Hibbett Sports (HIBB) Tops Q2 EPS by $1.44, Offers Guidance

Hibbett Sports (NASDAQ: HIBB) reported Q2 EPS of $2.86, $1.44 better than the analyst estimate of $1.42. Revenue for the quarter came in at $419.3 million versus the consensus estimate of $320.89 million.

GUIDANCE:

Hibbett Sports sees FY2022 EPS of $11.00-$11.50, versus the consensus of $9.19.

• Given the strong performance in the second quarter, we are updating our financial guidance for Fiscal 2022, which ends January 29, 2022. Due to continuing uncertainty in the business environment, potential legislation that could negatively impact our business, changes in consumer spending habits and ongoing supply chain disruptions, forecasting future results remains difficult and we are therefore providing limited forward guidance regarding our updated outlook for Fiscal 2022.
• Our projected financial results for Fiscal 2022 are influenced by many factors, several of which are discussed below:
• We 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 athletic-inspired fashion footwear, apparel and accessories both in-store and online.
• Other initiatives, including net low double digit unit 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 or significant wage inflation, increases in corporate tax rates and shifts in consumer spending habits.
• Based on the considerations above and our results in the first half of the year, we forecast the following GAAP results for Fiscal 2022:
• Comparable sales versus the prior year are expected to be in the positive mid-teens, up from our previous guidance range of positive high-single digits to positive low-double digits;
• Gross margin is expected to be lower in the second half of Fiscal 2022 in relation to the first half of Fiscal 2022, but is expected to be favorable to both GAAP and adjusted Fiscal 2021 gross margin on a full year basis, which is consistent with the previous guidance;
• SG&A is expected to increase as a percent of sales in the second half of Fiscal 2022 in comparison to the first half of Fiscal 2022, but is still anticipated to decline as a percent of sales in comparison to both GAAP and adjusted SG&A in Fiscal 2021 on a full year basis, which is consistent with the previous guidance;
• Diluted earnings per share in the range of $11.00 to $11.50, assuming an effective tax rate of approximately 25.0% and a weighted average diluted share count of approximately 16.2 million.
• Non-GAAP results for Fiscal 2022 are not expected to materially differ from our GAAP results.
• During the second quarter of Fiscal 2022, we continued to evaluate attractive investment opportunities for deploying our capital. We now plan to invest approximately $70.0 million of capital on attractive organic growth opportunities that we believe will lead to higher sales and on various infrastructure projects that will enhance our distribution and back-office efficiency during Fiscal 2022. We believe that these growth opportunities will enhance the consumer experience both in stores and online and modernize our technology and processes. In addition to our capital expenditure plans, we intend to opportunistically allocate capital to share repurchases and remain dedicated to returning capital to our stockholders in the form of our recently initiated regular quarterly dividend of $0.25 per share.

For earnings history and earnings-related data on Hibbett Sports (HIBB) click here.

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