Company: SPWH
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0000950170-25-048890
Chunk: 568

Company: SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 6
Chunk 568
---
12, 2025, the Oregon Court of Appeals ruled that the ballot measure is constitutional under Oregon's state constitution and gave the plaintiffs 35 days to appeal the decision.  As a result, sales of firearms in Oregon may be halted or substantially diminished until all permitting and training programs are fully developed by 

44

the state and/or law enforcement agencies. If that were to occur, it could result in a substantial decline in our sales of firearms and related products and reduce traffic to our stores in Oregon, which could have a substantial impact on our sales and gross margin. 

A pending bill in the Oregon House (HB 3075) seeks to delay the implementation of the permitting requirement until July 2026 and provides for certain exemptions (notably for law enforcement and military members). We currently operate eight stores in the State of Oregon.

Opening new stores and acquiring store locations is also an important part of our long-term growth strategy. During fiscal year 2023, we opened 15 new stores. We did not open any new stores in fiscal year 2024 and we plan to open one new store in fiscal year 2025. We may deviate from this target if attractive opportunities are presented to open stores or acquire new store locations outside of our target growth rate. 

We also have been scaling our e-commerce platform and increasing sales through our website, www.sportsmans.com. 

We believe the key drivers to increasing our total net sales include: 

•increasing and improving same store sales in our existing markets; 

•increasing customer visits to our stores and improving our conversion rate through focused marketing efforts and continually high standards of customer service;  

•expanding our omni-channel capabilities through refined product assortment, expanded content and expertise and better user experience;

•increasing our total gross square footage by opening new stores; and

•growing our loyalty and credit card programs.

Gross Margin 

Gross profit consists of our net sales less cost of goods sold. Gross margin measures our gross profit as a percentage of net sales. Our cost of goods sold primarily consists of merchandise acquisition costs, including freight-in costs, shipping costs, payment term discounts received from the vendor and vendor allowances and rebates associated directly with merchandise and shipping costs related to e-commerce sales.

We believe the key drivers to improving our gross margin are increasing the product mix to higher margin products, particularly apparel and footwear, increasing foot traffic within our stores and traffic to our website, improving buying opportunities with our vendor partners and coordinating pricing strategies among our stores and our