Hibbett Reports Q1 Fiscal 2025 Results

Hibbett, Inc. has reported its first quarter fiscal 2025 results, with a diluted EPS of $2.67 compared to $2.74 in the prior year. The company experienced a 5.8% decrease in comparable sales and a 1.8% decrease in net sales compared to the previous year.

The gross margin for the quarter was 35.8% of net sales, an increase from 33.7% in the same period last year. This change was primarily driven by a higher average product margin, which was approximately 195 basis points favorable to the prior year. However, store operating, selling, and administrative expenses increased to 23.7% of net sales from 21.1% in the prior year, primarily due to inflation on wages, benefits, and goods and services, as well as non-recurring professional fees associated with the pending JD Sports transaction.

Net income for the quarter was $32.5 million, or $2.67 per diluted share, compared with $35.9 million, or $2.74 per diluted share, in the same period last year. Additionally, the company opened six stores and closed six stores during the quarter, leaving the store base unchanged from the prior quarter at 1,169 in 36 states.

As of May 4, 2024, Hibbett had $28.7 million of available cash and cash equivalents on its unaudited condensed consolidated balance sheet and $7.5 million of debt outstanding on its $160.0 million unsecured line of credit. Inventory as of May 4, 2024, was $371.3 million, a 15.2% decrease compared to the prior-year first quarter and up 7.8% from the beginning of the fiscal year.

The company did not repurchase shares of common stock under its stock repurchase program during the quarter and paid a quarterly dividend equal to $0.25 per outstanding common share, resulting in a cash outlay of $2.9 million. As previously disclosed, per terms of the merger agreement with JD Sports, Hibbett has suspended the repurchase program and payment of future dividends through the closing of the transaction.

Hibbett entered into a definitive agreement to be acquired by a subsidiary of JD Sports on April 23, 2024. Under the terms of the agreement, Hibbett stockholders will receive $87.50 in cash per share at closing. The transaction is expected to close in the second half of 2024, subject to Hibbett stockholder approval, receipt of required regulatory approvals, and the satisfaction of other customary conditions to closing.

In light of the pending transaction with JD Sports, Hibbett will not be hosting an earnings conference call to discuss its results for the first quarter ended May 4, 2024, and will not be providing or updating previously issued financial guidance. As a result of these announcements, the company's shares have moved -0.1% on the market, and are now trading at a price of $86.17. Check out the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.