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Hibbett, Inc. (HIBB - Free Report) posted fourth-quarter fiscal 2024 results, wherein sales missed the Zacks Consensus Estimate and earnings met the same. The bottom line decreased year over year, while the top line rose.
Shares of this current Zacks Rank #3 (Hold) company have surged 60.4% in the past six months compared with the industry's 36% growth.
Quarterly Highlights
Hibbett's adjusted earnings of $2.55 per share decreased 12.4% from the $2.91 reported in the year-ago quarter. The figure matched the Zacks Consensus Estimate of $2.55 per share.
Net sales rose 1.8% year over year to $466.6 million for the quarter under review. However, the figure lagged the Zacks Consensus Estimate of $477 million.
Comparable sales declined 6.4% year over year and lagged our estimate of a 1% drop. Brick-and-mortar comparable sales specifically experienced a 9.2% decrease on a year-over-year basis, whereas e-commerce sales demonstrated an increase of 6.9%, excluding the 53rd-week impacts. E-commerce represented 18.9% of the overall net sales for the 14 weeks ended Feb 3, 2024, higher than 17.4% witnessed in the 13 weeks ended Jan 28, 2023.
The gross profit dipped 0.2% year over year to $160.8 million in the reported quarter, which lagged our estimate of $167.5 million. Meanwhile, the gross margin contracted 70 basis points (bps) to 34.5%, driven by a decrease of about 125 bps in the average product margin and an increase of 55 bps in store-occupancy costs. Freight, shipping, logistics costs and shrink improved as a rate of sales on a year-over-year basis, partly offsetting the adverse average product margin and store occupancy performance. Freight was favorable by about 65 bps, logistics was favorable by 30 bps and shrink was favorable by nearly 15 bps.
Operating income was $40.6 million, down 19.9% year over year. The metric came below our estimate of $43.6 million. Meanwhile, the operating margin contracted 240 bps to 8.7% for the reported quarter.
Store operating, selling and administrative (SG&A) expenses, as a percentage of sales, increased 140 bps to 23% due to the inflationary impacts on store wages and the related benefit costs, a growing store base and higher data processing costs concerning the ongoing investment in cloud-based back-office systems and technology.
Other Financials
As of Feb 3, 2024, Hibbett had $21.2 million in cash and cash equivalents, and $45.3 million of outstanding debt. In the fiscal fourth quarter, Hibbett paid a quarterly dividend of 25 cents per outstanding common share that resulted in a cash outlay of $2.9 million.
During the 53-weeks ended Feb 3, 2024, the company bought back 1.2 million shares of its common stock for $56.1 million. This included 47,550 shares acquired from employee holders of RSUs to satisfy tax withholding requirements of $2.8 million. It also paid the recurring quarterly dividends resulting in a cash outlay of $12.4 million. Capital expenditures for the fiscal year were $57.9 million compared with $62.8 million in the last fiscal year.
Store Update
In fourth-quarter fiscal 2024, the company opened 14 stores. As of Feb 3, 2024, it had 1,169 stores across 36 states.
FY2025 Guidance
Management has provided the view for fiscal 2025, which will have 52 weeks. Various business and economic challenges witnessed in fiscal 2024 will persist in fiscal 2025. These include the potential for inflation and elevated interest rates, the continued use of promotional activity to drive traffic, wage pressures, a more cautious and selective consumer, and ongoing geopolitical conflicts.
Hibbett expects net sales between flat and a 2% rise. The company anticipates comparable sales and brick-and-mortar comps in the range of flat to negative low-single digits each, and e-commerce comps to increase mid to high-single digits.
The gross margin is envisioned to be 34.2-34.5%, whereas the operating margin is predicted to be 7-7.4%. SG&A, as a percent of net sales, is estimated to be 23.9-24.2%. Also, interest expenses, as a percentage of net sales, are projected to be 0.10-0.20%.
Earnings are anticipated to be $8-$8.75 per share for the fiscal year. Also, the effective tax rate is expected to be 22.9-23.2%. For fiscal 2024, capital expenditure is expected to be $65-$75 million.
For fiscal 2025, net new store growth is likely to be 45-50 units. The first quarter is expected to have the lowest growth with net new units likely to be highly evenly distributed across the rest three quarters. Gross margin expectations consist of a less impactful promotional backdrop and small leverage gains in freight and logistics partly offset by headwinds in store occupancy. These factors are anticipated to drive nearly 40-70 bps of improvement in the gross margin year over year.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Gap (GPS - Free Report) and American Eagle Outfitters (AEO - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales suggests growth of 5.7% from the year-ago reported figure. ANF delivered an earnings surprise of 715.6% over the trailing four quarters.
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 180.9%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year earnings per share suggests growth of 11.1%, from the year-ago reported figure.
American Eagle Outfitters, a casual apparel, accessories and footwear retailer, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 22.7% in the trailing four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales suggests growth of 3.3% from the year-ago reported figure.
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Hibbett (HIBB) Q4 Earnings Meet Estimates, Sales Rise Y/Y
Hibbett, Inc. (HIBB - Free Report) posted fourth-quarter fiscal 2024 results, wherein sales missed the Zacks Consensus Estimate and earnings met the same. The bottom line decreased year over year, while the top line rose.
Shares of this current Zacks Rank #3 (Hold) company have surged 60.4% in the past six months compared with the industry's 36% growth.
Quarterly Highlights
Hibbett's adjusted earnings of $2.55 per share decreased 12.4% from the $2.91 reported in the year-ago quarter. The figure matched the Zacks Consensus Estimate of $2.55 per share.
Net sales rose 1.8% year over year to $466.6 million for the quarter under review. However, the figure lagged the Zacks Consensus Estimate of $477 million.
Hibbett, Inc. Price, Consensus and EPS Surprise
Hibbett, Inc. price-consensus-eps-surprise-chart | Hibbett, Inc. Quote
Comparable sales declined 6.4% year over year and lagged our estimate of a 1% drop. Brick-and-mortar comparable sales specifically experienced a 9.2% decrease on a year-over-year basis, whereas e-commerce sales demonstrated an increase of 6.9%, excluding the 53rd-week impacts. E-commerce represented 18.9% of the overall net sales for the 14 weeks ended Feb 3, 2024, higher than 17.4% witnessed in the 13 weeks ended Jan 28, 2023.
The gross profit dipped 0.2% year over year to $160.8 million in the reported quarter, which lagged our estimate of $167.5 million. Meanwhile, the gross margin contracted 70 basis points (bps) to 34.5%, driven by a decrease of about 125 bps in the average product margin and an increase of 55 bps in store-occupancy costs. Freight, shipping, logistics costs and shrink improved as a rate of sales on a year-over-year basis, partly offsetting the adverse average product margin and store occupancy performance. Freight was favorable by about 65 bps, logistics was favorable by 30 bps and shrink was favorable by nearly 15 bps.
Operating income was $40.6 million, down 19.9% year over year. The metric came below our estimate of $43.6 million. Meanwhile, the operating margin contracted 240 bps to 8.7% for the reported quarter.
Store operating, selling and administrative (SG&A) expenses, as a percentage of sales, increased 140 bps to 23% due to the inflationary impacts on store wages and the related benefit costs, a growing store base and higher data processing costs concerning the ongoing investment in cloud-based back-office systems and technology.
Other Financials
As of Feb 3, 2024, Hibbett had $21.2 million in cash and cash equivalents, and $45.3 million of outstanding debt. In the fiscal fourth quarter, Hibbett paid a quarterly dividend of 25 cents per outstanding common share that resulted in a cash outlay of $2.9 million.
During the 53-weeks ended Feb 3, 2024, the company bought back 1.2 million shares of its common stock for $56.1 million. This included 47,550 shares acquired from employee holders of RSUs to satisfy tax withholding requirements of $2.8 million. It also paid the recurring quarterly dividends resulting in a cash outlay of $12.4 million. Capital expenditures for the fiscal year were $57.9 million compared with $62.8 million in the last fiscal year.
Store Update
In fourth-quarter fiscal 2024, the company opened 14 stores. As of Feb 3, 2024, it had 1,169 stores across 36 states.
FY2025 Guidance
Management has provided the view for fiscal 2025, which will have 52 weeks. Various business and economic challenges witnessed in fiscal 2024 will persist in fiscal 2025. These include the potential for inflation and elevated interest rates, the continued use of promotional activity to drive traffic, wage pressures, a more cautious and selective consumer, and ongoing geopolitical conflicts.
Hibbett expects net sales between flat and a 2% rise. The company anticipates comparable sales and brick-and-mortar comps in the range of flat to negative low-single digits each, and e-commerce comps to increase mid to high-single digits.
The gross margin is envisioned to be 34.2-34.5%, whereas the operating margin is predicted to be 7-7.4%. SG&A, as a percent of net sales, is estimated to be 23.9-24.2%. Also, interest expenses, as a percentage of net sales, are projected to be 0.10-0.20%.
Earnings are anticipated to be $8-$8.75 per share for the fiscal year. Also, the effective tax rate is expected to be 22.9-23.2%. For fiscal 2024, capital expenditure is expected to be $65-$75 million.
For fiscal 2025, net new store growth is likely to be 45-50 units. The first quarter is expected to have the lowest growth with net new units likely to be highly evenly distributed across the rest three quarters. Gross margin expectations consist of a less impactful promotional backdrop and small leverage gains in freight and logistics partly offset by headwinds in store occupancy. These factors are anticipated to drive nearly 40-70 bps of improvement in the gross margin year over year.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Gap (GPS - Free Report) and American Eagle Outfitters (AEO - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales suggests growth of 5.7% from the year-ago reported figure. ANF delivered an earnings surprise of 715.6% over the trailing four quarters.
Gap, a fashion retailer of apparel and accessories, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 180.9%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year earnings per share suggests growth of 11.1%, from the year-ago reported figure.
American Eagle Outfitters, a casual apparel, accessories and footwear retailer, currently sports a Zacks Rank of 1. AEO delivered an earnings surprise of 22.7% in the trailing four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales suggests growth of 3.3% from the year-ago reported figure.