Hibbett Sports (HIBB) Tops Q4 EPS by 3c, Revenues Miss; Offers FY22 EPS Mid-Point Guidance Above Consensus

Hibbett Sports (NASDAQ: HIBB) reported Q4 EPS of $1.40, $0.03 better than the analyst estimate of $1.37. Revenue for the quarter came in at $376.83 million versus the consensus estimate of $378.42 million.

Mike Longo, President and Chief Executive Officer, stated, “The strong momentum that we experienced in our business in the second and third quarters continued in the fourth quarter. Our ongoing ability to deliver a compelling assortment of merchandise through superior customer service and a best-in-class omni-channel platform generated outstanding fourth quarter performance in both sales and profitability and provided a strong conclusion to a record-setting Fiscal 2021. The resilience of our team members, our customers and our business model contributed to transaction growth and a higher average ticket both in-store and online during the fourth quarter.”

Mr. Longo continued, “Our vendor partners recognize the value of the connections we make with the customers that shop with Hibbett and City Gear. We believe that the relationships with our vendor partners will likely continue to strengthen as we become even more engaged with the athletically-inspired consumer in the communities we serve.”

Finally, Mr. Longo added, “Following a record year, we believe the Hibbett and City Gear brands are positioned very well in the industry and the momentum we have created in Fiscal 2021 is sustainable. We will remain focused on providing attractive and differentiated customer experiences in stores and online.”

GUIDANCE:

Hibbett Sports sees FY2022 EPS of $5.00-$5.50, versus the consensus of $5.13.

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 January 29, 2022.

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 $45.0 million to $50.0 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. We believe that these growth opportunities will enhance the consumer experience 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 currently have approximately $136.3 million remaining under our share repurchase authorization.

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

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