- Reiterates Full Year Comparable Sales and Diluted EPS
Guidance
- Q3 Comparable Sales Increase 9.9% Versus Prior Year;
Comparable Sales Increase 51.7% Versus Q3 of Fiscal 2020
(pre-pandemic)
- Q3 Diluted EPS of $1.94; Increase of 15.5% Versus Prior
Year; Up Nearly 15x Versus Q3 of Fiscal 2020
(pre-pandemic)
Hibbett, Inc. (Nasdaq/GS: HIBB), an athletic-inspired fashion
retailer, today provided financial results for its third quarter
ended October 29, 2022, and business updates.
Mike Longo, President and Chief Executive Officer, stated, “Our
third quarter performance was highlighted by solid top-line growth,
with comparable sales up nearly 10% over the prior year period
including an impressive e-commerce increase of 22.0%. These results
reflect a strong back-to-school season, which fell more in the
third quarter this year than the second quarter as consumers waited
closer to the start of school to make purchases. We experienced
strong demand for our popular lines of footwear, reflecting
continued consumer loyalty to our key brands while our apparel
sales for the quarter were pressured by a more competitive pricing
environment. Additionally, margins were affected by continued high
freight and fuel costs and wage inflation.”
Mr. Longo continued, “We are very proud of our team as they
continue to execute both strategically and operationally in a
dynamic environment. We have a proven business model, and we remain
laser focused on enhancing the consumer experience with
best-in-class service both in stores and online. We believe a
compelling, quality product mix that appeals to our
fashion-conscious customers is an important differentiator for
Hibbett. Our omni-channel platform has also continued to perform
well, and we are excited about the opportunities to expand our
capabilities across this important sales channel.
Mr. Longo concluded, “As we enter the fourth quarter and the
busy holiday selling season, we believe we are well positioned to
meet our objectives for Fiscal 2023. As a result, we are confirming
our previous full-year guidance. We have a strong inventory
position and favorable vendor relationships to ensure we can meet
the demands of our customers. Our new store openings are performing
above expectations, and we will continue to identify opportunities
to extend our market reach. We look forward to a successful year
for Hibbett with a commitment to delivering a performance that
rewards our loyal customers and creates value for our
stockholders.”
Third Quarter Results
Net sales for the 13-weeks ended October 29, 2022, increased
13.5% to $433.2 million compared with $381.7 million for the
13-weeks ended October 30, 2021. Comparable sales increased 9.9%
versus the prior year and increased by 51.7% compared to the
13-weeks ended November 2, 2019 (“Fiscal 2020”), the most relevant
comparable period prior to the COVID-19 pandemic. Brick and mortar
comparable sales were up 7.9% while e-commerce sales increased
22.0% on a year-over-year basis. In relation to the 13-weeks ended
November 2, 2019, brick and mortar comparable sales increased 42.5%
and e-commerce sales grew 124.7%. E-commerce represented 15.0% of
total net sales for the 13-weeks ended October 29, 2022, compared
to 14.0% in the 13-weeks ended October 30, 2021, and 10.5% of total
net sales for the 13-weeks ended November 2, 2019.
Gross margin was 34.3% of net sales for the 13-weeks ended
October 29, 2022, compared with 36.3% of net sales for the 13-weeks
ended October 30, 2021. The approximate 200 basis point decline was
driven by lower average product margin of approximately 245 basis
points partially offset by expense leverage in our logistics
operations of approximately 45 basis points.
Store operating, selling and administrative (“SG&A”)
expenses were 23.9% of net sales for the 13-weeks ended October 29,
2022, compared with 25.2% of net sales for the 13-weeks ended
October 30, 2021. The decrease of 130 basis points is primarily the
result of leverage from the year-over-year sales increase.
Net income for the 13-weeks ended October 29, 2022, was $25.6
million, or $1.94 per diluted share, compared with net income of
$25.2 million, or $1.68 per diluted share, for the 13-weeks ended
October 30, 2021.
For the 13-weeks ended October 29, 2022, we opened nine net new
stores, bringing the store base to 1,126 in 36 states.
As of October 29, 2022, we had $25.1 million of available cash
and cash equivalents on our unaudited condensed consolidated
balance sheet and $51.7 million of debt outstanding, leaving $73.3
million available under our $125.0 million unsecured credit
facility.
Inventory as of October 29, 2022, was $404.8 million, a 56.4%
increase compared to the prior year third quarter and up 83.0% from
the beginning of the year.
During the 13-weeks ended October 29, 2022, we repurchased
160,637 shares of common stock under our Stock Repurchase Program
(the “Repurchase Program”) for a total expenditure of $9.0 million.
The Company also paid a quarterly dividend equal to $0.25 per
outstanding common share that resulted in a cash outlay of $3.2
million.
Fiscal 2023 Year-to-Date
Results
Net sales for the 39-weeks ended October 29, 2022, decreased
4.4% to $1.25 billion compared with $1.31 billion for the 39-weeks
ended October 30, 2021. Comparable sales decreased 7.4% versus the
39-weeks ended October 30, 2021 but increased by 41.3% compared to
the 39-weeks ended November 2, 2019. Brick and mortar comparable
sales declined 10.2% and e-commerce sales increased 11.2% compared
to the 39-weeks ended October 30, 2021. In relation to the 39-weeks
ended November 2, 2019, brick and mortar comparable sales increased
31.0% and e-commerce sales grew 135.5% over the three-year period.
E-commerce represented 14.9% of total net sales for the 39-weeks
ended October 29, 2022, compared to 12.8% in the 39-weeks ended
October 30, 2021, and 9.1% of total net sales for the 39-weeks
ended November 2, 2019.
Gross margin was 35.3% of net sales for the 39-weeks ended
October 29, 2022, compared with 39.1% of net sales for the 39-weeks
ended October 30, 2021. The approximate 380 basis point decline was
due to lower average product margin of approximately 225 basis
points, higher freight and transportation costs of approximately 90
basis points and deleverage of store occupancy costs of
approximately 90 basis points. These unfavorable impacts to gross
margin were partially offset by expense leverage of approximately
25 basis points in our logistics operations.
SG&A expenses were 23.2% of net sales for the 39-weeks ended
October 29, 2022, compared with 21.5% of net sales for the 39-weeks
ended October 30, 2021. The approximate 170 basis point increase is
primarily the result of deleverage from the year-over-year sales
decline in categories such as wages, data processing, and
advertising.
Net income for the 39-weeks ended October 29, 2022, was $89.6
million, or $6.71 per diluted share, compared with $156.7 million,
or $9.74 per diluted share for the 39-weeks ended October 30,
2021.
Capital expenditures during the 39-weeks ended October 29, 2022,
were $47.5 million compared to $43.9 million in the 39-weeks ended
October 30, 2021. Capital expenditures were predominantly related
to store initiatives including new store openings, relocations,
expansions, remodels and technology upgrades.
Fiscal 2023 Outlook
We expect to continue facing a number of business and economic
challenges in the fourth quarter of the 52-week fiscal year ending
January 28, 2023 (“Fiscal 2023”) as noted below. However, given the
performance we have experienced year-to-date and our outlook for
the remainder of the fiscal year, we are reiterating the guidance
for Fiscal 2023 that we presented on August 25, 2022, in
conjunction with the release of our fiscal second quarter
results.
Risks to be considered in the fourth of Fiscal 2023 include the
potential for ongoing supply chain disruptions, higher freight and
transportation costs, inflation, a tight labor market, geopolitical
conflicts and a more cautious consumer. These factors may
contribute to the complexity and volatility in forecasting Fiscal
2023 results.
To reiterate, our current guidance is as follows:
- Total net sales for the full year are expected to increase in
the low-single digit range in dollars compared to our Fiscal 2022
results. This implies comparable sales are expected to be in the
range of flat to positive low-single digits for the full year. Full
year brick and mortar comparable sales are expected to be in the
flat to positive low-single digit range while full year e-commerce
revenue growth is anticipated to be in the positive high-single
digit range.
- Net new store growth is expected to be in the range of 30 to 40
stores.
- As a result of product margin headwinds, higher freight and
transportation costs, store occupancy deleverage and a higher mix
of e-commerce sales, gross margin as a percent of net sales is
anticipated to decline by approximately 290 to 310 basis points
compared to Fiscal 2022 results. This expected full year gross
margin range of 35.1% to 35.3% remains above pre-pandemic
levels.
- SG&A as a percent of net sales is expected to increase by
10 to 20 basis points in comparison to Fiscal 2022 results due to
wage inflation, costs associated with growth in e-commerce, a
larger store count and annualization of back-office infrastructure
investments in Fiscal 2022. The expected full year SG&A expense
range of 22.7% to 22.8% as a percent of net sales is below
pre-pandemic levels.
- Operating income is expected to be in the low double-digit
range as a percent of sales, also remaining above pre-pandemic
levels.
- Diluted earnings per share are anticipated to be in the range
of $9.75 - $10.50 using an estimated full year tax rate of
approximately 24.5% and an estimated weighted average diluted share
count of 13.3 million.
- We are expecting capital expenditures in the range of $60 to
$70 million with a focus on new store growth, remodels and
additional technology and infrastructure investments.
Investor Conference Call and
Simulcast
Hibbett, Inc. will host a webcast at 10:00 a.m. ET on Tuesday,
November 29, 2022, to discuss third quarter results. The webcast of
Hibbett’s earnings review and a slide deck of supporting
information that will be referenced during the webcast will be
available at https://investors.hibbett.com/ under the News
& Events section. A replay of the webcast will be available for
30 days.
About Hibbett, Inc.
Hibbett, headquartered in Birmingham, Alabama, is a leading
athletic-inspired fashion retailer with 1,126 Hibbett and City Gear
specialty stores located in 36 states nationwide as of October 29,
2022. Hibbett has a rich history of convenient locations,
personalized customer service and access to coveted footwear,
apparel and equipment from top brands like Nike, Jordan and adidas.
Consumers can browse styles, find new releases, shop looks and make
purchases online or in their nearest store by visiting www.hibbett.com. Follow us @hibbettsports and
@citygear on Facebook, Instagram and Twitter.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Other than statements
of historical facts, all statements which address activities,
events, or developments that the Company anticipates will or may
occur in the future, including, but not limited to, such things as
our Fiscal 2023 outlook, future capital expenditures, expansion,
strategic plans, financial objectives, dividend payments, stock
repurchases, growth of the Company’s business and operations,
including future cash flows, revenues, and earnings, the impact of
the COVID-19 pandemic on our business, our effective tax rate and
other such matters, are forward-looking statements. The
forward-looking statements contained in this press release reflect
our current views about future events and are subject to risks,
uncertainties, assumptions, and changes in circumstances that may
cause events or our actual activities or results to differ
significantly from those expressed in any forward-looking
statement. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future events, results, actions, levels of activity, or performance
or achievements. Readers are cautioned not to place undue reliance
on these forward-looking statements. A number of important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements, including, but not
limited to: changes in general economic or market conditions that
could affect overall consumer spending or our industry, including
the possible effects of inflation; changes to the financial health
of our customers; our ability to successfully execute our long-term
strategies; our ability to effectively drive operational efficiency
in our business; the potential impact of new trade, tariff and tax
regulations on our profitability; our ability to effectively
develop and launch new, innovative and updated products; our
ability to accurately forecast consumer demand for our products and
manage our inventory in response to changing demands; future
reliability of, and cost associated with, disruptions in the global
supply chain including increased freight and transportation costs,
and the potential impacts on our domestic and international sources
of product, including the actual and potential effect of tariffs on
international goods imposed by the United States and other
potential impediments to imports; increased competition causing us
to lose market share or reduce the prices of our products or to
increase significantly our marketing efforts; the impact of public
health crises, including the COVID-19 pandemic, or other
significant or catastrophic events such as extreme weather, natural
disasters or climate change; fluctuations in the costs of our
products; loss of key suppliers or manufacturers or failure of our
suppliers or manufacturers to produce or deliver our products in a
timely or cost-effective manner, including due to port disruptions;
labor availability and cost; our ability to accurately anticipate
and respond to seasonal or quarterly fluctuations in our operating
results; our ability to successfully manage or realize expected
results from an acquisition, and other significant investments or
capital expenditures; the availability, integration and effective
operation of information systems and other technology, as well as
any potential interruption of such systems or technology; risks
related to data security or privacy breaches; our ability to raise
additional capital required to grow our business on terms
acceptable to us; our potential exposure to litigation and other
proceedings; and our ability to attract key talent and retain the
services of our senior management and key employees.
These forward-looking statements are based largely on our
expectations and judgments and are subject to a number of risks and
uncertainties, many of which are unforeseeable and beyond our
control. For additional discussion on risks and uncertainties that
may affect forward-looking statements, see “Risk Factors” disclosed
in our most recent Annual Report on Form 10-K. Any changes in such
assumptions or factors could produce significantly different
results. The Company undertakes no obligation to update
forward-looking statements, whether as a result of new information,
future events, or otherwise.
HIBBETT, INC. AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Statements of Operations
(Dollars in thousands, except
per share amounts)
13-Weeks Ended
39-Weeks Ended
October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
% to Sales
% to Sales
% to Sales
% to Sales
Net sales
$
433,164
$
381,719
$
1,250,021
$
1,307,837
Cost of goods sold
284,434
65.7
%
243,023
63.7
%
809,306
64.7
%
796,028
60.9
%
Gross margin
148,730
34.3
%
138,696
36.3
%
440,715
35.3
%
511,809
39.1
%
Store operating, selling and
administrative expenses
103,510
23.9
%
96,324
25.2
%
290,520
23.2
%
281,328
21.5
%
Depreciation and amortization
11,019
2.5
%
8,959
2.3
%
32,463
2.6
%
25,418
1.9
%
Operating income
34,201
7.9
%
33,413
8.8
%
117,732
9.4
%
205,063
15.7
%
Interest expense, net
467
0.1
%
64
—
%
900
0.1
%
191
—
%
Income before provision for income
taxes
33,734
7.8
%
33,349
8.7
%
116,832
9.3
%
204,872
15.7
%
Provision for income taxes
8,161
1.9
%
8,157
2.1
%
27,199
2.2
%
48,218
3.7
%
Net income
$
25,573
5.9
%
$
25,192
6.6
%
$
89,633
7.2
%
$
156,654
12.0
%
Basic earnings per share
$
1.99
$
1.75
$
6.89
$
10.13
Diluted earnings per share
$
1.94
$
1.68
$
6.71
$
9.74
Weighted average shares:
Basic
12,837
14,362
13,004
15,460
Diluted
13,202
14,975
13,358
16,082
Percentages may not foot due to
rounding.
HIBBETT, INC. AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Balance Sheets
(In thousands)
October 29,
2022
January 29,
2022
October 30,
2021
Assets
Cash and cash equivalents
$
25,114
$
17,054
$
29,749
Inventories, net
404,819
221,219
258,839
Other current assets
44,747
38,741
35,750
Total current assets
474,680
277,014
324,338
Property and equipment, net
165,196
145,967
127,715
Operating right-of-use assets
266,402
243,751
232,847
Finance right-of-use assets, net
2,027
2,186
2,137
Tradename intangible asset
23,500
23,500
23,500
Deferred income taxes, net
2,484
7,187
11,188
Other noncurrent assets
3,081
3,612
3,517
Total assets
$
937,370
$
703,217
$
725,242
Liabilities and Stockholders’
Investment
Accounts payable
$
209,194
$
85,647
$
116,234
Operating lease obligations
71,649
68,521
61,643
Credit facility
51,657
—
—
Finance lease obligations
1,057
975
861
Accrued expenses
28,370
39,721
33,814
Total current liabilities
361,927
194,864
212,552
Long-term operating lease obligations
233,504
212,349
202,568
Long-term finance lease obligations
1,143
1,427
1,505
Other noncurrent liabilities
2,962
3,062
3,132
Stockholders’ investment
337,834
291,515
305,485
Total liabilities and stockholders’
investment
$
937,370
$
703,217
$
725,242
HIBBETT, INC. AND
SUBSIDIARIES
Supplemental
Information
(Unaudited)
13-Weeks Ended
39-Weeks Ended
October 29,
2022
October 30,
2021
October 29,
2022
October 30,
2021
Sales
Information
Net sales increase (decrease)
13.5
%
15.2
%
(4.4
)%
25.4
%
Comparable store sales increase
(decrease)
9.9
%
13.0
%
(7.4
)%
24.1
%
Store Count
Information
Beginning of period
1,117
1,080
1,096
1,067
New stores opened
11
7
33
24
Rebranded stores
—
—
1
—
Stores closed
(2
)
(1
)
(4
)
(5
)
End of period
1,126
1,086
1,126
1,086
Estimated square footage at end of period
(in thousands)
6,376
6,131
Balance Sheet
Information
Average inventory per store
$
359,520
$
238,342
Share Repurchase
Information
Shares purchased under our Repurchase
Program
160,637
1,427,314
797,033
2,953,860
Cost (in thousands)
$
9,049
$
117,850
$
38,458
$
238,327
Settlement of net share equity awards
208
—
46,201
45,245
Cost (in thousands)
$
12
$
—
$
2,081
$
3,177
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221129005366/en/
Robert Volke - SVP, Chief Financial Officer Gavin Bell - VP,
Investor Relations 205-944-1312
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