Hibbett Sports Earnings Call INSIGHTS: Inventory Position, Merchandizing Initiatives
On Friday, Hibbett Sports Inc (NASDAQ:HIBB) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Sean Naughton – Piper Jaffray: When you look at the quarter and given the inventory position you had heading in, do you feel like you were too tight anywhere and may have walked some sales to maintain margin? I guess following up on that, the inventory remains very well controlled at the end of the quarter here, how are you thinking your ability to drive comps if demand does reaccelerate materialize in the third quarter?
Rebecca A. Jones – SVP of Merchandising: We actually felt like going into the second quarter that the inventories were really in a better place than they were a year ago, and that was really by design that we came out of the first quarter into the second quarter that way because last year we felt like we landed April a little bit too heavy, going into the second quarter because it’s typically not our highest volume quarters to begin with, so we felt better about the inventories going into the quarter. Coming out of the quarter, we really saw that by door it was basically flat to last year, so from a perspective of can we drive the sales in our stores into the third quarter and then going into holiday, we feel confident that we’re really where we need to be. We had a couple of orders that shifted out at late July into August may come in, so we’re in good shape.
Michael J. Newsome – Executive Chairman: We didn’t have to be nearly as promotional this July as we were last year because that helped our margin, but it probably hurt our comp store sales a little, but it was a right thing to do, we were lot healthy in our inventory.
Sean Naughton – Piper Jaffray: Then I guess I’m not sure if I missed this or not just on comps in the quarter. Can you breakdown the composition between traffic and ticket and then also sounds just on the comps how does – it’s nice that you had a nice acceleration in your last three days, but how does the end of August work in terms of comparison purposes and are you seeing the pickup in the states that you mentioned that have shifted back-to-school a little bit later?
Jeffry O. Rosenthal – CEO and President: Yes. We had increase in traffic and increase in dollar amount our average selling price the comp stores that we talked about will continue to grow over the month. So, we expect we were in the 7% range last year in comps so we expect that it will grow over time with the shift. We definitely see it going with the movement of back-to-school. For example, our Georgia which last year we had sales late July moved back a little bit this year. We saw the acceleration when they had their tax free in August. So, we expect that to happen with at least these five states and the other states that we still have, have been some of our highest comping states anyways throughout the year. So, we expect it to accelerate the rest of this month.
Rebecca A. Jones – SVP of Merchandising: The Georgia tax-free was new over last year and so the consumers were really excited about that being put back into place and so we saw their business shift into August, but as would be expected, when you have a new tax-free date come out.
Sean Naughton – Piper Jaffray: Then just lastly on the new stores just from a modeling perspective maybe how should we think about the cadence of opening for the balance of the year?
Jeffry O. Rosenthal – CEO and President: It will be similar to the last year. We for whatever reason we’re always back-end loaded. We expect third quarter approximately 20 stores and fourth quarter approximately 25 somewhere in that range, but it’s always so back end loaded for us and historically it’s always been that way. We wish we could get a few more in the first and second quarter, but we feel pretty confident that we can hit the 55 to 60 stores that we’ve said earlier and we feel pretty good about that.
Seth Sigman – Credit Suisse: I just want to dig into that comps outlook a little bit more, it seems like Q3 is doing similar to Q2 in the mid single-digits, maybe even a little bit better given the shifts that you mentioned. But guidance for the year implies low single-digits in the back half of the year. Can you just help reconcile that and is there any reason why comps would decelerate through the remainder of the year or is that just kind of level of caution there?
Jeffry O. Rosenthal – CEO and President: Well, we are always a little conservative on our outlook. There is no reason that it shouldn’t be mid single or higher, but we’re being a little bit conservative as we always are.
Seth Sigman – Credit Suisse: Then as you look to Q3 and Q4, are there any specific merchandizing initiatives, brand rollouts, et cetera that may help year-over-year. I think specifically at this time last year the outdoor program with North Face, Columbia, it was probably in about half of the stores and it sound like that would probably be expanding this year. Any update on those types of initiatives?
Rebecca A. Jones – SVP of Merchandising: We will have some additional doors in North Face, over last year there is – and that’s always a nice plus for us, because our consumer really looks forward to us being able to bring that to them. As our store base growth then our additional door face stores stays pretty consistent to the total of – as a percentage to our total number of doors that we have, and of course, on the other hand, we also have the new NFL product that’s coming out from Nike and as that season gets to us and the products really gets on our floors in a good way, we think that will be a nice plus for the license business in particular. Our footwear business looks good; the product looks good. Going into the back half we are very pleased with the Under Armour programs that we have on the floor now and really feel good about what we’re seeing and selling in that and it’s very encouraging what we see from the back-to-school perspective about assortment and on top of that Jordan continues to be a very good program for us in urban door base and we feel good about the allocations that we have for the back half and think that that will also help us.
Michael J. Newsome – Executive Chairman: In the Olympics, we don’t specifically sell a lot of Olympic stuff, but it has kind of an influence overall whereas the people’s awareness of physical picks goes up a little bit and that will help some.