6.90%

5 Factors Contributing to Hibbett’s Comp Sales Growth

Publicly traded, athletic-inspired fashion retailer Hibbett’s is projecting more than a 70 percent increase in second-quarter comparable store sales for the period ending Aug. 1, fueled by brick-and-mortar growth pegged at 60 percent and digital sales expansion of approximately 200 percent. An estimated  25 percent of brick-and-mortar and 40 percent of digital sales in the period will be generated by new customers to Hibbett Sports and City Gear. Additionally, quarter-end inventory is forecast to be “well below prior year levels.”

Hibbett senior management in a conference call yesterday morning attributed the gains to five factors: Pent-up demand from April and May; U.S. stimulus checks to consumers; temporary store closures by competitors; permanent door closures by rivals; and accelerating consumer adoption of its e-commerce platform that was launched in July 2017. Faced with impacts from the COVID-19 pandemic, Hibbett initiated curbside pick-up of orders in the middle of the second quarter.

In fiscal year 2020 ended Feb. 1, 2020, HIBB’s annual footwear sales were up 27 percent year-over-year to $735.6 million. The increase was aided by the company’s Nov. 2018 acquisition of City Gear. At FY end, the company operated 932 Hibbett Sports locations and 149 City Gear stores across 35 states. In the first quarter of fiscal year 2021, the retailer’s footwear revenue was off more than 22 percent to $166.2 million.

Hibbett shares rose nearly 13 percent yesterday to close at $25.38.

In other retail news:

Tilly’s, which was required to close 28 of its California mall-based stores earlier this month, reported a 9.4 percent decline in second-quarter comparable sales through July 14 with brick-and-mortar comps dipping more than 37 percent and e-commerce comps rising nearly 166 percent year-over-year to $41.2 million. Customer traffic in re-opened stores was down 27 percent y-o-y.

Footwear has accounted for 12 percent of Tilly’s annual sales for each of the last two fiscal years ended Feb. 1. The percentage implies 3.5 percent annual footwear sales growth last year to approximately $74.3 million from $71.8 million the prior year.