- Reiterates Full Year Fiscal 2024 Comparable Sales and
Diluted EPS Guidance
- Q2 Comparable Sales Decrease 7.3% Versus Prior Year; Net
Sales Down 4.6% Year-Over-Year
- Q2 Diluted EPS of $0.85
Hibbett, Inc. (Nasdaq/GS: HIBB), an athletic-inspired fashion
retailer, today provided financial results for its second quarter
ended July 29, 2023, and business updates.
Mike Longo, President and Chief Executive Officer, stated, “We
are pleased with our performance for the second quarter of Fiscal
2024. Our business model focuses on providing an exceptional
consumer experience in underserved markets and produced solid
financial results despite a challenging retail environment. Our
sales for the second quarter were supported by a strong start to
the busy back-to-school season and we also benefited from a
positive customer response to new product launches during the
quarter. Our strong relationships with valued brand partners
continue to provide us the ability to offer a compelling product
assortment and as a result, we believe we continue to gain market
share.”
Mr. Longo continued, “In today’s inflationary environment,
consumers have pulled back on discretionary spending. In response,
we have continued to focus on offering the products that meet our
customers’ more selective interests. Due to these efforts, our
footwear sales, especially with our popular premium brands, have
remained more consistent while our apparel business continues to
reflect softer demand amid a heavy promotional environment.
Although we still face considerable headwinds, we believe we are
well positioned for continued growth when market conditions
improve. As always, we are focused on the long term and we remain
confident in our ability to offer the most compelling brands and
products while continuing to attract and retain customers in Fiscal
2024 and beyond. We are reiterating our previously stated guidance
for the current fiscal year.”
Second Quarter Results
Net sales for the 13-weeks ended July 29, 2023, decreased 4.6%
to $374.9 million compared with $392.8 million for the 13-weeks
ended July 30, 2022. Comparable sales decreased 7.3% versus the
prior year period. Brick and mortar comparable sales declined 7.7%
while e-commerce sales decreased 5.2% on a year-over-year basis.
E-commerce represented 15.1% of total net sales for the 13-weeks
ended July 29, 2023, compared to 15.2% in the 13-weeks ended July
30, 2022.
Gross margin was 32.8% of net sales for the 13-weeks ended July
29, 2023, compared with 34.4% of net sales for the 13-weeks ended
July 30, 2022. The approximate 160 basis point decline was driven
primarily by lower average product margin which was approximately
215 basis points lower than the prior year period. This decline was
driven mainly by higher promotional activity across both footwear
and apparel. In addition, the year-over-year sales decline resulted
in deleverage of store occupancy costs of approximately 100 basis
points. These unfavorable gross margin impacts were partially
offset by lower freight, shipping and logistics expenses as a
percent of sales in comparison the prior year quarter.
Store operating, selling and administrative (“SG&A”)
expenses were 25.3% of net sales for the 13-weeks ended July 29,
2023, compared with 23.3% of net sales for the 13-weeks ended July
30, 2022. The increase of approximately 200 basis points is
primarily the result of deleverage from lower sales volume with the
largest headwinds noted in wage increases driven by inflation,
incentive compensation, medical expenses and data processing
costs.
Net income for the 13-weeks ended July 29, 2023, was $10.9
million, or $0.85 per diluted share, compared with net income of
$24.7 million, or $1.86 per diluted share, for the 13-weeks ended
July 30, 2022.
For the 13-weeks ended July 29, 2023, we opened 5 net new
stores, bringing the store base to 1,148 in 36 states.
As of July 29, 2023, we had $33.1 million of available cash and
cash equivalents on our unaudited condensed consolidated balance
sheet and $106.9 million of debt outstanding on our $160.0 million
unsecured line of credit. Inventory as of July 29, 2023, was $430.8
million, a 17.6% increase compared to the prior year second quarter
and up 2.4% from the beginning of the year.
During the 13-weeks ended July 29, 2023, we repurchased 294,917
shares of common stock under our Stock Repurchase Program (the
“Repurchase Program”) for a total expenditure of $11.0 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 Year-to-Date
Results
Net sales for the 26-weeks ended July 29, 2023, increased 1.7%
to $830.4 million compared with $816.9 million for the 26-weeks
ended July 30, 2022. Comparable sales decreased 1.4% versus the
26-weeks ended July 30, 2022. Brick and mortar comparable sales
declined 1.2% and e-commerce sales decreased 2.2% compared to the
26-weeks ended July 30, 2022. E-commerce represented 14.3% of total
net sales for the 26-weeks ended July 29, 2023, compared to 14.9%
in the 26-weeks ended July 30, 2022.
Gross margin was 33.3% of net sales for the 26-weeks ended July
29, 2023, compared with 35.7% of net sales for the 26-weeks ended
July 30, 2022. The approximate 240 basis point decline was due to
lower average product margin of approximately 300 basis points and
an approximate 45 basis point increase in store occupancy costs.
Freight, shipping and logistics costs have improved as a percent of
sales on a year-over-year basis, partially offsetting the
unfavorable average product margin and store occupancy
performance.
SG&A expenses were 23.0% of net sales for the 26-weeks ended
July 29, 2023, compared with 22.9% of net sales for the 26-weeks
ended July 30, 2022. The modest 10 basis point increase is
primarily the result of higher medical expenses and an increase in
data processing costs partially offset by lower advertising and
professional fees.
Net income for the 26-weeks ended July 29, 2023, was $46.8
million, or $3.61 per diluted share, compared with $64.1 million,
or $4.77 per diluted share for the 26-weeks ended July 30,
2022.
Capital expenditures during the 26-weeks ended July 29, 2023,
were $25.7 million compared to $30.5 million in the 26-weeks ended
July 30, 2022. Capital expenditures were predominantly related to
store initiatives including new store openings, relocations,
expansions, remodels and updated store signage.
Fiscal 2024 Outlook
Although the current retail business climate remains challenging
as consumer demand has been negatively impacted by persistent
inflation and higher interest rates, among other factors, we are
reiterating our full-year Fiscal 2024 guidance as noted in the
following table.
Metric
Reiterated Guidance
Total sales
Flat to up ~2.0%
Sales percent by quarter
~26%, ~22%, ~24%, ~28%
Comp sales
Down low-single digit
Brick and mortar
Down low-single digit
E-commerce
Down low-single digit
Net store growth in units
40 to 50
Gross margin %
33.9% to 34.0%
SG&A %
23.3% to 23.5%
Operating profit %
7.4% to 7.8%
Interest expense %
0.40% to 0.45%
Diluted EPS
$7.00 to $7.75
Diluted shares
~12.8 million
Tax rate
23.5% to 23.7%
Capital expenditures
$60 to $70 million
Investor Conference Call and
Simulcast
Hibbett, Inc. will host a webcast at 10:00 a.m. ET on Friday,
August 25, 2023, to discuss second 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 1,148 Hibbett, City Gear
and Sports Additions specialty stores located in 36 states
nationwide as of July 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
acquisitions, 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 on our expectations
and judgments as of the date of this press release 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 as well as similar disclosures in our other filings with
the Securities and Exchange Commission, press releases and other
communications. 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
26-Weeks Ended
July 29, 2023
July 30, 2022
July 29, 2023
July 30, 2022
% to Sales
% to Sales
% to Sales
% to Sales
Net sales
$
374,877
$
392,805
$
830,374
$
816,857
Cost of goods sold
251,954
67.2
%
257,653
65.6
%
553,832
66.7
%
524,872
64.3
%
Gross margin
122,923
32.8
%
135,152
34.4
%
276,542
33.3
%
291,985
35.7
%
Store operating, selling and
administrative expenses
94,867
25.3
%
91,414
23.3
%
190,880
23.0
%
187,011
22.9
%
Depreciation and amortization
12,039
3.2
%
10,926
2.8
%
23,732
2.9
%
21,444
2.6
%
Operating income
16,017
4.3
%
32,812
8.4
%
61,930
7.5
%
83,530
10.2
%
Interest expense, net
1,891
0.5
%
361
0.1
%
3,217
0.4
%
432
0.1
%
Income before provision for income
taxes
14,126
3.8
%
32,451
8.3
%
58,713
7.1
%
83,098
10.2
%
Provision for income taxes
3,224
0.9
%
7,738
2.0
%
11,936
1.4
%
19,038
2.3
%
Net income
$
10,902
2.9
%
$
24,713
6.3
%
$
46,777
5.6
%
$
64,060
7.8
%
Basic earnings per share
$
0.86
$
1.91
$
3.68
$
4.89
Diluted earnings per share
$
0.85
$
1.86
$
3.61
$
4.77
Weighted average shares:
Basic
12,648
12,951
12,719
13,088
Diluted
12,822
13,261
12,967
13,436
Percentages may not foot due to
rounding.
HIBBETT, INC. AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Balance Sheets
(In thousands)
July 29, 2023
January 28,
2023
July 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
33,067
$
16,015
$
28,438
Receivables, net
15,449
12,850
16,495
Inventories, net
430,819
420,839
366,218
Other current assets
23,124
23,351
25,864
Total current assets
502,459
473,055
437,015
Property and equipment, net
174,358
169,476
159,608
Operating right-of-use assets
263,334
263,391
260,932
Finance right-of-use assets, net
2,366
2,279
2,086
Tradename intangible asset
23,500
23,500
23,500
Deferred income taxes, net
2,875
3,025
2,441
Other assets, net
7,974
4,434
3,113
Total assets
$
976,866
$
939,160
$
888,695
LIABILITIES AND STOCKHOLDERS’
INVESTMENT
Current liabilities:
Accounts payable
$
133,310
$
190,648
$
140,951
Operating lease obligations
73,700
72,544
73,454
Credit facility
106,897
36,264
88,548
Finance lease obligations
802
1,132
1,015
Accrued payroll expense
12,776
11,361
11,755
Other accrued expenses
15,977
15,803
16,631
Total current liabilities
343,462
327,752
332,354
Operating lease obligations
229,292
229,388
228,848
Finance lease obligations
1,690
1,305
1,258
Other liabilities
5,112
4,484
3,692
Stockholders’ investment
397,310
376,231
322,543
Total liabilities and stockholders’
investment
$
976,866
$
939,160
$
888,695
HIBBETT, INC. AND
SUBSIDIARIES
Supplemental
Information
(Unaudited)
13-Weeks Ended
26-Weeks Ended
July 29, 2023
July 30, 2022
July 29, 2023
July 30, 2022
Sales Information
Net sales (decrease) increase
(4.6
)%
(6.3
)%
1.7
%
(11.8
)%
Comparable store sales decrease
(7.3
)%
(9.2
)%
(1.4
)%
(14.5
)%
Store Count Information
Beginning of period
1,143
1,105
1,133
1,096
New stores opened
6
13
18
22
Rebranded stores
—
—
—
1
Stores closed
(1
)
(1
)
(3
)
(2
)
End of period
1,148
1,117
1,148
1,117
Estimated square footage at end of period
(in thousands)
6,514
6,335
Balance Sheet Information
Average inventory per store
$
375,278
$
327,859
Share Repurchase Information
Shares purchased under our Repurchase
Program
294,917
145,178
454,509
636,396
Cost (in thousands)
$
11,013
$
7,009
$
21,212
$
29,409
Settlement of net share equity awards
—
—
47,177
45,993
Cost (in thousands)
$
—
$
—
$
2,833
$
2,069
Dividend Information
Number of declarations
1
1
2
2
Cash paid (in thousands)
$
3,165
$
3,223
$
6,339
$
6,500
Total paid per share
$
0.25
$
0.25
$
0.50
$
0.50
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230825274707/en/
Robert Volke - SVP, Chief Financial Officer Gavin Bell - VP,
Investor Relations 205-944-1312
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