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Hibbett's (HIBB) Q1 Earnings Top Estimates, Sales Grow Y/Y

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Hibbett Sports Inc. (HIBB - Free Report) posted first-quarter fiscal 2022 results, wherein the bottom line surpassed the Zacks Consensus Estimate. Further, both top and bottom lines improved year over year. Despite supply-chain disruptions, results gained from continued positive momentum, driven by enhanced omnichannel capabilities and robust demand, particularly in footwear, apparel and accessories. 

Q1 Highlights

Hibbett’s adjusted earnings came in at $5.00 per share, reflecting a sharp improvement from 31 cents reported in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $2.37.

Net sales increased 87.8% year over year to $506.9 million in the quarter under review. The uptick can be attributed to strength in the omnichannel platform, new customer acquisitions, improved store-level engagement, solid demand and additional stimulus payments. E-commerce sales inched up 1% in the quarter under review, accounting for 11.7% of total sales.

Apart from these, comparable store sales (comps) skyrocketed 87.3% in the quarter, driven by higher average ticket in both stores and online along with a rise in transactions. In-store comps improved 113.5%.

Gross profit increased nearly three-folds to $210 million in the reported quarter. Moreover, adjusted gross margin expanded 1,200 basis points (bps) to 41.4%.

Adjusted operating income was $110.2 million compared with a loss of $22.1 million in the prior-year quarter. Meanwhile, adjusted store operating, selling and administrative (SG&A) expenses contracted nearly 580 bps to 18.1%, as a percentage of sales, driven by higher sales.

Other Financials

Hibbett ended the quarter with $270.9 million in cash and cash equivalents and $75 million available under its credit facilities. Total stockholders’ investment, as of May 1, was $439.5 million.

During the fiscal first quarter, Hibbett repurchased 582,403 shares worth $40.2 million. In a recent development, management expanded its existing share repurchase program by $500 million, which led to $800 million of total authorization valid till Feb 1, 2025. Further, it repurchased 7,469,387 shares worth roughly $201 million on May 26, 2021, under its earlier share repurchase plan of $300 million.

Capital expenditures came in at $7 million during the reported quarter. Also, the metric is likely to be $45-$50 million for fiscal 2022.

Hibbett Sports, Inc. Price, Consensus and EPS Surprise

Store Update

In first-quarter fiscal 2022, the company opened six stores and shut two underperforming outlets. Hence, it ended the quarter with 1,071 stores across 35 states.

Looking Ahead

Driven by pent-up customer demand, gains from new customers, rising online sales, robust vendor relationships and strength in athletic footwear, apparel and accessories both in-store and online, management has issued GAAP guidance for fiscal 2022. Also, it doesn’t foresee any material difference between GAAP and non-GAAP figures.

The company expects comps to be up high-single to low-double digits, which suggests an improvement from comps of down low-single to up low-single digit stated earlier. Moreover, gross margin is anticipated to be relatively lower in the remaining three quarters of fiscal 2022 as compared to the fiscal first quarter. Meanwhile, SG&A expenses, as a percent of sales, are likely to increase in the three quarters of fiscal 2022, as compared to the reported quarter. However, the metric is forecasted to decline for fiscal 2022. Apart from these, adjusted earnings are envisioned to be $8.50-$9.00 per share.

The company foresees new customer acquisition and retentions in fiscal 2022. Further, its new store refresh program and supply-chain enhancements are likely to improve customer’s in-store experience.

Price Performance

In the past three months, this Zacks Rank #3 (Hold) stock has rallied 28.1%, outperforming the industry’s 2.9% growth.

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