Hibbett Reports Fourth Quarter and Fiscal 2021 Results
March 5, 2021
Download PDF- Fourth Quarter Comparable Sales Increased 21.9%; Full Year Comparable Sales Increased 22.2%
- Fourth Quarter Brick and Mortar Comparable Sales Increased 17.7%
- Fourth Quarter E-Commerce Comparable Sales Increased 44.8%
-
Fourth Quarter Diluted EPS of
$1.39 ; Adjusted Diluted EPS of$1.40 -
Full Year Diluted EPS of
$4.36 ; Adjusted Diluted EPS of$6.12
Finally,
Fourth Quarter Results
Net sales for the 13-week period ended
Gross margin was 37.1% of net sales for the 13-week period ended
Store operating, selling and administrative (SG&A) expenses were 26.8% of net sales for the 13-week period ended
Net income for the 13-week period ended
During the fourth quarter, we opened 10 new stores, rebranded four Hibbett stores to City Gear stores and closed 21 stores, bringing the store base to 1,067 in 35 states as of
We ended the fourth quarter of Fiscal 2021 with
Inventory at the end of the fourth quarter of Fiscal 2021 was
Fiscal Year Results
Net sales for the 52-week period ended
Gross margin was 35.5% of net sales for the 52-week period ended
SG&A expenses, including goodwill impairment, were 26.5% of net sales for the 52-week period ended
Net income for the 52-week period ended
During Fiscal 2021, we opened 16 new stores, rebranded 12 Hibbett stores to City Gear stores and closed 42 stores. Store closures were composed of underperforming stores and rebrands.
Fiscal 2022 Outlook
Although it is difficult to forecast future results due to the challenges posed by the ongoing COVID-19 pandemic and uncertainty regarding the business environment, further stimulus payments and potential labor and tax legislation, we are providing limited forward guidance regarding our outlook for Fiscal 2022, which ends
Our projected financial results for Fiscal 2022 are influenced by many factors, several of which are discussed below:
- We believe we have attracted new customers to our store locations and to our omni-channel platform in Fiscal 2021 due to pent-up demand, market disruption and government stimulus payments. Many of these new customers made repeat purchases. We expect to continue to attract and retain new customers during Fiscal 2022.
- Accelerating consumer adoption of e-commerce, which we believe is likely a permanent change, will continue to benefit our omni-channel business.
- Our strong vendor relationships allow us to meet customer demand for fashion inspired athletic footwear, apparel and accessories both in-store and online.
- Other initiatives, including net low double digit store growth per brand, an improved in-store experience resulting from our store refresh program, increased speed to market via supply chain enhancements and an improved focus on our sales culture.
Specific items not factored into our outlook include further government stimulus payments, unannounced and/or unexpected market disruption, changes to the Federal minimum wage, increases in corporate tax rates and shifts in consumer spending habits.
Based on the considerations above, we forecast the following GAAP results for Fiscal 2022 in comparison to Fiscal 2021:
- Comparable sales ranging from negative low-single digits to positive low-single digits;
- Gross margin decline of approximately 130 to 170 basis points;
- SG&A decline as a percent of sales ranging from 5 to 45 basis points;
-
Diluted earnings per share in the range of
$5.00 to$5.50 , assuming an effective tax rate of approximately 25.0% and a weighted average diluted share count of approximately 17.0 million.
Additionally, non-GAAP results for Fiscal 2022 are not expected to materially differ from our GAAP results.
During Fiscal 2022, we plan to invest
Investor Conference Call and Simulcast
The Company will also provide an online Web simulcast and rebroadcast of its fourth quarter conference call. The live broadcast of Hibbett’s quarterly conference call will be available online at www.hibbett.com under the Investor Relations tab on
About
Hibbett, headquartered in
About Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including adjusted net income, earnings per share, gross margin, SG&A expenses and operating income as a percentage of net sales. Management believes these non-GAAP financial measures are useful to investors to facilitate comparisons of our current financial results to historical operations and the financial results of peer companies, as they exclude the effects of items that may not be indicative of, or are unrelated to, our underlying operating results, such as expenses related to the COVID-19 pandemic, the acquisition and integration of City Gear and our accelerated store closure plan in Fiscal 2020. The costs related to the COVID-19 pandemic include impairment charges of goodwill, tradename and other assets and lower of cost or net realizable value inventory reserve charges. The costs related to the acquisition and integration of City Gear include amortization of inventory step-up value, professional service fees, change in valuation of the contingent earnout, legal and accounting fees. Costs related to the strategic realignment plan included lease and equipment impairment costs, third party liquidation fees, store exit costs, and residual net lease costs and were specific to Fiscal 2020.
While our management uses these non-GAAP financial measures as a tool to enhance their ability to assess certain aspects of our financial performance, our management does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial statements. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial statements, allows for greater transparency in the review of our financial and operational performance. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
For a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure prepared in accordance with GAAP, please see the sections titled “GAAP to Non-GAAP Reconciliation” that accompany this press release.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Other than statements of historical facts, all statements which address activities, events, or developments that the Company anticipates will or may occur in the future, including, but not limited to, such things as our Fiscal 2022 outlook, including future capital expenditures and share repurchases, expansion, strategic plans, financial objectives, dividend payments, stock repurchases, growth of the Company’s business and operations, including future cash flows, revenues, and earnings, the impact of the COVID-19 pandemic on our business, our effective tax rate and other such matters, are forward-looking statements. The forward-looking statements contained in this press release reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, or performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to: changes in general economic or market conditions that could affect overall consumer spending or our industry; changes to the financial health of our customers; our ability to successfully execute our long-term strategies; our ability to effectively drive operational efficiency in our business; the potential impact of new trade, tariff and tax regulations on our profitability; our ability to effectively develop and launch new, innovative and updated products; our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands; increased competition causing us to lose market share or reduce the prices of our products or to increase significantly our marketing efforts; the impact of public health crises, including the COVID-19 pandemic, or other significant or catastrophic events; fluctuations in the costs of our products; acceleration of costs associated with the protection of the health of our employees and customers; loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner, including due to port disruptions; our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results; our ability to successfully manage or realize expected results from acquisition, including our acquisition of City Gear, and other significant investments or capital expenditures; the availability, integration and effective operation of information systems and other technology, as well as any potential interruption of such systems or technology; risks related to data security or privacy breaches; our ability to raise additional capital required to grow our business on terms acceptable to us; our potential exposure to litigation and other proceedings; and our ability to attract key talent and retain the services of our senior management and key employees.
These forward-looking statements are based largely on our expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. For additional discussion on risks and uncertainties that may affect forward-looking statements, see “Risk Factors” disclosed in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any changes in such assumptions or factors could produce significantly different results. The Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future events, or otherwise.
Unaudited Condensed Consolidated Statements of Operations (Dollars in thousands, except per share amounts) |
|||||||||||||||||||||||
|
13-Weeks Ended |
|
52-Weeks Ended |
||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
% to
|
|
|
% to
|
|
|
% to
|
|
|
% to
|
||||||||||||
Net sales |
$ |
376,830 |
|
|
|
$ |
313,024 |
|
|
|
$ |
1,419,657 |
|
|
|
$ |
1,184,234 |
|
|
||||
Cost of goods sold |
237,123 |
|
62.9 |
% |
|
214,281 |
|
68.5 |
% |
|
915,169 |
|
64.5 |
% |
|
800,783 |
|
67.6 |
% |
||||
Gross margin |
139,707 |
|
37.1 |
% |
|
98,743 |
|
31.5 |
% |
|
504,488 |
|
35.5 |
% |
|
383,451 |
|
32.4 |
% |
||||
Store operating, selling and administrative expenses |
101,017 |
|
26.8 |
% |
|
83,927 |
|
26.8 |
% |
|
356,856 |
|
25.1 |
% |
|
318,011 |
|
26.9 |
% |
||||
|
— |
|
— |
% |
|
— |
|
— |
% |
|
19,661 |
|
1.4 |
% |
|
— |
|
— |
% |
||||
Depreciation and amortization |
7,688 |
|
2.0 |
% |
|
7,023 |
|
2.2 |
% |
|
29,583 |
|
2.1 |
% |
|
29,323 |
|
2.5 |
% |
||||
Operating income |
31,002 |
|
8.2 |
% |
|
7,793 |
|
2.5 |
% |
|
98,388 |
|
6.9 |
% |
|
36,117 |
|
3.0 |
% |
||||
Interest (expense) income, net |
(28 |
) |
— |
% |
|
32 |
|
— |
% |
|
(436 |
) |
— |
% |
|
211 |
|
— |
% |
||||
Income before provision for income taxes |
30,974 |
|
8.2 |
% |
|
7,825 |
|
2.5 |
% |
|
97,952 |
|
6.9 |
% |
|
36,328 |
|
3.1 |
% |
||||
Provision for income taxes |
7,042 |
|
1.9 |
% |
|
1,824 |
|
0.6 |
% |
|
23,686 |
|
1.7 |
% |
|
8,984 |
|
0.8 |
% |
||||
Net income |
$ |
23,932 |
|
6.4 |
% |
|
$ |
6,001 |
|
1.9 |
% |
|
$ |
74,266 |
|
5.2 |
% |
|
$ |
27,344 |
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share |
$ |
1.45 |
|
|
|
$ |
0.35 |
|
|
|
$ |
4.49 |
|
|
|
$ |
1.54 |
|
|
||||
Diluted earnings per share |
$ |
1.39 |
|
|
|
$ |
0.34 |
|
|
|
$ |
4.36 |
|
|
|
$ |
1.52 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
16,534 |
|
|
|
17,202 |
|
|
|
16,547 |
|
|
|
17,746 |
|
|
||||||||
Diluted |
17,203 |
|
|
|
17,574 |
|
|
|
17,037 |
|
|
|
17,957 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Percentages may not foot due to rounding. |
|||||||||||||||||||||||
Unaudited Condensed Consolidated Balance Sheets (In thousands) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
209,290 |
|
|
$ |
66,078 |
|
Inventories, net |
202,038 |
|
|
288,011 |
|
||
Other current assets |
28,472 |
|
|
18,423 |
|
||
Total current assets |
439,800 |
|
|
372,512 |
|
||
|
|
|
|
||||
Property and equipment, net |
107,159 |
|
|
100,956 |
|
||
Operating right-of-use assets |
216,224 |
|
|
229,155 |
|
||
Finance right-of-use assets, net |
3,285 |
|
|
2,250 |
|
||
|
|
|
|
||||
|
— |
|
|
19,661 |
|
||
Tradename intangible asset |
23,500 |
|
|
32,400 |
|
||
Deferred income taxes, net |
14,625 |
|
|
8,996 |
|
||
Other assets, net |
3,573 |
|
|
3,829 |
|
||
Total assets |
$ |
808,166 |
|
|
$ |
769,759 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Investment |
|
|
|
||||
Accounts payable |
$ |
107,215 |
|
|
$ |
131,662 |
|
Operating lease obligations |
58,613 |
|
|
60,649 |
|
||
Finance lease obligations |
956 |
|
|
886 |
|
||
Other accrued expenses |
58,536 |
|
|
40,464 |
|
||
Total current liabilities |
225,320 |
|
|
233,661 |
|
||
|
|
|
|
||||
Long-term operating lease obligations |
186,133 |
|
|
190,699 |
|
||
Long-term finance lease obligations |
2,599 |
|
|
1,704 |
|
||
Other noncurrent liabilities |
3,078 |
|
|
14,712 |
|
||
Stockholders’ investment |
391,036 |
|
|
328,983 |
|
||
Total liabilities and stockholders’ investment |
$ |
808,166 |
|
|
$ |
769,759 |
|
Supplemental Information (Unaudited) |
|||||||||||||||
|
13-Weeks Ended |
|
52-Weeks Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Sales Information |
|
|
|
|
|
|
|
||||||||
Net sales increase |
20.4 |
% |
|
2.3 |
% |
|
19.9 |
% |
|
17.4 |
% |
||||
Comparable sales increase |
21.9 |
% |
|
4.0 |
% |
|
22.2 |
% |
|
5.3 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Store Count Information |
|
|
|
|
|
|
|
||||||||
Beginning of period |
1,074 |
|
|
1,097 |
|
|
1,081 |
|
|
1,163 |
|
||||
New stores opened |
10 |
|
|
4 |
|
|
16 |
|
|
13 |
|
||||
Rebranded stores |
4 |
|
|
3 |
|
|
12 |
|
|
11 |
|
||||
Stores closed |
(21 |
) |
|
(23 |
) |
|
(42 |
) |
|
(106 |
) |
||||
End of period |
1,067 |
|
|
1,081 |
|
|
1,067 |
|
|
1,081 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Estimated square footage at end of period (in thousands) |
6,022 |
|
|
6,102 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Balance Sheet Information |
|
|
|
|
|
|
|
||||||||
Average inventory per store |
$ |
189,351 |
|
|
$ |
266,430 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Share Repurchase Information |
|
|
|
|
|
|
|
||||||||
Shares purchased under our stock repurchase program |
150,318 |
|
|
532,702 |
|
|
578,336 |
|
|
1,564,642 |
|
||||
Cost (in thousands) |
$ |
6,969 |
|
|
$ |
14,114 |
|
|
$ |
16,718 |
|
|
$ |
34,904 |
|
Settlement of net share equity awards |
7,493 |
|
|
— |
|
|
42,449 |
|
|
29,432 |
|
||||
Cost (in thousands) |
$ |
414 |
|
|
$ |
— |
|
|
$ |
897 |
|
|
$ |
555 |
|
GAAP to Non-GAAP Reconciliation (Dollars in thousands, except per share amounts) (Unaudited) |
|||||||||||||||||
|
13-Week Period Ended |
||||||||||||||||
|
GAAP Basis
|
|
Acquisition(1) |
|
COVID-19(2) |
|
Non-GAAP Basis
|
||||||||||
|
|
|
|
|
|
|
|
% to
|
|||||||||
Cost of goods sold |
$ |
237,123 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
237,123 |
|
62.9 |
% |
Gross margin |
$ |
139,707 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
139,707 |
|
37.1 |
% |
SG&A expenses |
$ |
101,017 |
|
|
$ |
229 |
|
|
$ |
— |
|
|
$ |
100,788 |
|
26.7 |
% |
Operating income |
$ |
31,002 |
|
|
$ |
229 |
|
|
$ |
— |
|
|
$ |
31,231 |
|
8.3 |
% |
Provision for income taxes |
$ |
7,042 |
|
|
$ |
52 |
|
|
$ |
— |
|
|
$ |
7,094 |
|
1.9 |
% |
Net income |
$ |
23,932 |
|
|
$ |
177 |
|
|
$ |
— |
|
|
$ |
24,109 |
|
6.4 |
% |
Diluted earnings per share |
$ |
1.39 |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
1.40 |
|
|
1) Excluded acquisition amounts during the 13-week period ended |
2) There were no excluded amounts related to the COVID-19 pandemic during the 13-week period ended |
|
13-Week Period Ended |
||||||||||||||||
|
GAAP Basis
|
|
Acquisition(1) |
|
Strategic Realignment(2) |
|
Non-GAAP Basis
|
||||||||||
|
|
|
|
|
|
|
|
% to
|
|||||||||
Cost of goods sold |
$ |
214,281 |
|
|
$ |
— |
|
|
$ |
(764 |
) |
|
$ |
215,045 |
|
68.7 |
% |
Gross margin |
$ |
98,743 |
|
|
$ |
— |
|
|
$ |
(764 |
) |
|
$ |
97,979 |
|
31.3 |
% |
SG&A expenses |
$ |
83,927 |
|
|
$ |
4,180 |
|
|
$ |
502 |
|
|
$ |
79,245 |
|
25.3 |
% |
Operating income |
$ |
7,793 |
|
|
$ |
4,180 |
|
|
$ |
(262 |
) |
|
$ |
11,711 |
|
3.7 |
% |
Provision for income taxes |
$ |
1,824 |
|
|
$ |
975 |
|
|
$ |
(61 |
) |
|
$ |
2,738 |
|
0.9 |
% |
Net income |
$ |
6,001 |
|
|
$ |
3,205 |
|
|
$ |
(201 |
) |
|
$ |
9,005 |
|
2.9 |
% |
Diluted earnings per share |
$ |
0.34 |
|
|
$ |
0.18 |
|
|
$ |
(0.01 |
) |
|
$ |
0.51 |
|
|
1) Excluded acquisition costs represent costs incurred during the 13-week period ended |
2) Excluded strategic realignment amounts during the 13-week period ended |
GAAP to Non-GAAP Reconciliation (Dollars in thousands, except per share amounts) (Unaudited) |
|||||||||||||||||
|
52-Week Period Ended |
||||||||||||||||
|
GAAP Basis
|
|
Acquisition(1) |
|
COVID-19(2) |
|
Non-GAAP Basis
|
||||||||||
|
|
|
|
|
|
|
|
% to
|
|||||||||
Cost of goods sold |
$ |
915,169 |
|
|
$ |
— |
|
|
$ |
3,043 |
|
|
$ |
912,126 |
|
64.2 |
% |
Gross margin |
$ |
504,488 |
|
|
$ |
— |
|
|
$ |
3,043 |
|
|
$ |
507,531 |
|
35.8 |
% |
SG&A expenses |
$ |
356,856 |
|
|
$ |
4,608 |
|
|
$ |
15,743 |
|
|
$ |
336,505 |
|
23.7 |
% |
|
$ |
19,661 |
|
|
$ |
— |
|
|
$ |
19,661 |
|
|
— |
|
— |
% |
|
Operating income |
$ |
98,388 |
|
|
$ |
4,608 |
|
|
$ |
38,447 |
|
|
$ |
141,443 |
|
10.0 |
% |
Provision for income taxes |
$ |
23,686 |
|
|
$ |
1,394 |
|
|
$ |
11,645 |
|
|
$ |
36,725 |
|
2.6 |
% |
Net income |
$ |
74,266 |
|
|
$ |
3,214 |
|
|
$ |
26,802 |
|
|
$ |
104,282 |
|
7.3 |
% |
Diluted earnings per share |
$ |
4.36 |
|
|
$ |
0.19 |
|
|
$ |
1.57 |
|
|
$ |
6.12 |
|
|
1) Excluded acquisition amounts during the 52-week period ended |
2) Excluded amounts during the 52-week period ended |
|
52-Week Period Ended |
||||||||||||||||
|
GAAP Basis
|
|
Acquisition(1) |
|
Strategic Realignment(2) |
|
Non-GAAP Basis
|
||||||||||
|
|
|
|
|
|
|
|
% to
|
|||||||||
Cost of goods sold |
$ |
800,783 |
|
|
$ |
956 |
|
|
$ |
(1,120 |
) |
|
$ |
800,947 |
|
67.6 |
% |
Gross margin |
$ |
383,451 |
|
|
$ |
956 |
|
|
$ |
(1,120 |
) |
|
$ |
383,287 |
|
32.4 |
% |
SG&A expenses |
$ |
318,011 |
|
|
$ |
17,432 |
|
|
$ |
2,031 |
|
|
$ |
298,548 |
|
25.2 |
% |
Operating income |
$ |
36,117 |
|
|
$ |
18,388 |
|
|
$ |
911 |
|
|
$ |
55,416 |
|
4.7 |
% |
Provision for income taxes |
$ |
8,984 |
|
|
$ |
4,547 |
|
|
$ |
225 |
|
|
$ |
13,756 |
|
1.2 |
% |
Net income |
$ |
27,344 |
|
|
$ |
13,841 |
|
|
$ |
686 |
|
|
$ |
41,871 |
|
3.5 |
% |
Diluted earnings per share |
$ |
1.52 |
|
|
$ |
0.77 |
|
|
$ |
0.04 |
|
|
$ |
2.33 |
|
|
1) Excluded acquisition amounts during the 52-week period ended |
2) Excluded strategic realignment amounts during the 52-week period ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210305005055/en/
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