Why Athletic-Inspired Fashion Retailer Hibbett's Shares Are Gaining Today

Hibbett Inc HIBB reported a second-quarter FY23 sales decline of 4.6% year-on-year to $374.88 million, missing the analyst consensus of $376.11 million.

Comparable sales decreased 7.3%. Brick and mortar comparable sales declined 7.7%, while e-commerce sales decreased 5.2% on a year-over-year basis.

EPS of $0.85 beat the analyst consensus of $0.73.

Gross margin contracted 160 basis points Y/Y to 32.8%. The operating margin contracted from 8.4% to 4.3%, and operating income for the quarter plunged 51% to $16.01 million.

Also Read: Hibbett's Q2 May Face Margin Pressure Amid Choppy Spending Trends: Analyst

Hibbett held $33.1 million in cash and equivalents as of July 29, 2023.

Store count at the end of Q2 was 1,148 versus 1,117 last year.

Inventory at Q2 end was $430.8 million, a 17.6% increase over last year.

In Q2, the company repurchased 294,917 shares of common stock under the stock repurchase program for a total expenditure of $11.0 million.

Mike Longo, President and Chief Executive Officer, stated, "Our sales for the second quarter were supported by a strong start to the busy back-to-school season and we also benefited from a positive customer response to new product launches during the quarter."

"Although we still face considerable headwinds, we believe we are well positioned for continued growth when market conditions improve."

Outlook: Hibbett continues to expect FY24 sales to be flat to up 2%, with EPS of $7.00 - $7.75 versus the consensus of $7.18.

HIBB reiterated comparable sales outlook of down low-single-digit. Net new store growth is expected to be in the range of 40 to 50 stores.

The company said it is reiterating its FY24 guidance despite the challenging current retail business climate, as consumer demand has been negatively impacted by persistent inflation and higher interest rates.

Price Action: HIBB shares are trading higher by 11.64% at $41.15 in premarket on the last check Friday.