Hibbett Inc. is generating demand this back-to-school season, thanks to a strong inventory assortment that includes high-heat brands like Nike.
The sporting goods retailer reported Q2 net income of $24.7 million, or $1.86 per diluted share, short of analysts’ expectations at $2.16. Net sales in Q2 decreased 6.3% to $392.8 million, also short of expectations at 394.78 million.
Despite the miss, Hibbett shares were up more than 5% this morning.
By category, the sporting goods retailer reported that footwear and apparel sales were up in the high-60s% and low-40s%, respectively, compared to fiscal year 2020. Executives said that the company’s strong assortment of high-heat product from popular brands has been a major factor in driving engagement and sales with consumers in Q2. As such, executives said they expect sales momentum to persist beyond the back-to-school shopping period, two thirds of which has already been completed.
Analysts have noted in previous quarters that Hibbett Sports appears to be one of just a few wholesale chains of choice for leading brands like Nike, which has dialed back its business with other wholesale partners. Williams Trading analyst Sam Poser noted in a March note that Hibbett “is improving its relationships with key brands, such as Nike by engaging and retaining customers better than other retailers.”
Hibbett also focuses on opening stores in “underserved markets,” where there is less competition among similar retailers.
In a call with investors on Thursday, executives noted broader economic headwinds, such as inflation and increased freight costs, but said the retailer has largely managed to avoid the issue of consumers trading down to cheaper alternatives.
“We were able to achieve this result by improving our inventory position while providing a compelling selection of in-demand product, delivering superior in-store customer service and leveraging our best-in-class omni-channel platform,” Hibbett president and CEO Mike Longo said in a statement. Compared to fiscal year 2020, inventory levels at Hibbett in Q2 were up 35%, which management said will benefit the company moving into the back half of the year.