Can Boot Barn Continue to Expand Its Merchandise Margin?

Boot Barn Holdings (BOOT) exceeded merchandise margin expectations in Q1 fiscal 2027 with a 220 basis point increase, driven by tariff refunds and stronger product margins. The company's work boots business showed robust demand, attracting new customers despite lower exclusive-brand penetration. Management raised full-year merchandise margin guidance to approximately 60 basis points expansion (excluding tariff refunds), supported by buying economies of scale, improved full-price selling, and supply-chain efficiencies.