Hibbett Stayed Open During the Pandemic — Here’s What That Did for Its Business
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Shares for Hibbett Sports Inc. are surging in Tuesday trading after the retailer posted better-than-expected profits and revenues for the first quarter.
During the three months ended May 2, the Birmingham, Ala.-based company saw a net loss of $15.3 million, or a loss of 92 cents per share. On an adjusted basis, its net income was $5.2 million, or 31 cents per share — 19 cents ahead of Wall Street’s bets. Sales, on the other hand, decreased 21.4% to $269.8 million, but the total was well above analysts’ forecasts of $211 million.
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As of 9:30 a.m. ET, its stock was up more than 10% to $21.50.
While comps fell 19.5%, Hibbett’s e-commerce sales improved by 110.5% and accounted for 22.3% of net sales for the quarter.
In late March, despite the domino effect of retailers shuttering their stores, Hibbett — as well as chains like Dillard’s and Sears — continued to operate business as usual, drawing the ire of some market watchers, who suggested that the decision to stay open could have been perceived as insensitive or shortsighted during the coronavirus pandemic.
Although it never formally announced store closures, Hibbett eventually shuttered doors where it was required to do so, indicated CEO Mike Longo today.
“When COVID-19 struck, we decided to have our customers and team members navigate us through these uncharted waters,” president and CEO Mike Longo said in a statement. “In other words, if our customers had essential needs and wanted to shop, and our team was eager to service our loyal customers, then Hibbett would wholeheartedly support them.”
He added, “In conjunction with state and local authorities, we remained open where prudent and ran our stores in a way that was both safe for our team members and customers. At the same time, we reinforced our best-in-class digital platform with extra product, marketing and an emphasis on fulfillment from the distribution centers and the stores, including curbside pickup. As a result, we gained many first-time customers.”
The company’s digital traffic jumped more than 80%, while conversion advanced 26% during the three-month period. It added that upwards of 40% of online sales in the second half of the quarter were due to new customers.
At the start of the month, nearly 700 of its stores had opened back up to the public. Today, more than 1,000 locations are back in business, and Hibbett reported “significant comparable sales increases” upon their reopenings.
“We have a strong business model, talented employees and a resilient customer base,” Longo said. “Our ability to react, adapt and execute successfully in a constantly changing environment further reinforces the opportunities ahead of us. I believe the company will emerge from this crisis stronger than ever.”
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