Hibbett Sports Inc. (Nasdaq: HIBB) said its apparel and footwear sales drove up its comparable-store sales in its fiscal first quarter, and validated its decision to offer more lifestyle apparel and footwear brands.
The retailer reported net sales increased 4.6 percent to $282.1 million compared with $269.8 million for the 13-week period ended May 2, 2015. Comparable-store sales rose 1.1 percent, although the growth slowed from 6.9 percent in February to 3.2 percent in March and 0.3 percent April. Average ticket was also up low-single digits, while the number of transactions was down low-single digits.
“Our focus is absolutely on less sporting goods and more on lifestyle,” said Senior Vice President and Chief Merchant Jared Briskin. “That seems to be where we have the 17-year-old influencer shopping with us for product.”
He lauded Nike, Adidas and Under Armour for investing to allocate more product to Hibbett, whose network of 1,053 stores in 33 states provides access to consumers living in small towns in 33 states.
“There’s still significant store growth opportunity in many of those lifestyle categories and products,” Briskin said.
Apparel sales were up low-single-digits thanks to a greater focus on premium fashion items. Men’s apparel was up high-single digits, while the women’s and kids were down low-single digits. Athletic bottoms and denim drove the growth.
Footwear was up low-single-digits. All genders were positive with the men’s and women’s business up low-single-digits and kid’s up mid-singles. Lifestyle and casual continued to post the healthiest gains with double-digit growth, while performance running was off double digits.
“We are seeing strong results from Nike sportswear, Adidas Originals, Puma, and Timberland,” he added.
Basketball was up low-single-digits thanks to strong performance by Jordan Retro and Under Armour’s Steph Curry line, which more than offset declines of higher priced Lebron and KD product that “wasn’t as trend relevant from a color perspective,” Briskin said.
Accessories and the licensed business were down low-single digits as lower sales of apparel related to the NCAA Final Four tournament more than offset a boost in sales of Carolina Panthers headwear.
Team sports sales were down low-single-digits as a mid-single-digit increase in spring football, track and soccer partially offset a low-single-digit decline in sales of baseball and fitness equipment.
Gross margin inched up 27 basis points to 37.2 percent, with 20 points coming from better markdown optimization and the balance from leveraging of warehouse and store occupancy costs. Operating, selling and administrative expenses climbed 69 basis points to 19.9 percent of net sales due in part to spending on omni-channel initiatives, including a store-to-home shipping service expected to launch in the fourth quarter and new e-commerce platform slated to go live in 2017.
Net income inched up to $27.9 million, or $1.22 per diluted share, up 12 percent from the 13 weeks ended May 2, 2015.
Hibbett ended the quarter with average inventory per store of $239,166, up 2.6 percent from May 2, 2015 thanks to vendors willingness to take back product not sold in the preceding quarter.
“The partnership level that we are getting from our vendors is really unprecedented at this point for us,” said Briskin, noting that major brands rely on Hibbett to get their products into more rural areas.
Hibbett affirmed its guidance for the full-fiscal year ending January 28, 2017, which calls for comparable-store sales to grow in the low single-digit range, and a relatively flat product gross margin rate compared with that of fiscal 2016.
Photo courtesy Hibbett Sports and Nike
