HIBB - Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to Hibbett's Third Quarter Earnings Results Conference Call [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Jason Freuchtel, Director of Finance and Investor Relations. Thank you, sir.

begin. may You

Jason Freuchtel

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

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

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

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

Mike Longo

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

the on go brief so If be you're along some third slide detail I'll following morning deck, on into of entitled this greater topics interest. using can team the relatively the introduction. I'm slide that

was This a the company. quarter's financial performance strong outcome for

The third the of quarter hardest is year. the always

very results able we're proud of to deliver. were we So the

of year Specifically, increased the both XX%. QX comp double digit from omnichannel. in a QX a increased and This came comp The sales two combination XX%. brick-and-mortar increase

most that that talent, consumer capital importantly, Most course, critical and a continue to of We our $XX of and, and the per also shares And experience, attract nearly model problems, we people. to delivered combination center, and we here represent publicized on prouder through of after global just earnings in to Slide highly I to will million in expenditures our million centers is, factors And people. of much selection of of by the number a improvements we dividend. of all, our spite end and share On develop them the have XX% of into business component a our represented their high they X.X model. capital delivered best-in-class substantial future, lasting customer of chain inventory business prior of managed have the since impact We to continue the we're the a to in are developments work buyback share diluted still our as consumer, the team, invested quality income and are to we year, versus that, our experience. we the QX. coveted the XX% put omnichannel the couldn't continued whether in Those grow commitment operating business, a X, to $X.XX. they or distribution and merchandise, believe In supply of previous stores and the sports today. further or be including service the the enhanced showed QX store all you our proud

of closures we I'm going competitive to the in our distribution point on that, our of communities, stores has minute bullish on give want to which the And are you to finally, comment. also But limits in significant mean from designs, coordination factors since And results strong improved and site on key improvements our the last delivering we close with But are valued marketing social trade community investment and are the a brand back in to that we such hasn't our work done experience has amount future. as to position, by and on This a now in which these cetera, our do we've program Again, new I reduction excited and the details. in customer the underserved supply benefited our list remodels, innovations, and partners. these effectively consumer future. it, Web programs brands. the some this areas. been report on put times chain which are changed and store discussed competition further then investments few in and finer additional inventory in and increase we the capacity, media underserved store to our by loyalty Second, capitalizing driven include new retention, program, et and to come

you to be going that And disclosed so haven't would previously think give data that we're some interesting. we I

key couple half competition our brands. forecasting from months are will our than that in better of miles carry As of within XX, stores future, have the January products a that of we no X

miles, within expand If one increases stores that that the XX%. with to almost at look you less and figure or X competitors

within stores repeat carry I'll because have will less, is one and January, this products at we this or to of jumps brands. from that number than haven't new no disclosed look news, actually key And our miles that that X our XX%. you half when previously. competition Come better So

in effects remember, a way January until don't really these So begin meaningful of XXXX.

you. So on that call detail going factor to we believe this merchandising go turn a to now into performance. be for success the our Jared significant will I'll greater forward. Thank our over

Jared Briskin

Thank you, Mike. morning. Good

slide. turn If the you to merchandising

For the of team and quarter, apparel, double categories merchandise sports third up all footwear digits. our were

compared sale in the continues kids growth deployed fiscal coming genders back-to-school impressive. as a in of results All with of organization below third digits merchandising average drive this to business toe-to-head saw results connectivity items and results achievement double a result the strong direct the We were had business to genders these strong and even across year. ticket. just all We're last compared XX% XXXX, when to XXXX as more of is merchandise that on believe fiscal per we focus quarter categories quarter. our we more are and cross-category women's season very to year's than shift doubling. third and the categories the drive up very proud Our improvement last When and strategic

Gear leadership we category a kids sports reminder, over and of men's, City team evolved apparel businesses. women's, footwear, traditional teams structure our to and from a and As focus

T-shirts. demand apparel the strong and continue business material to and we connectivity connected color athletic increased sizing. bottoms, for the brands, products, and fleece bottoms to kids connectivity from Drivers Our tops, apparel a see in to sneaker mid-teens. especially remain tall business small and in the adults tops From lifestyle fleece

to brand continued denim to continued denim and investment Fleece cross to fashion strong marketing standout. in effort a supported and were fantastic a teams result. but well. perform the bottoms business made the a We our tops performance the in investment in category and with extremely operations Licensed functional very performance Our visual drivers strong. be significant our through was leading

did Braves teams, job improved and as performed seasonal Fan to back the the business local merchants well. stories. of Bulldogs products an in and our Our such also our as exceptional Georgia some connecting quarter the Atlanta to sneakers, licensed

year, the very in XX% Casual by exceptionally kids. growth ended category. and and for quarter the Sandals and as to were the strong was sneaker Specific Socks, show Demand footwear footwear increased as in incredibly classics up the to led also the quarter. we for teens. in perform strong significant positive to period. remains slides supply Inventory such all Footwear ago masks women's and fresh. and and quarter explore to genders the assortment growth sunglasses during pandemic fall is year related well our results offset items, more basketball had strong, accessories, the across Running the continue low during short business by and continues and bags consumers last XXs as broadened footwear quarter, in market. apparel, in the investment.

by guidance We increase proud our a are our partners XX% priority our our season, securing in in to from inventory book, supply position efforts with and vendor than We order improving in our our capacity own position very closely our substantial in confident shipping environment. accomplished to product increasing are our secure the outlined regarding the more this vendor within and vendor inventory with improve partners incremental incredibly of our our to partners chain. working by current with deliver our results

growth growth high range, in and continue We the to expect prioritize year-over-year end over inventory digit we'll with consumer and experience to inventory to fiscal cost. year the single mid

the As challenged forward the we these chain fluid. quarter of 'XX, to to challenges. working supply into mitigate and remain we very look first tirelessly fiscal expect We're

will persist turn in I'll over first we challenge, might a to compared to While the inventory believe significant the achieving be now to level a the receipts we XXXX. our are fiscal new call of optimum Bob of to continue quarter challenges expecting Volke. and increase deliver

Bob Volke

Thanks, morning. good Jared, and

please quarter to results. sixth slide you fiscal refer will, XXXX the titled third If

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

million quarter, solid versus to E-commerce $XXX.X the consolidated an XX.X% third fiscal third versus prior XXX 'XX, the compares comp quarter the quarter XX.X%. sales XXXX. this This coming fiscal comp last most XXXX For third accounted third to quarter. sales have relative third comp XXXX the fiscal increase in third year recent and sales of and comp E-commerce net of million approximately In the and quarter to 'XX. XX.X% sales third quarter e-commerce total two XX%. year XX.X% of period, a during our rose XX.X% Over fiscal mix reflected for sales was points compared comp of XX% basis year year's of higher. XX.X% to quarter third quarter quarter sales comparing comp the compared fiscal XX.X% third at $XXX.X sales sales increased increase in XX.X%. increased the increase increased to quarter net Brick-and-mortar to of of were sales sales and the in the

of leverage prior Our XX.X% gross to more year XX.X% freight quarter. This and was decline third due increased margin costs, approximate GAAP from in which declined than point to offset the sales net transportation to primarily expenses. basis occupancy store compared XXX

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

our from basis reported points below expenses, were the and selling third of was depreciation quarter sales result in This year. sales excluding was third the and So the increase leverage and the of labor primarily amortization, gains XX.X% the operating, XX quarter, administrative which in management. of XX.X% strong last decrease net improved approximately

or the by expenses Gear last SG&A of year net in of decreased most for year, net infrastructure basis, year, investments projects. increased Excluding sales, approximately XX last occurred year's capital XX% amortization that SG&A quarter. million profit opportunities sales. net and certain of net increased to from $X.X last acquisition integration sales $XX.X compares quarter On profit operating recent of GAAP of $XX.X of we Depreciation reflecting basis expenses of sales million and organic and points operating on a prior X.X% the adjusted from expenses million approximately which XX.X% generated of growth City or XX%

nine from of fiscal adjustments year's our year earnings operating million fiscal reported any slight increased million million comparable compared to in nine XX.X% this months XX.X%. of operating third XX.X% income the $X.XX results the total forward sales Excluding $XX.X were a increased on all grew E-commerce to $X.XX. third were time this decrease XX.X% In comparable years to and sales earnings year-to-date last first Relative the of first XX.X% not per share 'XX. the of year, of for include X.X%. per you year-to-date basis, comparable quarter, to ago, 'XX. billion, On now two $X.XX $X.XX XX.X% Brick-and-mortar that comparable sales total GAAP compared two adjusted have of which during first were the prior increased sales year's e-commerce quarter, sales income last sales third move of diluted diluted over nine to last did during $XXX.X up share comparable quarter, GAAP Compared third share items. were diluted reflected to Slide period months current a nonrecurring represented total over of quarter per year page $X.XX to period. billion and months over year. increased earnings X. same up the year's XXXX XXX.X% sales sales Brick-and-mortar the of sales I'll the and in is compares fiscal non-GAAP year $XX.X and e-commerce and XX.X%.

of to for XXXX, net lower occupancy of mix sales of months GAAP the of product a reflecting year-to-date and strength, store margin Our leverage costs. nine XX.X% margin e-commerce fiscal gross compared first was XX% sales

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

For XX.X% net of the XXXX, sales expenses in XX.X% of of SG&A nine were fiscal last nine first compared of first months sales year. net with the months

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

Excluding operating comparable $X.XX first share current profit diluted the over adjustments months of of first earnings is nine or our year XX.X% profit in sales the year. per months fiscal $XXX.X prior representing XX.X% net to to last all of of fiscal $X.XX GAAP year, the net non-GAAP for in million, the year-to-date were of operating nine year-to-date sales, million $XXX.X adjusted of compared 'XX.

on compares Excluding in diluted $XX.X infrastructure approximately of strong SG&A earnings Driven adjustments remodeled plus million a related operating spent projects. we year, per $X.XX 'XX. flow sales, and robust $X.XX the expenses, cash was basis of capital, all margins fiscal for in new, generated to year and of relocated non-GAAP largely to $XXX various year-to-date this the the prior same period by million and which stores leverage have share expanded

over During months $XXX fiscal of to our first nine we've in million returned the shareholders. XXXX, cash

out have million. dividend current in We the quarterly million spent X.X nearly via quarter, $XXX.X million third $X.X repurchasing recurring $XXX.X the X June cost at Specific just company million million the regular was shares over of initiated shares, and to a have of that paid our repurchased year.

$XXX.X the in to which from and million a balance cash We equivalents, ended quarter Turning ago. million $XX.X quarter cash the million and the year was sheet. with down at of $XXX.X the beginning

of Consistent last XX.X% inventory from quarter ended the beginning strengthen the quarter made relationships of million, $XXX.X Our have end position. strengthen a the year's third at our entire increase to $XXX with quarter. the quarter of ending comments with borrowing to worked from our previously, third increase the remains available partners and the of XX.X% entire community vendor as collaboratively capacity us million Net with balance. inventory we vendor have to and build our and we continue

entitled review 'XX Updated our and will the fiscal I Guidance. Next, guidance updated quarter on fourth eighth

influenced are Given update factors. the fourth by 'XX, of financial This on strong ends guidance XX, the performance XXXX. which updating fiscal January several for experienced quarter year-to-date, we our is

have and demand, attract to disruption market customers previously government due fiscal we mentioned, new retain throughout we pent-up stimulus. As and 'XX

first customers fiscal for of feel the and to attract months nine will business to and continued have future. our that 'XX, in the opportunity retain the trend us this model provide continue on new We building

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

quarter implies comp is range, for fourth guidance, year We be the the comp sales sales in upward previous are high which an digit full now revision teens. in growth from the single to forecasting high positive and percentage positive

gross consistent potential a 'XX, of margin fourth expect due quarter costs activity. which previous in freight We 'XX headwinds and and will to lower performance the fiscal quarter shipping be increase in relation guidance is the with to in fourth of promotional on fiscal

favorable expect to on as decline quarter 'XX in gross sales to fiscal to and to full is fiscal the of in SG&A percentage fiscal also We adjusted is quarter year and adjusted gross and decline a percentages on be of fiscal is comparison year the SG&A in consistent fourth of a expected 'XX the to both of both guidance. basis. as sales with fourth 'XX, margin continue prior basis, a percent margin in GAAP also full comparison which anticipated 'XX GAAP to to a

to diluted full is diluted of the $X.XX $XX.XX Lastly, for range versus upward EPS to diluted revision of for fourth projected $X.XX, be to $XX.XX. the our outlook to previous $XX.XX. which EPS in an is EPS This implies year of forecast $XX quarter

the committed remainder a expenditure attractive perspective, built business, pipeline of year. we do Our have a results be our diluted average and XX%, approximately the $XX.X We GAAP investing not tax weighted the between investment assumes year. for anticipate our will fiscal approximately full material a year forecast an for EPS remain and non-GAAP and in current share of count the diluted capital difference to of of effective rate million. opportunities From

and store both our stores efficiency. our organic strategic distribution office we investments our plan technology on to and approximately we enhance and online that will full in $XX opportunities and operations, back sales experience invest assist periods focused incremental the year million existing customers, the growth lead processes. profitability these reiterate of customers, enhance modernize on to future in will projects new believe will retaining that For We in fiscal infrastructure attracting believe new 'XX, also that our and and customer and

program. our share plans, share to currently we and In under $XXX addition capital intend repurchases, to capital available repurchase to opportunistically have approximately expenditure million allocate our

our of share. open also We to per concludes quarterly line remarks. returning regular dedicated $X.XX prepared of That our Operator, dividend capital remain recurring to a form in questions. shareholders for the the please

Operator

time, we’ll Trading. Instructions] this questions At usual [Operator the addition Q&A, over also the Instructions] Poser be with be of a comes In from Williams session. [Operator webcast. conducting Our first question question-and-answer line Sam taking the Hibbett to will

Sam Poser

fixed talk we Can gross the so some margin versus details the bit cost or the margin? us on can a details sort the of And sort versus you understand give about the some of health, -- overall little more we can freight merchandise please?

Bob Volke

I don't the of everyone, on things get So store down before, said break we've just But margin, kind into specific those as transportation to occupancy. product guess, into kind of the again, we well piece as remind we percentages as buckets. the

on of would This margin So a quarter. sales it's margin side. on been bit consistent from quarter-to-quarter solid. say We've piece, the I pretty pretty little a is lower the product product

last headwinds freight and little expect we we about to that into increase get been really the get over a store see little starting the some as a the deeper leverage side. quarters several year. is of where as So and occupancy kind we've bit do saw we we And the costs transportation of less from talking

kind for breaks So of margin current how down the that's quarter.

Sam Poser

QX? margins they QX, remained your So your from to or if merch compare -- was QX improve margin high, did product we

Bob Volke

pretty I'd flat. say they're

Sam Poser

significantly And so year-over-year. then that's -- up

a And to was in your transportation little what as was You've less occupancy. QX? got leverage impacted then than degree it was that on QX margin gross in

Bob Volke

by to to when you would that of say from the driven transportation we would kind decline Again, and the -- from think component. that QX, that QX I look at -- most is freight of QX

Sam Poser

a but guiding, you're that from going and fiscal I Would some that know the when given you competition I -- stores closure have run you're stores looking did comps looking this that positive get with the you've Jared you'd anticipate year, not mentioned extraordinary less we're that then mention And and sort -- you. to into could to close you around some year? you benefit ahead -- 'XX comp decisions into of 'XX, vendor think that your for the so get on,

Mike Longo

The answer to your question is yes.

go line. next to sales detail of talking So great on I comfortable next about But part we're year. going very this year into am of the deal not a on

you tailwinds, were minuses. and look the to if and the puts the So the calls, headwinds at in pluses

degree which to headwinds, QX the and going the QX. it against stimulus, and knows, on negatives, comp, as So everyone to we're significant was impacted some

headwinds. are those So

that of We have of of that, mid the factor out and it and will over bit and into We're certainly but long a little about buying be services moving experiences. a the goods worried concern over term. wallet, rotation not share it

set, So and have to extensively the those headwinds. yourself competitive what are on tailwinds in which distribution, about. the written you we changes are the The spoke

January that our So earlier you year are programs of that and and over in is our business those run you And I basically we customer went marketing business. that the a retain add rate think XXXX, doing some reinvested that of improvements model. and point, -- is year. to that which next being to of as our the in expenditures them add us. the the all in the the substantial in extrapolate won't of that of that media. for remarks, significant at to detail that, tailwinds would to I amount I'd tripled a pains tailwind we up it capital our this The ability social the my around beginning to this to we're and include course, really out, which, customer if loyalty third until next show take a is fiscal be will

the with but an to and brick-and-mortar well consumer both digital do as of as improved at most that's omnichannel sure, for up, experience, of it has experience. catch Some

a Part of all digital drive strength. have We've very Additionally, got just Web the highly, not that the got top, some We we've a will will We come in from -- if better mousetrap. rank modesty. the our will universe we I that with out country. our brick-and-mortar only position because say also help and I of inventory is our in And sales point but that experience. degree site. better significantly going Websites the strength no as impacted at were e-commerce of sales year. better last digital a to not our well

the working So to a and as to inventory to brand next year. do major we that's want but recover our sales brick-and-mortar we're are great very e-commerce that have on hard partners and going sales effect

puts sum So the that year, all we've and and that. calls, do and got confident very a comp about when next up feel the positive we you you

Sam Poser

the I on degree If vendors, with How if increasing something on and delays on with vendors priority what think say and this. I major your up just the priority changing some that. expand your to are supply vendors follow direct-to-consumer. could -- could everything focus just has about with chain with the their is you the of probably to and else And you Jared

Jared Briskin

And distribution underserved has a underserved business consumer. our sales brands be an our and of leaves to to partners. Yes, with to and essentially on only conjunction vendors our distribution deploying, how focus very, lot and in that the the brand impacts and talked in the elevated. the elevated recapture on been our the brands. our us our all the changes for certainly, and confident the position with the with of remarks, valuable supply opening especially strong all brands And regard are majority Mike's that's for that very In markets primary markets very has positioning in that some point of chain. our we're very he significantly priority inventory about focus a our with on the positioning of In

Sam Poser

to there the I cost to level stores. if regard do appropriately issues last ability stores some with checks sales changing one in on have store to And the and been the subject staff at optimize that. in your the the From some markets, can one my may payroll

Ben Knighten

a a can have tightening challenges. I that's not There's are of differently and really react to labor point, markets little that general your individualized speak think those we that the To new. I you And going been bit. market, face but to

began after retail As component. labor that is going reopening, everybody

wage place up with seen of also that. bit we aged in because tactics with specifically, vendors put to some opens that. a younger partner And we've our But so in our that school we've And employee. us sole -- cost little some mitigate to on, which incremental and really

also a allows and age and our lowered give and hiring in so and retail And minimum the course, talk us. come been huge customer, and only about consumer. not to go our we which for target opportunity XX, general our to to of our to Hibbett actually experience us success into them They're sole with that's schools but that work us. And

been that's well. received so And very

that, have or they the the of what look but to a It's -- being compensation. components, Wage piece other also with actively the benefit not where the other you we take kind and big You value. that, quite the in itself including overall that. managing no only doubt. of discount, environmental honestly, the after, the consumer the employee also work wage at But of factor so go we're a that the associated

kind and on basis. that line we our and with is manage forward go we expectations, payroll in our a wage of can think Our

Operator

Hardt. next question from Chartier & Jim of the Crespi line comes Monness, with Our

Jim Chartier

and cost or you how the next those do Bob, the the freight transportation wondering, First, two three over trending see headwinds, was I quarters?

Bob Volke

than to little to of Again, going to still see think it's I a think be that. my Expectation today. bit pressure we is are don't are we continue where I going on significantly that more

we've into system our of a to doing trends ways fiscal this substantial I to of this. to going We've far internally got and internally some couple wage beyond as we mitigate kick don't of own in might some for of been or are lot again, a be some saying think think Again, to things like a 'XX. price I these rates to it's some product the move of business. kind kind see increases of We through headwind to that, that. as for additional things try quarters waiting But

Jim Chartier

repurchase significant this buy stock? share quarter. clearly back guys take the then And debt on very to willing Are you more to

Bob Volke

determined. allocation that's basis. look a think around obviously at capital on have We be I regular we -- No, here to

buy First We point future. when we there shares, to out invest want projects to continue need the foremost still it. will additional we it's business. to opportunities to put that that Obviously, determined. that's, and revenue We in time money that is opportunity at do our do certainly and But profitability prudent. if to generate we to for have again, are in into if in feel back be going we this attractive an there's backstop that want

Jim Chartier

Mike, third quarter you said year. of the is then the toughest quarter And

little Just is a might fourth and why get better if things bit more you wondering could quarter? in give around detail why that

Mike Longo

only My lower been a is general in low just about industry Back-to-school comments period the decade, whole in having with sales the are this single thing. relatively just relatively margins. event QX for gross over it's

that a from you game low a skews make as exciting. much is back-to-school commoditized sales Don't year homecoming the or are events but away of period. little QX, towards here so fashion a there, business business if just combination, QX and It's are every -- it's have comment. just You'll too the And drive look less typically business.

you do by season, in holidays. by QX Jared, want tax to dominated jump So there? dominated the QX

Jared Briskin

highlight with think additional comment just accurate. would Bob's to that's regard from the freight. one pretty remarks I I

to the coming mind work our in revenue inventory is helping processing been our securing The vendor with the other we've higher in thing facilities. we've us than inventory we keep is increase a significantly level through to significant historically. at at a build done partners are receipts Obviously,

to necessitating impact level us an is that significant receipts, is costs. So which process transportation also a and our of having freight on

Mike Longo

And add that, higher as to outbound both sales. was as fact inbound significantly the that than well

we've a point. any recent Jared got in freight this in than talking QX but good brings higher you've up time of about a conversation, was rate history. which in So The significantly volume great done increase, a job part

at will continue into the at level. problem a point, comes future. well problem, point. persist the the normalize. as So a back At rate Everything near you mean to volume won't volume some problem had problem that some rate But this will as the

So a out Thank by you. great Jerry. call that's

Operator

question the Telsey next from Group. line Our Cristina of Advisory with comes Fernández

Cristina Fernández

inventory talk in composition you over thought expect to of could flow next year Jared, and quarter the next inventory the that was received versus last. of two see you of about to more the fresh of first wanted receipts the the sort I you if quarters. I mentioned have interesting it

over on quarters. two the how affect high that can you launches and perhaps So that next product the heat expand will

Jared Briskin

with next is were the to year. where of we inventory access from done of first and our our teams expect quarter continue we've vendors, Yes, inventory. And expectations aware with the to increased we the regard year-over-year increase what everyone third incredible as of third last are increase quarter compared level to our continue the challenges inventory I regard achieve working a receipts just we're of relative with that well in when the coming chain in priorities based inventory of in as supply our in. second able to to gotten quarter. the have will get sales our partners in first half as with think but product foremost, our an We're certainly from and off in proud There of of fresh higher have to flow book substantial to to certainly we deliver to volume collectively but have to heightened and reacting our year significant a job very order conjunction to of some

occur As catch expect clean, to the year and in on in a into to fact period on that be quarter top year We've level being fresh very year we down. of next of will second of levels trend. what the quarter enter low third we significantly had much stimulus this inventory better early believe the this last use reminder, inventory year had the the to levels very those year we up, that in levels a drove inventory but

Cristina Fernández

on this versus the apparel on And more will for outs to in which perhaps taken standpoint are the product is out year the there was benefit a I and you was XXXX then side? competitor will interesting. department data more I skewed from one for competitors. Mike. that being where really It any gave between saw also mean the call last Hibbett, apparel you year, think be more is last point. mid-price XXXX I stores. was benefit year footwear more more know it do or Where the

Mike Longo

liquidation know, of as Stage stores. the thing detailing JCPenney time were spent So known well as closures we you very some the of of instances specific a as stores year, lot last for you that

the saw it those for they -- of come up immediately the door the what markets, some about those a consumer they see number We sized do in us where those They or know and and week. show didn't did whole in it medium uptick that away in walk So weeks doesn't if back. but markets. consumer part. smaller went when of finally every the because don't competition closure was took next markets in We an

And so the frequency of shopping drives some that. of

X basically you year if take for times customer to to that while have going little as consumer, X make your a a a them in it's discovery. to that's So average coming

inventory and when similar. close, while an these stores focus sort and of apparel Levi's of that your portion phenomenon, JCPenney. JCPenney Stage in more brand also would I And apparel driven say I was much a and sales point, other our we partners of will So out is sell and Stage on denim we was that of key point and to the significant conversations, that back

understand we've and that. of meant We tracked pretty that that us. we a So good phenomenon to idea what have

begin will set lose of price of the most meaningful up stores of in have seen we that drives some department 'XX. The 'XX that handful this of of distribution distribution a course so January come when to moderate year. And of over December

we So the year. the lion's next will share up show fiscal that in believe this of

happy want things to got So I'm but Jared's to heart I'm to the redirect your a couple to you of if sure question, have you direct go, of getting the not add.

Jared Briskin

Just to saw early business. that one more at and the talk of feel certainly add, more Mike a when lot also impacting distribution and about I is from about and certainly referenced the apparel products. like we Stage our in JCPenney, great say, good the point, reaction competitive you opportunity specific But your I we how better and to our that's that to think set levels

expect product best our positioning a the to grow taken standpoint to from at this are, focus regard reinforce serve. do will we'll But also best as the level consumers remains at in not or will our markets to a opportunity continue with offering that product. up Our a shop level that product. we opportunity And we that And have pick an that's we we our level. expectations another better destination where consumers some cases most level better have in to

Operator

the line Lawrence comes with question next Our Benchmark. John from of

John Lawrence

your in would were product that market those and callouts the just competition, talk of more markets that same urban -- your an of see advantage plays demographic with would the metro that in that take about you just maybe versus to that that of market, customer how Mike, market, in small more set. you customer differences a about a minute you smaller and and that

Mike Longo

most a in El markets. Texas I dozens in we stores area, in we these store ones examples. recently -- were Campo, and the there it up these because of are a ended were can of one the metro a trip underserved our but had I was So We of Houston was believe, in remember,

about a okay, a city manager your staff, to and obvious store you they because they ask, from? start you they then in away, where scratch the neighborhood, who's to store do up head your El and with can't It's So inevitably we're say, lapping. neighborhood, your And questions And consumer, start minutes in what's come any come talk well, said, that there's who's of neighborhood, ask we begin Campo, mall competition. answer. and that. standing then they And Texas. XX And well, their they other over in the

competitor our minutes sells us us is that So who nearest close anywhere to away. like XX product looks

only Armour, Acu, Jordan, radius the the Nike, XX-minute for are distribution around basically et we Puma, et county, Pink Dolphin, cetera, So Hilfiger, this cetera, point Adidas, in of store. Under

our and competitive pulling entire that So the of it's around that consumer. area part that's plus differentiation underserved it, we're market trade trade areas

example. all so when city? with within be and trade across Alief, be, places your that start and will Houston, trade for when may and if compare what is that, distances other areas or how work, those addressable And the drive you're then into Well, inside the in Alief about familiar in that well these areas consumers defines well, you ought you're you and radius, the Houston, you drive which Houston know go you next and talking or XX-mile you terms are And trade trade you to talk inside of diameter. defined you've Well, question any areas. be do contrast trade and X done within Mesa at actual you look Tidwell that miles area go if area, about to

And we're competition Alief. in There's area trade area, that thing so going. trade only that the within no within

distribution. of point We are the

the And area market a underserved identical, trade we a the market Certainly, difference customers metro pulling in you're is a economics than gun they're The the your in market in those rural your big so consumers more whether same. talk the only do geography have about because that are an this a or are are of that stores. you economics on average, same. lot the But smaller that cover, stores relatively

and a the we that And part so that as do. we environment business business that's to and big of a result. prosper incremental in we And model a what major complementary like brands we lot, that we're think

and redirect with go want So I'll minute you you where a for to that question. let pause

Operator

America. with of Alex comes Our line next Perry of Bank question from the

Alex Perry

I strong just here. and inventory a a to circle little holidays. to the bit on Congrats back wanted quarter, happy

Jared like extent about from So sounds I bit Vietnam the could a like think inventory of it it made of your was and position impact Classics And But in composition on I of maybe sort be versus an going I supply. talk the Maybe may And the a and sort you any inventory nicely. around are down first remains differences think seeing brand talk being that. that receipts if the hit. lot about have little then when a comment from Bball inventory year sounds holiday inventory partners short last in strong. half pretty to think to for But little the you would closures of year a next of are significantly. up bit

in just helpful. could normalized maybe you that it characterize would a be super sort level, of So versus

Mike Longo

position. start. I'll we're come So and will highlight, This inventory not overly then To Jared our is in. about concerned Mike,

next quarter of it's going and matter we a quarter, next this our fact, forward, of As both year. one think strengths

retailers. chain like while the So the it in this not This some is problem. for a is if you media is supply time. And was been when to breathlessly the go the first inventory, It's the reported back and recent the tariffs news big chain caused of through place supply that in history that into put bubble of were disruption. our slug inventory came that that

peaks, tops to that the to of way of deal supply you point at we've things is capacity. to the amplitude in this your do way I'll if weeks a the No chain. look been the to pour only increase been year. the dealing going millions and with it of the to best about increase and volatility is this. And one may sure is you lasted Now sometimes changes tens on the increase. you're at reason -- capacity with disruption only way. years, the severity you bigger it of two We've that it that be working none amplitude the troughs and flexible but dollars the receipts and your -- in longer, for a capacity that few of out don't is for this wants obvious our And only of And the own of variance but use and one graph have and looked talk of when is we the news. to the Well, bottoms,

allow him adding giving in a have great McAbee, Mike with different to and them unable and the they processes systems that that along IT capacity. the do their of Blahnik in ways partners with who masterful in have folks Jared pieces works done job So in Ron job them of and previously. were flexible to executing done a things business And do

thing. things, but today those So we're sort not is a of this really excited about

And to to out so is surprise none a of I wanted this us. just that point

to I'm to So this hand Jared. over going

Jared Briskin

here happening question So little and demand I'll over try lifestyle basketball. deeper in the what's within and get and maybe bit a classics and

sales liquidations XX is we historically and our that in high call a have and strong have lasting the update see and launch days receive product raffle week selling heat XX now lasting getting necessarily stores us product in that not Product lasted to now Ben's and in seven lasted is is XX. product, high extremely Where not have we it. us of doing in too have program, consistent strong launch technical, excellent very, might products, team essentially, out Bill lasted the job a demand. may have the sold rate Obviously, biggest would very done stores from standpoint difference job would a our the day So of the historically an to And what and team a we're to there. that business very a And that continuing getting products now and continue fantastic we maybe through. date, but days of seeing a -- XX.

through of advantage it Monday and experience inventory that. that's associated business. customer the selling it level other Friday done as has, with our we're take as of of has what through working not parts that's why fast the best is business So the typically elevated to improve really product has that to But

for investments investments, very confident. helped historically, have been patterns So us. demand our broadened categories in that haven't as categories again, these made we we're us large And

Our up double is the back-to-school for business digit footwear period.

to So new we as we and for he challenges reacted offer build mentioned They what our had chain about a positively great consumers. supply mentioned. the feel able to obviously story Mike and not we were inventory.

deliveries has for been So standpoint, XX on late an been can now. things we upwards we've of our expectation that with months the From dealing control. focus

be shutdown expect new. convergence off the the And there So do quarter. some that's Vietnam we that will based during first not of delivery

during will significantly we first our why will quarter, we're higher. levels levels excited that receipt that. and be significantly higher be believe That's about So the our inventory

As due inventory year compressed to big last you the stimulus. referenced, was our of quite ramp-up

how So but have lot we well, more. our in apparel and some very with basis products ability all would we reacting, of our on them. have like to on serve and And like confident. shoe would lots our available to day product in that, confident that to consumer is There's more categories the certainly as day a we're of a

Alex Perry

be of talk in just increase -- as about maybe the promotional maybe the of haven't promos. seem seen you've guide was in way XQ embedded a terms commentary if phrased, you are like in -- potential through the that maybe could that of seen you the in you some guidance there the But sounds like Could it talk that, but it guidance? embedded in kind

Jared Briskin

want be always We're healthy. period. Certainly, it of focused what competition on holiday the to inventory very Certainly, it. we cognizant Again, extremely doing. is is our is

going do that is react should some it time, promotional we've competition significantly are there level what could there a make So we're accordingly. prepared same lower than we sure a that that and at from standpoint done promotions But that we're run, but the to to want we historically.

I think we follow closely. certainly, it

further into we'll get as As Mike mentioned, January. significant reduction reduction we a have and a in have we competition

want But what's become ensure foot every of the our to occurring from we a are that some putting less day best standpoint, in market. and over that, forward the can understanding So important we with consumer time. reactionary

Alex Perry

It you're And I nicely out a both you're little you like could traffic in sort on help quarter. could. of versus of just sort were more differences detail parse up us last you the us one sounds Maybe if like seeing if give is Could maybe products within one, in ticket? if this to be that -- traffic any way help seeing increasing what revisiting And in quick a stores as sell-through stock? that helpful. you do there? see find rates, really are the Just very back would the a people there

Bill Quinn

So I'll start traffic general. with just in

loyalty by top significantly We of members program. our that, that lower new to well the that's and add And continuing members grown On rate. a new active driven have our just into base has as customers. just member from a existing really attrition of has record amount been as

So going more get with of purchases. you're to more course, customers,

see very we're trends. to So those happy

up. growing fastest well purchased then increase of customer segment that who is considerably. twice we've channels, things we've grown is a and our as And that omnichannel customer mention a loyalty seen top customers segment they much as we in that of as behavior. and new and far we're that, definitely program as other Jared the from of amount in shops on average purchase a bit two result spoke relaunched we components, seen go and to initiatives. through items Ben a is little variety many team well As that have sale. And job seeing driving AUR which a our a the That's going has per average purchase, up, that IPS just dramatic and of as done A the this to our how both customer in quarter wonderful couple as our shift

purchase is So higher we've program, two lot base made seeing it and level actually awards, amount our a VIP MVP a purchase points and times which more customer. who get particular, and In easier which driving a and an VIP, to rate. a to got we're is we've of level, that's top customers levels MVP, X the

of a level, more it we're customers. summarize, driven omnichannel more Ben to increased I'll number by turn also just seeing also that to being is little trends to good some just of bit members more just but and ticket over VIPs at and So talk the VIPs, about that.

Ben Knighten

bit. about lot nice Texas go to we've And inhibits in in not in not you that be can minutes. talked together able We're can Jared the in XX little it's one customer seen earlier. the find El that consumer Campo, store Bill's It specific items without can't point, attributed you an some and on to having to we that online both increases find have those in underserved assortment, them a in offer spot. and only tag increases to store. that AUR, a of assortment traffic, Just of To that nice

And investment so and what that of things. a piece drives and for other big our that's in denim us

our things know it's in that We consumers our to that to let some investments chain, out there. increases how stuff his let kind supply that, We've Bill local the to customers and we're that our done frequency let online. but product really to have and out we've engage store to have then job some that they we source also reach done made is like know consumers, a with how things team delivery, that, great them that reach accelerated of [indiscernible]. have with faster social their of or in of and product, get some have or media know our want and able

done we've that, in a see job and doing good metrics. so And that really those of you

Operator

Ladies Mike and have back the of this for I over remarks. we session. gentlemen, today's Longo reached call to question-and-answer like would to turn Mr. end closing

Mike Longo

you. thank Well,

imagine these We're like great like forecasting now. work inventory And can can't We We and next it results. team. to a love excited it having next anyone love our we We We like it you the very we play position. quarter to we our our and else As We we're had great on people We We like team. strong we QX. tell, like a business that our game this with with. year. go report model. QX.

we like they're a speaking year. job. next the quarter Look, and fantastic highlight that. have talk fact great forward to sharing like doing always So look to and results we We to always we our that about to teammates, next

we thank very soon. And appreciate you. with all again, it. of to look you So forward We very, speaking

Operator

us you joining conference. today's Thank concludes today. This for

time. this may disconnect at lines your You

Hibbett (HIBB) 3 Dec 212022 Q3 Earnings call transcript