Hibbett, Inc. (NASDAQ:HIBB) Q4 2023 Earnings Call Transcript

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Jared Briskin: Yes Sam, I think there’s obviously a little more struggle in Apparel right now. Consumer demand for Apparel in the fourth quarter . We certainly don’t see that necessarily changing anytime soon based off the level of inventory in the market and the promotional environment. So we certainly have some things that you know to work through. But the biggest impact of our inventory certainly is the price inflation and we want to ensure that we have an appropriate level of units to provide the best consumer experience that we can. So that’s where we sit today. The team is certainly focused on inventory productivity as the supply chain becomes, hopefully more normalized and more predictable. But Apparel is our toughest area at the moment with regard to liquidations of inventory.

Sam Poser : And just to follow up on that, you mentioned the supply chain. The supply chain in ’20, I mean, I understand there is going to be ongoing issues with the supply chain potentially in fiscal ’24. But isn’t it €“ I mean given all the craziness that happened last year, isn’t it probably still going to end up being a tailwind rather than a headwind.

Jared Briskin: Well, I think that this year as I mentioned, I think the predictability and the normalizing is something that our team is really looking forward to. The last couple of years with the chaos, you know planning inventory levels, tracking inventory, ensuring we have enough units for a positive customer experience was really, really difficult. As we go forward, we can be way more precise based on that predictability that will give the team a little bit more of a luxury to make decisions in a more timely manner than we have in the past. So yeah, I would agree with you. We would expect that to be a tailwind as we move forward.

Sam Poser : And then just two more things. Number one, you mentioned you know specific year-over-year numbers on the various merchandise categories. But you didn’t, you sort of gave a more vague one on team sports year-over-year. I wonder if you could just give us a more specific, what the change for year-over-year was in the fourth quarter for team?

Jared Briskin: Yeah, it was up in the mid mid-single digit area, largely driven by Cleats and then a positive impact around accessories for cold weather. Some of that frankly is due to some chaos and some of the cold weather accessory inventory the year prior from a compare standpoint, but it was in the mid-single digit area.

Sam Poser : Okay. And then lastly, in the gross margin and I’m not sure who this one’s for. In the gross margin, are you seeing some of your larger accounts basically cutting your margins like charging you more or cutting a discount or anything like that? And is that also impact €“ is that impacting the margins that you’re seeing or the gross margin items I guess.

Rob Volke : Yes, there’s some impact that we started experiencing last year, but I would say the bigger impact to the growth at this point is certainly the promotional environment and some of our liquidation efforts to ensure that our inventory remains healthy. As well as with the marketplace, as you know that the marketplace has been extremely promotional. So certainly in categories that have pressure on them, we want to ensure that we’re competitive.

Sam Poser : Okay. And then last, I’m sorry. Bob, in the first quarter you sort of gave a little direction. I’m assuming you’re expecting an increase €“ are you expecting an earnings €“ an EPS increase in Q1 and then a decrease in Q2. Is that sort of a way to think about it? The specific as you want to get would be greatly helpful.

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