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Hibbett (HIBB) on Expansion Spree, Opens 2nd Kansas Store

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Hibbett, Inc. (HIBB - Free Report) remains on track with its plans to expand in markets that offer increased growth potentials. In doing so, the company opened its second outlet in 63rd Street, Brywood Center, Kansas City. The launch event was commemorated by a grand opening celebration on Sep 25. Prior to this, it opened its first Kansas store at Linwood Square South. Management expects to open more than 1,500 stores in the underserved markets, going forward.

The newly opened boutique-style store comes with an open concept along with the option to navigate easily through the new and exclusive collection of footwear, fashion and athletic apparel from brands, including Nike (NKE - Free Report) , Jordan, Adidas (ADDYY - Free Report) , PUMA, and Levi's (LEVI - Free Report) . Customers will also enjoy the benefits of phone charging stations and other amenities.

For a better shopping experience, the company is offering delivery facilities such as Buy Online Pick Up In Store, Reserve Online Pick Up In Store, Curbside Pick Up, Ship to Store, Klarna split payment options and a mobile app. Alongside these, it features Klarna split payment options and a customer loyalty program called Hibbett Rewards.

The company remains focused on increasing the customer base by connecting with more customers through e-commerce and selective store expansion. Customers’ persistent adoption of the online mode of shopping and notable omni-channel capabilities such as home delivery, buy online and pick-up in store, reserve online and pick-up in store, buy online ship to store facility, same day delivery and mobile app services bode well. Driven by these factors, e-commerce comps sales surged 153.3% year over year in second-quarter fiscal 2021.

Management, on the last reported quarter’s earnings call, raised the view for fiscal 2022. The company doesn’t foresee any material difference between GAAP and non-GAAP figures. It anticipated comp growth in mid-teens for fiscal 2022, up from the earlier mentioned high-single-digit to low-double-digit growth. Adjusted earnings are envisioned to be $11-$1.50 per share, which reflects an improvement from the previously stated $8.50-$9.00.

However, Hibbett expects SG&A expenses, as a percentage of sales, to increase in the second half of fiscal 2022 from the first half. Higher freight expenses, stemming from supply-chain disruptions, remain concerning. This is likely to weigh on the gross margin in the second half of fiscal 2022.

Bottom Line

 

Zacks Investment Research
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We believe that increased focus on stores along with improved omnichannel capabilities are likely to help offset cost woes in the near term and drive growth for the company. The Zacks Rank #2 (Buy) stock has advanced 59.5% year to date compared with the industry’s growth of 5.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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