- Raises Full Year Fiscal 2024 Diluted EPS Guidance
- Q3 Diluted EPS of $2.05 Versus $1.94 Prior Year
- Q3 Comparable Sales Decrease 2.7% Versus Prior Year
- YTD Net Sales 1% Higher Than Prior Year
Hibbett, Inc. (Nasdaq/GS: HIBB), an athletic-inspired fashion
retailer, today provided financial results for its third quarter
ended October 28, 2023, and business updates.
Mike Longo, President and Chief Executive Officer, stated, “Our
solid financial results for the third quarter of Fiscal 2024
reflect our ability to consistently execute our strategy, and we
believe we continue to gain market share in a challenging retail
environment. Our sales were in line with our expectations, boosted
by a strong back-to-school season during the first month of the
quarter. We also benefited from a more normal seasonal schedule of
new launch products throughout the quarter, with a positive
response from our loyal customers to the latest trend-relevant
brands and products.”
Mr. Longo continued, “Our footwear sales, especially with our
popular premium brands, have continued to be a key driver of our
ongoing success. We believe our strong relationships with valued
brand partners are a distinct competitive advantage for Hibbett,
with a favorable product mix that appeals to fashion-conscious
shoppers. At the end of the quarter, we were pleased to announce
the launch of our Connected Partnership, an initiative that
connects the Hibbett and Nike loyalty programs. This further
reinforces our valued partnership with Nike and confirms the
strength of our relationship. This transformative partnership will
support our loyalty member customers across all retail channels,
providing exclusive shopping experiences, personalized content, and
early access to Nike and Jordan member products.
“As we enter the fourth quarter and our busy holiday selling
season, we believe we are well positioned for a strong finish to
Fiscal 2024. We expect to benefit from additional new product
launches that will continue to attract and retain customers and
extend our market reach. With the previous supply chain issues
behind us, we are confident in our ability to meet customer demand
with a favorable inventory level. We believe Fiscal 2024 will be
another solid year for Hibbett as we remain focused on our primary
objectives to serve our customers and deliver greater value for our
shareholders,” Mr. Longo concluded.
Third Quarter Results
Net sales for the 13-weeks ended October 28, 2023, decreased
0.3% to $431.9 million compared with $433.2 million for the
13-weeks ended October 29, 2022. Comparable sales decreased 2.7%
versus the prior-year period. Brick and mortar comparable sales
declined 5.4%, while e-commerce sales increased 12.6% on a
year-over-year basis. E-commerce represented 17.0% of total net
sales for the 13-weeks ended October 28, 2023, compared to 15.0% in
the 13-weeks ended October 29, 2022.
Gross margin was 33.9% of net sales for the 13-weeks ended
October 28, 2023, compared with 34.3% of net sales for the 13-weeks
ended October 29, 2022. The approximate 40 basis point decline was
driven primarily by lower average product margin, which was
approximately 130 basis points lower than the prior-year period.
This decline was mainly due to higher promotional activity across
both footwear and apparel. In addition, the slight year-over-year
sales decline resulted in deleverage of store occupancy costs of
approximately 40 basis points. These unfavorable gross margin
impacts were partially offset by lower freight, shipping, shrink
and logistics expenses as a percent of sales in comparison to the
prior-year quarter.
Store operating, selling and administrative (“SG&A”)
expenses were 23.0% of net sales for the 13-weeks ended October 28,
2023, compared with 23.9% of net sales for the 13-weeks ended
October 29, 2022. The decrease of approximately 90 basis points is
primarily the result of our continued focus on expense management,
including improved efficiency of store labor and strategic
reductions in discretionary expense categories such as professional
fees and advertising. These initiatives have more than offset the
impacts of inflation on wages, goods and services, and deleverage
from slightly lower sales volume.
Net income for the 13-weeks ended October 28, 2023, was $25.5
million, or $2.05 per diluted share, compared with net income of
$25.6 million, or $1.94 per diluted share, for the 13-weeks ended
October 29, 2022.
For the 13-weeks ended October 28, 2023, we opened 10 net new
stores, bringing the store base to 1,158 in 36 states.
As of October 28, 2023, we had $29.6 million of available cash
and cash equivalents on our unaudited condensed consolidated
balance sheet and $96.9 million of debt outstanding on our $160.0
million unsecured line of credit. Inventory as of October 28, 2023,
was $398.1 million, a 1.7% decrease compared to the prior-year
third quarter and down 5.4% from the beginning of the fiscal
year.
During the 13-weeks ended October 28, 2023, we repurchased
707,621 shares of common stock under our Stock Repurchase Program
(the “Repurchase Program”) for a total expenditure of $32.0
million. We also paid a quarterly dividend equal to $0.25 per
outstanding common share that resulted in a cash outlay of $3.1
million.
Fiscal 2024 Year-to-Date
Results
Net sales for the 39-weeks ended October 28, 2023, increased
1.0% to $1.26 billion compared with $1.25 billion for the 39-weeks
ended October 29, 2022. Comparable sales for the 39-weeks ended
October 28, 2023, decreased 1.9% versus the 39-weeks ended October
29, 2022. Brick and mortar comparable sales declined 2.7% and
e-commerce sales increased 2.9% compared to the 39-weeks ended
October 29, 2022. E-commerce represented 15.2% of total net sales
for the 39-weeks ended October 28, 2023, compared to 14.9% in the
39-weeks ended October 29, 2022.
Gross margin was 33.5% of net sales for the 39-weeks ended
October 28, 2023, compared with 35.3% of net sales for the 39-weeks
ended October 29, 2022. The approximate 180-basis-point decline was
primarily due to lower average product margin of approximately 240
basis points and an approximate 40-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 39-weeks ended
October 28, 2023, compared with 23.2% of net sales for the 39-weeks
ended October 29, 2022. The modest 20-basis-point decrease was
primarily due to strategic reductions in advertising and
professional fees.
Net income for the 39-weeks ended October 28, 2023, was $72.3
million, or $5.66 per diluted share, compared with $89.6 million,
or $6.71 per diluted share, for the 39-weeks ended October 29,
2022.
Capital expenditures during the 39-weeks ended October 28, 2023,
were $37.2 million compared to $47.5 million in the 39-weeks ended
October 29, 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
raising our full-year Fiscal 2024 diluted EPS guidance and updating
several other components of our guidance as noted in the following
table.
Metric
Prior Guidance
Updated Guidance
Comment
Total sales
Flat to up ~2.0%
Flat to up ~2.0%
No change
Sales percent by quarter
~26%, ~22%, ~24%, ~28%
~26%, ~22%, ~24%, ~28%
No change
Comp sales
Down low-single digit
Down low-single digit
No change
Brick and mortar
Down low-single digit
Down low-single digit
No change
E-commerce
Down low-single digit
Flat to up low-single digit
Slightly higher mix
Net store growth in units
40 to 50
~ 40
Delays in permits/construction
timelines
Gross margin %
33.9% to 34.0%
33.9% to 34.0%
No change
SG&A %
23.3% to 23.5%
23.1% to 23.3%
Cost savings initiatives
Operating profit %
7.4% to 7.8%
7.6% to 8.0%
Lower SG&A
Interest expense %
0.40% to 0.45%
0.35% to 0.40%
Steady interest rates; timing of
payments
Diluted EPS
$7.00 to $7.75
$8.00 to $8.30
Improved EBIT %, lower interest &
taxes
Diluted shares
~12.8 million
~12.6 million
Timing of share repurchases
Tax rate
23.5% to 23.7%
23.1% to 23.3%
Impact of credits on pretax income
Capital expenditures
$60 to $70 million
$60 to $70 million
No change
Investor Conference Call and
Simulcast
Hibbett, Inc. will host a webcast at 9:00 a.m. ET on Tuesday,
November 21, 2023, 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 1,158 Hibbett, City Gear
and Sports Additions specialty stores located in 36 states
nationwide as of October 28, 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
39-Weeks Ended
October 28,
2023
October 29,
2022
October 28,
2023
October 29,
2022
% to Sales
% to Sales
% to Sales
% to Sales
Net sales
$
431,923
$
433,164
$
1,262,297
$
1,250,021
Cost of goods sold
285,579
66.1
%
284,434
65.7
%
839,411
66.5
%
809,306
64.7
%
Gross margin
146,344
33.9
%
148,730
34.3
%
422,886
33.5
%
440,715
35.3
%
Store operating, selling and
administrative expenses
99,404
23.0
%
103,510
23.9
%
290,284
23.0
%
290,520
23.2
%
Depreciation and amortization
12,457
2.9
%
11,019
2.5
%
36,189
2.9
%
32,463
2.6
%
Operating income
34,483
8.0
%
34,201
7.9
%
96,413
7.6
%
117,732
9.4
%
Interest expense, net
1,106
0.3
%
467
0.1
%
4,323
0.3
%
900
0.1
%
Income before provision for income
taxes
33,377
7.7
%
33,734
7.8
%
92,090
7.3
%
116,832
9.3
%
Provision for income taxes
7,880
1.8
%
8,161
1.9
%
19,816
1.6
%
27,199
2.2
%
Net income
$
25,497
5.9
%
$
25,573
5.9
%
$
72,274
5.7
%
$
89,633
7.2
%
Basic earnings per share
$
2.09
$
1.99
$
5.76
$
6.89
Diluted earnings per share
$
2.05
$
1.94
$
5.66
$
6.71
Weighted average shares:
Basic
12,224
12,837
12,554
13,004
Diluted
12,408
13,202
12,780
13,358
Percentages may not foot due to
rounding.
HIBBETT, INC. AND
SUBSIDIARIES
Unaudited Condensed
Consolidated Balance Sheets
(In thousands)
October 28,
2023
January 28,
2023
October 29,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
29,580
$
16,015
$
25,114
Receivables, net
12,136
12,850
15,170
Inventories, net
398,106
420,839
404,819
Other current assets
28,408
23,351
29,577
Total current assets
468,230
473,055
474,680
Property and equipment, net
172,701
169,476
165,196
Operating right-of-use assets
272,909
263,391
266,402
Finance right-of-use assets, net
2,095
2,279
2,027
Tradename intangible asset
23,500
23,500
23,500
Deferred income taxes, net
3,044
3,025
2,484
Other assets, net
8,414
4,434
3,081
Total assets
$
950,893
$
939,160
$
937,370
LIABILITIES AND STOCKHOLDERS’
INVESTMENT
Current liabilities:
Accounts payable
$
118,127
$
190,648
$
209,194
Operating lease obligations
75,490
72,544
71,649
Credit facility
96,916
36,264
51,657
Finance lease obligations
663
1,132
1,057
Accrued payroll expense
9,573
11,361
11,550
Other accrued expenses
16,003
15,803
16,820
Total current liabilities
316,772
327,752
361,927
Operating lease obligations
239,300
229,388
233,504
Finance lease obligations
1,557
1,305
1,143
Other liabilities
4,211
4,484
2,962
Stockholders’ investment
389,053
376,231
337,834
Total liabilities and stockholders’
investment
$
950,893
$
939,160
$
937,370
HIBBETT, INC. AND
SUBSIDIARIES
Supplemental
Information
(Unaudited)
13-Weeks Ended
39-Weeks Ended
October 28,
2023
October 29,
2022
October 28,
2023
October 29,
2022
Sales
Information
Net sales (decrease) increase
(0.3
)%
13.5
%
1.0
%
(4.4
)%
Comparable store sales decrease
(2.7
)%
9.9
%
(1.9
)%
(7.4
)%
Store Count
Information
Beginning of period
1,148
1,117
1,133
1,096
New stores opened
12
11
30
33
Rebranded stores
—
—
—
1
Stores closed
(2
)
(2
)
(5
)
(4
)
End of period
1,158
1,126
1,158
1,126
Estimated square footage at end of period
(in thousands)
6,569
6,376
Balance Sheet
Information
Average inventory per store
$
343,788
$
359,520
Share Repurchase
Information
Shares purchased under our Repurchase
Program
707,621
160,637
1,162,130
797,033
Cost (in thousands)
$
31,999
$
9,049
$
53,211
$
38,458
Settlement of net share equity awards
373
208
47,550
46,201
Cost (in thousands)
$
17
$
12
$
2,849
$
2,081
Dividend
Information
Number of declarations
1
1
3
3
Cash paid (in thousands)
$
3,088
$
3,199
$
9,427
$
9,699
Total paid per share
$
0.25
$
0.25
$
0.75
$
0.75
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231121388502/en/
Robert Volke - SVP, Chief Financial Officer Gavin Bell - VP,
Investor Relations 205-944-1312
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