reaching mid-single digits (MSD) and an increase in the fiscal year 2025 guidance that surpassed the quarter's beat. However, the focus was on the announcement that CEO Jim Conroy is set to leave Boot Barn in November to assume the same role at Ross Stores (NASDAQ:ROST).
Conroy has been acknowledged for his exceptional leadership over the past 12 years, driving Boot Barn to become one of the top growth narratives in the retail sector. His impending departure is expected to be viewed unfavorably by the market. Despite this change, the analyst believes Boot Barn's management team is robust and capable of securing a high-caliber replacement. Interim CEO John Hazen is considered a potential permanent successor.
Boot Barn's fundamentals remain solid, with consistent unit growth and the anticipation that third fiscal quarter SSS will also rise to MSD levels. The analyst noted that some investors might be dissatisfied with the lack of greater margin expansion, despite the robust comparable sales performance.
The firm's stance on Boot Barn remains positive, but it advises a more opportune moment for investment, considering the stock's current valuation is at the higher end of its historical range. The revised price target of $160 reflects a cautious but still favorable outlook on the company's ongoing story.
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