HIBB - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to Hibbett Sports First Quarter 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Friday, May 28, 2021. It is now my pleasure to turn the conference over to Jason Freuchtel, Director of Finance and Investor Relations. ahead. go Please

Jason Freuchtel

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

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

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

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

Mike Longo

the Jason. to Hibbett's QX call. Thanks morning and Good earnings welcome

following you're the using deck, the slide along on third If slide entitled Introduction. I'm

of from for an you of the a This And X%. operating and These brick-and-mortar quarter This $X. comparable just for the XX,XXX work e-commerce the XX% as was a diluted in course, financial results the over stores, XXX% per by outcome share our and of increase the income saw of of resulted hard the sales was were and in and reported earnings for teammates we of support store $XXX center. center, release, possible, a distribution company. were made components terrific in million perspective press the that

another they business in challenging always, us environment. lead through help As quarter a

categories, both of shop reasons Several them thank guidance. teammates Later, guidance. are new and fiscal wanted performance. put We Volke I that adoption, results to announced well believe We address increased our us. last more This Bob to rotation today outperform track that will our represent first, year to spending the closures, course, stimulus. competitive on sure a to for strong to a and and want our significantly proud factors our job some QX even for e-commerce product new existing into fiscal previously to with make reasons customers done. highlight included us But the gave year

data attract and shows have factors that a more and As our gave us even The retaining far. a opportunities new we we our from momentum done these them increased we've result, good to job believe consumers share. so market retain

more little four. talk on bit about Let's drivers sales slide a

selection, omnichannel of new previously, to stated business advantages a satisfy also and we customers and customers, premium resilient our best-in-class consumer competitive to that while capability attracting our provide a our experience. existing without model retaining As ability deliver continues service, sacrificing strong us and a with

to and product continue update We both our capabilities our experience improve and our chain consumer expand supply assortments, enhance overall in-store and online.

results margin Our sales in performance. a gross expectations exceeded as both strong first well growth as quarter

other delivering Some numerous of provide supply improvements store benefits. the like included, include the to will than earlier that future anticipated, emphasis and model a number contributors business all, results first on culture, of things chain key these investments of those continued innovations,

those see to Another new in increases retention. in and continue of factors customer were large that customers gains we

and shopping frequency Next, consumer existing we order continued value increases. saw

our sales, competitive had maintain And these larger limited previously. only well significant higher but projected. combination provide guidance a had drove that we closures and and impact were As of on allowed leverage high a margin SG&A. not course of in that we our probably us which forecast. stimulus as distribution The came And anyone factors early gross more finally, did significant reminder, than to not on than payments a put

to of So, moving little wanted a five, slide to quarters. on bit insight into you next the I few give

last million of improved discussion. it position at will improvements and impact previously incremental and our inventory new consumer that retention, inventory shortfall we future will cost customer and estimate sales. to customer continued factors We the quarter was opportunity business position, that our That approximately additional sales others reductions We additional the improved include, of competitive the a the could investments the factors profitability. in temporary, into the Of order closures, improve these our in a into believe and on experience, to first us end demand course, to model, future of mentioned warrants persist factor, $XX capitalizing below in inventory million bit are significantly have little drive in to some while where key distribution be support lasting of and $XXX brands wanted position.

incremental of achieving the a will position deliver factors the performance. months. help inventory the expect over expect of desired turn provide in opportunity coming the we the toward levels make our in-stock our when increased drag We When position higher inventory progress sales revenue improves, to the that to call now discuss the benefit Jared to fade. our that mitigate merchandising I'll temporary will to much from

Jared Briskin

Mike. you, Thank

year you nicely merchandising triple-digits. sports women's which results in significant including period, we categories, saw slide, business, COVID in apparel. to declines from If achieving turn the all Team All triple-digit have across triple-digit by growth. the incredible also our recovered grew gain ago genders led growth the

Strong impact in average increases strategy retail led positively. our toe-to-head to and and Our cross-category merchandising connectivity continue consumer focus per unit sale. items to results

be reminder, buying, more we a Flooded just by to last apparel, starting across included As positive. our November, teams kids organization structural change our look our connectivity, as announced this significantly women's, performance men's, change deliver we are confidence the branding and triple-digits. we and and bottoms, organized business This athletic Sports, categories, change, leadership and All apparel color gives to between consumer-focused up Apparel which were connectivity apparel, apparel, team and us categories merchandising Gear. structural realigning City to demand closely and has were in organizational to significant have strong to more us primary teams while we loungewear, our from We been we and consumers. have licensed our our and athleisure, tall-to-small forward. allocation fantastic, fashion our driven all genders All and was see brands, our made connectivity for enabled accessories, focus throughout align assortments to were execution results sneaker continue progress the From planning, believe triple-digits. product. drivers. tops that up and assortments

exceptional. fashion business Our continue brand to be

slides triple-digit as Basketball, accessories for underwear, as driving with Continued in and denim the Classic in the sandals standout increased expansion lifestyle quarter. be our sales strong The jerseys business Specific the explosive toe-to-head and drove the up apparel, standouts business growth lifestyle, collections men's investments categories with our growing business with results also were strategy chain its of was area business. the and slides, and footwear strong positive All high-XXs. in fastest supply to with remained were License quarter was women's performance. significantly performance. as continue well grew the Men's kid's. hats was the the socks, tied to strong genders continue to low-XXs sales. our outpacing footwear business and our high to and in with slide kid's merchandising and and in were sunglasses, shoes basketball, Casual continued lounge during inventory. sneakers product quarter. women's in Accessory Footwear very disruption across recent sneaker connectivity strong results. to and and low-XXs and demand. pressure

standards our opportunity. us levels inventory our to While provide allowing experience led fantastic, our have results the to consumer to are are missed likely not and

improve Bob we the fill on fiscal to Our XXXX receive but be inventory fiscal our still partners significant through take focus And opportunities expect and to XXXX merchants to from continue we will below comparison into to position. up current we vendor our as to inventory projections, back-to-school levels work head in financial Based void this regarding you levels. results. now,

Bob Volke

good and morning. Jared Thanks

titled If fiscal refer XXXX the first seventh you quarter slide to results. will, please

results a on our basis. and include combined both City reminder, a and reported are Hibbett As Gear

XX.X%. of and fiscal Over at essentially quarter of compared increase reflected sales For $XXX.X million XX.X%. the XXXX a increased to comp sales were sales during XXXX. comp relative quarter This increased quarter increased net compares year's first first first but first XXX.X% a XXX.X% two-year first quarter, comp sales last versus comp of a period, fiscal total a the decline with comp XX.X%. to robust consolidated a quarter and and comp XXXX were and sales first XX.X% versus the e-commerce million of Brick-and-mortar X% XXXX. $XXX.X quarter, to our came increase XX.X% sales fiscal the to flat in fiscal sales

public of available to our prior quarter, XX% the which business reminder, significant a online the the of year amount for open were to a in approximately drove days first stores As channel. only the

current in quarter. sales the to As sales e-commerce quarter for XX.X% first a the prior year of XX.X% compared accounted net result, in

approximately However, XXXX. points sales of higher the current quarter fiscal the is than quarter e-commerce mix still basis of first XXX

of which gross GAAP due to the the due X,XXX sales, about inventory expenses, to expanded pandemic. improvement store a reserves -- realizable higher market a value leverage to cost expenses non-cash reserve compared were prior inventory from point incremental XX.X% and cost margin to margin year, net or of to was significantly initial shift XX.X% of first a a non-cash in brought sales net uncertainty or Our lower the occupancy promotional lower by basis away carry incremental in low as year mix of sell-through, lower This a result e-commerce a quarter. of fulfillment valuation recorded environment, related In decline cost, consideration. approximate prior

comparable is margin inventory XX.X% of depreciation which Store reserve operating, prior the XX.X% excluding was of first in margin were which administrative non-cash quarter, and the below year XXXX. first and gross selling, of $X.X to non-GAAP the XX.X% of fiscal to quarter in current adjustments. the the sales Our in adjusted XX.X% exclude reported net gross was reported expenses, of well quarter amortization million

leverage assets related brought about strong the for year to significant activities. Gear performance, integration several of dollars expenses addition sales plus and and goodwill, the trade by impairment acquisition uncertainty prior COVID, gained store In non-cash to name, hundred from thousand City included select

year's prior XX.X% current costs XXX Thus, approximately and non-GAAP This certain was prior-year the decrease expense results. and of pandemic-related projects. leverage of growth versus year, and quarter from acquisition the opportunities last organic from we increased million adjusted Depreciation significant SG&A infrastructure the generated approximately represents a point City integration On million. increased million due to first or of Excluding amortization expenses reflecting loss valuation primarily year sales of rate to net which XX.X%. capital $XX.X last compares basis a on profit decrease expenses, operating SG&A increase. XX.X% basis, and were GAAP investments sales, these and an Gear on basis $X.X impairment $XXX.X year operating

the $X quarter, this year's GAAP share $X of and first were of quarter per quarter for quarter this during and cash Driven $XXX.X of three operating a diluted not were operating did year's was the XXXX. $X.X inventory approximately expenses, share capital in last sales, robust non-recurring months, margins, per new, results. earnings compares of first of strong $XXX.X million. income year adjustments leverage items fiscal in by relocated, first in We SG&A quarter. compared $X.X In million expenditures generated in our balance year's to were our share reduction our largely first $X.XX. diluted related flow capital million we earnings prior prior $X.XX million year operating identify in expenditures, million first GAAP In spent income and the first cash $X.X the operating million all year current per approximately Excluding quarter, remodeled were to we flow loss any last quarter, the during quarter over and which to stores. current last adjusted of non-GAAP

Turning in million of balance equivalents, sheet, quarter the we at ago. the to the quarter year a up million with and million from the beginning ended cash cash $XXX.X and $XXX.X $XXX.X

Our ongoing drove and entire $XX to the XX.X% chain in X.X% the Net a to inventory current channels, $XXX.X available, year's from line remains million last The decline addition the based and credit quarter borrowing quarter borrow brick-and-mortar but strong both the ending million decrease the balance. anticipate at the secured our on not constraints need cash in do position. from of in from continued capacity of supply our inventory we in projections. the sales online down ended or beginning

As will start see Mike feel the next earlier, we mentioned to inventory rise we several months. balances over

the $XX.X under million repurchased our company of authorized shares quarter, During XXX,XXX common plan. stock repurchase cost the a at of share first

this repurchase share has financial As in by cash $XXX authorization generation. our our confidence increased and morning, to million related in disclosed flow earlier performance Board our the response projected

guidance our review fiscal updated on XXXX updated eight slide I'll titled Next, the guidance.

is our strong ends we fiscal are This factors. the for the Given year influenced for first January by which quarter, outlook XXth, XXXX. results several revising update on XXXX, full

We retained fiscal due throughout XXXX have new and payments. attract demand, we and market retain previously customers attracted customers in fiscal we disruption, to pent-up stimulus and continue we new feel mentioned, additional to government As XXXX.

continue e-commerce best-in-class growth across expect selling have growth, drive increases help our by addition platform. strong relationships vendor Double-digit team also merchandising growth chain, our expected as well-positioned to sales We drive business. of factors us purchases Those that will to initiatives the our addition our targeted adoption of and consumer take to accelerating to supply in in consumer and in advantage in-store store improving experience, omnichannel well. should

the now a up to forecasting This low in from lap experience positive single-digit guidance single-digits margin the for during closure sales to range negative will previous due positive and in first are shipping next what We high on headwinds low quarter. We and expect double-digits. positive freight than in year from to comp is from of an full expect low single include potential the the a and reminder, increase increase landed digits. third XXXX promotional three Stores experienced over year, did Also Relative government of stimulus we benefit quarter JCPenney to the performance for a the of expected quarter payments position, that and now to costs, activity. in first inventory the quarters represented the the easiest guidance Sage during we last not gross fiscal our year will be lower the as quarter. comp earlier

XXXX to both be margin gross a will on GAAP gross favorable basis. and full percentages year we expect margin However, adjusted fiscal

decline indicated performance in Our GAAP year-over-year gross a basis. margin a on previous guidance

SG&A in full fiscal year the We continue categories wage and adjusted expect a SG&A of and costs equity of will related increased XXXX. fiscal a SG&A next travel first to over as to we insurance. impacts, such leverage to three reported basis believe and benefit deliver quarter costs, comparison and quarters XXXX both compared GAAP to to in percent But on sales in increase performance-based as incentive the and due

our projected to to now $X $X previous EPS $X.XX. EPS to diluted outlook diluted be $X.XX range Lastly, forecasted the of that in is versus of

to rate of difference XX.X an capital approximately We customers, we new do will attracting on and and that the the existing online, for to year. infrastructure assist We average weighted anticipate efficiency. diluted and $XX organic target focused will investments and fiscal to that and investments in-stores processes. the Our million and these incremental our results diluted forecast and will of and continue believe modernize distribution consumer retaining not tax count lead be believe that XX% a we back of current customers, enhance approximately GAAP results technology million. share projects a non-GAAP our growth perspective, in expenditure opportunities experience and profitability assumes $XX enhance sales new between million strategic on also effective EPS office our will From material

expansion our addition In allocate expenditure our the have expanded program repurchases following opportunistically capital share of $XXX and capital to our plans, available intend repurchase we under to program to million earlier today. share currently approximately share

our our during Day line take XXth. expect That your additional place remarks. We and look at Investor forward open June and that the formal to prepared product for culture attendance our operational financial We customer-centric compelling to please Operator, targets on into concludes questions. event. first longer-term and offerings insight will provide that

Operator

Trading. The you. question from first Sam Thank [Operator Instructions] Williams Please comes ahead. Poser of go

Sam Poser

for Thank Good the some given how all, -- Has of you your within well, May I us of you momentum guidance can is idea assume everybody. give my morning, that first quarter-to-date? taking questions. continued looking?

Bob Volke

Bob. about Hey as the outlook. again, into about positive I momentum point, any strong not we like. month-by-month had I what ending pretty Sam earlier, the going Again, first in this but think, to we we We're future at you think, to performance can continue said specific quarter, get expect feel the feel looks we've obviously, its positive pretty that

Sam Poser

do assume most QX you going then from I to that a the every probably And you're is leverage it quarter mean -- and you're perspective, -- SG&A doesn't compare. difficult

assume leverage delivering about and good to potential other see way a that Is it? then and we can QX you're in quarters? the So, think that

Bob Volke

said quarter-by-quarter. standpoint, can was SG&A things is point. as clearly different just still to a was it from more specific good yes, this leverage but easiest full the from into We an again, comp we QX, that last QX. the of Again, comp do lot not we were think we guidance going quarter-to-quarter. But year But little to at the toughest get bit looking a year,

Sam Poser

once, then on MVP you sort how terms, of of details And color new shopping in that can could you people talked be you can are if us some give some you've -- your talked year, give -- how you than us specific, -- more helpful. -- would people about retention, -- customer your program, many twice on this general the the on you about more got many greatly on sort

Bill Quinn

Bill. it's Sam, Hi

number to our up So, program. we had loyalty sign this people quarter record of a

of had in program. also We a record number shopping members new the

only increased also members. not transaction an those following new new transactions members So, value. We've a gain those as new started level last more May shopping, but been of new starting members members we to those higher when as for well

And so of prior far, that. before we've seen year attrition and versus lower even the year levels

having So, experience. a we keeping we of is, of are in-store new before. customers and wonderful effectively Part have course, than better ever that online

The other piece their information. have of that is we

we're like make of them, loyalty grown of millions before. that push, effectively more incentivize course, have is Part terms where never email, to program, communicate to files in trips. of with by our we Our text, them able so

Sam Poser

cash? Great. the an outside How the And just buyback didn't then you cash are you use authorization, looking -- of and and store got of remodels, how but sheet. -- a you're how buyback there lot the you balance for things that other the -- openings on at of are raise

Bob Volke

cash. obviously, going And inventory again, to you I replenish business. be big use we as of foremost, inventory to values, that replenish generates want think of one and that's our more first

in expenditures, geared bit as in becomes to which we it $XX opportunity the of little again, house feel continue opportunities. toward additional But So, additional the touched kind targeted million end is still to the capital, to there's repurchase you've inventory, capital from heavily share Again, the on we invest $XX a million ourselves front store of the cyclical. marketplace additional in and of aspect. like

that's the So, trifecta of basically capital allocation.

Mike Longo

in we we're run rate doing the like Sam, that as I And in think we're couple CapEx today. early of that's our From invest fact significantly is think to that in the noticed making be is get remarkable never all very are Mike. opportunity very, the the both The to a innings omnichannel We an comments. perfect, doing everyone Hope recognition Hey, I'd and things with results that it we'll early have process. sales a and culture of that Bill experience stores doubled in we the embedded. that incessant -- omnichannel be. brick-and-mortar the think years. things we and Ben perfect, Look, goal. near And experience as at, this that Raffle and is add of to that doing the consumer make He to in omnichannel experience. those that investment. that well has increase is aspects to the the where we're of the program, in that continues And we're well from that virtually all previous love you're the but And going loyalty the program. experience. best-in-class nowhere we're the we where while obsession the

So, the I'm on those future investments. very bullish and

Sam Poser

Two open double-digit and this unit store Is that? -- stores new the you'll banner, that correct Okay. prior. year by that about from mean does on that One, up and XX am net XX that's it press least growth I your at more. said release,

Mike Longo

Yes, that. north of

said whatever those unit a year. are few City in So, Gear we'll and brand the net have brand you're Hibbett this and have we double-digit of closures growth do double-digit in the unit right, we'll growth

Sam Poser

I'll Okay, for in come and a thank more come back. -- I'll Thanks. back then second. you.

Mike Longo

you. Thank

Operator

Thank you.

comes Bank Our Perry, America. next Alex of question from

Alex Perry

for exceptional taking congrats another thanks Hi, quarter. my question and on

Mike Longo

you. Thank

Alex Perry

are launch to how this how a a much given of the quarter? like from XQ of seeing comps inventory And to be in you be that XQ partially in particular, from is was quarter, by how the tax about second last second seem -- lapping the drag Just offset stimulus the And it in the a delays? with benefits credit continue inventory think to benefits first, quarter? coming? then off should of much to the of of how drag we -- expected just maybe on the with And specifically just the in sort [Indiscernible] inventory, year, shift calendar that, it

Jared Briskin

the we're up improve some morning, Certainly confident made do Hey the issues real certainly to supply expect to improve. Alex, as to continue its trend, in second good very we're difficult of quarter, certainly access company, But we chain we our improvements some against a the inventory to quarter. Jared. the

your your So, in to with flow regard I had very obviously, significant to question believe inventory, -- we has like of we've improvement our sales. a last odds. Specific and a consistent resulted in inventory

the our what I what more this with So, remain partnership a with we launch month-to-month, get been in more inventory deal and done they've our expect have of Specific team much as that. historically, been they've to that has of has we're inventory be to expect in quarter-to-quarter. improved on calendar, we merchant wouldn't I that frequent been position able quality chase trend some vendors to do the of have in effort. and always back-to-school, we've be been whether a cannot say do calendar. to closer launches what Herculean we'll changes shifted, there the levels the than at we seen be launch it the to any proud

fairly is that of some So, normal.

some of to been but completely seen past. abnormal impact supply the due in the not we've through have process again, certainly chain, a that We the

Alex Perry

then annualized sort vendor distribution come you and of distribution, there's $XX included Can they're companies Perfect, public opportunities? Since Nike on to competitor million you particularly, some detail was on saw that market helpful. to an think give and know, I said I us limited just a update you publicly of share like positive it sounds and maybe Sage time the more but closures access a it limited then really that the other that products. and JCPenney, quarter. vendor been, losing said impact that's few and in think And out maybe $XX you from benefit, last the an million more

wondering of an just if could give sort there? So, update us you

Jared Briskin

What have that our its our certainly, seen in whether market better of initially in are marketplace a JCPenney and be again. Yes, there's be number with performing from a by it regard changes, whether is than it I Sage those we closure distribution that their Jared mean from or closures partners. stores of strategy, lots to did average. changes

very, losing that's from we've so seen need we But far. are that with the pleased year. of in what this So, as go get certainly we throughout of we inventory that a out will more that very those some and a as some we are early occur, that innings, of for point distribution to go There significant as see opportunity to where maybe forward. certainly banners us flushes completely

Alex Perry

Perfect. strength over last just some margin three just to what my color remain you the And quarters? expectations then give fairly to drive here? is more gross next us question, environment the the on expected and for can guidance promotional the limited Are the

Jared Briskin

sure should Hey we means limited. what promotional environment today. do Alex, the quite not expect conversation Lots cadence Jared again. Yes, that be of around the back normal normal, to

inventory, a expect record remain distribution of we are occurring, of that but the lot inventory, inventory as our based the aged certainly lows the marketplace, -- of level health promotional and changes to the off would health at So, low. that fairly activity we're

Alex Perry

helpful. forward. of Perfect, that's luck really going Best

Jared Briskin

Thank you very much.

Operator

from Benedict of Peter go The Please comes question ahead. Instructions] [Operator you. next Baird. Thank

Peter Benedict

morning Hey, guys. good

second that going The make following question. typical last analyses you're that suggest decline. just first see following at I'm that I of given what trying we kind -- versus a maybe guidance, normal So, short-term? season -- maybe anywhere that the worthless and but know but the or sign of not of any are be kinds still giving sequentially question. first know that to just question just seasonality? up quarter on those the -- mid-teens XQ, comp now, you XX% is seasonality that's understand to That's as just there's last we don't north down, what's in like part my imply your typical revenues right I'm of very I there of understand would would are Or we're -- trends is that little

Jared Briskin

referenced that Certainly made thrilled regard that us understand And predict most really we're back-to-school. we're But and certainly we've The inputs through all going the significantly as try and worthless call big get go quarter of I hard is Mike obviously, and certainly to company, we've if healthy new seen things I don't access would with Peter. with customers. to what to that cadence to know improvements we against Hey very about, inventory the across numbers. the that up and to that, help excited a we that to them feel closer the build do is.

merchandising back-to-school year We a certainly a it within across the we've So, the and information Will improvements being really certainly at around occur, really is we've Very company, the believe lots number historically. timing. But out difficult to the ago. be unsure. normal so those back-to-school? connecting modeling a of it seen in some certainly When month-by-month confident somewhat made it cadence. our that significantly know that improvements with And quarter-by-quarter than still you're cadence, drastically we're But of different of big proud be better up made what than we've against. this will that questions consumers. will point

Peter Benedict

Yes. No, fair. that's

inventory situation, margins year. guys back it of maybe performed anywhere balance I have gross don't promotions much and any to kind product return normal your color on too given kind a sense You shifting assume near which outlook XQ the just versus over wanted to to guess that to job activity really you occupancy? promotional the get And curious makes markdowns of the doesn't in But confirm but sounds guys like, great expect done of here. those margin, just

Bob Volke

times, as significant strength Again, the in product occupancy Peter, we store think of off multiple we've the I volume piece. get sales its margin to the obviously, line Bob. and see we've we some with leverage -- continue said

sales those numbers, replenish only not last margin leverage, values, start occupancies we of obviously, some bit pressure a a the are get compares As to. year, to little against but the there again, on is you you less product as on forward little move side tough up inventory

So, that I that's more what looks we're like. cautious a on said why little being bit

start will some Obviously, the three really some a that that to quarters. a with headwinds. We expected drop point, there but there here over to number, been to through overall blessed be quarter bit strong is little next get at gross number margin concern another we've

Peter Benedict

can you on that doing, curious Okay. my also you. more that? to, in some initiatives the maybe Thank been experience just around specifics can customer chain kind of of supply question provide you've last and just -- And then you investments any elaborate the just alluding is you're

Bill Quinn

Peter, Bill. Hey, it's

Peter Benedict

Bill. Hey

Bill Quinn

-- So, what we're time around omnichannel hey. lot we've actually spent next We of research, calling experiences. design, doing generation a testing analysis, spent and doing

for our focused those to number loyalty today, easier making are on even be easier as going is more So, our it members. program, than well as one, valuable use, to that

loyalty. we're our one, Number even number good they're going today, very two, and but launch better. app, to process our So, this make

So, we things around then leading And and how have get some fulfilment, lastly, to to piece. industry plans very that around unique faster customers.

we're our on, those things that focused around next very three So, generation are omnichannel.

Ben Knighten

store contests nature there to want again, to SPIF, at environment been again, consumers with that just we We've they compelling a inclusive things things you this and make both from in, our the in. is we doing a of level, our chime continued stores our customers for through training fresh some spend and I'll come when Yes, associates things fun lot updating store a our to done leadership within our training, in program, obviously, our play experience and and the we've both and increase in-store store that Ben. experience, also done music in for time it side it customers one, in. standpoint, to stores, some that new our of we've the and design, number stores, the upgrading so associates the From make want

Peter Benedict

great. Okay,

Mike Longo

about And is extended that a view supply been chain. Mike, my retail talk always the just an is I'll chain for second. supply this It's

The important then incredibly and I'll what to capacity, doing do what they're efficiency. today. represent of priorities it's when we order we were velocity, three started this journey So, in then priority,

-- line, and has higher the shelf the turn, the the it's sales the this started because on a and the a consumer, initiatives I'll are frequency in of of the gross. faster in with the and the store gross and market. in So, lot have the the the you you faster delivery, to line it's underway life. and great those results, see remind in velocity, they Those speed hands stuff higher them margin And yielded of

to short we in The and grow expected second was a amount capacity turned part grown substantial have important of of amount incredibly in of growth because we that we've time. and

a capacity important. more And result, so become as ever that has

week because to distribution seven-day can comes from in third, going before have the be centers example, a as for So, be well last, then week side. a operation And to efficiency always throughput a in things as you a that five-day judiciously the investing operation, by increase you effective transportation through efficient. the

good be can to have before frugal. be You you

And the supply the And to initiatives you'd that all are the labor improve the in so underway. the turns. doing expect they're that we're things and lower costs efficiency chain

So, thanks.

Peter Benedict

forward Thanks on great color. much that's so deeper Look guys. XX. diving the to Well,

Mike Longo

Thank you.

Operator

The Cristina go next Group. comes from Advisory you. Fernández, Please question Telsey Thank ahead.

Cristina Fernández

you up either questions; what on as good the higher Hi, and with is a put two have on trading as up good ticket. some comment tickets? items one average sales or have any morning would higher seeing So, would there the have congratulations pressure color apparel I on you're consumers about Can quarter. helpful. that more be could far found purchasing

Bill Quinn

Cristina, Bill. it's Hi,

amount but a with less so selling of retail has unit sneaker, that average so ticket we gone Also our clearance, -- accessories it. gone things, it. not only result a part the obviously, toe-to-head, apparel go and has and unit up average focus units up, of have and that's the our So, also of per the the couple on that's

driving the factors. So, main those are two of

Cristina Fernández

you think second the or quarter? sales quarter $XX Thanks. guess, your you million, to you million expectations, And I in the inventory, shortfall left do then in And have that question was estimate $XXX Thanks. was to here was based relative recover on the the during of I second on table of that that demand? quantification the just the the the can

Jared Briskin

Jared, commentary was inventory good its levels. to Yes, so specific that morning,

inventory does certainly translate the sales potential a to shortfall. of So, lack

both and to we online. experience customer the provide So, feel in-store again, like right

gap to approximately million of a $XX have We $XXX million in inventory.

Operator

comes Thank Please Sam from Poser, you. The go Williams Trading. next ahead. question

Sam Poser

follow-ups. couple got a I've Hi, of

Sage balance the built of that -- Is from to year, being built number credit and of to you JCPenney the million Just $XX has changed? $XX into the tax the [Indiscernible] -- benefit the have into guidance guidance? million the

Bob Volke

a future. the think, brief I anticipated. and bit Sage kind a of kind we baked like the of We too, think stimulus when little the a that some are of the known item, understand the originally we've be to [Indiscernible] going was are a cutting of of in of -- off, that potential impact but rate factor of just tax timing really plus from it's not more it's made some with really that. estimate states probably Sam so impact Yes, past, JCPenney have did standpoint tax and that unemployment that the favorable we run in credit, who just the comment, the combination closures to, wise, include does we to had credits than we point, of of how At benefits know not this any going the obviously to into

Sam Poser

All right.

right into question. leads actually next the that So

getting do How it call in but your control and helped -- there's wrote so consumer there, facing But the that you really relative of macro called much appears keep keep which good do you better, have on guys to judging guys that in -- like, job to you guide. headwinds put feel in other And driving improving commentary, built your -- engagement, the the that to have results. getting macro And -- I be all I much does to sort the done you -- are of you How you what's how and the because and that you I improve as -- consumer here, happening it omnichannel How you much believe as a think are should continue don't just versus understand in-stores, so stuff, yes, theoretically could the headwinds forth, of you up numbers release? business. the next? really that call and your -- if of you very sort out that press the factors -- better, as in sort on impacting done concerned, then you're like out to you overwhelm So, in quarter? shows macro. you've you in both much how did stimulus of then know have of the

Bob Volke

answer. questions don't any Sam, you So, I easy could have

a a back, we to this just providing very quarters third, But bit run even to there. quarter-by-quarter, last there's different that building period money. Obviously, and a have we not still this moving we stimulus we're pressure here. fact long-term again, money, than people like? was this these lot fourth game. had new came they I not attracted the to on of customers, quarter these is customers parts whether feel in the significant a joined year experience and obviously a it's see consumer. we to This does think we're some what ago. that when to difficult we remind three parts, difficulty business clearly though quarter why has not parts a to third us, we where they us, and running of So, want stimulus margin, in confident of moving Depending like the got second, relevant mean, we've that a none of -- when we're the we on of Again, there's something them -- or I is are had moving isolate was of at SG&A think And better impact year, QX, a opportunity stimulus. the exclusive. some and I mutually much from lot couple our to results. it some away and look of stimulus little of existing them are base we going get The is on it looking is years in compared long feel

there So, And again, a a we start separate into so stronger much that keep to really in much again, trying longer parts, moving many built mind. built think but base. all pieces, we've term perspective to we are we've can't the engine, because stronger get

Sam Poser

everything so offline. follow-up I'll right. much. All on Thanks else

Operator

any for our turn final closing host our over remarks. I'll to was question. back That

Mike Longo

thank call. you for everyone the Well, attending

proud We of our are team. very

work. excited We for our very us about back and that's enough it's are and to results celebration

hope much. We you together back getting Memorial forward honor everyone we has Day. we safe that So, while weekend, so a look soon. Thank to

Operator

conclude lines. call you does you you your the please today. Thank and for We and This disconnect a participation thank good conference your ask you. day. that have Thank for

Hibbett (HIBB) 28 May 212022 Q1 Earnings call transcript