Low oil prices are typically considered a boon for consumers' wallets.
But as the cost of a barrel of oil continues to plummet, Boot Barn — a company that specializes in Western and work-related footwear — said sales during its recently ended quarter were weak in regions where the local economy depends on the energy sector for jobs.
"During the third quarter, we faced increasing headwinds due to the softening of local economies dependent on oil and other commodities," said Boot Barn CEO Jim Conroy said.
According to preliminary figures, same-store sales declined roughly 2 percent in the period ended Dec. 26, compared with previous guidance for low-single-digit growth. Conroy noted that the retailer continues to log gains in many of its core markets that do not have significant exposure to commodity prices, including California, Arizona and Nevada.
Boot Barn is not the first retailer to cite pressure from oil-dependent markets. Earlier this week, Stage Stores CEO Michael Glazer said the company's holiday sales decline fell in line with expectations, "despite continued pressure on stores impacted by the oil and gas industry."
Glazer previously attributed part of the company's third-quarter same-store decline to softness in stores with exposure to oil and gas. Whereas overall comparable sales dipped 3.5 percent during that period, they dropped in the mid-single digits in those economies.
Michael Kors and Restoration Hardware also mentioned oil prices as a detriment to their recent performance in Texas, while Kohl's — though it did not specifically call out oil prices — said the South Central region, in particular Texas, was the most challenging in the third quarter.
Not all retailers have reported weakness in the region. Plano, Texas-based J.C. Penney said on its third-quarter call that all regions of the U.S. saw sales gains during the period, with the Southern and Western regions delivering the best performance. And Ross Stores, which also relies on the oil economy for a chunk of its sales, told investors in November that sales in Texas were in line with the chain average for the third quarter.
With oil prices plunging to their lowest level since 2003 on Tuesday, investors will be watching retailers' fourth-quarter earnings announcements, which begin in earnest in February, for further signs of the oil market's impact on sales. According to a recent report, low oil prices caused more than 258,000 layoffs globally last year.
As for Boot Barn, BB&T Capital Markets analyst Corinna Freedman remains cautious on the retailer's near-term performance.
"As oil continues to decline, we expect this could represent a more significant headwind in the foreseeable future," she said.