HIBB - Earnings call transcript Q2 2022

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Operator

Greetings, and welcome to the Hibbett Incorporated Second Quarter Fiscal Year 2022 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Freuchtel. Jason. you, Thank

begin. You may

Jason Freuchtel

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

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

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

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

Mike Longo

Thanks, welcome and to earnings Hibbett and good morning, the QX call. Jason,

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

strong financial performance for the outcome Company. This was quarter’s a

us through As earnings we a was of means sales a at you center of saw Having for responsibilities to XX%. executed in comp resulted work year-to-date. income hard the quarter said teammates helped reported strong of share comp a last the another support and per the by for They were store quarter. for XX% level $X.XX. in in million business lead year and of and in XX% their XX,XXX the of high second challenging stores, X% decrease press release, $XX.X the These our possible two-year the the centers. This quarter a environment. respective That operating for a results diluted distribution a and quarter made the total that, we were comparing total comp our

outperform to to And We’re team for as address my stimulus. and shop them highlight wanted our some and We categories But proud job performance. said first, results put I strong track will into a our team. some last year fiscal fiscal new announced our Several to gave to remarks a represent previously want Volke is thank significantly on us. e-commerce this and sure guidance, reasons product I today in included customers believe favorite us his the make sport, QX year rotation with repeatedly, that and our spending and compelling factors This our for both new guidance competitive to teammates of closures, minutes. adoption, love reasons increased I’ve done. Bob well to in few the existing

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

little a slide sales X. more talk Let’s on about drivers bit

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

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

second two-year a performance. growth strong strong well as margin results delivered Our gross sales as a quarter

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

while added we customers above-historical Second, retaining existing customers our at levels. new

and finally, gross allowed with experienced limited sales price year-over-year closures we their results to quarterly customers competitive of number the a Third, maintain amount and gains drove factors our solid distribution to margin. combination continue continued these positively. purchase high us our average to and existing sales of impact us in shopping The increase. And

you want Moving on next some X, to give quarters. to our into few insight we slide

distribution customer discuss will some key -- improved position. And in improve competitive consumer model, our of closures merchandising inventory into reduction the that improvements on and retention, will believe some the to drive mentioned were future sales new We a investments while significantly to could temporary, incremental have the of to call the performance. persist brands include will capitalizing lasting over in of Jared factors now the I’ll the discuss factors business additional an profitability. now continued the our to be and our and to turn For Jared? experience, that, and opportunity in impact previously I future others

Jared Briskin

Thank Good you, morning. Mike.

the to turn you’ll If merchandising slide.

able above were majority the significantly we all year’s the of For categories to sales second the prior significant comp increase. quarter, plan, as were

but on being growth kids double-digit for categories all focus and licensed All toe-to-head the growth to sports standout area by business. drive genders over and two-year the team achieved fiscal achieved the results. to in with XXXX, period. and triple-digit as quarter were women’s men’s Our declines double-digit merchandising offset our continues compared Women’s products with growth

apparel during performance improvement small products. brands, the sizing. Our demand Drivers quarter. color strong kids we tops remain to and athletic business continue to tall bottoms, to sneaker declined From products in from mid-single-digits connectivity adults the and and connectivity see lifestyle for connected

very to performance fashion continued Our brand be strong.

as year-ago inspired to are worked the as pandemic-related Inventory in lifestyle quarter, declined footwear and an remains strong demand and with License the demand. jerseys, masks led well significant continue to nimble issues. accessories, during disruption. our in sales apparel, Classics with business volume us running offset items the our very Casual sandals shoes in to women’s remains very exceptionally results pressure was elevated growth footwear supply Specific drive consumer. well. Denim mid-single our chain very The strong, Basketball by Our by The closely during ‘XXs mitigate were footwear vendors our supply continue resonated bags increased in our had footwear sunglasses resonating this the and with they’ve but business space to was such area Sneaker, are important and digits. driver. and under business area perform and slides as fastest-growing was has and kids the headwear men’s and to by this are investment strong. period. remains strong due declining. and as business. also looks quarter, business and very

the are and inventory deliver as as to information, have on we expect with merchants over up levels of to be what tirelessly during secure working year, remain projections levels. results. turn vendor below partners Bob to our inventory. well the discuss our financial the additional Our will back current ‘XX to Based to but ‘XX to call on we fiscal I order now fiscal half

Bob Volke

refer Fiscal and slide Quarter XXXX Xth Second to titled morning. Please Jared, Thanks, Results. the good

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

reflected sales X.X% but increase Over $XXX.X the fiscal period, have came as a sales were comp sales increased year drove two-year compared XXXX, XXX.X% ago. comp were declined to the business in but second to Brick-and-mortar were versus years and second decrease million year’s X.X%. In quarter channel. XX.X%. shopping at habits total two quarter up comp second X.X% XX.X%. and the incremental net XXXX the XX.X% This prior sales a a fiscal sales sales online ago. comp consolidated sales relative quarter, two For a quarter $XXX.X our COVID-XX second to quarter quarter, to declined million the decreased of second This second to consumer disrupted versus our years result period same last pandemic. comp E-commerce XX.X% of compares solid comp the and of during

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

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

cost products, slight to a rate shift a still carries overall XX% from due margin a compared mix This of sales prior in net initial priced improvement low improved Our an which to e-commerce, and basis-point the margin, despite approximate premium margin GAAP sell-through gross e-commerce promotional lower to higher fulfillment. expanded of the XX% year was meaningfully environment, quarter. improved away due of to XXX second

Excluding year in the XXXX. XX.X% prior excluding City minimal second quarter, was margin our to inventory activities. gross administrative in the sales second operating, fiscal noncash current of amortization, gross and expenses, adjusted quarter reported of year below XX.X% current slightly costs to XX% in result in adjustments of integration which acquisition decrease year. were with having a Store year, last the is of of net reserves XX.X% and selling valuation and was Gear comparable the This depreciation associated margin the the

Excluding regular the certain investments processes. markets, versus year year the results. back-office basis-point operating advertising expenses, on an represents efficiency to was XX.X%. experience current adjusted stores second prior an primarily XXX quarter the related integration in prior and at aimed in of staffed This expense was across adjusted new SG&A basis in and City incremental engaging drive to year rate and increase attracting disrupted customer approximately hours, targeted cost improve business customers fully to SG&A acquisition expense XX.X% of the Thus, increase Gear

store and basis, quarter second year’s a net operating plus we of profit additional generated GAAP sales, million. XX.X% than second development in a operated less amortization prior of increased quarter. last capital reminder, year’s at and year with in levels many reduced our slightly on from approximately business to hours increased of or infrastructure profit the reflecting staffing On $XX.X last $XXX,XXX operating projects. Depreciation of As quarter million growth compares quarter, the initiatives second regular stores opportunities expenditures which $XX.X

quarter, second this Excluding year’s non-GAAP million per year of fiscal to adjusted XXXX. second in last year’s $X.XX, were this were the and million share compared we and -- second of for year’s adjustments diluted operating diluted all diluted operating earnings during per adjusting share had $XX.X last In share were $X.XX GAAP second income were our quarter, adjusted period. earnings $X.XX. quarter, GAAP items quarter no per the of $XX.X income earnings current in

of sales slide and E-commerce million XX.X%, fiscal comparable year. On XX.X%. turn prior the XX.X% over the two Relative sales significantly comparable in of sales comparable total increased increased to the XX.X%; of months of years period. year-to-date the year e-commerce and six sales $XXX.X e-commerce year comparable brick-and-mortar first to the sales $XXX.X million first total XX.X%. from increased X. to comparable increased to Now, XX.X% XXXX. looking up the $XXX.X fiscal current fiscal XX.X% compared sales decreased the sales which last basis, than six Brick-and-mortar up in XXXX, of million, grew two-year And sales XXX.X% months a to months first over higher back were period is while XX.X%; XXXX, in I’ll six sales the represented

of Our XX.X% the months of year-to-date for net GAAP gross margin fiscal XX.X% sales first to ‘XX. six compared was

XX.X% of valuation adjusted prior to our the year. in noncash the to comparable is year gross current adjustments last inventory the year, Excluding gross XX.X% margin of margin reserves

First half of net first net SG&A expenses sales six the compared were last year. with months of sales in XX% XX.X% of

produced pandemic-related and year, expenses costs integration adjusted $XXX.X an XX% net points occurred sales of that first of year the of reflected from expense six a of SG&A year-to-date year. operating last improvement approximately acquisition last months we year’s Gear GAAP last of City valuation XXX SG&A operating $XX.X expenses basis certain of of over profit and million. impairment current compared to basis, XX% Excluding On million profit

of to existing $X.XX of were in year-to-date non-GAAP profit robust leverage were sales, stores. $XXX.X our fiscal basis all have share the Excluding all in spent year, compared last year-to-date the the million operating relocations, the first GAAP excluding expenses, adjustments and fiscal months year-to-date ‘XX, new by flow there to per to related cash $XXX.X we to Since items million last compared earnings and of $X.XX profit $XX.X adjusting $X.XX diluted six million year. no of openings, diluted of earnings $X.XX year, operating strong was for comparable adjustments. period compared generated a $XX.X of million non-GAAP of SG&A prior remodels margins expansions of current on per Driven share operating largely adjusted year. store in the capital, which over and

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

balance quarter and is as to $XXX.X equivalents. and beginning fund quarter. entered cash of build continue to in Regions from agreement million to the Bank we into $XXX.X Turning We at sheet, returning cash the ago second capital million with a cash and credit with the quarter a the million deploy new while ended down cash million the $XXX to year we This unsecured stockholders. during five-year inventory expenditures, our also $XXX.X

second no from at million, at outstanding from not from XX.X% and quarter-end Net current credit year’s this have based borrow last the was inventory the a and unsecured the XX.X% increase anticipate present need quarter. We do to of line, an beginning cash on borrowings increase projections. quarter $XXX.X

buying significant previously we mentioned, the to our our have is highly continues and Jared work strengthen that relationships around to global merchandise coveted supply by our base. with obtain vendor our continued team by posed partners to As challenges customer the chain

million million shares as a to During stockholders XXX,XXX at the cost recurring part our as plan common of and over first stock our repurchase second returned $XX.X authorized we $XX dividend. quarterly quarter, repurchased $X.X under share we just our million ever of of distributed

For at share repurchased under million year, of of stock buyback have we $XXX.X the X,XXX,XXX approximately common shares cost a plan. our

In the X, of addition, close payment of in the record our business $X.XX to next per common the has stockholders September Directors declared amount dividend share of at XXXX. Board quarterly of on

our XXXX the I’ll Guidance. review slide Xth on entitled Next, updated fiscal Updated guidance

XXXX, by our This update ends full the are year on Given performance in XX, strong the outlook for we fiscal January second quarter, factors. XXXX. revising influenced several which is

retained As previous payments. XXXX new disruption customers due comments, fiscal mentioned in demand, throughout to year and attracted we market pent-up stimulus and government

XXXX. attract continue fiscal to and We customers retain new additional in

and infrastructure in-store opportunities. Net and sales revenue chain incremental additional of drive expect us will consumer to addition omnichannel in We adoption e-commerce take accelerating investments our that and profitability product consumer positioned improved growth position, in our growth. to experience capital to well selection continue across double-digit to platform. unit the Those and inventory have store drive supply factors, capabilities corporate advantage of growth, also improvements best-in-class help should

for We guidance high up in digits full positive digits. to of the is the from are low now year double previous forecasting mid-teens, comp which single sales

expect comp also third the positive we both growth in Although the be we expect and slow. to year-over-year to fourth sales quarters,

costs. We expect headwinds and performance half half from to due and in lower fiscal deleverage the shipping gross to be store the occupancy XXXX in year freight of potential the will margin costs first second on of relation

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

wage such increased due reported year-over-year and expenditures. deliver in a level the full as of comparison insurance. of consideration. of more Depreciation We adjusted deleverage as slightly in GAAP percent believe leverage will to half first the cost expected repairs difficult we of the the incentives operating maintenance, of fiscal half capital basis sales also out performance-based to impacts, due second year expected the continue the to ‘XX and and margin back point expense leverage categories quarter third fixed to on to gross to will to fourth margin expect SG&A XXXX, compared and costs, both, we comparisons related like a benefit travel in to year equity quarter and fiscal believe be would the is due SG&A to and costs the that in and than year We and in increase in half SG&A

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

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

share under In have the expenditure as of opportunistically program. million repurchase we the our quarter, second available our addition And share plans, end capital repurchases. to intend capital to to allocate of $XXX approximately

Operator, That program. also to We in initiated line of for our form remarks. additional capital recurring to open the the concludes recently dedicated our stockholders dividend returning please questions. remain prepared quarterly our

Operator

first Perry Instructions] America. [Operator from with Bank Our is question you. of Alex Thank

Alex Perry

congrats great quarter. and question, another my taking for on Thanks Hi.

slowdown Is the guidance. contemplating the of of stack there little the implied comp in it just in explain that, color, on that just considered inventory then, securing cadence to back you. progression of of maybe the sort sort us through lead versus is thinking I challenges, off half? a more in an in two-year Can So, Thank could slowdown? you And think give XQ would XQ? is you of what most the a being

Jared Briskin

the question. it’s Alex, the I’ll part Jared. of first take

supply numbers up So to with yes, period. had fluid. I that we’ve characterize we’re feel ability obviously, certainly would our about chaotic the recently, concerns we additional I certainly against guess and very very-strong to the talked the in to as chain, There’s without about. strongly go question, the results hit we’re some and it year regard that confident we really and flow here somewhat starting But, our ago goods from numbers

answer to So, I think, question. it to I’ll the turn of Bob, maybe part your back second

Bob Volke

Yes.

periods, As did it numbers. large such indicate gets quarters little of last the of back far pretty year, the as we that coming the comping a tougher keep to four bit obviously half strong off some over

So, expect the see we half to in of still the back positive year. comps

of think somewhere year. half mid applying in digits upper the to kind the I for single back the of we’re

keep we to that momentum what’s going. that’s So think the again, going

Alex Perry

That’s really helpful. And then, just my second question.

at scenario light Day, guidance should us and be this we for in more gave next about next So, changing all? at guidance you year, thinking how Investor the of year through that the about newly raised of base planning is Like on that high thinking you year? there a margin still pretty color are just off same-store any for positive sales and shaping that gross expansion a

Bob Volke

expect several we I a the growth we’ve that opportunities. we’ve lot last our of a over expectations question outperformed kind challenging obviously, a future of still from of Again, quarters. got mean, standpoint

think opportunities certain and we obviously, one We a and another, don’t hurdle or sales in up this obviously, more margin profitability. necessarily rate not long-term we have our continue think equation. in I steps the expand Again, is still quarter-after-quarter. on continue over we extended bit of grow, confident go an year-after-year period as But we again, a pile feel to difficult. quarter linear still outlook. But, time, gets to after to little good

Operator

Thank you.

with Our Trading. from is question next Sam Poser Williams

Sam Poser

few. a got I’ve

clarification. a Let I just want me --

this you’re You’re comp year the versus to saying ago the half? back -- in versus that half, year the last years back up versus two in -- back going or back in in the

Bob Volke

back will year. last we of comp year versus half this positive the No, in

Sam Poser

And the range was again how you much? mentioned

Bob Volke

single high expectation. to our digits Mid is

Sam Poser

comp year Doesn’t that your put guidance? your above full

Bob Volke

No, that’s the to to basically get the guidance. math

Sam Poser

men’s versus please? you Compared team ago, versus kids’ and and Okay. footwear color ‘XX, couple give as was apparel ago, a years -- sorry, to of QX I’m could sorry, two fiscal what to Jared, years sports there us women’s, some it

Jared Briskin

Yes.

As morning. all, I first good -- mentioned, Sam of

All Certainly, was referenced up the of period. our ago the to women’s and double were standout, compared our digits genders categories area. as two-year I

to those And Next opportunity. and area, our strong. for two would try kids’ be our as entire a as were capitalize significant a we areas focus was merchandising incredibly reminder, which us on evolved that organization

our period, smallest area area. improvement footwear was growth team thrilled over was the and growth sports the double-digit but with ago were Our the by We of apparel. two-year driven really

Sam Poser

you year, your Great. EPS Analyst And when excuse on And next that said this on for is, when the ‘XX, would based into we today, me. based ‘XX guidance case the know you prior Day, ‘XX? fiscal fiscal grow anticipated the you still year’s is -- look versus that expect that what you then, question gave that also -- you

Bob Volke

know if saying think was certainly was more grow we it don’t it definite the I in yes, Bob. of year-over-year. it’s like long Sam, could answer question I the I it we think definitive were we hi could grow? Again, was said, when thought

I I we can made I continue to still commitment increases when it strong I the continue that. best that. on talked we to to the we do do we can that as think our quarters, that’s we basis. just bit. repeat the But but firm It’s just don’t to grow that to what think a is here will mentioned to little stack hope again, to and Alex think year-over-year bar possible, be still and a expectation again, As a I’m just we said, may question, going in completely linear. last obviously continue Again, not I Again, it

Operator

question from Fernandez Group. Cristina next with Our Telsey comes

Cristina Fernandez

call say the XXX the Do constraints talked was last My is, the think the possible, supply year. to question on chain first the in the I inventory about that system? increasing is just of by still XX million, end you you let’s number given by

Jared Briskin

try constraints, I morning. amount that’s get a some difficult. operating would say, our more Good up the aspiration based Yes. we’re those we’ve time, our certainly of on lower team’s demand caught and to becoming same lower seeing to numbers. levels think It’s operated significant inventory the and of is our At inventory Jared. continue off to that and I the in of with effectively inventory. a gotten amount more comfortable But,

we I it think right inventory, becomes flow So, right really it time. how that are ensuring about the the trend we and at more of have

So, we’re focused on that’s what now.

controlling the the with confident in the have but supply control to we inventory we we’re regard and inventory in. We’re the can that things chain, that of very flow coming

Cristina Fernandez

previously incremental the CapEx then, million year, you $XX million where to the is million? about more now this you follow-up Thanks. versus going And is provide Okay. details $XX can the forecast my $XX

Bob Volke

a of major on There’s kind of couple that. buckets

it. that we’ve anyway, some into just buck accelerated something be that some about doing of store forward kind a is we expansions, this the We move of got So figured time get bit so of more piece the for bigger of again, bang refreshes we obviously, would remodels, development, the talk growth, over future. opportunity store little That’s to to our a when -- we’ve that we stores, quickly. new

as infrastructure to to is is the of smart We’ve more safe some kind fixtures to fixturing the and also refreshing overall to store the putting referring capabilities as kind the of well piece and of technology, and wraps second of kind the of attack IT into those cash we’re store. stores infrastructure some all within a stores committed result in as some our Hibbett what of some us decided IT of The the other of upgrading we give going of project. just around the

or was a done something opportunity of and that spend, accelerate probably the clear current Again, have an advantage two we kind would over it So, stuff is took for but just year. advantage from projects again, not or new three-year we go-forward moved the the the be those baseline forward. took period, in I to that the normally of million want advantage $XX an of timing

Mike Longo

I’m there’s those upside to think Yes. tag on a Cristina, of investments. this is along those going Mike. lot comments. We on

about excited improve see there, exciting of broad is very one the still opportunities, took some my and outlined invest And more we still that them. bold we the our in that this provides the experience strokes aspects quarter, but against opinion to step, opportunity Bob fact the upside. of consumer is them. of executing We’re and those there, we’re

really that. enthusiastic about I’m So,

asking So, for the thanks question.

Operator

with Hardt. Our next question Monness, comes from Jim Chartier Crespi,

Jim Chartier

of could what to that or availability, inventory just Was have were two-year of little in seen provide you’re one drove color big in you play? So, companies other it at that improvement relative And acceleration better factors terms few a the if their first sales trend. I’m quarter? there a curious just

Mike Longo

two-year Well, about excited comp. thank very you. that we’re Yes,

to been tell how has get on against Everyone the is the bump. thing XX% do the I perform that we’re How about is And this do? quarter to waiting you, XX%, see something comp year? got that’s going think to it. going excited against two-year last And to that’s speed been are waiting performance. I is been everybody they Hibbett I’m excited to about. has going second how to very

comps here have So, great against to XX% But out? XX% pretty expect executed not. certainly, proud things. Do we how of aspire and from to team that, it. on Probably we proud of the pretty

of the build to So, and digital we’re I after and in have get it. lot continuing marketing, to push been merchandising, there’s that. a stores in And that I and and efforts things the wait coming, know Jared can’t exciting

Jim Chartier

in again. Great. trends, open stores trends? that change any now reopened closed you And year customer country mostly then, retention and is customer were Are are the that last retention seeing

Bill Quinn

This is Yes, trends Actually morning. retention. Bill are. we positive Quinn. Good very, very in customer overall

value. And we what by more attrition, of top each year, Also last top and so even on of back cohorts trips, in customers customers, May XXXX, we in seeing is purchase one-and-done. we month, customer cohort that, we’re back et those when us. that, a of tracked lower while, low So, higher our of average seen cetera. in shop stores reopened in group we’re May haven’t come on that June, And lapsed with seeing

Jim Chartier

or of in lapsed then, doing organically? terms in is outreach, just terms that the that of you’re happening customers, that something And your is

Bill Quinn

Yes.

of so that’s actually lapsed are lot outreach part a it. We doing to definitely customers, of

our it model. part is, improve continue to we of The other

product, if as So, provide to to improve and and top stores you job we improve of fantastic well Jared’s On the that, best-in-class have provides a to of use continue our a benefits it’s just at customer service And vendors there. we look customer the to continue as customers. loyalty lastly, attracts level and very in that our lot online them. that done And of easy program experience. team

Jim Chartier

to then, Stage closed? Great. in million put initial you markets and then, target, competitor of are your $XX stores year, the And seeing tracking out I sales how JCPenney where you versus a are million last $XX closings. think, And What from you benefit store expectation?

Mike Longo

that really We about feel This is estimate. Mike. good

within in have those to all externally of model our of radius We’re our where as well we accurate know We sales We it sales stores. distribution in. of track the a reported competitive are. forecast. what changes X-mile seeing those as We closures pretty come means believe competitors a as

that. against executing We’re

great product, done and and product the great We’ve Ben things, consumer awareness and obvious consumers. coaching job. ready job level to ready we’re of our adding like marketing to we’ve against mix to there and the a in gone those we’re that stores of of know store in has to We detail the got and opportunities the in serve have getting those done to the doing gone the employees getting lengths for changing We’ve that. product. the a the

So, really to good we come. feel estimate. the more There about is

that it we August. stores everybody actually closed see XXth their that the think was time I didn’t of this very last it it -- come quicker. would or I it remembers began was more clearly One thing would thought was year be we stores, -- believe Stage that in XXth

along up XX That the began before been somewhere registers. really in our XX consistent. has lines relatively was saw we what so, days of the And effects cash show to to

And would those in, annualize how but to effect into upside still calendar those sales about Stage, about in the against you of continue to the numbers, future they so, until least all we’re layer opportunities against come at of those as don’t publicly it and now, got as end this think think all we changes you year. really going reported distribution,

future, Stage are I those So, comp. for Did answer yet? the all your still of upsides question in stores except the

Jim Chartier

That I great. appreciate was it.

Operator

Baird. with Kleber Justin from is question next Our

Justin Kleber

about here first think of you of as that do much of hitting end or how Just is in XQ, magnitude tail timing came that we XQ? the off, and think back-to-school, the most business at of

Mike Longo

Yes.

think later, -- to and a think simply see we We little back-to-school, in for in and general Back I did is to historical -- because up prepare districts I bit think It school gave So, lead it. had mimic right. this curves -- to all mean, shifted general, that out they week school of additional back going shifted And Mike. obvious themselves historical I and a is in reasons, angst to terms for that it were little that levels to themselves the there general sales a seasonality. a school timing or some bit there. two parents the to

should moved we believe is think going it’s stores back-to-school? the thing. as it. specific material, this regards think and any won’t in a that do see don’t see further will with you we it QX. the Ben, than We but comment into of sales to from bit little did I how of something So, we QX

Ben Knighten

Yes, of Mike, echo of comments. those some kind

with didn’t Of by ago, Labor so back way, two stores in of course, I’ve far. on, been and saw to very back leading it -- there. But, little efforts from comparing with that, standpoint, a thus giveaways a things local results. we’ve events, excited store that results, We and with definitely the a of still shift we’ll backpack and capture a after but go haven’t and the continues do have but marketing and in results around major pleased lot a really northern comparing things bit western with gone Day, been the nothing later been hyper local our it did back-to-school, markets market the particularly lot been continues. years which happy to a to definitely about. year, we saw shift, very with there very which back-to-school and have last happy to very We our DSM

Justin Kleber

Okay. the That’s outlook. Bob in just good terms gross to hear. margin Maybe for a of question

second makes I rate half which margin second was XX.X%? year’s second you be the will around think gross the above half, half think But The sense. half being last do below first

Bob Volke

here. I -- the way, the process welcome Yes. guess Justin, to by

tough QX margin to in is margin had have products I we opportunities prices. our where access up some here, all figure coming to maybe to some think again, movement was -- I a exactly in year But because struggling quarter year. marketplace of going. get out discounted the we QX at We the last compare think, was the highest are

freight in going to Also, half going are see to a compare occupancy year. -- strong for costs. But, number the half certainly back challenging. have can overall shipping against think or the of think more be compare is to the a We year, the the deleverage, last of think, competition some and we last of we we little store we some bit

Justin Kleber

about, a XX Okay. could And been here, the last back that it’s improvement you I going of it the one to outlined in, annual set guys then, talked but guidance, XX I if just you when you sneak points your just margin based long-term the or something few guidance, were basis times asked know meeting. knowing think to at guide, operating which line. be moving that north north did you the higher? of XX, on today’s to was be base going this you you’re outline on going I to year, this that of expansion, one, using old XX% base for was the

trying understand a you’re I there what saying you. make in Thank exactly terms go-forward sure So, of to basis. just

Bob Volke

Yes.

of keep As on stacking we other. top we each pretty strong quarters said,

off longer-term about clearly XX thinking estimate a a Again, in lower most XX I we’d a year to be just said not multiple big just the that this a of achieved think to based recent in to be here lift It over slightly cycle, we end linear to of over period. was we a the think going from quarter. have what still where period not from up equation, period period. may we’re we

Operator

next with is Benchmark John Company. The question Lawrence Our from

John Lawrence

able Thanks. this Yes. seen -- you about Congrats, about, a be have guys. of goods -- we’ve to up is a strong competitors Mike, Can sporting talk help would business. done for your in your there bit something for some you’ve the structural week, the just besides you’ve little But space. higher what and forward? to going a about you set reports business little bar that really this indicated that the a closures comment on bit

Mike Longo

Good morning, John. question. for Welcome. the Thanks

think a believe I very think opportunity this good is place. in industry is I reason that money. I is The a the there. consumer have job to The that has

improved last think of more great were skills deal of idea we the hasn’t the I in a consumer the a pandemic. that with angst year, have much I coping think, how cope of that it suffering to through realistic dissipated, while the

to general, we -- have And of to against. all are able have kids happen what’s outlooks our people’s about school, go I to think in going us to I be comp gotten those think I we of to to better. all that all able going think have been concerns had the much

they’re and basic are mindset, families curve brands think to continuing provide we of of new faring, the continuing job a as the very their good by combined those microeconomics controlling doing with their is distribution combined of mental really that demand a strong. So, how how just combined of innovate, all to reasons the the with product, an to the strength consume, individual of into

leads now, you’re of exceeding demand That more know up, creep all and things going supply. the right? that exceed see to I’m that continues to say supply. prices the inflation demand continue So, less to then will be to going to the you about So, about

You’re actually and to margins going and some Those to see then see as the sell-throughs online. on that continued gross pace, dollars per on the margin going -- but store means gross to inflation going the product. creep level Certainly, to product be as lead long actual at we’re continues are to higher. in cost, high the product turns the gross profit higher keep

certainly in and going chain. me are to need they verse know think They’re are. I don’t what supply go that. We all see you reported. to We the chapter on challenges publicly

to tried who’s see it. that has it’s anything You Anybody order to all found hard get.

more going cause an that those oversupply, chain. to of cause It’s It’s in But going the see supply timing. supply swapped chain. increased continues to with increase. cost are going in by demand increased costs. to So, freight that all of disruptions means going the gap us that we’re It’s to to problems and benefits

up, be to forever we up. that It’s we’ve Now, a what part, I last needs, all it and how And we’re it’s forward. industry in won’t couldn’t the will But in the looking doing for consumers’ is. and products, the got industry by place. innovative because we’re themselves. going again, And ways, both our going itself segment and is the and know about retailers economics that what new place time catches my and addressing innovative catch it be we’re the our brands more doing bullish completely

John Lawrence

restructured little us And obviously, Remind that that, and a question much and walk dramatic women’s buying you. because turned pretty the a you in Jared, insight. you teams so bit, this for and us numbers. us bit. a through Thanks move that bullish to I that’s Great. little Can be look the mean, little remind pretty you when bit just at one out please? business, for just a reformulated

Jared Briskin

Yes.

women’s the had growing being women’s we results. I felt and time, with with our we opportunity mean, enough business. the across like into took significant enough effort putting business, business men’s really And like largest kids the kids’ we the opportunity. we an So, business. felt and weren’t We pleased

really to marketing the team individually in these of and has external lot really Bill significantly. the ensure some really in talent, reorganized men’s, consumers and across forth with bring merchandising that to us kids’ all And City Gear. to team opportunities getting and look dig really effort a a to that and partnering with as able helped and these leadership in on area And we fruit. we’re then really were Ben at we what ops trying put capitalize allowed which entire after low-hanging and strong as well women’s was So, focus incremental and the

it really pleased, inventory frankly, making some appropriate off the areas, investments the risk about So, providing was and the then based taking we saw. these and really more that focus in in data

John Lawrence

for Thanks update. that Congrats.

Ben Knighten

now so And the much is so, and store Bill level across a really come we done you has way because talk it to those you the to in genders, about life than connectivity come there has it more life, right? toe-to-head, what the when in done historically. at store …and that’s see walk higher

the have that to so, now apparel the from to footwear connectivity we store in And accessories.

up where And it so, shows results. see that’s the customer, for and the we

Operator

Sam with Trading. Our Williams is Poser question from next

Sam Poser

that vendors spring I just orders. adjust looking the some when ‘XX, up fall for and follow fall wanted how, starting you’re to that specifically you’re supply to they’re probably this this we’re -- Jared. for chain, into prices, large starting at the are then raising is looking looking and to on this of ones hear When specifically

what’s degree your on? are of to what fair Thanks. share, know, or fair than share to I And that? get want you your to however going more attack you want to So, want your getting I impression

Jared Briskin

Yes. Hey, Sam.

would earlier. said I think revert I back I to something

It fluid. is is It chaotic. rapidly. pretty it’s foremost, and changing First

And having months. Our great opportunities last rebuy job, been continually redo, for They’ve been XX remarkable reassort, a we’ve done done find team and have job. a with and this tasked reallocate, question. without doing has the

So, how it, do doing like used been we’re it. to we although we don’t something to, We’ve it’s know that it. and

to control very that control. flow our really the strongly the our going our and feel We about treating strongly vendors way business. we feel inventory, So, are we’re things we of about can the

Sam Poser

written mean, starting and things? Are raised those the were prices question. You that cancel with really X% I January We’ve and heard I’ll they’re heard that XX%, -- taken, I seeing blunt. we’ve other one, the answer orders you spring specific has that to prior don’t orders hearing to retailers. or be want we’re some Nike guess,

Jared Briskin

concerned nothing about. some seen seen be surprise. don’t that we’re There’s I we’ve Sam, that would a price that think increases. we’ve

said to or any earlier, as allow us dealing the With As continue last XX been Mike for will regard increases to these complement cuts mentioned of the with gross earlier, drive months. we’ve cancellations, the things are additional margin. to I price

of As priority, that treating a would job have an stay expect way. our incredible of as business and our to done right now, vendors I it

Sam Poser

much. Continue very guys. you Thank success,

Operator

Thank you.

next America. is Alex question Our from Perry of Bank with

Alex Perry

Jared, maybe, the the willing to I based sort between of just between availability. inventory ask if you’re on consumers wanted substitute seeing about products brands and to

looking in Air based on for you. So, being availability? Thank they came if to Jordan inventory X, willing substitute the maybe

Jared Briskin

certainly, Good Thanks, question. Yes. than mentioned, has supply. as the mean, greater I Mike Alex. demand been far

for an So, want substitution. seeing But frequently opportunity they of at the time, want. more we are consumers same what

lot products. a say trade, we think I a to a seeing, are done but Ben our a off. be good But really accepting similar I That’s insight certainly from we’ve perspective. we of access this give consumers can So, within to consumers. store bit But full paying some absolutely little can company to necessarily wouldn’t more able to are provide ensure that

to to I’m over Ben. flip So, going it

Ben Knighten

because just because kind levels, sell-through. Jared. or be in thanks, they our industries the -- next of it around would they day, one of it’s I and or historically here inventory it’s on it kind been more than have as see it industry the they’re the other Yes. supply limited day there understanding classify I’d in throughout, not of

still some you nature. when So, we’ve to loyal for historically, by But, you have substitution probably have buy buy haven’t for seen that brand to there back-to-school. back-to-school, very but you out

around, you shop get way for, best can where and you you possible. hope we looking kind what you’re the in that out you provide And of figure so,

Operator

[Operator Instructions]

Jason Freuchtel

Hi. priority? view It to shareholders? webcast. higher strategy do the of To increasing returning or questions shares your how about repurchasing few you you looks like over summarize, terms dividend in we capital have your capital a allocation additional think Do a

Bob Volke

mentioned we Again, point strategy. believe have comments, time, billion Well, parts of as repurchase to available both allocation this over At important Bob. capital still, shares. this in I my the $X.X in they’re is we

in doing opportunistic be certainly will We that.

of will be The go You’ve is we year. six months the us seen again priority that expect I dividend forward. established. that we’ve as that been fairly first for aggressive would in the now a

be But expect have we the the stable continue that next opportunities fairly evaluate of again, couple program. those to We will as quarters. here it of for to that cash all available continue kind to support of we will

Operator

Thank the questions comments. this no closing at I’d over floor turn for back you. management are time. to There further any like to

Mike Longo

the time business, to our always morning. about answer very we thank questions teammates business really industry. morning. love love for represent And your call. this We We Again, Well, our We on appreciate our our you we’re love and this the bullish model. speak team. your time to

you. And We’ll off thank Goodbye. so, sign now.

Operator

your participation. gentlemen, conference. conclude and Ladies you thank does This today’s for

your lines. a And wonderful may have You disconnect day.

Hibbett (HIBB) 27 Aug 212022 Q2 Earnings call transcript