Hibbett Sports (HIBB), a retailer of athletic footwear, apparel, and equipment, is trading sharply higher today (+25%) after reporting big upside for its Q1 (Apr) results this morning. HIBB has now posted back-to-back large EPS beats in JanQ and AprQ after three misses in a row. Non-GAAP EPS rose 44% yr/yr to $1.61 while revenue rose 25% yr/yr to $343.3 mln. Both results were much better than expected. HIBB also raised full year EPS guidance to $2.00-2.15 from $1.80-2.00.
Same store comps are always critical for retailers as this metric filters out the impact of adding new stores. It's a more closely watched metric as it's a better indicator than total sales of the underlying health of the business. HIBB posted AprQ comps of +5.1%, which is a nice improvement from +3.8% comps in JanQ and +0.1% comps in OctQ. It's always great to see comps trending higher.
In addition to reporting strong AprQ comps, HIBB is also raising full year (FY20) guidance for comps to +0.5%-2.0% from -1.0% to +1.0%. That is still not quite the comp level HIBB achieved last year (FY19) at +2.2%, but it's good to see it inching higher. Also, with +5.1% comps in AprQ, there could be some upside to that comp result once the whole year is reported.
CEO Jeff Rosenthal noted that AprQ results "reflect improved performance in both the store and e-commerce channels. We believe our improved web traffic and mobile app, along with continued traction in Buy Online, Pickup in Store, are translating to traffic in our stores and online."
HIBB should be commended for being aggressive in terms of building out its omnichannel capabilities. HIBB has made this a priority in recent quarters and it seems to be gaining traction with the strong AprQ results.
In addition to beefing up its online/mobile offerings, another key strategy for HIBB has been to close underperforming stores. As previously announced, it expects to close around 95 stores this fiscal year. HIBB ended the quarter with 1,144 stores, so 95 stores is a fairly significant amount.
Looking ahead, investors should be aware that Hibbett Sports is looking for a new CEO. In March 2019, the company announced that CEO Jeff Rosenthal is planning to retire. A search is underway for his replacement and it's not clear how long it will take. Rosenthal will stay on until a successor is named.
As we have noted before, retailers are having a tough time with online competition. Sporting goods stores are particularly susceptible as most of that merchandise is well-suited for online purchases, meaning it's not unique and can be easily price-checked online. HIBB seems to be adapting. With back-to-back impressive quarters in AprQ and JanQ following three EPS misses in a row, the hope is that HIBB is turning the corner.