HIBB - Earnings call transcript Q3 2021

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Operator

Greetings. And welcome to the Hibbett Sports Third Quarter 2021 Earnings 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 on Friday, November 20, 2020. to Finance conference and like Freuchtel, to now of Director Investor would turn over the Jason I Relations. Please go ahead, sir.

Jason Freuchtel

note morning. will These help with our found at Good deck materials hibbett.com via deck may Please that bottom Relations prepared on discussion have our morning. link Investor a is that available we along remarks. of refer you prepared during the follow the to this The slide we slide the homepage.

remind to of should are statements. everyone some we reflect begin, risks. financial like Before differ the discussed uncertainties the made reliance and noted conference respect XXXX be materially to forward-looking would and comments performance management’s are the in Safe future with statements. in this and provisions on These Reform that forward-looking during future and views I from of the Harbor which subject events results It to are of the Private company’s that company’s call Securities current anticipated may those Act statements, Litigation

of XX-K, report are on cause company’s to Report on been Exchange Form differences for you have measures the to extent, this and more in recent the other those call. most information. Securities Form discussed news or in this XX-Q Annual Commission. factors could the Some filings financial such described the release with on non-GAAP contribute issued that quarterly the sources in and We the refer Also, to morning,

comparable our find a GAAP most reconciliation measures may to on directly You the website.

its as information, Marketing the Jared information turn Financial time-sensitive Bob to days. this and The replay Briskin, Because conference call Senior of on conference now Officer; Mike Chief to and Knighten, a webcast Longo. Longo, that nature the Quinn, November Executive Ben President XX, Operations. the limit period Senior of call Mike Merchant; on Digital; XXXX. and archived this based Sports policy President over XX during of of to like call Volke, remarks date, Chief out Senior President this would I this to Chief and Hibbett is Officer; point Bill President today’s Lastly, understandings and call of of it believed accurate of are of will Vice I Vice participants are management’s Vice

Mike Longo

And Good the Jason. Thanks, earnings morning. welcome call. QX to Hibbett

using following on you If the the deck, Introduction. along entitled am are third I slide slide

quarter was for This great the a perspective financial from outcome a company.

the of This XX% XX,XXX you and the store were release, sales non-GAAP work million teammates made the support results the our share possible was e-commerce the XX%. $XX distribution a saw a earnings non-GAAP our operating in of the by hard These income and and per center. stores, press reported $X.XX. we resulted center XX% of was comp comp, in in almost As brick-and-mortar almost

directly business in higher business the on This a as our And As what our City to consumer. women’s, all focus us another put I the in and and team day. teammates ultimate retail connectivity do of the picked and team. sport with. us thank allows Structure And recent lens much about speaking men’s, of last to allow reporting Gear want environment. are to wanted have make the quarter proud release call for changes our better VP the said always, to I’ve on align and each week sure us we will every the through them compete the they today in The a to team, a before, team consumer. they is couldn’t from represent our Briskin through effort new Jared I to merchandising to they highlight did the press Those helped business lead of around challenging of better degree new kids our to

We’re that Banks, these taken Stephani Frankel Alicia critical have Smith, Brooke very positions. Kahn Lauren excited Varetta Portera, and

of Hibbett before, online remain Response. in Let’s that slide COVID restrictions entitled regards a you’ve as this we state as next we heard and reminder, the in adopted a and the so open move stance the Coronavirus. local long stores I to were would compliance to on Much as point. won’t But with with belabor

as While the we local and to our running several we safety our as months we -- of order sure federal stores during our these in ensure state made last several guidelines consumers, made followed well employees.

through to to of continued since feel pertinent believe we that these shop situation probably this safe employees short-term seen what the felt safe actions, before know the to cases some work. we believe and being do. safe consumers virus in result increases we’ll a our and to anticipated around disruptions is country. current As we We’ve to This experience the our due feel to winter and reported

believe slide We to bit Moving factors we Drivers. a on to wanted results. of drove to produce and Sales sales the QX next the continue that give background on you little

website many higher to discuss boost And we and by with to new and stores itself opportunity e-commerce, we As by believe driving consumer gave us. an existing volumes driven saw our time in adoption share spending leisure retain of to higher rotation year, what reasons increased increases yielded those traffic sales. from and factors, customers a be even business our to This in and the shop we were entertainment us market QX consumers sales That temporary and the of sales to our more drive gave manifested our future. call, from believe into the earlier we of closures of in into travel fiscal including accelerating earnings and that and stimulus. and the several competitors,

anticipate. did so effects J.C. us data Penney good those I’ll far. these capitalize you that remind J.C. for an and the a both job team merchandising fact, opportunity stores In that we to We buys we to the done Stage In Stores. those for QX, in and as an begin closures the retaining see our made to In Penney’s the upside consumers categories. the fashion all opportunities, on in of -- new shows we the handle specific believe athletic additional of presents tailwinds have order of well. business we’ve stores some future This

see best-in-class we just the changes I with on we place go to believe our shop merchandising $XX platform. incremental is with In ask strength future. in consumers Jared? we total, And Briskin adoption finally, last I new we omnichannel in of Jared and our the These these continue the continued what the believe experience. many and us would But any that will in approximately consumer in changes like the the our of performance. to believe is competitive quarter attract sales begun. $XX future omnichannel before behavior Additionally, we some to further detail attracted million on continue million to that result really only in landscape will provide consumer to opportunity that

Jared Briskin

morning. Good Mike. you, Thank

you If turn to slide. please the merchandising

was and Our sales double our by share by strong to be continue COVID. footwear Team of comp and It apparel gains mix. performance impacted in digits. was low sports driven sales with significant down

our increase genders brands acceleration early lifestyle transaction the leading saw and as in assortment to business, All in well in is business. strong. is see fashion in basket business Our our apparel, additional toe-to-head apparel, and items the athletic strategy as responded working, performance gains significantly we were mid-XXs. continue athletic upon The of up was and growth. athletic fleece, apparel accessories. licensed This average were the as to we positively delivery positive. Consumers jackets bottoms selling to the by fall products driven brands From and merchandising very

hydration, increase fleece our securing Our our vendor was is strong exceptional, fashion focus performers. fall well growth and also inventory. as jerseys and offset on business significant Caps on us and us. performed assortment in remain growth partners with the and trend. for performance achieved were across kids. performed during technical with our significantly low well investment driver was XXs. in were declines sandals traditional strong take well gainers during driven and as a performed brand growth we was business, additional positive fan underwear quarter. men’s and basketball, performance and also and as all Quick denim results business. worked business turnkey lifestyle, our up as outpacing sunglasses Licensed boots. women’s the Lifestyle by the socks, in significant Accessory were Footwear advantage very quarter. was exceptionally wellness the In genders basketball robust All the the This business running performance, of gains

and excellent the kids the also was During mid Slides team in comp our the remained performed All the to during men’s sales high-teens. our grew exceptionally business what’s XXs inventory the and down category strong. chasing very apparel, quarter, job and our Specific well. growing as period. launch sandals historically with area fastest sell strong in an in a footwear did deliveries boot low business XXs, incredibly gains in our was women’s

opportunities end quality sales and shipment Inventory very our that across genders. We lows, at remained in said, levels quarter delays are increase very all about excited of to position. the historic we’re With of continue with our our and down approaching age inventory pressure confident the the future outstanding inventory deliveries.

expect the fourth levels We continue throughout inventory to quarter. improve to

Gear composition in as will is of year. confidence the the us visual we fiscal Hibbett end coming stores, of well our lot XX prototype. into also improvements this year, we’ve we a new the inventory remodeled stores confidence as and to gives City stores XX made Increased performance fourth our merchandising sales quarter. Our have from By head as remodel the

Increased thus and results highlights sell mannequins from been premium elevated. new toe-to-head design. far store graphics, as this highlight focal looks sneaker walls We’re to ability prototype points, improved are has seeing the and numerous this of elevated exceptional our

which quarter, a project deploying we as prototype eliminate a focuses refresh with be full and less of new balance cost elevating than store our for wall on This consists new stores well remodel. the to refresh similar mannequins, look substantially refresh sneaker fourth the updated the wall. to as flat store, walls, During The of also the will new new plan. systems tables level the will

call only our Volke. Our turn this incredible, looked refresh I test to but improved Bob of performance. now will rollout not the over

Bob Volke

and Jared, good Thanks, morning.

If third quarter refer please will results the slide. to you

a of As treat combined Hibbett business the we extension on results is a reminder, basis. an Gear these City are reported and

million third increased sales and e-commerce increased XXXX expansion a million came sales increase of quarter, at comp $XXX.X XX.X%. in of XX% to third and $XXX.XX net the total the over remained sales sales strong attractive XX.X% and XX.X%. sales omnichannel to grew at fiscal consolidated For our in This comp representing Brick-and-mortar platform. comp compares quarter, quarter XX.X%, sales in

XX% to quarter, accounted XX.X% XX.X% -- in the net year. sales third last for quarter the of to e-commerce of sales, For compared

promotional are compared the slightly which This There’s due inventory environment, a of significantly year improvement margin prior the XX.X% margin margin the in occupancy in XX.X% offset quarter. to expanded Our gross higher the costs low carry GAAP store was included sell-through, gross higher due third initial e-commerce incremental leverage lower that due to volume to a our XXX-basis-point to calculation. sales, to a of net and reduction costs sales. shipping associated of a reserves sales, with of slight approximate

in operating, selling were and margin Gear. Excluding of inventory adjusted activities XX.X% margin to the leverage adjusted performance, third integration -- basis quarter, sales XX.X% points to year primarily the net as to last reduction of gross reserves XXXX. associated administrative XXX the lower expenses was fiscal with This sales gross third in of well the current from Store of XX.X% strong the due XX.X% as approximately this in quarter period, the of compared City valuation decrease of install cost acquisition from year. was

gear GAAP third adjusted compared operating last year to income, XX.X% quarter. net income was Excluding million of in which SG&A prior to a and compares of basis, year’s integration million. XX% SG&A adjusted city acquisition we $XX.X generated certain sales, $X.X On expenses, the operating

or for income million year. Excluding adjustments of of operating months, compared to GAAP three X.X% income operating sales, adjusted earnings were the third of $X.X share quarter the Primarily million $X.XX. improving all quarter earnings million were operating quarter. for result non-GAAP quarter, the generated during was $X.XX share last in per third cash year’s a position of and over inventory the per our we as $XX.X last an of outflow this non-GAAP $XX.X

results which increase was cash quarter, We sales were now $XXX,XXX to were $X.X stores. have in a On also new expanding third flow expenditures year-to-date months million. forward of spent page. with a related from sales, year-to-date capital to relocated growing and the the year expenditures, approximately brick-and-mortar you year-to-date nine $X.X of X.X% a $X.XXX to In largely billion and XX.X% compared approximately move Comp the operating million are XX%, On prior XX.X% capital I’ll remodeled the million for $XXX.X year. sales of sales year. last to over year-to-date first first represent basis the nine e-commerce months total basis and XXX.X%. XX.X% on prior net our e-commerce basis,

margin gross months net to the of was sales, GAAP XX.X% Our XXXX. compared in of first XX% nine

Gear produce XX.X% year-to-date expenses same of the $XX.X modest of year, Excluding primarily months XX.X% year. adjusted to Year-to-date reserve and $XX.X year-to-date the year. the for year of year, current the revenue, nine current increased last strategic to was was for GAAP million. profit gross for sales, compared prior decline XX.X% of year, year’s to acquisition by inventory compared of nine adjusted GAAP last in last adjustments in period and compared months of SG&A to driven a City operating alignment last operating in this SG&A year. costs first first profit, margin months nine million first was On were XX.X% net XX.X% compared we the This XX.X% the basis, the

non-GAAP both earnings current in were year, earnings all nine last compared period income Excluding year-to-date months $X.XX this GAAP years, $X.XX $XXX.X of the $X.XX fiscal for year, per to share adjustments to million adjusted $X.XX fiscal in non-GAAP profit for year, of and comparable were operating to this million prior first the was for the $XX.X in compared operating year. the share XXXX. compared adjusted year per

with and a a generated relocated million have on cash million capital, focus remodeled again and have year-to-date operating stores. in new $XXX.X once flow We $XX.X spent of basis on

cash nine capital expenditures the prior first was $XX.X flow were months Over operating of million year, the and million. $XX

$XX.X balance and ago currently with to a Turning versus sheet. quarter the the We debt cash year ended million we million free. $XXX.X remain in

We last online ended cash a fiscal the borrow not XX% channels continued decline have to borrowing current and to decrease. capacity projections. The quarter. line a quarter anticipate the the Inventory based do our us, strong both third need our available but from at secured credit drove $XX million on in the year-over-year million, under sales $XXX.X of brick-and-mortar year’s

despite However, representing as under inventory repurchase third last our XX% million nearly well effort any strong our authorized quarter, We position execution, over relationships. focused growth sales in strong from our did $XX a or the quarter, share quarter plan. increased shares on not the purchase vendor the as during

future January million share through just have discretion. management’s We XXX authorization over of remaining repurchases at XX, XXXX for

guidance on the Now titled slide I updated will review Future. our

Our by results are fourth quarter for anticipated the XXXX fiscal influenced the multiple factors.

Permanent we As XXXX. to and throughout should future market retain opportunities provide have Mike mentioned attracted new third earlier, new customers quarter in the additional the capture closures any share. and in fiscal closures

initiatives, supply relationships allow of growth of vendor selling the should advantage sales team as help by resulting purchases expected targeted and chain merchandising strong drive in as will take adoption Our to our accelerating business. Other and increase well. as continued well us e-commerce

holiday confident recent trends seen. surge beginning model season, business COVID-XX we counts, uncertainty the of are case continue we in great to the experience and our the recently in due deal While we economic have of to a at the

providing XXXX. As the for a result, limited we GAAP fourth fiscal are quarter guidance of

million. range share and points the comp be approximately basis in with is in below quarter diluted First, the sales will high XXX is tax approximately fourth SG&A difference to results margin the our fourth the EPS as anticipate assumption count $X.XX to XX% year. fiscal by the non-GAAP rate we XXXX. questions. of an will We results forecasted will line to last comparison percent XXX sales range. in be material for effective XX the basis approximately single-digit to expected to low be anticipate not Gross be points fourth projected be comparison $X the of prepared double-digit the our points XX.X to quarter. in points That basis Diluted between a of be concludes GAAP our the quarter XX the improve open and remarks. in of is basis please to do to Operator, that will

Operator

first with proceed. [Operator Sam you. Our Susquehanna. question comes Thank Instructions] Poser from Please

Sam Poser

ask Thanks morning, Well, this. questions. taking for me Good let you my gentlemen.

$XX can right us? any Can you and in you about share if us right M&A now, at Are tell have a you looking what an idea? give cash You now. so,

Mike Longo

always is Sam, Great Good we to from Certainly, -- this hear morning. you. Mike.

Sam Poser

morning. Good

Mike Longo

strategic look is always allocation debate. doing in we’re capital alternatives Certainly, always and going subject to we’re at of great what a Bob?

Bob Volke

us Yeah. you feel level. continue still Good of heard an continuing there’s remarks, optimal morning, our for balanced. inventory an to Again, as get in opportunity prepared build to that We Sam. the to we are to that more

said, always our I open. think, as we’re kind of Mike keeping options again,

to we how deploy shareholders. at looking capital can the for best get We’re return

again, of it store repurchase, whether table, the on share potential think, M&A, options units. investment I be a there’s lot new in

kind to options So we’re forward. going going of keep our open

Sam Poser

think, to then and and where, of and benefits you’re you I Thanks. March, got you’ve from be close Okay. already no situation Penney Nike, J.C. are -- Dillards a Stage Belk stores some And seeing going as longer closings. mentioned, that carrying

that and about does you? that might new what If how I retention how you on. next guess, -- -- of, that top that you do think How about -- on customer think help going your year? into How so

Jared Briskin

Jared. Hey, Good morning. It’s Sam.

Sam Poser

Hi, Jared.

Jared Briskin

on certainly of is We disruption. our timing work hand team continuing advantage obviously in based certainly to to that that the off have without ability inventories when understand it’ll go our on disruption our occur. market. help There’s on We to and focused believe question will us. based that But off take

Bill Quinn

Hey, Sam.

Sam Poser

And then…

Bill Quinn

is Good morning. This Bill.

Sam Poser

Hi. Okay.

Bill Quinn

that. to add Just

displaced marketing been customers testing target have programs to area. We in those

something prepared future. the in do is that to we’re So that

Sam Poser

-- to strong and the then -- quarters fairly significantly you’ve two had I And quarters. then, Thanks. last mean,

to something can stick next QX build comps the not? able business on be going you in to a year gives headwinds are confident the it, give why to about talked far I some you’re say or that, this because and so is you QX you -- that new be where well, that of year, -- mean, you’re probably extraordinary going you’ve next that You just to to feel comfortable that’s, sticky, of think sort lot you going done we customers be what going what’s going that, there’s the of the on confidence I can year?

Mike Longo

Mike, again. Sam. Thanks,

the going But full the year. and two-year combination So, challenge we added and very we’ve an experience experience this next One, what had look all to a written like. certainly, of the playbook and comps this comes understand good comp QX have that against. year factors. that We year, for we and that we’ve have gained do confidence a of from confidence year been the executing that

scope the broader side, the what For tactical we’re the plan, doing. of strategic

is We goes are as of we again. -- gain by, great least quarter this and quarter the recent And out a not we additional low, there we’re deal are to executing had what unusual, perfect have past, have I we do confidence have at to noted, as neglected visibility, XX a this guidance think, QX, give it forecasting this many there. look to We which days in a confidence the confidence retailers in regardless and to you’ve and job we and didn’t or something while put it’s the the miss whether for currently, and guidance. and confidence ahead for opting we high did give said, against we’ll retailers is

about and points, question, on and makes new good that? what experience is you Bill, your you a central anything certainly, and like to feel those retention year, capabilities. add would customer big some to deal, of us next our to our So hit

Bill Quinn

Absolutely. Yeah.

we’ve looked that that customers shopping great to critical will online about lot that first said great A pandemic testing we’ve loyalty getting in they great them they came had what experience is in the comment. loyalty new as And XX again. well. experience at of did learned and And our customers they program. been Also, days, from great shop. QX customer communicate the in-store us incentivizes we’ve with the never about really a is, experience. in-store Also, we Ben a got naturally it’s all part to they new experience it online So a within shop is a and with with that their providing shop. store has online said, shop better. I’ll behavior new customer and into And having to of our and also they it’s them a and experience turn and made what to you they that over those strides had program shopping that QX, with We great back and pressure to we’ve and customers back surveyed

Ben Knighten

Thanks, Yeah. Bill.

make We’re team right? our our and stores, training special culture blocking field to about entire new Sam. think our of and laying to the our management we touching all where down that the and store members there. taking talked in that doubled year. out for obviously, stick location. also make we In went refreshing it’s doors team in conducted through experience give those customers obviously, in on mentioned, tackling, our in-store customers we’re In project groundwork, those next our stores with we refresh as to stick, training those you intention, and come leadership quarter, and customers the it’s We’ve remodels Jared all sales and every about there

Sam Poser

plus general key And as, relationships just -- with Thank your changed just I lastly, I mean you. As how far has allocations vendors this guess… then year? throughout just

Mike Longo

with We our are support. improve. vendors the to in Throughout the extremely confident positioning continue years

portion they’re partners. vendor of our opportunities to with continue they large Hibbett opportunities City as a with as Gear the the numerous well against see brand. both have mobilizing brand, We And

we that will around how we’re positions we very confident occurring. and in believe particular we’re very our some about marketplace are there So opportunities, as are be confident disruptions

Sam Poser

much Thanks. holiday. and everybody safe. a Have stay very great Thanks

Mike Longo

you, Sam. Thank

Bob Volke

you. Thank

as well. You

Operator

America. Perry of question next Alex Please from comes Our with Bank proceed.

Alex Perry

outlook COVID point, and in quarter programs? the I surge for fourth quarter? you just in how confidence especially question. thanks impacting stimulus the double-digit comp taking fourth what you first, great the sort that do gives quarter, a recent on the of on absence guess, And potentially my in Congrats just in high the then low single-digit Perfect. see separately the of business in any to

Mike Longo

then Thanks and some Mike. lead we for that today, of of this in I you’ve got see from to I’ll have give Jared an experience and obviously, extension to as the will the We do question. quarter follow and off This results trends that up. QX. and is confidence

there QX, While our stimulus have QX Ben is any was current believe in was into I not eked and a, be extension we that this In there that slight a any small simply moment, of there in a don’t the will in will a guidance. amount did market. experience. of that model cover out visibility This reasonably our that an stimulus

math doing new we’ll -- we’re around the seeing that e-commerce. on the Bill, Jared? we’re brick-and-mortar in in a And and Our what and trends touch minute. in customer, that

Jared Briskin

Yeah. morning. Good

our most quality inventory point. exceptional is think, I importantly, at of the this

So our that quarter. lot a us gives of ability confidence the in fourth during

incredible our team an enhance third in quarter, to the right on seen that really trends what also particular, and of book. securing has we’ve only done but hand, in have ability during Our order our job inventory, not we some the

around quarter, So position in of we’re with cadence our and opportunities in be fourth in very inventory. the we’ll very confident launches very confident we’re about confident the

Bill Quinn

Yeah. that. This is add I’ll Bill. to

us So more customers, are have do customers perspective, those us more than than frequently customers. prior from we a new with shopping customer new -- new

look year, during last at visits. you buying they’re If also more those

behavior. encouraged by we’re their So

omnichannel more both and who is in in-stores of buying very so increase positive information. for there. result we which any we’re customers large will than increases other that huge Also from and seeing online is improvement are customer a our customers those just seeing or customers activity, as us. also are are of that seeing increase worth in I online traffic in add and perspective, a behavior gathering an We’re

whether can of those to all files, et market cetera, push, our customers So it’s text, easily. email, we

it which a it source. the And to online about been. than experiences sales. has drives talk Ben I’ll turn offering, also traffic best-in-class have ever over We our omnichannel lastly, to better and

Ben Knighten

Bill. Thanks, Yeah.

the of state many minimal in strong, But quite focus was the our our our think, see I’m increasing at quarter. out away limited QX. and in sales on obviously unemployment meaningful and benefits in The stimulus did can and team was through quarter September confident to stores won’t earlier, impact. honestly execute very continue Mike with I a that additional Jared we a is And markets. in mentioned absent obviously kind partnering store As to in few culture some obviously, we timeframe there go our that level. that had Bill,

Alex Perry

cutting Perfect. their that And or of That’s guess, sort banners net of by vendor of Can being -- market? cadence your number my growth I last unit growth are one think would really just net to of from that what’s really longer you here. move update how in for us you helpful. any Just there unit be an partners distribution last you other closer Thanks and partners being of maybe a unit some see this across that. a both sort just opener the and term? give driving about whitespace helped thinking helpful? Is I color that. both sort on you for year quarter of then

Mike Longo

Yeah.

until quarters you new the tell intended that did the recent the go We to back growth store openings. to more of correct. where net than there past, double-digit In were closures. we You’re the market were net closures multiple

that we that. -- are expect We reversing to

confidence where stores. those those how confidence and around in we opening stores have model our we’re opening store We have we’re and new

important. in I and with the model likelihood of we’re and faster is back faster our and the markdown. a support gets and so math IT confidence open life, the new frankly, best-in-class those put at of the turn it product them stores, of ways that Jared and to So stores the the net looking we that how we’re lowers all taking the it a science and and meaning to that’s from doing street to then, openings double-digit worked where the all we’ve that of in for. supply deal to then the we’re approach fashion, contact we chain practices place changes of we that we’ve how opening of it you and best to that great has new go We speed when retailers this of around like amount fair it a of made top the gives us combine our things the on other stores some the other inside in Ben And is efforts And Bill think market, improve shelf the range. is the to and as begin to together,

that terms is will worth the the merchandising experience on a the or of a where where they’re terms a Clay goes. often markets, We then however, good are delivery they’re that as total as on store, we crew that I’ll that best a on that stores. market They hand-in-hand. online, backfill consumer a whether urban focus a across whether inventory right? that of economic is and we commonality value add omnichannel And store, the relatively area we And laser focus The to targeted in it’s not participating door a the and store tell is Alexandria, in a is market combination do with. repeat Jared we the laser net consumer, a give retail in we’re underserved the -- have There ship have and the go any of have store every and how so their more of between slant. But of go change of the also store consumer a detail examples a great store in group things I BOPUS consumer a we that density e-commerce that one-on-one in supports is relationship should that I are New on in that a underserved Board it. of go the Board going in brick-and-mortar that worth has be We sizes consumer and customer, carefully. a have be product experience. website customer to whitespace Those consumer Bullard an terrific Bill to The we’ve just and that micro There one more has in lot Because in with pure-play won’t Orleans and we combination how those the Orleans And that New value this economic in And job are a in our stores to lot. rural and together. consumer is will consumer judicious and our and have be great that’s a the is they a into omnichannel country. brands and the of say, to our markets and put in Houston dense is will of the the brick-and-mortar middle the spend Bill markets, got underserved -- would Louisiana, all culture and on we different value lot. do put and whitespace stores finally, on unbelievably we selection picking They’re and in couldn’t a market They’re also is. services product his on team carry. terms those curbside sites the his different said, Ben you they’re and equivalent, and of Quinn’s that in of terms the of ROPUS different. our by consumer taste. be consumer market, different done very And the be where those and or doing can in new and are buy work where should valuable style.

that all through goes that and science that. fantastic that a team and goes job they’ve So math Jared’s done with into and

want you you question to go? do and redirect let pause it where the I’ll So

Alex Perry

lot was to No. answer. think, I very your comprehensive pass for Thanks I Thanks. that. a that a -- it of luck And and best on yeah, I’ll holiday.

Mike Longo

you. Thank

as You well.

Operator

Baird. next from Our of line Please Benedict Instructions] question proceed. the Peter [Operator comes with

Peter Benedict

high Hi, mess that question. than better think we a is guys. for is I the Thanks you low can agree taking a mentioned mess, but mess mess. Mike, all a

Mike Longo

Absolutely.

Peter Benedict

Well done.

Mike Longo

you. Thank

Peter Benedict

Well done.

the maybe and profit the thinking can if distribution fixed improvement relative maybe leverage margins are to sustainability level, clearly how longer know going strong more when the kind fourth my and about think question quarter. the term? guess to I warehouse margin what That’s just I occupancy again product margin get the of you don’t contribution and the you’re Bob takes So just margin cross to in the But you as normalized untangle maybe some be product of a puts promotional we quarter? question. of in first those, around the there the back about first

Jared Briskin

Yeah. Jared. It’s Morning. Good Peter. Hey,

and I foremost… think, first

Peter Benedict

Jared. Hi,

Jared Briskin

we’re on we aged lows at historic …as inventory. mentioned,

That top Ben’s with as product question. question. really to on impact having as is that of team upside work quality sale into is our where continue, accelerated, we question have sold The our have deliveries something translating historically And product our from of On which that, head than and rate without that has the faster inventory, that able the the into confident and assortment then being have ability positively. in our based perspective lastly, product take that’s markdowns. limited of a quality is merchant along we to done, we So without margin we’ve well we’re without Bill’s promotions QX. is on as of team we do of we been limit our advantage upcoming feel certainly

Operator

with comes Monness, proceed. Jim Our Crespi, Please Instructions] & question next from Chartier [Operator Hardt.

Jim Chartier

morning. for my question. Good Thanks taking

up previous and on there’s product. been the question, chasing limited in Just kind of kind following supply been guess, of the athletic marketplace I everyone’s

footwear? how have benefited a you to expect promotional to year, year get we Thanks. sports increase has mix as and margin And to So apparel next categories, terms and team from in gross -- from this of you then, activity. had sales away into

Mike Longo

you. Yeah. Thank

our footwear a normal forward inventory and mix as think both and focus in we’ve maintaining seen years is I clean in as acceleration we go year. think, into position sports is about first very next But well. incredibly strong on perspective, significant important team we From a obviously, how our foremost, apparel. margins

dramatic the impact we’re inventory, the seeing don’t online and health really selling mix. is to an our selling a limited of that The quality the I and of see that impact the big So in-store due now being inventory. clearance, both an from

Jim Chartier

then or of you’re And and refreshes? stores and then for remodel many seeing then the what understand, And year? you what refreshes, quarter you’re expecting in help payback think remodels period how kind stores next can you in what’s of remodels Great. refreshing refresh kind and store fourth plan you’re terms lift of those do sales us for and the

Mike Longo

Yeah.

stores complete will in refresh all Sports quarter. we So the during fourth Hibbett the project

excited We’re that very about project.

plan the in significantly us than cost strong new look that comp designs, our store we mentioned, are year. we this with and but a the we overall As doing next remodel, to gives of have impact feel a store. year above a over lower similar acceleration economically, remodels the of the remodel significant it’s seeing and for comp. regard full of a the it’s did number the perspective, And From

Jim Chartier

the I trends recent seen just want stores, or that then to or COVID have is between given the quarter? in just sales likelihood you And understand, cases your any spike a possibility think change you Okay. something or in later mix is in e-commerce or

Jared Briskin

Yeah.

that. too early It’s see. to talk about probably we’ll think I

Jim Chartier

Okay. best Thanks and of luck.

Operator

Benedict next with comes question Baird. Peter Our proceed. from Please

Peter Benedict

Hey, guys.

question chain that’s what I how forward today, might How higher that. elevated else other in about few of to obviously, Hopefully, I that more to ask supply went just wanted we capital years anything the to around going and the around phone sales supply continue. level that about chain should just your of systems, not next you support investments level need in an sure support fit Are need down. to mean, they here systems. that happened. the But Sorry the anyway, demand. you’re there to business? be was experiencing My investment and thinking get pulled But

Mike Longo

supply and in we’re doing intimately Mike. Yeah. This what is involved I’m on chain. the strategy

one. that take I��ll So

would distribution and about completely very is I about it We doing have re-engineering good less outfitted. today what we’re more say, is processes. and a capital center

going a of millions the here it’s range, process. There’s modest through capital there needed, we’re in not time. XXX,XXX So amount but at and a

a week about It’s and on live a capital a process and deliveries more changes was equipment. load, loading of from require once transitioning a that re-engineering a focused fluid store. to don’t multiple application from that load, the having more of trucks actually times resources. knowledge more and tons dispatch into Moving week Those

investments of the those made and the so today. expenses And that can we’ve you far, P&L see all in our expenses,

to the So or balance don’t cash the the like they’re early we’re ROIs out. sheet impact we we’re what have any I material would But They say, innings of see we sales. the doing. faster and the get paying or to of faster market, I improvements. and the And gross really to P&L in high ultimately as those to a flow higher adding again, sales. that be our get result -- something I’ll I will to our earlier, repeat we said except it, product margin

Peter Benedict

there one the changing a merchandising thinking guess of I model. structure? store are just and to how labor and the about all evolving, follow And you’re labor hat. lot the Excellent. that, if you’re up Mike, store the How is at compensation maybe thinking store model in kind I about any the how culture to on you that front know changes

Mike Longo

Those be The an upward there of an on range, And those might wages news. changes we’re all the But be in might are bias chronicled there future. Certainly, when part experienced. think that. first the material us. right compensation, have doesn’t we the -- take I’ll impact the are we’ll we’ve happen, some see. a underlying in on that in statutory well generally,

we side the that don’t control inflation, of the So see control of nor spiraling ledger out of either. side. do spiraling see a out We on benefit wage we the on don’t compensation of other see

labor stores. actual sanguine how Knighten your about system. of have that we scheduling staff it. model now putting process labor about grave his watching of and don’t a it, you So we best-in-class and deep while deep question a are we going we’re about labor run tell concerns through the and Ben have a will it, scheduling first the Ben? To I on and the in we’re not part knowledge

Ben Knighten

in you to in the that expense quicker, To right aids time. can controllable environment whole experience actually in-store begun there. an point, out to sure you labor our largest all the our electronic that how But to and even the is only that the the Mike’s helps that and it’s of stock customer we in labor place with product I stores. actually we think labor store Hibbett service Yeah. labor maximize make and display our talking us the frequency an the labor Obviously, changes, about process actually to locations shelves that not being to from those customer. way where in scheduling our can is to use customer Mike’s stores, the system us rolling increase we from existing the we’re scheduling right stores have appropriate a how And on had and that get effort really maximizing that we about, of the at front to people them process but level, at right and ability the delivery in standpoint, of items in get able with replace

labor task from trying types model box the We And have model we much take customer doing more it. on we customers, open points than and interaction to customer front so and refine the person the a more in in to those basis that’s with and place we of in stores a and our or that of really things tasks. valuable so put having that are efforts streamline the continue things, of before sales focused the can around those away we of in labor way to think of that the the side front the put more the that that’s minimize that friction do better

Peter Benedict

Okay. much, That’s great color. Thanks guys. so

Operator

question proceed. Poser Sam with next from Susquehanna. comes Our Please

Sam Poser

taking up. for my Thanks follow

the the your a did you quarter should the XX% to above inventory had revenue you since in would that feel since you What you -- going to up, have but you QX. your inventory end level, they’ve third is the the it? third of quarter it you’re third -- your back in sort Fiscal you your your the inventory quarter level of back optimum inventory say at the the been Fiscal levels XXXX building ‘XX. revenue lowest ‘XX -- you that’s like, the in be? inventory was inventory, in is Your since and what way -- wanted are Where been bring levels of quarter had at On the did like, end the or at

Jared Briskin

Jared. Sam. It’s Hey,

Our from inventory, about we’re year-over-year from a like expectation to be we’d on where perspective. points away XX

absolutely inventory of believe to I can why reason keep inventory part our clean. ability faster that’s our we the are we turn think our margins improving and as our

on that little We and during sell-through we quarter also third the feel in potentially our the was places fast certain opportunity a left some too bit table.

So many that strike balance rate the of on we really to is as capitalize what opportunities improve is, while can, we to continuing do we’re sale. our that, ensure looking as how of we possibly

And As disruption you there’s have with than from lot those things we of we all we ability turn mentioned, of perspective. a ensuring take a in faster our make want while of inventory, to marketplace to inventory past. that advantage the sure our balance that we

Sam Poser

Thanks. Hold on a second.

that that have have around at million thinking that of to that I have liked means like sort you the about -- -- think been quarter, have $XXX So end where would would been you the should you an right? of been should if you

Jared Briskin

not terribly but you’re that, far off. higher Yeah. than A little

Sam Poser

mall-based difference performance strip your then in you any your have Okay. -- from you guys see And was in secondly, performance stores -- versus what did your difference or brick-and-mortar the center?

Jared Briskin

as they as locations But our strong performed than well. mall whole. I stores mall Yeah, Sam. very stores absolutely a our mean It’s our Jared. performed non-mall were as better The locations. non-mall not

Sam Poser

that And at up the double a to the was you or single-digit number? just not degree malls were digits too,

Jared Briskin

at approximately in stores. levels center mall, strip the the were very not Again, strong sales It was of there. Yeah. the just

Sam Poser

success. again. Thanks Continue

Mike Longo

Thank you.

Operator

[Operator Instructions] time. your this Please questions remarks. with closing further presentation Mr. Longo, at continue there are no or

Mike Longo

We Well, attention thank you appreciate everyone’s so today. and time much.

thing business. doing our and is I and out team day. each and today. about only more delivered proud being them enough. can’t going We we call We what business. every than the are love that everyone thank We on of that these results the say love talking appreciate The We they for it do

So soon. again very see I hope everyone has a great holiday you. you Thank season and we’ll

Operator

you your conclude that disconnect does please you for We the ask day and Have your great today. thank conference a line. That everyone. for call participation

Hibbett (HIBB) 20 Nov 202021 Q3 Earnings call transcript