Hibbett Sports Inc. continues to reap the rewards of pandemic-related retail closures.
The sporting goods chain, which today released a better-than-expected third-quarter financial report, indicated that the permanent shutdowns of its rivals and similar businesses that sell footwear and apparel have given it an edge in recent months.
For the three months ended Oct. 31, the Birmingham, Ala.-based company posted adjusted profits of $24.9 million, or earnings of $1.45 per share, compared with the prior year’s $5.8 million, or 32 cents per share. The figure was well above analysts’ forecasts of 45 cents in EPS. Revenues increased 20.3% to $331.4 million, versus market watchers’ expectations of $286.42 million.
Overall, comps surged 21.2%, with brick-and-mortar sales delivering a 17.5% gain and e-commerce growing by 50.7%. (Its online business represented 13.2% of total net sales — up from 10.5% in the previous year.)
“We believe the increase in sales were driven by several factors, including: a time earlier in the year [when] we saw temporary closures of competitors; accelerating consumer adoption of e-commerce; rotation of spending from travel and leisure and entertainment into our business; and the boost from fiscal stimulus,” president and CEO Michael Longo said in a conference call with analysts.
In particular, the executive chief cited the bankruptcies of competitors J. C. Penney Company Inc. and Stage Stores Inc., which announced the closures of roughly 250 stores within two miles of an existing Hibbett Sports or City Gear unit.
“In Q3, we did begin to see the effects of the closures of some JCPenney stores and all of the Stage Stores,” Longo added. “This presents an upside opportunity for us, both in fashion and athletic categories.”
Over the past three months, Hibbett didn’t open any new stores, but it rebranded two of its namesake outposts to City Gear locations and closed five units, bringing its brick-and-mortar base to 1,074 in 35 states. The retailer did not provide an outlook for the fiscal year. However, it shared that it expects to retain the customers it had gained early in the outbreak, when Hibbett kept stores open while competitors had temporarily closed down.
For the fourth quarter, it predicted that comps will advance in the high single digits to low double digits, plus diluted earnings per share in the range of $1.00 to $1.10. Within the next few months, it also intends to deploy a new “store refresh” plan, which is focused on outfitting outposts with new tables and mannequins as well as refreshing its sneaker walls.