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HIBBETT INC (HIBB)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 FY2024 delivered stable revenue ($431.9M) and stronger profitability, with diluted EPS at $2.05 vs $1.94 prior year, supported by lower SG&A leverage and disciplined cost control .
  • Management raised full-year diluted EPS guidance to $8.00–$8.30 (from $7.00–$7.75), with modest improvements to SG&A%, operating margin %, interest expense %, diluted shares, and tax rate assumptions; top-line and gross margin guidance maintained .
  • Comparable sales fell 2.7% YoY (brick-and-mortar -5.4%; e-commerce +12.6% to 17% of sales), reflecting a still-promotional environment and selective consumer demand; footwear outperformed while apparel lagged .
  • Strategic catalysts included launch of the Connected Partnership integrating Hibbett and Nike loyalty programs, expected to deepen engagement and access to coveted product launches during holiday season .

What Went Well and What Went Wrong

What Went Well

  • Strong execution and market share gains despite a challenging backdrop; management: “Our solid financial results… reflect our ability to consistently execute our strategy and we believe we continue to gain market share” — Mike Longo, CEO .
  • Footwear strength and premium brand mix continued to drive performance; positive response to “trend-relevant brands and products” and normalized launch cadence .
  • SG&A improved 90 bps YoY to 23.0% via store labor efficiency and strategic reductions in discretionary expense categories; operating margin held at ~8.0% .

What Went Wrong

  • Comparable sales decreased 2.7% YoY; brick-and-mortar -5.4% amid elevated promotions; apparel demand remained softer .
  • Gross margin contracted ~40 bps YoY to 33.9%, primarily on ~130 bps lower average product margin due to promotions and occupancy deleverage .
  • Inventory remains elevated versus earlier in the year for the category (though Hibbett’s own inventory declined 5.4% since the start of FY24); management continues to navigate a promotional environment .

Financial Results

Revenue, Profitability, and EPS (periods: oldest → newest)

MetricQ1 2024Q2 2024Q3 2024Q3 2023 (YoY ref)
Net Sales ($USD Millions)$455.5 $374.9 $431.9 $433.2
Gross Margin (%)33.7% 32.8% 33.9% 34.3%
Operating Income ($USD Millions)$45.9 $16.0 $34.5 $34.2
Operating Margin (%)10.1% 4.3% 8.0% 7.9%
Net Income ($USD Millions)$35.9 $10.9 $25.5 $25.6
Diluted EPS ($)$2.74 $0.85 $2.05 $1.94
SG&A (% of Sales)21.1% 25.3% 23.0% 23.9%

Channel and Comps KPIs

KPIQ1 2024Q2 2024Q3 2024
Comparable Sales YoY+4.1% -7.3% -2.7%
Brick & Mortar Comps YoY+4.7% -7.7% -5.4%
E-commerce Sales YoY+0.6% -5.2% +12.6%
E-commerce as % of Sales13.7% 15.1% 17.0%

Balance Sheet and Corporate Actions

MetricQ1 2024Q2 2024Q3 2024
Cash & Equivalents ($USD Millions)$26.9 $33.1 $29.6
Credit Facility Debt ($USD Millions)$103.6 $106.9 $96.9
Inventory ($USD Millions)$438.0 $430.8 $398.1
Share Repurchases (Shares / $USD)159,592 / $10.2M 294,917 / $11.0M 707,621 / $32.0M
Dividend per Share ($)$0.25 $0.25 $0.25
Ending Stores1,143 1,148 1,158

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total SalesFY2024Flat to up ~2.0% Flat to up ~2.0% Maintained
Sales % by QuarterFY2024~26%, ~22%, ~24%, ~28% ~26%, ~22%, ~24%, ~28% Maintained
Comp SalesFY2024Down low-single digit Down low-single digit Maintained
Brick & MortarFY2024Down low-single digit Down low-single digit Maintained
E-commerceFY2024Down low-single digit Flat to up low-single digit Raised mix slightly
Net Store Growth (units)FY202440 to 50 ~40 Lowered (permits/construction)
Gross Margin %FY202433.9% to 34.0% 33.9% to 34.0% Maintained
SG&A %FY202423.3% to 23.5% 23.1% to 23.3% Lowered (cost savings)
Operating Profit %FY20247.4% to 7.8% 7.6% to 8.0% Raised
Interest Expense %FY20240.40% to 0.45% 0.35% to 0.40% Lowered
Diluted EPS ($)FY2024$7.00 to $7.75 $8.00 to $8.30 Raised
Diluted Shares (MM)FY2024~12.8 ~12.6 Lower (repurchases)
Tax RateFY202423.5% to 23.7% 23.1% to 23.3% Lower
Capex ($MM)FY2024$60 to $70 $60 to $70 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Consumer demand & promotionsQ1: Updated FY guidance due to “more cautious consumer outlook” and elevated promotions across footwear/apparel . Q2: Inflationary pressure; promotional environment; comps -7.3% .Still challenging; comps -2.7%; promotions pressured product margin; apparel softer .Stabilizing but still promotional .
Footwear vs ApparelFootwear more resilient; apparel weaker (promotions) .Continued footwear strength with premium brands; apparel lag .Footwear strength sustained .
Digital & LoyaltyE-commerce 13.7% in Q1; 15.1% in Q2 .E-commerce 17%; launch of Connected Partnership with Nike loyalty programs .Rising digital mix; enhanced loyalty .
Inventory & Supply ChainCategory surplus inventory; Hibbett inventory $438.0M in Q1 .Inventory $398.1M (-1.7% YoY; -5.4% YTD); supply chain issues “behind us” .Improving levels .
SG&A & OpEx disciplineQ1: SG&A leverage -140 bps YoY; cost actions . Q2: SG&A deleverage from lower sales .SG&A 23.0% (down ~90 bps YoY); cost efficiencies sustained .Improving efficiency .
Guidance postureQ1: Cut FY guidance (margin/promotions, interest) . Q2: Reiterated FY guidance .Raised FY EPS, improved SG&A% and operating margin %, lowered interest and tax .More constructive .

Management Commentary

  • “Our sales were in line with our expectations, boosted by a strong back-to-school season… and a more normal seasonal schedule of new launch products… with a positive response from our loyal customers” — Mike Longo, CEO .
  • “Our footwear sales, especially with our popular premium brands, have continued to be a key driver… [Connected Partnership] connects the Hibbett and Nike loyalty programs… providing exclusive shopping experiences, personalized content, and early access” — Mike Longo, CEO .
  • “With the previous supply chain issues behind us, we are confident in our ability to meet customer demand with a favorable inventory level” — Mike Longo, CEO .
  • CFO highlights: SG&A down ~90 bps YoY via labor efficiency and discretionary expense reductions; operating margin ~8.0% .

Q&A Highlights

  • Inventory normalization: management indicated trajectory toward inventory declines by year-end; external transcript summarized “on track to deliver a mid-teens year-over-year inventory decline at year end” .
  • Guidance clarification: reaffirmed flat to +2% FY sales including 53rd week and raised FY diluted EPS to $8.00–$8.30; reiterated margin and expense framework adjustments .
  • Mix & promotions: management emphasized footwear strength and continued promotional pressure in apparel; e-commerce penetration rising with loyalty integration .
  • Participants included major sell-side firms (Seaport, Williams Trading, Telsey, Baird, Bank of America, Benchmark), indicating broad coverage of merchandising, margin, and inventory topics .

Estimates Context

  • S&P Global consensus estimates were unavailable due to a current CIQ mapping issue for HIBB (attempted retrieval failed). As a result, we cannot provide definitive “vs consensus” comparisons anchored to S&P Global for Q3 FY2024 at this time [GetEstimates error].
  • Management’s raised FY EPS guidance ($8.00–$8.30) and maintained sales/gross margin guidance suggest sell-side models may need upward revisions to EPS, with minor tweaks to SG&A/interest/tax assumptions .

Key Takeaways for Investors

  • Profitability resilience: Q3 EPS $2.05 with operating margin ~8.0% despite a promotional backdrop; SG&A discipline drove bps improvement YoY .
  • Guidance positive: FY diluted EPS raised to $8.00–$8.30; SG&A% and operating margin % improved; interest and tax rates lowered—supportive for FY EPS trajectory .
  • Mix shift benefits: E-commerce penetration rose to 17% with strong footwear trends; Connected Partnership with Nike expected to enhance loyalty-driven demand and access to launches .
  • Inventory normalization: Inventory down 5.4% year-to-date and -1.7% YoY; supply chain issues “behind us” aids fulfillment and margin stability .
  • Store growth & capital returns: Ending stores 1,158 (+10 net Q3); continued buybacks (708k shares; $32.0M) and $0.25 dividend underscore shareholder return commitment .
  • Risk monitoring: Apparel remains pressured by promotions; brick-and-mortar comps -5.4%; sustained promotional environment could cap gross margin recovery near 33.9%–34.0% FY guide .
  • Near-term trading: Narrative likely supported by raised EPS guidance and loyalty integration; watch holiday launch cadence and promotional intensity for Q4 execution against unchanged top-line/margin guardrails .

Additional Source Documents Reviewed

  • Q3 FY2024 8-K with Exhibit 99.1 earnings release and updated FY2024 guidance .
  • Q2 FY2024 8-K and earnings release (reiterated FY guidance; comps -7.3%; margin pressure) .
  • Q1 FY2024 8-K and earnings release (raised caution on consumer; lowered FY guidance then) .
  • External transcript resources for call details and Q&A participation .
  • Business Wire press release reference for Q3 results .