- Q1 Comparable Sales Increase 4.1% Versus Prior Year; Net
Sales Up 7.4% Year-Over-Year
- Q1 Diluted EPS of $2.74; 10.1% Operating Income
Margin
- Updates Full Year Fiscal 2024 Guidance to Reflect A More
Cautious Consumer Outlook
Hibbett, Inc. (Nasdaq/GS: HIBB), an athletic-inspired fashion
retailer, today provided financial results for its first quarter
ended April 29, 2023, and business updates.
Mike Longo, President and Chief Executive Officer, stated,
“Hibbett posted solid sales results in a challenging environment,
delivering a 4.1% comparable sales increase and a total sales
increase of 7.4% versus last year. We maintain very good
relationships with our valued brand partners that enables us to
maintain our new store growth plan and provide the product
assortment to meet consumer’s narrowed demand. We’re investing in
our already best-in-class consumer experience while also taking
costs out of the business, producing leverage on SG&A of 140
basis points versus last year. We believe our product array and
outstanding customer service is a competitive advantage, resulting
in market share gains.”
Mr. Longo continued, “Our consumers are facing a number of
headwinds that range from inflation to concerns over outright job
loss. Of note, the total amount of the average tax refund was
unfavorable to last year by approximately 10%. We believe this
disproportionately impacted our consumer and impacted our sales in
the important first quarter of the year. Additionally, the athletic
inspired segment of our industry is carrying surplus inventory and
therefore experienced an elevated level of promotional activity. As
a result of the challenging retail environment, consumers are
focused on a narrower range of products. The combination of these
factors is a major contributor to our revised guidance for the
remainder of this fiscal year. Notwithstanding our more cautious
near-term consumer outlook, we believe Hibbett remains well
positioned for the long-term to continue to grow and increase
market share.”
First Quarter Results
Net sales for the 13-weeks ended April 29, 2023, increased 7.4%
to $455.5 million compared with $424.1 million for the 13-weeks
ended April 30, 2022. Comparable sales increased 4.1% versus the
prior year. Brick and mortar comparable sales were up 4.7% while
e-commerce sales increased 0.6% on a year-over-year basis.
E-commerce represented 13.7% of total net sales for the 13-weeks
ended April 29, 2023, compared to 14.6% in the 13-weeks ended April
30, 2022.
Gross margin was 33.7% of net sales for the 13-weeks ended April
29, 2023, compared with 37.0% of net sales for the 13-weeks ended
April 30, 2022. The approximate 330 basis point decline was driven
primarily by lower average product margin which was about 375 basis
points lower than the prior year due to higher promotional activity
across both footwear and apparel. Store occupancy was relatively
flat as a percent of sales year-over-year while both freight and
logistics operations were favorable as a percentage of net
sales.
Store operating, selling and administrative (“SG&A”)
expenses were 21.1% of net sales for the 13-weeks ended April 29,
2023, compared with 22.5% of net sales for the 13-weeks ended April
30, 2022. The decrease of 140 basis points is primarily the result
of expense reduction initiatives, lower advertising spend and
reduced incentive compensation expense partially offset by wage
inflation.
Net income for the 13-weeks ended April 29, 2023, was $35.9
million, or $2.74 per diluted share, compared with net income of
$39.3 million, or $2.89 per diluted share, for the 13-weeks ended
April 30, 2022.
For the 13-weeks ended April 29, 2023, we opened 10 net new
stores, bringing the store base to 1,143 in 36 states.
As of April 29, 2023, we had $26.9 million of available cash and
cash equivalents on our unaudited condensed consolidated balance
sheet and $103.6 million of debt outstanding. Inventory as of April
29, 2023, was $438.0 million, a 39.1% increase compared to the
prior year first quarter and up 4.1% from the beginning of the
year.
During the 13-weeks ended April 29, 2023, we repurchased 159,592
shares of common stock under our Stock Repurchase Program (the
“Repurchase Program”) for a total expenditure of $10.2 million. We
also paid a quarterly dividend equal to $0.25 per outstanding
common share that resulted in a cash outlay of $3.2 million.
Fiscal 2024 Outlook
The current retail business climate is challenging as consumers
have been dealing with persistent inflation and higher interest
rates. Consumer confidence has weakened, which we believe has
impacted purchasing behavior, especially for discretionary products
and services. We anticipate the risks noted below will impact us
through the remainder of the 53-week fiscal year ending February 3,
2024 (“Fiscal 2024”) and expect these headwinds will be more
impactful on our second fiscal quarter than in the back half of the
year. Therefore, we are updating the guidance for Fiscal 2024 that
we presented on March 3, 2023, in conjunction with the release of
our results for the fiscal fourth quarter and full year ended
January 28, 2023.
Risks to be considered for the remainder of Fiscal 2024 include
inflation, a high interest rate environment, reduced consumer
confidence, the ongoing promotional environment, potential
reduction or deferral of discretionary purchases, a tight labor
market, inventory quantities above ideal levels and geopolitical
conflicts. These factors may contribute to the complexity and
volatility in forecasting Fiscal 2024 results.
Our updated full-year guidance compared to the previous guidance
provided is summarized in the following table:
Metric
Prior Guidance
Updated Guidance
Comment
Total sales
Up mid-single digit
Flat to up ~2.0%
Includes 53rd week
Sales percent by quarter
~26%, ~22%, ~24%, ~28%
~26%, ~22%, ~24%, ~28%
Comp sales
Up low-single digit
Down low-single digit
Softer sales; cautious consumer
Brick and mortar
Flat to up low-single digit
Down low-single digit
E-commerce
Up high-single digit
Down low-single digit
Net store growth in units
40 to 50
40 to 50
Gross margin %
34.9% to 35.0%
33.9% to 34.0%
More promotional environment; occupancy
deleverage
SG&A %
23.2% to 23.3%
23.3% to 23.5%
Deleverage offset by cost reductions
Operating profit %
9.0% to 9.3%
7.4% to 7.8%
Lower margin and SG&A deleverage
Interest expense %
0.25% to 0.30%
0.40% to 0.45%
Higher average debt; rising interest
rates
Diluted EPS
$9.50 to $10.00
$7.00 to $7.75
Diluted shares
~12.7 million
~12.8 million
Tax rate
24.0%
23.5% to 23.7%
Capital expenditures
$60 to $70 million
$60 to $70 million
Investor Conference Call and
Simulcast
Hibbett, Inc. will host a webcast at 10:00 a.m. ET on Friday,
May 26, 2023, to discuss first 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 1,143 Hibbett, City Gear
and Sports Additions specialty stores located in 36 states
nationwide as of April 29, 2023. 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 2024 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, 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 and higher interest rates;
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;
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 or other significant or
catastrophic events such as extreme weather, natural disasters or
climate change; the impact of any future federal government
shutdown and uncertainty regarding the federal government’s debt
level or changes in fiscal, monetary or regulatory policy;
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
wage pressures; 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
April 29, 2023
April 30, 2022
% to Sales
% to Sales
Net sales
$
455,497
$
424,051
Cost of goods sold
301,877
66.3
%
267,218
63.0
%
Gross margin
153,620
33.7
%
156,833
37.0
%
Store operating, selling and
administrative expenses
96,014
21.1
%
95,596
22.5
%
Depreciation and amortization
11,693
2.6
%
10,518
2.5
%
Operating income
45,913
10.1
%
50,719
12.0
%
Interest expense, net
1,327
0.3
%
72
—
%
Income before provision for income
taxes
44,586
9.8
%
50,647
11.9
%
Provision for income taxes
8,711
1.9
%
11,300
2.7
%
Net income
$
35,875
7.9
%
$
39,347
9.3
%
Basic earnings per share
$
2.80
$
2.98
Diluted earnings per share
$
2.74
$
2.89
Weighted average shares:
Basic
12,791
13,224
Diluted
13,111
13,612
Percentages may not foot due to
rounding.
HIBBETT, INC. AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Balance Sheets
(In thousands)
April 29, 2023
January 28,
2023
April 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
26,926
$
16,015
$
23,221
Receivables, net
12,582
12,850
13,877
Inventories, net
437,957
420,839
314,861
Other current assets
13,662
23,351
16,579
Total current assets
491,127
473,055
368,538
Property and equipment, net
175,285
169,476
153,993
Operating right-of-use assets
262,999
263,391
250,522
Finance right-of-use assets, net
1,913
2,279
2,348
Tradename intangible asset
23,500
23,500
23,500
Deferred income taxes, net
2,744
3,025
3,236
Other assets, net
7,777
4,434
3,477
Total assets
$
965,345
$
939,160
$
805,614
LIABILITIES AND STOCKHOLDERS’
INVESTMENT
Current liabilities:
Accounts payable
$
131,437
$
190,648
$
164,294
Operating lease obligations
73,142
72,544
65,054
Credit facility
103,577
36,264
20,415
Finance lease obligations
929
1,132
1,034
Accrued payroll expense
7,707
11,361
9,730
Other accrued expenses
14,183
15,803
15,271
Total current liabilities
330,975
327,752
275,798
Operating lease obligations
228,645
229,388
219,296
Finance lease obligations
1,116
1,305
1,516
Other liabilities
5,594
4,484
2,898
Stockholders’ investment
399,015
376,231
306,106
Total liabilities and stockholders’
investment
$
965,345
$
939,160
$
805,614
HIBBETT, INC. AND
SUBSIDIARIES
Supplemental
Information
(Unaudited)
13-Weeks Ended
April 29, 2023
April 30, 2022
Sales Information
Net sales increase (decrease)
7.4
%
(16.3
)%
Comparable store sales increase
(decrease)
4.1
%
(18.9
)%
Store Count Information
Beginning of period
1,133
1,096
New stores opened
12
9
Rebranded stores
—
1
Stores closed
(2
)
(1
)
End of period
1,143
1,105
Estimated square footage at end of period
(in thousands)
6,485
6,252
Balance Sheet Information
Average inventory per store
$
383,164
$
284,942
Share Repurchase Information
Shares purchased under our Repurchase
Program
159,592
491,218
Cost (in thousands)
$
10,199
$
22,399
Settlement of net share equity awards
47,177
45,993
Cost (in thousands)
$
2,833
$
2,069
Dividend Information
Number of declarations
1
1
Cash paid (in thousands)
$
3,173
$
3,277
Total paid per share
$
0.25
$
0.25
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230526005027/en/
Robert Volke - SVP, Chief Financial Officer Gavin Bell - VP,
Investor Relations 205-944-1312
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