Hibbett, Inc. (NASDAQ:HIBB) Q3 2023 Earnings Call Transcript

Bill Quinn: So I think you mentioned fulfillment, we’re absolutely working on that. You can break that into a couple pieces. The first one is how long it takes for you to prepare an order, which we’re working on. And then also how long does it take to actually deliver that order, which we’ve got numerous initiatives around. So yes, fulfillment is a big focus for us. The other thing is just the customer experience. And obviously, we have a very good offering of omnichannel capabilities and we spend a lot of time on the design as well as testing of our Web site, apps. But currently, we have installed all of the customer pain points that are out there. So we are not going to stop, as Mike mentioned, there are customer pain points that are out there that we are going to invest in solving and those are pain points that are common, both online and in store.

Justin Kleber: Just a follow-up, unrelated on the comment on wage inflation. Curious if that pressure is accelerating and can you give us a sense of how much wages are up on a year-over-year basis or maybe where your average hourly wage rate stands today versus pre-pandemic levels?

Mike Longo: Bob mentioned earlier, our SG&A and the wage pressures we have experienced. The one thing I would say though, that’s been going over a while. We have actually seen a little bit of mitigation there, that growth has slowed, which is obviously good. Our job is to mitigate that cost, both in the stores, the SSC and our distribution centers. Some of our investments in technology and automation are starting to come online, and that’s really helping us to control those. We are also focused on managing our overtimes as well as continue to look our labor model and making sure that we have got it dialed in exactly right. But hopefully that answers your question. We are actually seeing a little bit of a slow in that growth. Still there, but slow.

Operator: Thank you. Our next question comes from the line of Mitch Kummetz with Seaport Research Partners.

Mitch Kummetz: First off, just on apparel. I was hoping you could elaborate on the competitive pricing pressure that you are seeing there. Maybe just getting to some of the specifics and then how you see that kind of carrying through into the fourth quarter?

Jared Briskin: So yes, we have obviously seen, the apparel promotions ramp up. I mean, we expected them to ramp up but we believe they’ve ramped up even more than expected. Our big challenge in the third quarter was less with regard to competition and was more with regard to our desire to get to a seasonally appropriate work. So we were fairly aggressive around spring and summer product that delivered late and maybe we didn’t get through as much as we would like. Typically in the back end of the quarter, you get an offset of seasonal product and unfortunately this year with some weather challenges back into the quarter, we didn’t see that come to fruition. The other part of that is with our improvements in footwear inventory and our consumers very focused on footwear that likely led to some pressure in some of the apparel businesses as well.

So we are less reactive to the competitive environment. We are more reactive to our business and how we want our floors to look as we get into future seasons.

Mitch Kummetz: And then on footwear, I’m curious with the discontinuation of Yeezy, a couple of things. First off, just kind of remind us how important that business was to you? And as that’s gone away, are you seeing demand transferring to other brands or is it just — or is that demand just going away? And in particular, are you seeing demand maybe transfer to the Retro Jordan business? And I’m curious, if that is happening, does that benefit you just kind of given better allocations there and kind of your relative position in that business versus some of your competition?