Hibbett Sports Inc. HIBB posted third-quarter fiscal 2022 results, wherein the bottom and top lines not only surpassed the Zacks Consensus Estimate but also improved year over year.
Despite supply-chain challenges, results gained from a positive momentum, robust assortment of merchandise and expanded omnichannel capabilities that led to substantial traffic, higher average ticket, and a greater number of items purchased per transaction. Investments in stores and the online business as well as strong vendor relationships contributed to growth in the Hibbett and City Gear brands.
The HIBB stock plunged more than 4% on Dec 3. Nonetheless, shares of this Zacks Rank #3 (Hold) company have jumped 50.5% year to date against the industry's 7% decline.
Image Source: Zacks Investment Research
Hibbett's adjusted earnings of $1.68 per share grew 15.9% from $1.45 reported in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.56.
Net sales rose 15.2% year over year to $381.7 million for the quarter under review and beat the Zacks Consensus Estimate of $360 million. The metric advanced 38.6% from third-quarter fiscal 2020.
In the quarter, Hibbett witnessed favorable impacts of market disruption, better customer retention, continued strength in the online channel, the availability of in-demand products and government stimulus payments. Strength in apparel, footwear and team sports along with the solid back-to-school season across all categories and genders also contributed to top-line growth.
E-commerce sales rose 22.3% for the quarter under review, while the metric surged 84.2% on a two-year basis. It accounted for 14% of total sales, reflecting an improvement from 13.2% of total sales in the year-ago period.
Comparable store sales (comps) increased 13%, while in-store comps grew 11.6% for the quarter under review, driven by double-digit growth in both stores and online. Comps skyrocketed 37.4%, while in-store comps advanced 31.6% on a two-year basis.
Gross profit increased 9.2% year over year to $138.7 million for the reported quarter. The adjusted gross margin contracted 180 basis points (bps) to 36.3% due to higher freight and transportation costs, which more than offset reduced store occupancy expenses. Adjusted operating income was $33.4 million, up 2.1% year over year, while adjusted operating margin contracted 110 bps to 8.8% for the reported quarter.
Adjusted store operating, selling and administrative (SG&A) expenses, as a percentage of sales, contracted nearly 80 bps to 25.2%.
Hibbett, Inc. Price, Consensus and EPS Surprise
Hibbett, Inc. price-consensus-eps-surprise-chart | Hibbett, Inc. Quote
Hibbett ended the quarter with $29.7 million in cash and cash equivalents, and $100 million available under its credit facilities. Total stockholders' investment, as of Oct 31, was $305.5 million.
In the fiscal third quarter, Hibbett repurchased 1.4 million shares worth $117.8 million, with $398 million remaining in the existing share repurchase plan. Management declared a quarterly dividend of 25 cents in the quarter under review.
Capital expenditure was $23.1 million in the reported quarter, stemming from store openings, relocations, expansions, remodels and infrastructure upgrades.
In third-quarter fiscal 2022, the company opened seven stores and shut one underperforming outlet. Hence, it ended the quarter with 1,086 stores across 35 states.
Management raised its GAAP view for fiscal 2022. This was driven by the solid quarterly results, customer acquisitions stemming from pent-up customer demand, government stimulus payments, continued online momentum, strong vendor relationships and gains from store refresh program. The company stated that it doesn't foresee any material difference between GAAP and non-GAAP figures. However, uncertainty in consumer spending and supply-chain disruptions remain concerning.
Hibbett now expects comps growth in high-teens for fiscal 2022, up from the earlier mentioned mid-teens growth. For fourth-quarter fiscal 2022, comps are likely to grow in high-single digits, with gross margin envisioned to decline year over year. Higher freight and shipping costs as well as promotional activities are expected to mar margins. Hibbett reiterated its view of positive GAAP and non-GAAP gross margin for fiscal 2022.
SG&A expenses, as a percentage of sales, are projected to decline year over year in the fourth quarter and fiscal 2022. Adjusted earnings are envisioned to be $11.70-$11.90 per share, reflecting an improvement from the previously mentioned $11-$11.50. The company also projects a bottom line of $1.85-$2.05 for the fiscal fourth quarter.
Here's How Other Stocks Fared
We have highlighted three better-ranked stocks in the Retail - Wholesale sector, namely Boot Barn Holdings BOOT, Tractor Supply Company TSCO and Capri Holdings CPRI.
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel, and accessories, currently sports a Zacks Rank #1 (Strong Buy). Shares of BOOT have skyrocketed 176.9% year to date. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings' sales and earnings per share (EPS) for the current financial year suggests growth of 54.4% and 183.3%, respectively, from the year-ago period's reported figures. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average.
Tractor Supply, a rural lifestyle retailer in the United States, currently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 22.8%, on average. Shares of TSCO have surged 63.9% year to date.
The Zacks Consensus Estimate for Tractor Supply's sales and EPS for the current financial year suggests growth of 19% and 23.9%, respectively, from the year-ago period's reported numbers. TSCO has an expected EPS growth rate of 9.6% for three-five years.
Capri Holdings, which operates membership warehouses, presently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 1024.9%, on average. Shares of CPRI have rallied 46.4% year to date.
The Zacks Consensus Estimate for Capri Holdings' sales and EPS for the current financial year suggests growth of 12.6% and 1.2%, respectively, from the year-ago period's reported figures. CPRI has an expected EPS growth rate of 56.4% for three-five years.
Investor Alert: Legal Marijuana Looking for big gains?
Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0%.
You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Tractor Supply Company (TSCO): Free Stock Analysis Report
Hibbett, Inc. (HIBB): Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report
Capri Holdings Limited (CPRI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.