Q4 2020 Earnings Call
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Greetings and welcome to the Hibbett Sports fourth quarter 2000 in 20 earnings conference call. During this presentation participant on in listen only mode. Afterwards, we will conduct a question and answer session at that time, maybe of the question plus the one.
Oh by the four on your telephone.
At anytime during this conference you need to reach an operator press Star Zero as a reminder, this conference is being recorded on Friday March Twentyth 2020, It's my pleasure to turn the conference over to Jason for tail director of Finance and Investor Relations. Please go ahead Sir.
Good morning, Thank you for joining hibbett sports to review the Companys financial and operating results for the fourth quarter in fiscal year 2020, which ended on February Onest 2020, before we begin I would like to remind everyone that management's comments. During this conference call, which are not based on historical facts, including.
In response to your questions are forward looking statements. These statements, which reflect the company's current views with respect to future events and financial performance are made and reliance on the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 and are subject to uncertainties and risks Sydney.
Did that the company's future results may differ materially from.
Those anticipated in discussing the forward looking statements some of the factors that could cause or contribute to such differences had been described in the news release issued this morning, and the company's annual report on form 10-K, and and other filings with the Securities and Exchange Commission, we refer you to those sources for more information.
Lastly, I would like to point out that management's remarks. During this conference call are based on information and understands believed accurate as of today's date March Twentyth 2020, because of the time sensitive nature of this information. It is the policy of Hibbett sports.
To limit the archive replay of this conference call what pass through a period of 30 days I'd now like to turn the call over to Scott Humphrey, Our interim Chief Financial Officer.
Thanks, Jason and good morning, everyone.
Welcome to the Hibbett sports fiscal 2000.
Sure and year end earnings call.
Today, we have with us, Mike Longbow, President and CEO, and Jared Briskin, senior VP and chief merchant.
I'll start today's call with the prepared remarks on the fourth quarter and full year results followed by Jared with a review of merchandising and then Mike will cover highlights from the quarter, along with the general business update.
As a reminder, we treat city year as an extension of the Hibbett business and the results will be reported on a combined basis. The fourth quarter marked the first time that city year sales were included in our consolidated comp sales as we now have owned the city gear business for over one year.
For the fourth quarter total net sales increased 2.3% to $313 million.
And overall comp sales increased 4% compared to last year's fourth quarter increase of 3.8%.
This was our fifth consecutive quarter of positive comparable sales.
Our E Commerce sales continued to accelerate representing 14.2% of consolidated net sales for the fourth quarter.
For the full year comparable sales increased 5.3% total net sales for fiscal 2020 increased 17.4% to 1 billion 184.2 million compared to 1 billion 8.7 million in the previous year.
Our E commerce sales increased 41.3% compared to the prior year.
Our gross margin increased 46 basis points as a percentage of sales in the quarter on a GAAP basis, mostly attributable to lower occupancy costs due to the store closures. We have completed this year.
However on an adjusted basis, our gross margin decreased by 41 basis points as we close 23 more hibbett stores in January and there are accelerated add backs to occupancy expense, one store closures occur or curve.
For the full year, our gross margin decreased by 21 basis points as the increase in E commerce as a percentage of our total sales mix reduced our overall margin.
SGN a.
Acquisition.
As we discussed in note three of our 10-K last year the city gears acquisition.
Purchase agreement included two contingent earn out payments based on city gears achievement of certain EBITDA thresholds for fiscal 2020 and 2021.
The preliminary fair value of the liability was included in other liabilities in the fiscal 2019 year end consolidated balance sheet.
Subsequent changes in the liability are recorded through current period earnings and based on current forecasts for city year performance for fiscal 2020 in 2021. The earn out liability was increased 3.3 million, which has an impact of 105 basis points as a percent of sales in the fourth quarter.
We expect some continued volatility in this expense as we continue to realize the city gear business opportunities.
Additionally, we incurred a net charge of 0.9 million related to the Finalization of the former CEO his retirement agreement.
This amount was not removed from adjusted SGN, a and represents an additional 29 basis points to SG, ne and five cents to consolidated S.
On an adjusted basis fourth quarter SDMA as a percent of sales was 85 basis points higher than the prior year quarter due to a combination of the form the former Ceos retirement agreement and higher ecommerce sales, which typically drive our ESG unit costs higher.
For the full year, our SGN expenses as a percent of sales were 67 basis points higher than the prior year due to the city gear contingent earn out expenses, which I discussed previously.
On an adjusted basis or SGN expenses constituted 25.21% of sales compared to 25.73% of sales in the prior fiscal year.
The income tax rate for the quarter was 23.3%, which compares to last year's rate of 22.8%.
And for our full year, the tax rate was 24.7% compared to 24.3 in the prior fiscal year.
Consolidated earnings per share for the quarter was 34 cents per share compared with 36 cents per share last year.
Including adjustments our normalized consolidated earnings per share is 51 cents compared to 57 cents per share last year.
On a full year basis, we have delivered earnings per share of $1.52 per share versus $1.51 per share during last fiscal year. After adjustments our normalized earnings per share was $2.33 per share for fiscal 2020 versus a $1.77 for fiscal 2019.
A 32% increase.
Turning to the balance sheet. The company ended the year with 66.1 million and cash versus 61.8 million at the end of our last fiscal year.
We ended the year with zero borrowings on our revolving credit facilities as we paid off 35 million in debt related to the Citi. Your acquisition during the year.
With no debt and substantial cash on hand, we feel well position to be able to withstand the potential for any slowdown in business activity related to the Corona virus pandemic.
Inventory increased 2.8%.
From the end of our last fiscal year.
Our aged inventory has improved as a percentage of total inventory to 16.8% versus 21.4% of our total inventory at the end of last year.
We spent 17.4 million in Capex in fiscal 2020, as we opened 13 stores rebranded to 11 hibbett stores to city year relocated seven stores expanded to existing stores and made further progress on our other capital initiatives.
Also the company purchased approximately 533000 shares for a total of 14.1 million in the quarter under our share repurchase program.
At year end, we had about 153 million remaining under the existing authorization.
I'll turn the call over to Jared for a review of merchandising.
Thank you Scott Good morning, everyone. As a reminder, in my prepared remarks are reflective of comparable store trends and we'll consider here.
In the fourth quarter, our momentum continued posting our executive comp store game, our sharp focus and investment, but our strategy of leading the sneakers is driving results while excited about our results for the quarter Henson challenges that we were able to overcome these include the calendar shifts launch date changes and unfavorable.
Our fourth quarter performance was driven by strong results in footwear, posting a low double digit comp.
This performances are 10 straight quarter comparable sale gains in footwear.
Double digit gains across our mens womens and kids business.
These results were made possible by a strong launch calendar and continue to improvements in our non launch business.
Nike sportswear continues to perform exceptionally well as broader investments and models such as Air Force, one and air Max affords us resonated.
We had a strong quarter with the Jordan brand as models, such as six barrels a day, one and retro models performed well.
Well there is strong performances came from champion Brooks Reebok Encumbers.
Apparel was down low single digits strengthen men's apparel was offset by challenges are losing his apparel and licensed products.
I will just seasonal categories across activewear unlicensed drove our results now.
Apparel products that showed strong connectivity to sneakers continued to perform exceptionally well.
Team sports business was down low single digits, but was on plan.
Wrestling soft wall and track performed well, but were offset by other categories, including a planned reduction in the fitness business.
Outgrew the call over to Mike longer.
Thank you Gerry good morning, everyone. We're very proud of the results the team turned down for quarter four more importantly, im very proud to lead. This team has a terrific sales associates in our stores, who serve our customers each and every day.
As you all know our recently took on the role as CEO at Hibbett Sports I was asked to spend a few minutes on my background. So in short.
Had a very successful career in the U.S. Army starting at West point.
Then as an inventory all sort of paratrooper and the second airborne and I've finished out my 13 year career teaching economics back at the Academy.
When I left the military I was lucky enough to have exactly one interview with exactly the right company that was autism.
It was perfect for me.
Great people with a mission. So in my 13 years at Autozone around supply chain, all the stores and merchandising and that provide them in education and all disciplines of retail.
Following that in 2006, my business partner, Jeff Presley, and I bought sitting here.
And in those 13 years, we turn to 40 store chain into a 150 store chain that we eventually sold to hinder.
That brings the present day, where I accepted the C O position in December.
I'm proud to be here I'm proud to be at Hibbett sports I'm proud to be a member of the team and I'm proud to be the leader of that team.
But that's enough about me, it's move onto what I've learned in the past 90 days at habit I've learned we have a great team dedicated to serving our customers and we have a great business model we.
We believe that our success going forward will be based on our sales culture in the stores, our product selection, our customer service and our ever improving ability to deliver products and services to our customer whenever and wherever they choose to consume it that is a key to our success and will set us apart even further from.
Our competition now and in the future.
But.
Reality creeps in and I'm sure you're also going to want to hear more about our current situation with respect to the Corona virus.
First things first though we're deeply concerned about those directly affected by this virus, our thoughts and our prayers go out to that many people are affected physically and some economically and in equal parts, our concerns or with them and we hope the best and we're trying our best to a system.
To get to a better pause.
There are few things I would like to point out that help him hibbett sports remain resilient in the face of this problem.
For one we're in smaller markets, mostly in the south Miss Midwest with less exposure to major population centers were also a small box retailer and that means we don't have concentrations of a great number of people at any given time in a store and over a week's period.
As opposed to a big box retailers, who has a different set of issues.
And obviously it goes without saying, but I don't want it to go on said, we're taking a great deal of care and disinfecting services in the stores.
In disinfecting services in the stores and practicing social distances between the staff and the customers. Following CDC guidelines in every other common sense measure that you would imagine.
And operator would put in place.
I do want to also make the point that currently our stores are open their open with reduced operating hours and reduced staffing and that decision has come as a result of careful deliberation and thought.
I thought regard with regards to staff safety and welfare.
Our employees want us to stay open, but we have to balance that with precautions necessary to ensure their safety.
And those precautions also health insurer customer safety, our customers of express their desire for US remain open to that's all it yesterday in the stores waiting on customers.
As well we continue to utilize our best in class E Commerce platform to pick orders from our retail locations as well as our distribution center and at the same time, we continue to execute our BOPUS and wrote the services to great effect.
Our new our new Curbside service is yet another demonstration of a way to utilize our strong digital platform and integration with our brick and mortar business.
The digital platform continues to perform and remains open for business and will remain so our store support center.
You might refer to it as an office or corporate.
As operating on reduced staffing and were able to work remotely with our strong cyber security controls.
Our DC our distribution centers also operational and doing a great job supporting our stores and the digital business.
The next topic I want to cover is liquidity.
In our case it is not an issue Scott gave you some facts and figures earlier in the presentation.
I will also remind you again, we are cash on the balance sheet and an available line of credit.
Our liquidity can withstand a shutdown for a long period of time, our model indicates our liquidity will take us well past the short term crisis, we have the ability to manage for the foreseeable future well in excess of any projected disruption time frames.
Additionally, we have the ability to make some adjustments to our model to preserve liquidity, if it becomes necessary to do so.
And they're all the obvious ones that you would already have ticked off capex can be reduced terms on peos can be extended.
We are managing our inbound.
And we have great relationships with our landlords.
As a reminder, all of our locations or at least offer store locations or lease we have a great relationship with the landlords and our leases are relatively short term where we can.
With 15% to 20% coming up on renewal every year and of course, we can always reduced staffing to match demand.
So in conclusion I'm confident in our plan I'm confident in our ability to withstand set of circumstances, we find ourselves down I'm excited to be here I'm excited to lead this great team.
And we are up to the task of delivering on our commitments to our customers employees and owners operator, we're ready for questions. Thank you. Soon we'll now begin the question and answer session. If he would like to register for question plus the one followed by the four on your Touchtone phone.
Three teleprompter technology requests.
If your question has been answered and you're like to withdraw your legislation passed the one followed by the three once again, that's the one oh by the floor now because I just you for question.
Our first question comes from the line of.
Peter Benedict with Baird. Please proceed.
Hi, guys.
Thanks for thanks for the question I guess.
The first one.
You know would you would you'd be willing to kind of speak to how the first quarters gone so far.
I know you guys don't typically like to do that but obviously this is a bit of unique situation. So just getting a feel for how the business was in February.
And then thus far in March so at least we know kind of what what's been accomplished to date.
Sure. This is Mike I'll cover the first part of that Jerry can chime in and Scott as well results up until mid week last week were very very good. We were we had a positive comp we were hitting on all cylinders all regions all of our brands, we're doing well.
In ecommerce remains strong obviously.
That has changed over the last week, but.
But prior to that a very very good result, Jared any color you like there the.
No I think I think you know that Mike maybe we were very confident that our plan very confident in the positioning of our inventory the health of our inventory and we're really pleased with the results we were seeing before the demands water.
No. That's helpful. Thanks, and so does that mean that I mean, the E. Commerce is gone negative as well I mean other stores are probably down, but but has the ecommerce stepped down as well.
E Commerce continues to operate depending upon the day in a pot normally positive territory. So we're still seeing good rentals there.
Okay. Thanks, Mike and then just you mentioned Capex flexibility can you give us a sensor maybe what the base plan is for Capex. This year in it and if you had to.
Cut back how much you could.
And your thoughts on on buyback is is there any thought of kind of holding off on that for the time being.
We're going to review all those options as you can imagine things are changing on a moment by moment basis.
If you hear us Paulson I answer, it's because we're probably checking.
And email or a text and dealing with the situation in the current current timeframe. So things are changing yes, we're going to modify our capex spending some of it is already determined and in place and you can't get out of it and you shouldn't get out of it because theyre wise investments in the future in the current business and in the fuel.
Your business.
We'll examine buybacks and we'll look at all those were just not willing to go forward and tell you a.
The modifications to the plan yet.
That's fair that's fair Mike I last question, maybe Jared only if you could weigh in on this but.
It seems as though the least footwear supply chain looks looks reasonably good and operational at this point any changes to the launch calendars, though as we look out over the first and second quarter, let's kind of take that as the timeframe that might be.
Be taking taking shape here is as people start to through some of your supplier start to think about.
You know where the demand will be over the next few months. Thanks.
Yes, Peter and as a rifle second and I want to be careful when I say exactly obviously the situation is fluid and as Mike mentioned, we're dealing with not a lot of changes on most minute by minute from a supply chain perspective.
At least through the through the first quarter, we felt pretty confident.
With regard to litigation there from a long stay perspective, we have not seen any changes at this point.
But the situation is fluid.
But as a right. This second we've not seen changes.
Okay, alright, thanks, so much guys. Good luck.
Thank you for your question, Sir Thank continuing continuing on.
Next question comes from the line and Jinsha key with Monness Crespi in high. Please proceed with your question.
Good morning, Thanks for taking my question.
Following up on the first question.
How much of the quarter still left what percentage of sales.
Date or have you had in the quarter.
I'm I'm sorry.
Can I think your question is we're halfway through the quarter I think is yes. Okay.
And then in terms of inventory planning how are you guys thinking about.
The rest of a year or are you starting to maybe dial back some some purchases and plenty more conservatively for the back half a year as well.
Yeah, as we discussed very fluid situation, we're working with our partners Oh by the minute on what the future looks like from a supply perspective.
As well as ensuring that we're trying to mitigate a as much of which bodes well see some potential demand slowed more again very very fluid situation the constant conversation with our partners.
We have incredible partnerships with our vendors and incredible support I'm sitting here like we have some significant flexibility to managing inventories appropriately.
As we go through the balance of the cycle.
Okay, and then just on the E commerce rollout at Citi gear.
What have you seen there what does the adoption rate there been.
You know in any reasons to be gear ecommerce can't be successful as would have been has done.
Oh, the sitting here ecommerce transition has gone very very well our digital platform as we continue to reiterate is.
The best in the business Barr Nunn, and adding sitting here too. It has seen some phenomenal results. We've also added most of the sitting here stores to the fulfillment process and that that has gone very very well.
And Scott will correct me, but I don't think we break it out below that that level now correct.
Okay, and then Mike.
What do you see I guess, the biggest opportunities going forward for for the two businesses.
When I guess you termed the store opportunity you know what do you see for secure inhibits longer term.
Great question. Thank you we see the two brands are operating a running down parallel tracks keeping the separation of the brands a super important to us at least on the customer facing piece there two brands that stand for different things both of them very successful with the consumer are.
John This is take the best of all in the best ideas in hit it put them in sitting here the best ideas on sitting here and put them inhibit Meanwhile, consolidating and we have consolidated the back office for the savings in the synergies that we were looking for and that also allows us to leverage our best in class.
Merchandising team for lessons learned and other things that we can do to expand categories. So.
We like our strategy. We it has been very successful the city gear acquisition. If I may say, so myself was ER has been a great success and we're capitalizing on it and there's more room to grow in the future. Your specific question was store count as well.
We are continuing to grow the sitting here brand at a modest level and the same answer for the Hibbett sports brand.
Great. Thanks best of luck.
Thank you.
Thank you for your question continuing on our next question comes from the line of Sam Poser with Susquehanna. Please proceed with your question.
Oh, Thank you and welcome look into the party Mike.
Thank you too can you can you give how many given that some all boats the CLO close like Simon.
And can you tell me how many stores right now our clothes sort of the out of your control closed.
Oh the majority of stores are open we have a a dozen let's see a few dozen that are closed overnight as a result of the Simon move we had some localities I'd closed prior to that.
But it's less than it's in 60 to 70 range upwards of 100 after Simon a the majority of stores are still open and as I said I was in stores yesterday and solve decent traffic.
We're not and just to jump ahead, we're not going to characterize our current sales.
Percentages in the current quarter, but.
So.
Well, let me I'm I'm.
I'm wondering if I mean, the decision to keep the stores open I'm wondering you know you're encouraging people to come out of their house when the government telling people to stay in their houses and while that may be good for short term sales and people might want to make sure that they're getting paid people might want to buy the latest sneaker.
You know at the end of the day couldn't this do a lot more harm done good.
That's certainly your point of view our point of view is that a we're keeping our customer safe and we're keeping our employees safe.
And what I saw with my own to eyes yesterday is it that's the case.
You know you're in a store and there's two customers in the store upwards of four customers in the store and the staffs keeping it claims so I understand your point of view.
I mean, it's got ride might come and go to.
The staff starts to come and go to work as as do customers are going out thing. It's okay. Your time that cuts. There is it's okay to go out I.
I understand and keep the sorts clean and all that but I mean, there's there's sort of a little more to within that isn't there.
I'm, assuming you got out today to at some point so.
What are your point of view is good and I appreciate it and we take it for how you intended it.
My statements Stan.
Thank you Sir.
As a reminder to vintage two food question pest and one follow up by the floor.
We now have a question from the line at the Attics Parry with Bank of America. Please proceed with your question.
Hello, Thanks for taking my question and welcome Mike I'm, just first can you comment on how much shot clock or not the by now pay leader solution Health E. Commerce. This quarter and then just separately.
Can you help us parse out the difference between city gearing the hibbett banner for the quarter and sort of your more fashion focused doors.
Versus versus the rest of the chain. That's my first one. Thank you. Good question corridor continues to be an important part of our digital strategy, we're very appreciative of what they do and how they do it and it's been a great success for us and it helps amplify our digital platform and make make those.
Those products available to more customers and would have otherwise been able to purchase.
In terms of specifics I'm going to a lateral to Scott and let him handle those since he although historically, what we haven't have not disclosed.
Yes, so typically.
We had we had given out some some numbers on city year, saying just from a revenue standpoint, just saying that was until we had them rolled into the comp, which which they now arming city gear Comped positive in.
Q4, yes, they continue to perform very well, but you know we're not segmenting our business and so were.
We're kind of rolling everything together and moving forward as one Big company now.
Great that's really helpful and then.
I guess just my last one what are the other offsets the as she nay that you could sort of pull here.
You know in terms of like marketing expense and then just on some of the rent clauses like is there no chance, where if others sort of tenants around you begin closing that you know base is landlords help share some the rent burden.
Thanks.
Good question, where we're taking a look at that and I'll. Let Scott finished the question certainly we have great relationship many of our landlords have multiple locations with us we're all.
In conference right now with the landlords trying to work through the issues. Its a great question and we don't think we know all the answers yet.
So Scott.
Yes, no I think.
As Mike said I think we're looking at the the leases in the situations on a case by case basis as far as your other question. The I think there's a there's a lot of different areas, where a slowdown in business or.
You know potentially kind of a worst case scenario going forward that you have lots of different things, whereas DNA would be significantly reduced I mean, you mentioned marketing I would talk more you know.
Travel expenses maintenance and the stores.
Supplies.
You know the list goes on and on to what would be reduced store cut out all together kind of in.
You know a slowdown situation for us so yes, I think you know good question I think.
We're we're evaluating this and looking at at scenarios.
Jared and Mike both mentioned really.
Multiple times, a day just to react to what's going on and trying to prepare for the future, but I think you know a good hypothesis for what may happen going forward.
Great. That's really helpful best of luck going forward.
Thank you and the new further question.
This does conclude today's conference call. We thank you all for your participation and actually please disconnect. Your lines. Thank you once again has a great day.
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Greetings and welcome to the Hibbett Sports fourth quarter 2020, <unk> earnings Conference call. During this presentation like there's been I know listen only mode.
Afterwards, we'll conduct a question answer session.
That maybe of the question plus the one full about a four in your telephone it's at any time. During this conference you need to reach an operator, but starts ill.
As a reminder, this conference is being recorded on Friday March Twentyth 2020, It's my pleasure to turn the conference over to Jason <unk> tell director of Finance and Investor Relations. Please go ahead Sir.
Good morning, Thank you for joining hibbett sports to review the Companys financial and operating results for the fourth quarter in fiscal year 2020, which ended on February 1st 2020.
Well, we began I would like to remind everyone that management's comments. During this conference call, which are not based on historical facts, including those in response to your question or forward looking statement.
<unk>, which reflect the company's current views with respect to future events and financial performance are made and reliance on the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 and are subject to uncertainties and risks.
Noted that the company's future results may differ materially from those anticipated in discussing the forward looking statements. Some of the factors that could cause or contribute to such differences had been described in the news release issued this morning, and the company's annual report on form 10-K, and and other filings with Securities and exchange coming.
<unk>.
I refer you to those sources for more information lastly, I would like to point out that management's remarks. During this conference call are based on information and understands believe accurate answer today's date March Twentyth 2020, because of the concept of nature of this information. It is the policy Hibbett sports.
If you want to the archived replay of this conference call what pass through a period of 30 days.
Now I'd like to turn the call over to Scott Humphrey, our interim Chief Financial Officer.
Thanks, Jason and good morning, everyone.
Welcome to the Hibbett sports fiscal 2000.
And your and earnings call.
Today, we have witnessed Mike long, though president and CEO, and Jared Briskin, senior VP and chief merchant.
I'll start today's call what the prepared remarks on the fourth quarter and full year results followed by Jared with a review of merchandising and then Mike will cover highlights from the quarter, along with a general business update.
As a reminder, we treat city year as an extension of the Hibbett business and the results will be reported on a combined basis. The fourth quarter marked the first time that city. Your sales were included in our consolidated comp sales as we now have owned the Citi Your business for over one year.
For the fourth quarter total net sales increased 2.3% to $313 million.
And overall comp sales increased 4% compared to last year's fourth quarter increase of 3.8%.
This was our fifth consecutive quarter of positive comparable sales.
Our E Commerce sales continued to accelerate representing 14.2% of consolidated net sales for the fourth quarter.
For the full year comparable sales increased 5.3% total net sales for fiscal 2020 increased 17.4% to 1 billion at 184.2 million compared to 1 billion 8.7 million in the previous year.
Our E commerce sales increased 41.3% compared to the prior year.
Our gross margin increased 46 basis points as a percentage of sales in the quarter on a GAAP basis, mostly attributable to lower occupancy costs due to the store closures. We have completed this year.
However on an adjusted basis, our gross margin decreased by 41 basis points as we close 23 more hibbett stores in January and their accelerated add backs to the occupancy expense when store closures a carol occur.
For the full year, our gross margin decreased by 21 basis points as the increase in E commerce as a percentage of our total sales mix reduced our overall margin.
SGN.
Acquisition.
As we discussed in note three of our 10-K last year. The city gears acquisition purchase agreement included two contingent earn out payments based on city years achievement of certain EBITDA thresholds for fiscal 2020 and 2021.
The preliminary fair value of the liability was included in other liabilities in the fiscal 2019 year end consolidated balance sheet.
Subsequent changes in the liability recorded through current period earnings and based on current forecast for city year performance for fiscal 2020, and 2021. The earn out liability was increased to 3.3 million, which has an impact of 105 basis points as a percentage of sales in the fourth quarter.
We expect some continued volatility in this expense as we continue to realize the city year business opportunities.
Additionally, we incurred a net charge of 0.9 million related to the Finalization of the former CEO. His retirement agreement. This amount was not removed from adjusted SDMA and represents an additional 29 basis points to SG, ne and five cents to consolidated EPS.
On an adjusted basis fourth quarter SDMA as a percentage of sales with 85 basis points higher than the prior year quarter due to a combination of the form the former Ceos retirement agreement and higher E Commerce sales, which typically drive our SG an egg costs higher.
For the full year, our SGN expenses as a percent of sales were 67 basis points higher than the prior year due to the city gear contingent earn out expenses, which I discussed previously.
On an adjusted basis, our SGN expenses constituted 25.21% of sales compared to 25.73% of sales in the prior fiscal year.
The income tax rate for the quarter was 23.3%, which compares to last year's rate of 22.8%.
And for our full year the tax rate was 24.7 per cent compared to 24.3 in the prior fiscal year.
Consolidated earnings per share for the quarter was 34 cents per share compared with 36 cents per share last year.
Including adjustments our normalized consolidated earnings per share is 51 cents compared to 57 cents per share last year.
On a full year basis, we have delivered earnings per share of $1.52 per share versus $1.51 per share during last fiscal year.
After adjustments our normalized earnings per share was $2.33 per share for fiscal 2020 versus $1.77 for fiscal 2019, a 32% increase.
Turning to the balance sheet. The company ended the year with 66.1 million in cash versus 61.8 million at the end of our last fiscal year.
We ended the year with zero borrowings on our revolving credit facilities as we paid off 35 million in debt related to the Citi. Your acquisition during the year.
With no debt and substantial cash on hand, we feel well position to be able to withstand the potential for any slowdown in business activity related to the Corona virus pandemic.
Inventory increased 2.8%.
From the end of our last fiscal year.
Aged inventory has improved as a percentage of total inventory to 16.8% versus 21.4% of our total inventory at the end of last year.
We spent 17.4 million in Capex in fiscal 2020, as we opened 13 stores rebranded 11 hibbett stores to city year relocated seven stores expanded to existing stores and made further progress on our other capital initiatives.
Also the company purchased approximately 533000 shares for a total of 14.1 million in the quarter under our share repurchase program.
At year end, we had about 153 million remaining under the existing authorization.
I'll now turn the call over to Jared for a review of merchandising.
Thank you Scott good morning, everyone.
As a reminder, in my prepared remarks are reflective of comparable store trends.
So the here.
During the fourth quarter, our momentum continued posting our executive comp store gate.
Our focus and investment, but our strategy of leading with sneakers is driving results while excited about our results the quarter had some challenges that we were able to overcome.
Calendar shifts launch date changes.
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Our fourth quarter performance was driven by strong results in footwear, posting a low double digit comp.
Performances are 10 straight quarter of comparable sales gain in footwear.
We are double digit gains across our mens womens and kids business.
These results were made possible by a strong launch calendar and continued improvement in or non launch business.
Nike sportswear continued to perform exceptionally well as broader investments and models such as Air Force one the air Max Wireless resonated.
We had a strong quarter with the Jordan brand as model such a six agent one and retro models performed well.
Other strong performances came from champion Brooks Reebok in Commerce.
Apparel was down low single digits strengthen men's apparel was offset by challenges.
Apparel and license products.
Challenges and seasonal categories across activewear unlicensed drove our results.
Apparel products that showed strong connectivity to sneakers continue to perform exceptionally well.
Team sports business was down low single digits, but was on plan.
Wrestling, softball, and track performed well, but were offset by other categories, including a planned reduction in the fitness business.
We outgrew the call over to Mike longer.
Thank you Jeremy Good morning, everyone. We're very proud of the results the team turned down per quarter for more importantly, I'm very proud to lead. This team has a terrific sales associates in our stores.
Serve our customers each and every day.
As you all know originally took on the role of CEO Hibbett Sports I was asked to spend a few minutes on my background. So in short.
Had a very successful career in the US army starting at West point.
Then as an entry all sort of paratrooper in the second airborne and I've finished out my 13 year career teaching economics back at the Academy.
I left the military I was lucky enough to have exactly one interview with exactly the right company that was autozone the fit was perfect for me.
Great people with a mission. So my 13 years that autos on around the supply chain, all the stores and merchandising and that provide them in education and all disciplines of retail.
Following that 2006, my business partner, Jeff Presley, and I thought sitting here.
And then those 13 years, we turn to 40 store chain into a 150 store chain that we eventually sold Heather.
That brings the present day, where I accepted the CEO position in December.
I'm proud to be here I'm proud to be at Hibbett sports I'm proud to be a member of the team and I'm proud to be the leader of that team.
But thats enough about me.
Moving onto what I've learned in the past 90 days Hibbett I've learned we have a great team dedicated to serving our customers and we have a great business model.
We believe that our success going forward will be based on our sales culture in the stores, our product selection, our customer service and our ever improving ability to deliver products and services to our customer whenever and wherever they choose to consume it that as a key to our success and will set us apart even further from our.
Competition now and in the future.
But.
Well, the creeps down and I'm sure you're also going to want to hear more about our current situation with respect to the Corona virus.
First things first though we're deeply concerned about those directly affected by this virus, our thoughts and our prayers go out to that many people are affected physically.
And some economically and.
Equal parts, our concerns or with them and we hope the best and we're trying our best to a system.
To get to a better for us.
There are few things I would like to point out that help hibbett sports remain resilient in the face of this problem for one we're in smaller markets, mostly in the south Midwest with less exposure to major population centers were also a small box retailer and that means we don't have concentrations of a great number of people.
Given time and in store and over a week period.
As opposed to a big box retailers, who has a different set of issues.
And obviously it goes without saying, but I don't want it to go on said, we're taking a great deal of care and disinfecting services in the stores.
Disinfecting services in the stores and processing social distance between the staff from the customers. Following CDC guidelines and every other common sense measure that you would imagine.
And operator would put in place.
I do want to also make the point that currently our stores are open their open with reduced operating hours and reduced staffing and that decision has come as a result of careful deliberation and thought that thought regard with regards to staff safety on welfare.
Our employees want us to sales, but we have to balance that with precautions necessary to ensure their safety.
And those precautions also health insurer customer safety, our customers of express their desire for US remain open to I saw that yesterday in the stores waiting on customers.
As well we continue to utilize our best in class ecommerce platform to take orders from our retail locations as well as our distribution center and at the same time, we continue to execute our BOPUS and wrote the surfaces to great affect our new our new curbside service as yet another demonstration of away.
The laws are strong digital platform and integration with our brick and mortar business.
The digital platform continues to perform and remains open for business and will remain so our store support center.
You might refer to it as an office or corporate.
As operating on reduced staffing and were able to work remotely with our strong cyber security controls.
Our DC our distribution centers also operational doing a great job supporting our stores and the digital business.
The next topic I want to cover is liquidity.
And our case it is not an issue Scott gave you some facts and figures earlier in the presentation.
I will also remind you again, we have cash on the balance sheet and an available line of credit.
Our liquidity can withstand a shutdown for a long period of time, our model indicates our liquidity will take us well past the short term crisis, we had the ability to manage for the foreseeable future well in excess of any projected disruption timeframe.
Additionally, we have the ability to make some adjustments to our model preserve liquidity, if it becomes necessary to do so.
They're all the obvious ones that you would already have ticked off capex can be reduced terms LTL is can be extended.
We're managing our inbound.
And we have great relationships with our landlords.
As a reminder, all of our locations are leased or store locations or lease.
Great relationship of the landlords in our leases are relatively short term, where we can with 15% to 20% coming up on renewal every year and of course, we can always reduced staffing to match demand.
So in conclusion I'm confident in our plan I'm confident in our ability to withstand set of circumstances, we find ourselves out I'm excited to be here I'm excited to lead this great team.
And we are up to the task of delivering on our commitments to our customers employees and owners operator, we're ready for questions. Thank you. Soon we'll now begin the question and answer session. If you'd like to register if a question plus the one followed by the four on your Touchtone phone.
To pump technology requests.
If your question has financing you like to withdraw your registration plus the one followed by the tree once again still well above the four now because I just your question.
First question comes from the line of Peter Benedict with Baird. Please proceed.
Hi, guys.
Thanks for thanks for the question I guess.
The first one.
Would you would you be willing to kind of speak to how the first quarters gone so far.
I know you guys don't typically like to do that but obviously this is that of unique situation. So just getting a feel for how the business was in February and then thus far in March so at least we know kind of what what's been accomplished to date.
Sure. This is Mike I'll cover the first part of that and Jerry can chime in as Scott as well.
Results up until mid week last week were very very good where we had a positive comp we were hitting on all cylinders all regions all of our brands, we're doing well.
Commerce remains strong.
Absolutely.
It has changed over the last week.
But prior to that very very good result, Jared any color you would like there though.
No I think I think what Mike.
We're very confident in our plan very confident.
The positioning of our inventory the health of our inventory and we're really pleased with the results we were seeing before the demand Florida.
No thats helpful. Thanks, So does that mean that I mean, the E. Commerce is gone negative as well I mean other stores are probably down, but but has the ecommerce stepped down as well.
Ecommerce continues to operate depending upon the day in the pot normally positive territory. So we're still seeing good rentals there.
Okay. Thanks, Mike and then just you mentioned capex flexibility.
Can you give us a sensor maybe what the base plan is for Capex. This year and if you had to.
Cut back how much you could.
And your thoughts on on buyback is there any thought of kind of holding off on that for the time being.
We're going to review all those options as you can imagine things are changing on a moment by moment basis.
You hear us Paulson I answer, it's because we're probably checking.
And email or a text and dealing with the situation in the current current timeframe. So things are changing yes, we're going to modify our capex spending some of it is already determined and in place and you can't get out of it and you shouldn't get out of it because theyre wise investments in the future in the current business and in the future.
Your business.
We'll examine buybacks and we'll look at all those were just not willing to go forward and tell you.
The modifications to the plan yet.
That's fair that's fair Mike I last question, maybe Jared unless you get weigh in on this but.
It seems as though the least footwear supply chain looks looks reasonably good and operational at this point any changes to the launch calendars, though as we look out over the first and second quarter, let's kind of take that as the timeframe that might be.
Kicking taking shape here is as people start to Theres. Some of your supplier start to think about.
Where the demand will be over the next few months. Thanks.
Yes, Peter as a second and I want to be careful when I say rate give secondly, obviously the situation is fluid and as Mike mentioned, we're dealing with a lot of changes on most minute by minute from a supply chain perspective.
At least through the through the first quarter, we felt confident.
With regard to mitigation there from a launch date perspective, we have not seen any changes at this point.
But the situation is fluid.
But as a right. This second we've not seen changes.
Okay, alright, thanks, so much guys. Good luck.
Thank you for your question, Sir Thank continuing continuing on.
Next question comes from the line and Jim Shaw K with Monness Crespi and high. Please proceed with your question.
Good morning, Thanks for taking my question.
Following up on the first question.
How much of the quarter still left what percentage of sales.
To date have you had in the quarter.
I'm I'm sorry.
Thank you question is we're halfway through the quarter I think is yes, okay.
And then in terms of inventory planning how are you guys thinking about.
The rest of the year are you starting to maybe dial back some some purchases plant more conservatively for the back half of the year as well.
As we discussed very fluid situation, we're working with our partners.
By the limited on what the future looks like Berlin supplier with SEC.
As well as ensuring that we're trying to make.
Much of winter.
While we see some potential demand slowed more again very very fluid situation.
Conversation with our partners.
We have all kind of low partnerships with our vendors and parental support.
So.
We have some significant flexibility to energy inventories appropriately.
As we go through the balance of the cycle.
Okay, and then just on the E Commerce rollout of Citi. Your what have you seen there what does the adoption rate there have been.
You know in any resistance to the gear ecommerce can't be successful as would have been has done.
Other sitting here ecommerce transition has gone very very well our digital platform as we continue to reiterate is.
The best in the business Barr Nunn, and adding sitting here too. It has seen some phenomenal results. We've also added most of the sitting here stores to the fulfillment process and that that has gone very very well.
And Scott will correct me, but I don't think we break it out below that that level now correct.
Okay, and then Mike.
What do you see I guess, the biggest opportunities going forward for for the two businesses.
I guess.
Turning to store opportunity, what do you see for citic year inhibits longer term.
Great question. Thank you, we see the two brands operating a running down parallel tracks keeping the separation of the brands and Super important to us at least on the customer facing piece there two brands that stand for different things both of them very successful with the consumer.
Job is to take the best of all and the best ideas inhibit put them in sitting here the best ideas on sitting here and put them inhibit Meanwhile, consolidating and we have consolidated the back office for the savings in the synergies that we were looking for and that also allows us to leverage our best in class.
Merchandising team for lessons learned and other things that we can do to expand categories. So.
We like our strategy.
It has been very successful the city gear acquisition, if I may say, so myself was.
Has been a great success.
And.
Capitalizing on it and there's more room to grow in the future. Your specific question was store count as well.
We are continuing to grow the sitting here brand at a modest level and the same answer for the Hibbett sports brand.
Great. Thanks best of luck.
Thank you.
Thank you for your question continuing on our next question comes from the line of Sam Poser with Susquehanna. Please proceed with your question.
Got it.
Thank you and I welcome welcome to the party Mike.
Thank you can you can you give how many given that some all folks a CLO close like Simon and could you tell me how many stores right now are close.
Sort of the out of your control close.
The majority of stores are open we have a a dozen let's see a few dozen that are closed overnight as a result of the Simon move we had some localities had a closed prior to that.
But it's less than it's in the 60 to 70 range upwards of 100 after Simon.
The majority of stores are still open and as I said I was in stores yesterday and saw decent traffic.
We're not and just to jump ahead, we're not going to characterize our current sales.
Percentages in the current quarter, but.
So.
Well, let me.
I'm wondering if I mean, the decision to keep the stores open I'm wondering how you are encouraging people to come out of their house when the government telling people to stay in their houses and while that may be good for short term sales of people might want to make sure that they're getting paid that people might want to buy the latest sneaker.
At the end of the day couldn't this do a lot more harm than good.
Thats certainly your point of view our point of view is that we're keeping our customer safe and we're keeping our employees safe and what I saw with my own to eyes yesterday is and that's the case.
You know you're in a store and there's two customers in the store upwards of four customers in the store and the staffs keeping it claims so I understand your point of view.
I mean, it's got read my say come and go to.
The steps to come and go to work as as do customers are going out, saying, it's okay youre, telling the cuts there is it's okay to go out.
I am I understanding the sorts clean and all that when I mean, there's there's sort of a little more to within that isn't there.
I'm, assuming you got out today to at some point. So look are your point of view is good and I appreciate it and we take it for how you intended it.
My statements Stan.
Thank you Sam.
As a reminder, conventions to food question piston one followed by the flat.
We now have a question from the line at the Attics Parry with Bank of America. Please proceed with your question.
Thanks for taking my question and welcome Mike.
Just first.
Can you comment on how much shock clar not by now pay later solution Health E. Commerce This quarter and then just separately.
Can you help us parse out the difference between city, Gary Hibbett banner for the quarter and sort of your more fashion focus stores.
Versus versus the rest of the chain. That's my first one. Thank you. Good question Clarida continues to be an important part of our digital strategy, we're very appreciative of what they do and how they do it and it's been a great success for us and it helps amplify our digital platform and make make.
Those products available to more customers and would have otherwise been able to purchase.
In terms of specifics I'm going to a lateral to Scott and let him handle those since he although historically, what we have and have not disclosed.
Yes, so typically.
We had we had given out some some numbers on city year, saying just from a revenue standpoint, just saying that was until we had them rolled into the comp, which which they now arming city year Comped positive in.
Q4.
Yes, they continue to perform very well, but you know, we're not segmenting our business and.
So were.
We're kind of rolling everything together and moving forward as one Big company now.
Great. That's really helpful. And then I guess just my last one what are the other offsets the as she nay that that you could sort of pull here.
In terms of like marketing expense and then just on some of the rent clauses like.
Is there no chance, where if other sort of tenants around you begin closing dates.
Landlords help share some the rent burden.
Thanks.
Yes, and where we're taking a look at that and I'll, let Scott finished the question.
Certainly we have great relationship many of our landlords have multiple locations with us where all.
In conference right now with the landlords trying to work through the issues.
It's a great question and we don't think we know all the answers yet.
So Scott.
Yes, no I think.
As Mike said I think we're looking at the the leases in the situations on a case by case basis.
As far as your other question the I think there's.
Theres a lot of different areas, where.
A slowdown in business or.
Actually kind of a worst case scenario going forward that you have lots of different things, where SDMA would be significantly reduced I mean, you mentioned in marketing I would talk more you know.
Travel expenses maintenance and the stores.
Applies.
The list goes on and on to what would be reduced or cut out all together kind of in.
You know a slowdown situation for us so yes, I think good question I think.
We're we're evaluating this and looking at at scenarios.
As Jared and Mike both mentioned really.
Multiple times, a day just to react to what's going on and trying to prepare for the future, but having a good hypothesis for what may happen going forward.
Great. That's really helpful best of luck going forward.
Thank you and the new further question.
This does conclude today's conference call. We thank you all for your participation and actually please disconnect. Your lines. Thank you once again have a great games.