Sporting shoes retailer Hibbett Sports Inc. (HIBB, Financial) released its fiscal second-quarter earnings on Aug. 28 before the market opened. The company's earnings and revenue surpassed expectations and were up from the same quarter last year.
By the numbers
The company's net profit for the quarter was $40.4 million, resulting in earnings per share of $2.38, up from a net loss of $8.8 million, or $0.49 per share, for the year-ago quarter. The company's adjusted earnings per share stood at $2.95, which was more than the projected $1.15. Revenue of $441.6 million was up 74.9% year-over-year and surpassed analyst predictions of $349.58 million.
Comparable store sales for the quarter ended Aug. 1, 2020 jumped by 79.2%. E-commerce sales jumped a mammoth 212.2% and made up 15.7% of the total net sales of the quarter. SG&A expenses declined to 22.6% of sales compared to 31.8% of sales in the year-ago quarter as the coronavirus-related costs were more than offset by an increase in net sales.
CEO Mike Longo had the following to say:
"Our nearly 80% comparable sales results were driven by multiple factors, including pent-up consumer demand, temporary and permanent competitor store closures and government stimulus money. We believe that these circumstances yielded increased traffic to our stores and website and provided new customers the opportunity to experience our trademark service. As a result, we were able to deliver these exceptional results."
The company's balance of cash and cash equivalents stood at $217.8 million at the quarter's end.
At the end of the quarter, the company had inventory of $182 million, which reflected a decline of 32.7% from the fiscal second quarter of the previous year. This reflected efforts to manage strong brick and mortar and e-commerce demand.
During the quarter, the Alabama-based sporting goods retailer launched three stores and rebranded four Hibbett stores to City Gear stores. Additionally, the company shut down as many as eight stores, which included mainly underperforming stores. As of Aug. 1, 2020, the company had a total of 1,077 stores in 35 states.
Outlook
The company has provided guidance for the second half of fiscal 2020. The company projects diluted EPS to be between $0.85 and $1.00 for the next quarter and comparable sales to rise in the mid-single digits.
Disclosure: I do not hold any positions in the stocks mentioned.
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