All right. Good afternoon, everyone. My name is Peter Keith. I'm a Senior Research Analyst at Piper Sandler. Very happy today to introduce to you Boot Barn. Boot Barn, which you may already know, they're the nation's largest lifestyle retailer of Western and work products, with 382 stores. Presenting from Boot Barn is gonna be CEO Jim Conroy. In my view, Jim has a tradition of giving one of the best presentations at ICR. With those high expectations, I'd like to introduce Jim Conroy.
Thank you very much. I'm not sure how the heck I'm gonna live up to that, but I'll give it a shot. By the way, the clock's not working. Well, welcome, everybody. I appreciate you guys all coming to hear the spiel. I will try to live up to Peter's lofty expectations. He's been tracking our stock since we went public in October of 2014. Most of what he told us has come true. I'll point out the parts that he may have misguided us a bit. In terms of the agenda today, a quick short-term view of the quarter, and then zooming way back to look at the company, much bigger picture, tell you a little bit about the story of Boot Barn, and then tick through our four strategic initiatives, which are the same as they've always been.
If we start with the quarter, we did, in fact, grow sales. So our sales grew modestly by about 1%, and admittedly, all of that growth came from the development of new stores and opening up of new stores. From a same store sales perspective, we were -9.7%. It's unusual for Boot Barn to be negative. For the last decade, we've averaged about +8%. If you look out, back a couple of years and the numbers on the slide, we had a three-year stack of +65%, and unfortunately, we've given a little bit of that back. Despite that, though, we were still able to grow merchandise margin. So we left the quarter clean from an inventory standpoint and added to our merchandise margin, and amazingly, we're able to grow EPS year-over-year.
So we'll give more specific numbers when we officially announce our quarterly financials, but right now, we expect earnings to come in at or above what we guided. So if we look at guidance, total sales were pretty close to our range, slightly short. Both operating income and earnings per share will be at or above our guidance. So it does sort of demonstrate the resiliency of our model, that we can grow earnings despite a negative 10 comp. Zooming way out, looking at the Boot Barn story, we are the number one player in a huge $40 billion industry. We have one formidable competitor. We have 382 stores. They have about 98. The balance of the industry is made up of single- shingle mom-and-pop operators. We have an enormous opportunity to continue to grow new units, and we have developed a national brand.
Please note, nowhere up there do we position ourselves as a footwear company. We are much more than a footwear company. We are truly a high-growth company, a high-growth retailer with multiple levers of growth. Same-store sales, new stores, merchandise margin, SG&A leverage, et cetera. And you'll see, those have come to play to help us continue to expand earnings despite soft same-store sales. We service a very broad customer base, and I put this one picture up there because I think there's a natural inclination for people to believe that we service a Western cowboy ranching customer, and that's true. That is our best customer. But if you look past that, and we probably have guided you a little bit too much to that customer, our customer is everywhere.
When you leave New York, and you fly to Los Angeles, and you look down for 5.5 hours of that 6-hour flight, you're looking at our customer. They build America, they feed America, they protect America. They're your contractor. If you drive to Buffalo from Manhattan, you will drive through nothing but dairy farms and a very rural environment, and those folks don't look at our product as Western wear. They look at our boots and our jeans and our jackets as just their wardrobe, just their clothing. This is what the business looked like when I got here 11 years ago. We were 86 stores in eight states. 11 years later, we're 382 stores in 44 states.
One of the notable things about Boot Barn, I think it's pretty unique in the retail world, every single one of those stores is EBITDA positive on a four-wall basis. We've really been focusing on building the Boot Barn brand. So nationwide, our brand awareness is about 48%. For those in the Northeast, I live in Greenwich, Connecticut, you've never heard of us, your family's never heard of us. That's not surprising. In the eastern part of the U.S., the brand awareness is about 33%. But if you look at where we've had presence for several years now, California, where we started, Texas, where we entered in 2015, our brand awareness is 60%-70%. So we've really been focusing on building a true lifestyle brand, and as we continue to expand in the Northeast, I'd expect that number to come up as well.
And this is one of the most exciting things, because now we're getting customer traffic based on the brand itself and the word of mouth of that brand as we enter new markets. This is our sales for the last decade. And I'm pretty encouraged by that, right? We've added more than $100 million of sales every year for over 11 years. And if you look at it from a compounded growth standpoint, we've grown about 20% on average every year. For those unfamiliar with the Boot Barn story, you'd probably look at that and say, "Must be a digital native, direct-to-consumer company. Who has that kind of growth in retail?" I'll disarm you of that in a second, 'cause this is our earnings growth, which is even more, which you wouldn't see.
So we've been able to grow 34% from a profitability standpoint over that same decade. And there are a couple of bars missing, which I'll show you in a second, but when I look at the business, I'm incredibly encouraged that we've been able to grow sales 20% on average, grow earnings more than 30%, and the part that's getting a little bit caught up in the story is, unfortunately, we're earning less this year than we did a couple of years ago. But if you look at the business and say, "Well, you're earning $222 million now," they've had this massive step up from $86 million. Unfortunately, I've missed. I must have missed the run-up. The profitability of the company is nearly two and a half times what it used to be.
You're in luck, the stock price hasn't changed. We have been recognized nationally. We've gotten some really nice awards. The one we're most proud of is the one on the bottom. We're one of the top 100 fastest-growing companies in the world, not retailers in the U.S., but companies in the world. So that was just a really nice acknowledgement to the entire Boot Barn team across the country for growing what I think is just a phenomenal brand. Now we'll walk through each of the four strategic initiatives and try to anticipate some of the questions that we get from investors after each one. We make no apologies for focusing first on our stores, and the reason for that is almost 90% of our business goes through our retail stores, and only 11% of our business goes through our e-commerce channel.
Generally, investors say, "Well, that's because your customer is rural, and they don't have internet coverage, or they want to shop at a store." The truth of the matter is our customer does over-index stores versus digital, but not that much. This is what the rest of the retail world looks like. I fully recognize that 99% of newspaper headlines talk about digital growth. Most of the country, in our kind of product, clothing and general merchandise, is transacted in a store. If we added food to this grocery, it would be even higher. So we're really not that far off the rest of the industry. So let's talk about the stores. This is what our new store format looks like.
Historically, we really leaned Western, but we've changed everything about the company, the assortment, the marketing, and the in-store environment, to be much more welcoming to customers that are outside of our industry, and that has enabled us to more than double our business in five years. Boots, of course, are our signature category. They're about half of our business in total, but only about one in three transactions include footwear. So when we look at what's been driving the growth of our business, it's across the entire store. As promised, trying to answer some of the questions that we've gotten from investors or that we traditionally get from investors. The first is, "Why are you opening stores in a negative same-store sales environment, you dumbass?" That's gonna be on the transcript. It's a very simple answer.
I think generally, when people see retailers comping negative, they think one of two things have happened. One, they're cannibalizing their sales in their mature markets, and that's why they're comping negative. Or two, the model's not working in some of their new markets. Neither of those are true. So when we look at the end of this year, we think we'll have 397 stores. That's at the end of March. We think we can open 500 more stores. Conservatively, if they do $3 million each, that'll be $1.5 billion. We'll nearly double the size of the company. They pay back in eighteen months and have a 66% return on capital. In my view, the real question isn't w hy are you opening stores?, i s c an you open more stores in this environment? Let's talk about same-store sales growth.
What we do often put up this slide of this virtuous cycle, right? We've taken a position to expand the Boot Barn brand outside of pure Western and invite more customers in, and we've elevated the brand, we've broadened the product assortment, and we continue to invest in the customer experience, particularly in the store. And we've really transformed what Boot Barn looks like. This is an old view of our marketing. It was very promotional and very much in your face, and we were talking about products at a price point. We've completely scrapped that view about five years ago, and that transformed the business and enabled us to double the size of the company as we've taken the branding up multiple levels and really put the lifestyle on a pedestal and romanticized the Western industry.
I think you could ask nearly anybody that works within the Western or work business, who's driving the top-line growth for the industry? Who's the creative muse? And it's Boot Barn. In terms of broadening our reach, and the top left picture is a picture of what's called Cowboy Christmas at the rodeo in Las Vegas that happens every year. They sell out Thomas & Mack 10 nights in a row for 30 years in a row, and that's our core customer. Every single person in that arena knows who Boot Barn is. But in order for us to continue the growth that we've had, we're looking at more and more places to bring additional customers in: NFL partnerships, NASCAR partnerships, partnerships with Morgan Wallen from a country music standpoint, all in the spirit of opening the aperture and adding additional customers.
So same-store sales have been perennially strong, and then we hit this incredible number of a 53.7%. If you break that into two pieces, for the first seven years on the page, we averaged a +6%. Somehow, everybody's worried about our same-store sales growth. For the next period of time, we've averaged a +11%. Our average unit volume used to be $2.7 million, now it's worth of $4 million. The candid answer is, we're actually not terribly worried about our same-store sales growth. We might give a little bit of it back, but we have plenty of growth drivers, and we fully expect that same-store sales will get to a positive trajectory relatively soon. One of the businesses that's been more difficult for us is the ladies' business.
So one of the questions that we get from a same-store sales perspective is, when do you think the ladies' business will get better? Well, this is the last 11 quarters of same-store sales for ladies' boots and apparel. So for a year, that business comped approximately 100%. That's comp, not total. We've given a little bit of that back, but the ladies' business really is hardly broken. It's still a bigger share of our store today, at 22%, than it was prior to this growth, at 19%. So we've called this out. We did benefit from a little bit of a fashion trend in this part of our business two years ago, and now we're paying a little bit of that back, but that business is still extremely strong for us.
Was it Taylor Swift that generated the outside sales lift? She is an amazing artist, but it wasn't Taylor Swift, and the reason I know that is that's when the Taylor Swift concert series began. So unless our core customer was anticipating her announcing a concert series and started buying product two years ago, it had nothing to do with Taylor Swift. Our third strategic initiative, continue omnichannel leadership. We are always focused on the combination of stores and e-commerce, so we really focus on that integration. We do have four ways of selling digitally. So at bootbarn.com, if you looked at our business and the results that we publish, you'd see a negative same-store sales for e-commerce in general. bootbarn.com, specifically, was much better than the total business. bootbarn.com was about a negative 2 comp in the quarter.
It was dragged down by two other sites that we continue to operate. One is Sheplers, that goes after a price-sensitive customer, and the other is Country Outfitter, that goes after a very fashionable female customer, and as we just discussed, that business is under distress. Then finally, we also sell on Amazon, a decent but small channel, and not a very profitable one. So what we focus our digital team on is, first, how do we drive store traffic using e-commerce or using digital marketing? Many companies put their best and most expensive and most fashionable product on their site and the more basic product in the stores. We've completely flipped that, so the best product that we have is in the stores, and if you want to buy it online, we just simply fulfill it from the stores.
We also have been working on continuing to find more efficient ways of shipping, so we can fulfill from our distribution centers. We can fulfill from stores. And then finally, we focus on profitability of our online channel. I do think we're somewhat unique in doing so. So we establish a limit in terms of return on ad spend that we will approach, but not go over. So if same-store sales on our e-commerce channel are negative, we won't spend up to ad just that or to impact that, if it's going to be EBIT-eroding. In terms of the integration of channels, 60% of our online business is touched by a store associate in one way or another, so we have really melded these two channels together. One of the questions we often get is, w hy hasn't e-commerce grown as a percentage of sales?
Part of the reason is this is just our store sales. So given the fact that historically, our stores have been comping positive, x-ing out e-commerce, and we're adding 15% new units, our store revenue is growing so fast that e-commerce can't keep up, so it's only 11% of sales. If you benchmark that to how the e-commerce channel has been doing. I think everybody's expectation is e-commerce is going like this. Well, this is e-commerce, total U.S. retail sales in clothing and general merchandise for the last five years. There was a nice step up from COVID, right, in 2020, and then it's been 14% of total sales from that point forward.
The one comment I would make, when we look at the two channels, is the moment that the investment community holds direct-to-consumer companies to the same profitability standards that they hold real companies to, that number's likely to go down. Let's talk about exclusive brands. We have about 12 exclusive brands. They're sort of segmented between our different customer categories: W estern, country, work, male, and female. three of our exclusive brands are in our top five brands in the entire store. Idyllwind is only five years old and is now the number 5 selling brand. Cody James is the number one brand in the entire company, bigger than every vendor that you might have heard of. So we're really thrilled with the exclusive brand performance in our business.
If we look at it just for the quarter, we did have some nice growth in exclusive brand sales in our third quarter. If we take a broader look, this is what that business has done over the last 10 years. It's grown from $5 million to $640 million in total sales. It's unbelievably important to us because it gives us some competitive differentiation, and it's margin accretive by 1,000 basis points. So can exclusive brand penetration continue to grow and provide margin expansion? We believe it can. This is the exclusive brand penetration as a percent, so we're now at 38% of sales. When we went public, we thought we could grow at about two or three points of penetration every year, and we've been far exceeding that. We're at four or five points of penetration every year.
So we do think there's more opportunities to continue to grow exclusive brands up to 45%- 50%. But notably, one of the things that I think is lost in our story is this is only one of our merchandise margin drivers. If I go back to that page that I showed you earlier and let some of that fade away, we were much more promotional and sale-oriented eight or nine years ago. And as we've continued to evolve the Boot Barn brand and become more top of mind, we are much less promotional, and we have very few markdowns. So the vast majority of what we sell now is at full price. So if you say, "Well, where did your merchandise margin accretion come from?" Well, we have the exclusive brands. Since fiscal 2019, we've grown by 22 percentage points of penetration.
It's 1000 basis points of margin accretion, so that gave us 220 basis points of margin accretion. Over the last six years, though, we've grown margin by 650 basis points. So if I take that 220 and that 650, only a third of our merchandise margin accretion is due to exclusive brands. We did have an investor say, "You know, no one's going to give you any credit for the margin accretion that's not exclusive brands." He was right, but it's still there. Two more pages, thinking about the future growth potential. One of the questions we're often asked is: When will Boot Barn return to our long-term algorithm, the one when we went public with Peter Keith, as one of our five analysts, helped us construct?
Our long-term algorithm then was, "Let's grow new stores by 10% new units each year, and those new stores can do $1.7 million per store. Let's grow same-store sales low to mid-single digits. Merchandise margin can improve by 25 basis points a year, and you'll grow earnings per share by 20% if you can do those things. And then valuation will be 1.5x PEG, and you'll trade at a 30x multiple." Let's see what we've done based on that. Well, our actual performance, we're now growing stores 15% annually. We did that last year, we'll do that again this year. Our new stores are no longer doing $1.7 million, they're doing $3+ million. Our same-store sales, while in the quarter were negative, have averaged 11% over the last four years, including this year.
Our merchandise margin has grown by over 100 basis points every year for the last six years, and we've grown earnings for that same period by 30%. So honestly, I hope we don't return to the long-term algorithm, because it'll be much worse than the performance we've been putting up. This is how it results in earnings per share. We've grown our EPS from $1.64 to $5. If I now take a second to think, going forward, what's our opportunity? I will give one small caveat. This is an illustrative example. This is in guidance. This isn't a projection. But I do want to introduce a new way of thinking about our growth.
If we take the different dimensions, and we start with same-store sales, and we say, "All right, our comp base today is $1.5 billion," and over the next four years, you grow 2.5%, and there's a flow-through, et cetera, that will contribute cumulatively about $50 million. If we do the similar math for new stores, we open about 60 stores a year, or 15% new units, and they achieve $3 million over the next four years cumulatively, that'll be $270 million of EBITDA contribution. On the margin side, that 25 basis points that we promised, you roll that same math forward, it's $40 million.
So in total, we have a pretty good line of sight of $360 million of cumulative EBITDA, or if you look at it on a one-year basis, in the fourth year, we have a pretty good line of sight for $110 million of additional EBITDA, and I think many of those numbers are pretty conservative. 2.5 points of comp, we've overachieved that. By the way, if it's - 2.5% comp, we'll lose $13 million. But the biggest number on this page that gets us to $110 million is new stores, and we are pretty committed to driving 15% new-store growth with a 66% return on capital.
I think the growth in addition to that, from a same-store sales perspective and from a margin perspective, will just be gravy on top. I do appreciate everybody's time and attention. Thank you very much.