Hibbett Sports Inc. just reported Q4 results that fell short of analysts’ expectations. However, sales of popular footwear brands were the main growth driver for the sporting goods chain in the quarter and the full fiscal year of 2023.
The sporting goods retailer, which also carries high-heat sneaker brands like Nike and Adidas, reported that Q4 net sales were up 19.6% to $458.3 million, short of analysts’ expectations of $476.57 million. Net income was $38.4 million, or $2.91 per diluted share.
“Our sales for the fourth quarter and full year reflect continued high demand for our popular footwear brands as consumers continued to pay premium prices for the latest product launches,” said CEO and president Mike Longo.
Like in previous quarters, Longo called out strong partnerships with vendors that kept the retailer stocked with inventory. Hibbett Sports is one of just a few wholesale retailers that still carries high-heat sneaker brands like Nike and Adidas, both of which have dialed back their business with other wholesale partners.
According to company executives, a general promotional environment impacted margins on secondary and tertiary footwear brands, though launches from high-heat footwear brands remained stable.
By channel, brick-and-mortar comparable sales were up 14.3% in Q4, and e-commerce comparable sales grew 21.4%. Hibbett opened nine new stores and closed two stores in Q4.
For the full year, net sales increased 1% to $1.71 billion, a record sales total for the sporting goods chain and on the low end of the company’s guidance from November. Net income was $128.1 million, or $9.62 per diluted share, which fell slightly short of the previously outlined guidance of between $9.75 and $10.50.
Moving forward, Longo anticipates future headwinds from inflation, higher interest rates and a more promotional retail environment in fiscal year 2024 — though he believes the company’s strong assortment of footwear brands can help drive positive momentum.
“We anticipate consumers will be more cautious in their discretionary spending, and while we still feel our unique assortment of high-demand footwear will drive traffic and sales, margins are expected to be negatively impacted,” Longo said.
For fiscal year 2024, Hibbett expects total sales to be up in the mid-single-digit range, compared with 2023. Diluted earnings per share are expected to be in the range of $9.50 to $10.