Looking back at the chart this last year, shares of HIBB began to see some pressure in the summer of 2018 with weakness again returning in full swing by the fall and on into the 2018 holiday. All told, HIBB lost 29.9% in 2018, and the stock has been in the midst of a “death cross” for the better part of the past six months.
The losses were tossed aside on Friday, though, as results offered those who’d stuck with HIBB through the 2018 decline a bit of relief. To be sure, investors weren’t expecting as impressive growth as HIBB was able to turn in this quarter.
HIBB reported better than expected Q4 EPS of $0.57 on a 14.7% revenue increase to $305.96 mln.
HIBB also reported Q4 comparable store sales growth of 3.8%, outperforming analyst expectations, which were forecasting a comp decline.
The company also continued to expand its online presence; Q4 e-commerce sales represented 10.6% of total sales, up from 8.8% in the OctQ. Management noted that the omni-channel initiative continues to deliver strong results, with online sales increasing 60% to 10.6% of total sales in the quarter.
What’s more, HIBB is seeing significant improvement in web traffic and good traction with Buy Online, Pickup in Store (BOPIS) and improvements to its mobile app. At the same time, the company continues to improve the productivity of its store base by closing unproductive stores and positioning the City Gear banner to drive sales for fashion consumers.
Investors were also impressed with HIBB’s FY20 earnings guidance; the company sees EPS in a range of $1.80-2.00 for the year on comparable store sales of -1.0% to +1.0%. Management also sees a 35 to 55 basis point decline in non-GAAP gross margin this year as the company anticipates approximately 10 to 15 new store openings with about 95 store closures. Also, management expects between $18.0 mln to $22.0 mln in capital expenditures this year.
Separately, this morning HIBB announced the planned retirement of Jeff Rosenthal, President and CEO. The Board will commence a search process to identify the company’s next CEO, and Mr. Rosenthal will remain at the company in his capacity as CEO until a successor is named.
In sum, HIBB is performing well in the current retail environment, and the company expects its recent success to continue. The stock topping multi-month highs is obviously earning a nod of approval from investors, and judging by the stock’s losses in 2018, it definitely needed a quarter like this.