Hibbett (HIBB) 25 May 182019 Q1 Earnings call transcript

Company Profile

Participants

Pat Watson	Corporate Communications
Jeff Rosenthal	Chief Executive Officer
Scott Bowman	Senior Vice President and Chief Financial Officer
Jared Briskin	Senior Vice President, Chief Merchant
Cathy Pryor	Senior Vice President, Store Operations
Camilo Lyon	Canaccord Genuity
Peter Benedict	Robert W. Baird
Dan Wewer	Raymond James
Patrick McKeever	MKM Partners
Sam Poser	Susquehanna
Jim Duffy	Stifel
Nick Zangler	Stephens
David Schick	Consumer Edge Research

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Hibbett Sports First Quarter 2019 Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Friday, May 25, 2018. to conference like Watson, to now Communications. Corporate would turn over the Pat I ahead. go Please

Pat Watson

XXXX, everyone you company’s for fiscal X, operating the Hibbett financial results on year XXXX. quarter first Thank the joining and for Sports ended May which to review

begin, in remind materially of that with made Before Private These questions XXXX forward-looking response in during discussed on to I management’s are uncertainties be results historical reliance the statements. on from statements, like events in forward-looking subject not and future the the to statements. views differ call your the respect are conference based Litigation Safe would and of company’s those which facts, Harbor Act anticipated that comments to provisions we It should future noted performance, the everyone this including and current reflect Reform risks. those to Securities company’s are financial and may

contribute in to Some such in of the with to you Form this Annual news issued the for Exchange been the XX-K information. have company’s morning, more other and We Report Commission. differences earlier factors the in sources filings that on refer release could cause these and or Securities described

Because Rosenthal, I Officer. to the that is now the Lastly, limit understandings it based go turn to Chief period like XXXX. this Sports on Hibbett replay Jeff days. date, Jeff. time-sensitive this Please over call I of believed today’s information, archived would to management’s Executive call information ahead, a policy of nature conference of this the accurate point XX the webcast to would of like conference to XX, out May and during of remarks call are as of

Jeff Rosenthal

Chief this Store morning Senior everyone. VP, Scott Sports to Jared morning, and have you Bowman, me with first Cathy quarter Operations. and Briskin, VP Hibbett VP Senior Senior of earnings Merchant; CFO, Pryor, call. I and Thank the good Welcome

we ending XX, the ended period X% E-commerce exceeded X.X% in quarter. improvement the and cleats as and with compared are during expressly net April. gross quarter, plan apparel sales Footwear positive million store period X.X%. X% store the of continued and above range. quarter. experienced total quarter of $XXX.X million Comparable with internal expectations E-commerce results, our $XXX.X margin sales for March as high well. with approximately sales to perform April to strong decreased for XXXX. X, pleased we represented Branded total comparable Overall, sales sales XX-week results in the First the for single-digit were XX-week sales sales decreased XXXX the for represented was the

rated the smartphones. X is we shopping our of apps results on are out of also app new believe highly from with traffic mobile will mobile is be of our Overall, top stars very customer. iTunes. app web app, The a Our one is great early and for tool XX% encouraged our of the this X.X XXX

and We since percent the meaningful have had sales. is of app already launched XXX,XXX over we downloads digital a

mainly the app, to in-store received raffles. from ability sneaker our our very customers for feedback We sign-up have with positive our

entries have the weeks out since We over XX,XXX ago. had a we process few rolled

business. to digital and Our our progress we make website, grow continue

and reserve One in our is online numerous pickup buy initiatives of and capabilities. to store in-store

Our ahead plan season. functionality is to launch holiday the of this

digital. reserve buy The the comes value. one pickup growth be both online drive store pickup online of growth stores and from in and average will help We in store. that both few traffic, online conversion retailers and sales in This and and order will in will functionality and offer

positively. versus of are program loyalty program, X%. to year’s year-over-year continuing last Loyalty QX approximately to registrations marketing, our sales continue we approximately revamp Our see XX% comp our XX% from increased results of

reinventing stores, on direct e-mail raffle focused are program, our process with our traffic to app. mail to the We measurable and activity in-store program drive

opened real drive X, for store to store We will Hibbett and base states the of quarter, and stores, Real estate bringing underperforming increased XX as to expanded traffic. new closed X,XXX XXXX. X May X the XX opportunity stores see high-performing stores

stores will We invested improve optimizing while our on continue store to capital. close return our and base

Briskin, and second we assortments, Merchant forward trends. strategies prepare see feel Jared we are improvement quarter, we I results with that our about call season, well the starting the in as Looking shape are as start VP, that over we turn starting that in are the have excellent significant the put am we for encouraged talk business. Chief to will we now comparisons to see with back-to-school to inventory, merchandise place Senior fresh our positioned to we easier the I our

Jared Briskin

Thank you, morning. Jeff. Good

started first with February. The quarter difficult slowly a

the e-commerce in quarter and acceleration year. inventory. the This progressed, the cleaner in innovation, saw As nice by business indicators our some access additional positive we new points, acceleration of balance growth and for driven was

the single-digits double-digit high quarter All in from as was quarter in apparel business and and women’s improve. positive mid apparel single-digits fourth at both were trend to men’s Our up with growth continued genders our apparel. kids’

business assortments with area business double-digit. all genders. our across focused consumers resonating remains are challenged hydration most socks during as challenged quarter. The in Accessory the sportswear our continued remains and down license declines Our

of as with was growth categories significant negative college to soccer of year period and down our reduced was with track, championship. a plates. not continued Team offset penetration was in in core low fan the North category championship portion headwear also was in comparison football can championship business and The Significant apparel as achieved basketball business decrease to sports lead improved. the to attributed single-digits. of Carolina was a investment, all Cleated ago declines. the strong e-commerce Villanova’s While be up very challenges the

impacting women’s continued a low While positive business our were was due we Fitness the and Men’s equipment as was single-digits. for was down in changes Footwear the as the down reduce bat a category. while whole, up business. was low both kids positive single-digits. remains the to challenge to regulation investment baseball quarter,

and access of innovative points year. improvement in new over models prior resulted the delivery Additional

and As we we is look The quarter our sports in stabilize. plan. assortments team and confident business to to second beyond, starting are

our investment in reduced have license products. We

We intros on are will product many footwear. of and scale in apparel in our trend clearly new

aged productivity is Scott overall discuss to improve financial by reducing reduced continuing and results. now inventory Our Bowman to we I our the our are over to will inventory. significantly turn call some

Scott Bowman

good and Jared Thanks, morning.

the inventory million quarter expenses decline from sales included sales in quarter. improvement our For aged clearance decreased Product gross X.X% continued April, due in XX due sales, sales March higher the increased federal and rate in points in a million, rate This the increased quarter negative XX of percent sale X.X% was the up decrease store positive XXX quarter the In Logistics the which February, sales e-commerce was was year. total income last $X.X first was and XX profit quarter million comp per percent to of per SG&A Depreciation decreased a a of cost was reform. the of of of due leverage represented expenses sales. to of XX% the This levels basis improved income versus month, compensation. margin versus margin of sales to X.X% of the a X.X% associated from year. in X% the costs. division earnings in decreased points year’s points to with associated $XXX.X $XX.X basis significantly reduction associated and basis decreased which in mobile XX and decreased as as a XX.X%, $X.XX trends marketing quarter, increased due compensation gain Diluted due we was compared to also from our due XX.X% last per sales. mainly prior which of e-commerce a and basis positive with higher last due with Overall, percent launch share in accounting compares increased XX% Operating mainly The amortization occupancy last and share team in sales. to app, sales e-commerce the e-commerce cost year. increased freight X% mainly $X.XX treatment for share higher points to total and sales. Strong XX% experienced year position. stock-based was mainly points quarter. first X% comp our April. to and decreased business, with basis Gross operational the sales rate tax The X.X%. the last which of the rate business, our expenses as as XX% to XX.X% to of XX.X%. in tax of By result were somewhat rate year

facilities. a as opened last borrowings Inventory cash shares year, and spent ended balance to quarter authorization. outstanding we end, basis. approximately a existing was per the the our company we X X% revolving repurchased for made We At million on lower credit Also, quarter stores had total remaining in sheet, under $XX on in quarter. the XX,XXX CapEx last new major with further our versus from company of progress the on for Turning $XXX,XXX store the no X% with million the year initiatives. $XXX quarter million decreased in $X.X million and $XXX purchase the

like of earnings our of $X.XX. reaffirm our $X.XX share range to to would in to full guidance, guidance the Turning I per year

will Number points. points for and our of driven the in first better quarter shift total internal much comparisons second we stated XXX following in gross the footwear. we by and for we we healthier, that higher continue the we there a Last and due weakness Number inventory As quarter, our In the XX% and product. have was two, negative a gross week assortments Last be more year, we cleaner product year, will we margin will believe in categories adjusted new opportunity down comp product. margin. to which fresher due release, branded year, exceeded margin one, believe down second basis had XXX the the to easier basis these apparel reasons. was are press have plan This quarter. for volumes will

occupancy quarter are information questions. operator million. third that for gross ready third and leverage With shift release. on quarter store the positively contained impacted leverage sales, impact from in we be the expect week occupancy by I improvement by the shift would year. week the expenses like impacted due remind shift. year’s would additional and caused fresher on due regarding Based XXrd by negative now update, week We quarter this the for And supplemental this to margin. details negatively press also Keep product last in week margin significant the last store would does revenue would about $XX million details about that $XX in approximately mind in product of the second and impact Further on lastly, expenses the the be to to everyone are significant

Operator

question with Thank you. first Canaccord of Please line go Genuity. ahead. [Operator Instructions] Camilo Our Lyon from comes the

Jeff Rosenthal

Good morning.

Camilo Lyon

given Yes. easier merch Digging trying the clearly they probability what’s and of second the better you recovery half degradation a Just you of of little discussed, newer help I out innovations. got more margin on in you, that and how got is can the calendar that there position were the gross you gain around your inventory comparisons, Can think you recovering as down the year all bit XXX back? be commentary it opportunity that benefit it deeper shift for understand think about magnitude gaining we occupancy? should Could week have QX quarter? plays possible the basis volume the got to extra the that coming from that you the into last said opportunity you margins to points, of margin

Jeff Rosenthal

on are look we first opportunity is that The Sure. product way significant there already the it side, we is and there seeing margin that. at

margin feel so And will comfortable that significantly. we product improve

the other on week math, will piece leverage significantly that mean of just expenses. I improve that’s The that, that, our straight shift, occupancy

on question, good more down year, points the think than were we we your basis to I answer opportunity really half have XXX to that. recover So last of

Camilo Lyon

looks that so on seem the of we for improves line half, the a kind trends? will growth you a single-digit introduction X-year last low And improves then aged about year’s significantly. impact the February shift like clearly positive in guiding the QX low and the comp it item, comp may inventory have e-commerce are about should of assumptions are similarly reset product How then comparisons with on – makes tax to Perfect. pretty X-year it comp, now lapped trends in within what volumes improve decelerated as you your have that, think that the single-digit the and from think And and respect the back back to half? I like be that your

Scott Bowman

Yes.

question I answer So, first. will that

growth will still are half, is seeing we think we lapping that As is that growth as I acceleration now is I in And look think the acceleration in the dynamic will but will seeing now the the we are seeing better e-commerce. at growth dynamic well. that we is e-commerce, see e-commerce And what some are see mean, some and in seeing that which see is we getting be we in back what which e-commerce. I in we mix we are we

So, we freights more clearance margin. product, selling product full-price cost is on helping are on and which less certainly product, leverage

the and it healthier business getting is accelerating. So, is

statement for to business your little second on do add positively bit we comp that so the on I And on sales And quarter, just the the e-com just is think color see half. a opportunity the a more to first the in the back reset trend in year. was We similar on also mind And X based my refunds. last on negative saw did most for a we timing comp. of tax this correct just year, opportunity that part quarter

And news negative at more comp and healthier, XX are on it’s they that because look so year. of last last of in to new The true is it those because that today, weakness footwear. year as whereas that comp and businesses is much a we the environment we think normal, true opportunity and different more significant was second the was the at see weakness if improve good we quarter that both in look apparel based you branded business the in that

is the is early we the at numbers healthier that the a in second single-digits and And but say so of everything branded confusion and I a comp. are and that lot we by our the total apparel don’t being and normally lot there do in around since end footwear of our driven quarter this, the in would shift week else of And up April, business about business. mid trends,

look as will volume have of of that we so products increase we And that as to we product the quarter, in second the closer back-to-school. forward coming get new

should we business mid We are apparel quarter, assortments that better getting have traction our to number. good which allow throughout level that the single really see continuing that in us and comp maintain

Camilo Lyon

right? remind And Great. year’s quarter monthlies got from QX, me just the your last progressed they worse as

Scott Bowman

negative June comp in and were in we They did. negative about a X.X% We comp May were XX% and July.

see back-to-school. we opportunity where to we really closer especially that’s so as And the get

QX at the and look think you you X.X same keep better that our time in because at e-commerce QX comp I to was as we negative year year, need in in perspective QX. have last too, last much

have is in well QX. of so probably long a you today. out little less your kind thinking little in opportunity reflected QX, a as incorporate what there you And that model to And more QX is as than story short, into

Camilo Lyon

significantly, to or that’s and clearly business, those articulate how accessories I it. Got lap really to And the of that’s overall last impact maybe on and last the Yeti been declines? slowed year you then is an the accessories from much had there start business is contribution to to comp when healthy think will my question you anyway

Jared Briskin

really it’s starting last a an for that point. it the at us quarters lessening the the for to Yes, of was early impacted few the gets been impact part The first degree, second certainly quarter is impact quarter as in but well. that than

Camilo Lyon

of Thanks, the quarter. Got for Good it. the guys. luck rest

Jared Briskin

you. Thank

Operator

Our ahead. next Baird. Benedict Peter question comes Robert from the of with Please line W. go

Peter Benedict

Hey, guys.

are non-Jordan know of but business? but back more I now? think of is did over how which historical with about this them the to referring or to you the Are the mean, that First I do products levels? we being presume Jordan product quantities those are just that’s it’s for clarification, the case year. of product, allocating is a I in normal how the tighter they and kind typically than Nike increasingly I they now holding is the allocations, bit they on with product coming guess How question fresh balance compare

Jared Briskin

Yes, this is Jared.

morning. I – think good

marketplace, Vapormax business think from helped as there slice heat will the it really that as start as product throughout that as Max they certainly certainly adidas to certainly always and and feel support. first for Air a creation we we We to are of a can of go the XXs, such XXs, I the and on do which control the in feel Xplorer scale us foremost, start the pie get of is first in to and impact of we through amount Air XXs, of rest we Max models throughout to going product The continue most our go new platform as is that really the lot the around whether quarter the the XXs, franchises that are exciting started the XXX be larger. just our heritage products and models share the year. news year, Force or Swift, can scale we React, Air new year

Peter Benedict

Okay. That’s Thanks, Jared. helpful.

going to penetration, e-commerce have we and the can having have ago, XQ, a X% to think do how that cycling a what past. those coming year think you percentage spoken aren’t about don’t XQ I that then from of sales you store? forward? still and that are towards that getting are about the you quarter over markets I as second in that build the think are thinking online continue it you – guys to think at but that the How that and you Moving

Scott Bowman

Yes.

We are bit. – doing fourth outside increase up quarter we on progress. seasonality the but continuing see that, to the adjustments. traction e-commerce we ticking some it probably around good the as work is some in see still we and due marketing a So of of holidays, Naturally, there making to in see penetration will

well we app product expand mobile assortments the which the as that think online. help have will continue now, to We

And so clearance a well. keep as even business and will of so for accelerating light to of which out in good that lot a make of the bit things sales business little healthier have going e-commerce on that merchandise would fewer help margin

pretty is everything going So, well there.

And that will online look us we that. back-to-school think an good We to and forward drive we continue it. be perspective to so for should from

Peter Benedict

percent you markets store the that That guess, Do the makes from have markets? outside, based sense. comes I

Scott Bowman

that to hasn’t we changed much, the still It’s Yes, still coming in traffic XX% from. and it so see encouraging range too that’s Peter. where XX%

Peter Benedict

is question the last have my plan back And comparisons to got of in you that then kind got Yes. know shifting trajectory drive you into are in XQ that, half visioning your you as XQ. comps, you of the some to store just I over the easier look to have marketing some try initiatives year, and

curious thinking you. your just guidance Thank kind you year laid of out? So as how that about full you are have got

Scott Bowman

Yes.

So, by comps healthier encouraging, some we that seeing I newer more assortments recently helped are fresher and is think and well store is being products. some as so

of And a continuing so stronger be little year. that for to we see bit the the remainder

Jeff Rosenthal

as think to opportunity buy see we in pickup it store, definitely in online have traffic an we pickup We our reserve drive year as store, we in stores. online get the later to

launching and driver online as should see So fourth we traffic and it doing quarter our that as on look reserve store we pickup in upon pickup online, a app, store, by comps. the help loyalty store the buy definitely

Peter Benedict

Okay, so much, great. Thanks guys.

Scott Bowman

Thank you.

Jeff Rosenthal

you. Thank

Operator

with James. next Raymond Dan line from of ahead. the Wewer go Our Please comes question

Dan Wewer

buy to sale from heavily online of the powerful of that consumer vendors’ branded Hibbett’s largest going Armour, sites. say, to invested your in consumers’ opposed a generating directly apparel site? Nike Under direct why perspective, number as shopping would have very shopping the their or From Hibbett consumer the a what capabilities, let’s Jeff, is item, including a vendors in advantage Thanks. to

Jeff Rosenthal

Sure.

products have at brands better not very look Really, digital are giving just of we of with Nike some really of or or adidas and whatever. this, the brands. our it’s those or Nike us so just other us colors adidas and can with we Also hard look the people among, having growth comparison helping differentiation As worked things. type exclusive or brands really

that are to get comparison we or a what time it’s and shop They of of Nike the selling some have a and ways, also there line. consumers market maybe products lot brands through pull are as out are the selling same also and vice-versa. both trying things, will a but unique out So the we of lot that things hot they at – is

we with all So, doing they really content kinds product. are extra enhancing are what of digitally

they wanted be for as them. to So us it is as for just healthy

Dan Wewer

online When your revenues those clearance you the comment of sales are for primarily traditional are geography, items? that XX% to the XX% are that your outside shopping of

Jeff Rosenthal

job SEO. Not a good do necessarily. We on really

rankings on search on our are We search. pages

competition the page our of correctly have on compared search. we few good a job top are from and our one page the quite We website is where and really done a beginning to setting up

lot a We also sure we they making show up that really but about people and us are show up, times that way. know and us job we of have good of a done finding

Dan Wewer

declined I question subtracting it have site? the using around sales e-commerce out the to quarter mortar that is cannibalization your of during online use existing the the I have think of is, bricks sense you may and the X% shopping appears revenues a as much word customers how do last that same-store have

Jeff Rosenthal

and we was northern a then markets the think to the tougher around in for most comparisons really levels sure tax on the lot and you gone people new store tax out and we in the – northern affecting just And for the field, the impact they that had we think really of us I maybe this you February norm comps feel little and refund refunds somewhat. where at we the then and were expected are has of in not managers really hard in talk us up, kind to our store are cannibalization refunds. it affected to really tax It’s awareness comps it’s bit markets as has the a looking get am customer

comps. and March see improvements April in into got our we as store we So significant

Dan Wewer

you. Thank great. Okay,

Operator

McKeever with MKM line go Partners. of Patrick ahead. Our next from question comes the Please

Patrick McKeever

everyone. Good Thanks. morning,

has $XX e-commerce, in on in the a have are And about think that? on even maybe how I million currently thoughts could incremental just about of for wondering also I are evolving what question the past right two had just so at it marketing will breaking time for investing now, e-commerce talked talk and think sales marketing on I I been that more, you think the leave terms it about where your one I most annualized being. at but Just you then and you can’t in those the

Scott Bowman

Sure.

breakeven First point e-commerce, are little it some maybe for that investing on question of reason are on and main reason a more and area. in in the we bit is we that some marketing higher have than initiatives the the The that. traction we because pretty for seeing that good is

And of customers is sales for acquire near-term for new benefit. it that some future of and is to so some

our you for bit if higher at look be So, probably revenue will than e-com, this little year that.

And the dollars look terms that. we So marketing paid close e-com have terms see after others. ads. are From we for to that it we is and more of circle standpoint, a profitable of reason and test and in get take several kind continue year approach on back have been and we tests run will search we because spending which and better learn should product where to a than a and our listing come in breakeven this lot PLAs,

behind have and mode. we have done are seen that more have so so in dollars some things And put And we traction some we that. on we still that good certain

word fair doing to the social on also get out. media amount are We

looking oldie effective. into doing has are direct but it kind been goodie, an but We some mail of

And on so to we bit our especially that, little more doing are help a stores.

continue And on the keep will well. close eye will but marketing, invest we so we as as half, back into continue in we to return a

Patrick McKeever

I one other some retailers winter a of have the many earlier, the pent-up of was related kind thinking about weather into the wondering material impact mention core any weather during if the markets? didn’t storms just colder through that demand quarter you then that think And the to some related is you has the do to came even more the your some weather? so, And if of strength down of though,

Scott Bowman

about Yes. We you the much. half don’t the the than were talk at noticeably southeast like that if too our the mentioned I Jeff tell comps of northern and as look is the to would worse southwest. geography, What you weather

that Now It trend to worse fair quarters. quarter. this has little be been just was the past few over a bit last

assumptions we you maybe of that but and think impact, it don’t a So bit little given own that impactful. your can was make

Patrick McKeever

thank you. Okay,

Operator

comes the question ahead. Sam from Susquehanna. next of Our with line Poser go Please

Sam Poser

guys. morning, the of got major my accounts, in three. I follow-up and on I very Good some for have offices you Birmingham and question. have correct? to am you Thank your vendors taking down question, have Number major other closely, to one, still continue support

Jared Briskin

That’s correct.

Sam Poser

Okay.

can the footwear sides apparel and the the versus outside Secondly, performance performance how in different you that’s talk and of Jared, and of that? of sort between performance cleats about line, products performing like running, product fashion of basketball the more

Jared Briskin

mean, the are I the blurry two. between lines Yes. certainly

and from certainly premium position are performance away positioned business a the We certainly have We performance of some core products. our some in still well. of take doing

are from as to UltraBoost, the to cool the shoe, that aesthetics, whether be it’s certainly materials, shoe developed just adidas the an will but those selling compelling color in performance again example with consumer be look that it’s visible some compelling storytelling We as a whether or a performance Nike trends, the or all feature are sneakers which non-performance assure sold there today feature products React, whether a it consumer resonate not fantastic really technology performance in it performance as elevation lifestyle, today be resonate or fantastic that a more of it’s be products products is whether as is their enhances significant interest materials would on visible alone. a at technology to A versus There again also the needs product. we performance that has Epic product. of do performance well. great Some standpoint

Sam Poser

expectations Thank then of shifting in your the Jeff effective better you what third reason above in came that lastly commented quarter expectation. because quarter the are us for both you. specifically your asking in And second you Can were as for more And first I for the give results? is dollars and results than am today, Scott, to the the press release quarter and some idea leverage.

So everybody abused your quarter beat stock gets on do, you the given in but is And given calendar and happen something said as the normally going – bit and shift to understand now? and next? same but getting this page you hence is not say relative really that you to in this numbers your I right you what’s a

Jeff Rosenthal

Yes.

first probably reason the the a our internal plan bit was I why lower of things. quarter, Street couple than mean, in the So was

the some that think did in saw on up that clean margin inventory the is volume through is have of to that I side. that be understand quarter the expand. yet and planned as our done product new important we impact we that we fresh and to needed have I go of as didn’t first an volume throughout in that is thing kind nuance still some the will that We think first year of work product

small other we XXX quarter, have So, first in items Epic couple volume. Max Air and the did React but very

it quarters. have of will eventually didn’t And later in so as that effect that an much

go visibility did that into clear about So, to that thinking had pretty internal we our plans. some our and

how kind I today compares. continuing. expansion easier quarter. So of question like that’s consumer just running new few we that. on mid that entirely single-digit of always But points of based QX of we that QX, product, we And are said and that, with the the potential the internally, that. feel positive We a comps about discussed the some It’s second possible in QX things we around at and think whim see

XXX will all a see comps third in showed lapping portion be recapture for for XXX a half then last We margin standpoint, product as – on are numbers points, the points going the kind main course because e-commerce more but leverage driven good a was I should of lot that gross of down to and that not that think we ability of of than is by recover portion quarter, and we you reason allow of us back From about good return margins. was the the and that year. to year to I QX. from store a occupancy that get look of last that talked of as to flatter

As opportunity. we less there get an will QX, a be of bit into little

points so we down opportunity keep to have of is dollars occupancy store still on shift opportunity store because that mind so thing pretty occupancy in quarter the that it XXX last but And Our in will from the much year, on much line, And static, shift expenses product margin significant there next. QX. margin QX the occur. to not as see as down, impact revenue stay just than as be is will we a pretty from was won’t as standpoint, some the those one leverage

Sam Poser

Why last in is were merch your that margins QX year? when you in XXX bps down

Jeff Rosenthal

gross total I margin think on an overall the affect margins. week the impact the basis, will definitely shift gross from it’s that

will the have I not quarter, us that there is as quarter. like and all think as later that we that in we into third the come into in that to some things of recover allow promotions get So, from won’t much opportunity standpoint

Sam Poser

cleaner and a higher down your is means inventory e-commerce your cleaner, prices sort it on had last clear, of you have your e-commerce year, at is inventory is. said more now you able slower hard that quickly should of be to lot least the basis year-over-year a now you that your to was sellers clear But was inventory at

those the As very all positive you merchandise things look forward, shouldn’t to be margins?

Jeff Rosenthal

better we when it’s of we mean a that. I a think That that get and will just on Yes, means I as little a get have those to should matter timeframe, read help closer much we I we better point, of is idea clear QX, there think mean, will on line have but get of we a that sight bit we how to I recover. QX, on can

Sam Poser

in not the you quarter? for plans was second quarter first Why everybody of EPS out the there the sort year have disconnect since give back EPS and estimate, such in just a and everybody here half of a range figure your of clearly mind

Scott Bowman

am – specific not really I I to really Yes. want EPS don’t numbers. give

we revenue margin I the that I and very have get account discussion had the think gross take if you you that into close. opportunity, will around think

Sam Poser

luck. very thank good and you Well, much

Jeff Rosenthal

you. Thank

Scott Bowman

Thank you.

Operator

Stifel. go the Our of question Please Jim with Duffy next ahead. from line comes

Jim Duffy

ASP is on the what just Stifel. about question build around behind with apparels Duffy can are you in apparels do and branded the talk you plan have how to a key to guys component an Jim branded there things that, It’s strength Thanks. I this strength, holiday? the that and are that back-to-school

Jared Briskin

Yes.

capitalize are of our sportswear some both is going ability are some on some cleaner it in customers what we the genders of have. currently to that apparel, increase is really but with seeing the that’s across trend in We XXish of inventory we our it all units well sold as resonating on ASPs have as today, certainly

half. our better is back Our expectation we get that product penetration as to of the gets

we very we So, with about feel are currently. where apparel good

Jim Duffy

lifestyle product more tells oriented? it performance than oriented So

Jared Briskin

very go we a of start and much throughout do significant then the is the year. performance as declines to lap we It some from lifestyle standpoint

Jim Duffy

cleats statement can then the that there are in seeing seems team I comment recognize on it regulation bats, is also And category Okay. in change sports stabilization stabilization? your you else that business, what that the is you was behind healthy.

Jared Briskin

Yes.

the one follow me, other component a have to focusing of think with differentiation. our regard we we path cleats categories I followed on to that tried obviously to in some similar number

development we the e-commerce certainly So but primarily cleated has had has e-commerce that helped, of that biggest our the stabilization our business growth. the have been our from certainly within is business, coming enhancement

Jim Duffy

guys. Alright. Thank you,

Jeff Rosenthal

you. Thank

Operator

Please go line Our ahead. next Rick of question with Stephens. the comes Nelson from

Nick Zangler

gain Zangler traffic app, launch Nick guys. is early, launches is attribute new here. shoe in-store with am then this schedule accessible. would Hey, I driver a And imagine clean, you you talk is shoe can lever else could it any for these I drive to for raffles, potentially seems have have the always just incremental that would this Rick launch the just I with all your opportunity exclusive for Hibbett, app all the especially to complete like be awareness of imagine it Hibbett there downloads you mobile given here, possible it seems easily schedule brands to the in but to for but enthusiasts. this a I app, that this It’s general launches, shoe you place also a the at could app allocations, about anything feature, been sure seems hit. store? traffic it’s schedule? on know lot the And very a do can seen like like and traffic on the relationships new into

any thoughts So here? just

Jeff Rosenthal

Sure.

out stores of things in New our really store that sneakers. good launch. we on launch York on have customer see increase a and built surveys One to pain in really a we the customer buying We lot people’s on points surveys our through did and we opportunity did traffic

is. we store how the really first opportunity stores, out all that to having just got opportunity our of we vendors. to XX that it but year, traffic And also with help which but really there us of for showing to a rolled last not time really say are stores them our that conversion hey, the demand and our rolled much I we see which do how XXX, that. much we we really out, it pairs will had for some am We have and trying an drives and stores it us all those soon, demand for gives shoes have that

and quarter, only go throughout our the it about see launched I we there, some stores stores. X not opportunity we ago second of have a really we just So if to more will huge testing and and weeks all as all. get as almost X it or been And

of is we had have you and where over year opportunity launches. raffles isn’t that see know huge people huge put their a this few there the it And in a XX,XXX We huge, even names soon. that time launches we for opportunity just a as so the of a ton

in as will take feature next into re-raffles. another our to big Also driver. which year the a we later get see is X weeks the we in those we when So live that X

So it we to our will drive to customers, with if up get which liquidation somebody didn’t traffic. also store and up, show can re-launch help

that are excited with can deal there many we So, take things it it of where can we very us. are and think we

Nick Zangler

to new downloads customers? just part the of it do see – Are the actually ongoing you get and offering for or initiative new be downloaded and it have raffles to or is completely is continuing an that apps

Jeff Rosenthal

It’s stores on do the one when that unique traffic not We the up, that a we opportunity put there, call also of a the for different to fashioned you stores. new. This people features you all with which And completely is it customers. and makes have to in old just sign we easier lot it drives did have other three and that. it buckets had

like in multiple to stores a happen to you there you town is multiple if it, have it So, chance where in that be locations. a win Birmingham, have

will especially sneaker opportunity drive likes to loyal think I customers he that it he feels So, and kid really that the that anywhere our that get help raffles.

Nick Zangler

great so helpful this had itself looks it quarters just e-commerce in in in inventory weighed aged And in mentioned offering the on mix was so of clean. quarter, higher finally on then the mitigating It’s Yes, prior markdowns. far. super the margin you quarter, that e-commerce the

case e-commerce maybe that e-commerce margins, you or may the can didn’t have wouldn’t versus Just did have quarter expanded you you a such help because have was was obviously curious you there the if on estimate spread potentially marketplace? if as well, e-commerce if provided it in that this had

Scott Bowman

Yes, are impact sooner that some if still difficult little at mean, a difficult we and the think it’s do because clearing are this things see point measure, we little Nick. we level. get fewer I a a total are markdowns. to some we to with see high liquidations it at where just examples to adjusting our of It’s trying

will do monitor bit continue an there. put and little exact that number but opportunity early a to on to it, see some it’s we So,

Nick Zangler

Thanks a lot Great. Good guys. luck.

Jeff Rosenthal

you. Thank

Operator

the David Schick next Our with comes Edge Instructions] question from Consumer Please of [Operator ahead. go Research. line

David Schick

Thank it’s Two questions. I Schick. my Tim you. David friend Duffy, joined Well,

it say fair or and flattish, weather that was that been – as X us it is basis First, to it was blurring, you was you going better. more be in that’s are you a sounds you X for the and second, talked May essentially you like have to was in to about ASP flat sense performance trying talked line some is is the or the the singles mathematic give start have May normal? and of you fashion, that think Could in then March comp about that if true? April And footwear would say mid

Scott Bowman

Yes.

I in X into the second in a a of think year comp X.X and as get we then did May. change, a negative April last we lot quarter, the

really big a saw we So, year shift May. to from April last

soft a lot And real it the lot but of is of that mid it so from seeing a is is pressure now single just we compare comps year. part product, of are last a

David Schick

we Great. the And new in? the coming might stuff sense some what as like the of then that math into ASP, footwear look shift anything on

Jared Briskin

an Yes. there lack perspective ASP impact to some bigger positive, on the from assortment the From is in standpoint aged is shift but footwear, an of ASPs inventory.

from we as ASPs well the health So, as the benefit assortment both inventory. some will in get of

David Schick

into the launch the a should Okay, any step down expect last next to of around with stick the lap great. we real in that And cost then app, build year? or of that

Jared Briskin

Cost of the builds.

David Schick

or you launch of around that adding cost budgeted have finding digital short-term been the spending out? the it’s general have if have incremental incremental just towards then part the anything around Well, app, and you the app you if digital around in there is out

Scott Bowman

It part spending. the of general will be

to the to launch to and app will be seen the year of will make we our but continue make so to launch app. far we little the it, but that we magnitude as and to that have we more, It into the enhancements a built continue further is next spend we So won’t improvements improvements this into continue guidance. year,

David Schick

Okay, thanks.

Jeff Rosenthal

you. Thank

Operator

turn Rosenthal, no to the Mr. you? back further at questions you this like are me time. presentation there to Would

Jeff Rosenthal

We Sure. August you today. participating. second Thank call in quarter earnings our call thank for to for on our and forward being you look

Operator

you does you that thank for conference please conclude your We disconnect ask and gentlemen, today. for the Ladies that lines. your participation and call

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