Sportsman's Warehouse Holdings Inc. (SPWH) posted third-quarter results that technically checked the boxes—earnings met expectations, revenue came in a hair above estimates—but Wall Street wasn't impressed. The outdoor retailer's shares tumbled more than a third on Friday as analysts raced to lower their price targets.

The numbers tell an interesting story. Sportsman's Warehouse reported quarterly earnings of 8 cents per share, matching analyst consensus exactly. Revenue came in at $331.3 million, just edging past the $331.1 million estimate. Not bad, right?

Here's where it gets tricky. The company now expects fiscal 2025 net sales to be flat to up slightly, with adjusted EBITDA landing somewhere between $22 million and $26 million. That guidance apparently didn't inspire much confidence, given the stock's nosedive to $1.60.

CEO Paul Stone emphasized the positive momentum in his statement: "This quarter we delivered our third consecutive period of positive same-store sales growth, driven by strong performance in our hunting, fishing, firearms, and personal protection categories, while continuing to gain share in a highly promotional and challenging retail environment."

Stone also highlighted the company's new Surprise, Arizona location that opened in early November—the company's 11th store in the state. It's their first personal protection-focused concept, and notably, it's the only store opening planned for both 2025 and 2026. Stone framed this as "thoughtful capital management," which is corporate speak for being careful with the checkbook.

The Analyst Response

Following the earnings announcement, two analysts made substantial cuts to their price targets on Sportsman's Warehouse:

Baird analyst Peter Benedict maintained his Neutral rating but slashed his price target from $3.50 to $2.00—a 43% reduction that suggests he sees limited upside even at the current depressed levels.

Roth Capital analyst Matt Koranda kept his Buy rating intact but cut his price target from $4.25 to $2.25. Even with the Buy recommendation, that's a 47% haircut to his previous target.

The disconnect here is fascinating. Three straight quarters of same-store sales growth in a "highly promotional and challenging retail environment" sounds like a company doing something right. But when your stock drops 35% on earnings day and analysts are cutting targets in half, the market is clearly worried about something beyond this quarter's performance—probably that flat-to-slightly-up guidance for the full year.