Q4 2021 Hibbett Sports Inc Earnings Call
Greetings and welcome to Hibbett sports fourth quarter and year end of 'twenty 'twenty One earnings conference call. During the presentation, all participants will be in a listen only mode.
Afterwards, we will conduct a question and answer session.
At that time, if you have a question. Please press the one followed by the four on your telephone.
If at any time during the conference you need to reach an operator, Please press star zero.
As a reminder, this conference is being recorded Friday March 5th 2021.
I'd now like to turn the conference over to Mr. Jason <unk> director of Finance and Investor Relations. Please go ahead.
Good morning. Please note that we have prepared a slide deck that we will refer to during our prepared remarks. The slide deck is available on hibbett Dot com via the Investor Relations link found at the bottom of the homepage. These materials may help you follow along with our discussion. This morning before we begin I would like to remind everyone that some of management's comments. During this conference call are forward looking.
Statements these statements, which reflect the company's current views with respect of future events and financial performance are made in reliance on the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 and are subject to uncertainties and risks. It should be noted that the company's future results may differ materially from those anticipated and discussed in the forward looking statements some of the.
Actors that could cause or contribute to such differences have been described in the news release issued this morning, and the company's annual report on form 10-K, and most recent quarterly report on form 10-Q and in other filings with the Securities and Exchange Commission, we refer you to those sources for more information.
So to the extent non-GAAP financial measures are discussed on this call you may find a reconciliation of the most directly comparable GAAP measures on our website lastly, I would like to point out of the managements remarks. During the conference call are based on information on on understandings believed accurate as of today's date March 5th 'twenty 'twenty, one because of the time sensitive nature of this information.
It is the policy of Hibbett sports to limit the archived replay of this conference call webcast to a period of 30 days of <unk>.
Participants on this call are Mike Longo, President and Chief Executive Officer, Bob Oki, Chief Financial Officer, Jared Briskin, Senior Vice President and Chief Merchant Bill Quinn Senior Vice President of marketing and digital and Ben Knighton Senior Vice President of operations I will now turn the call over.
Good morning, Thanks, Jason Good morning, everyone and welcome to the Hibbett Sports Q4 earnings call and if you are following along using the slide deck I'm on the third slide titled introduction of.
This quarter was a terrific outcome from a financials perspective for the company as you saw on the press release, we reported a 22% sales comp our brick and mortar comp was almost 18 and E. Commerce was almost 45%. This resulted in a non-GAAP operating income of just over $31 million and non-GAAP earnings per share.
<unk> of $1 40 of these results were made possible by the hard work of our 10000 teammates on the stores the store support center and the distribution center as always they help lead us through another quarter in a challenging business environment. We're proud to represent our teammates today and wanted to make sure to think of them all for a job well done.
On an as I'm fond of saying and of our repeated often retails of ultimate team sports and I Couldnt of picked a better team to compete with.
Moving along to the force slide entitled sales drivers, we wanted to give you some background on the factors that we believe drove sales in Q4 and continue to produce strong results. As noted previously in earnings calls we believe the increases in sales were driven by several factors including timber.
Temporary closures of competitors earlier in the year accelerating consumer adoption of e-commerce rotation of spending from travel leisure and entertainment and a boost from fiscal stimulus that gave consumers new both new and existing even more reasons to shop with us and this manifest itself by driving traffic.
To the stores in two of our website and yielded what we believe to be increased market share and higher sales. This gave us an opportunity to attract and retain many new consumers and drove higher sales volumes. In fact, our data shows that we've done a good job retaining these new consumers so far.
We also believe that we of tailwind in the future.
In Q3, we began to see the effects of the closure of JC penney's and stage stores.
We believe this presents an upside opportunities for us in both fashion and athletic categories. Additionally, we see what we believe is continued consumer adoption of the Omnichannel experience. This plays to our strength with our best in class Omnichannel experience, coupled with a great consumer experience in the stores.
And finally, we believe that many of the new consumers, we attracted last quarter and continue to attract will continue to shop with us in the future.
In total we believe these changes in the competitive landscape and changes to consumer behavior will result in a 20% to $40 million incremental sales opportunity for hibbett.
For this and of for a few other reasons, we're very confident in our future, but before we go into the future any further I'm going to ask Jared briskin to provide some detail about our merchandising performance Jared yes.
Yes. Good morning, Thanks, Mike If you will please turn to the fifth slide titled merchandising.
Our strong comp sales performance was driven by apparel and footwear with significant gains across all genders team sports continues to be impacted by COVID-19, and it was down in the high teens.
So they had merchandising strategy in consumer focus led to increases in average retail items per sales as a result, we saw significant year over year dollar per transaction growth, while increased demand and supply chain challenges continue to impact our inventory ownership on merchants did an incredible job securing and flowing in demand merchandize into our assortment.
Of it.
Apparel business was up in the high Thirty's, all apparel categories, including branded apparel fashion apparel licensed and accessories were positive all genders were significantly positive from the athletic brands. We continue to see strong demand for athleisure, loungewear and performance product as and capitalize on the casual and wellness.
<unk>.
Multiple fabrications fits and patterns and fleece tops and bottoms were exceptional during the quarter and drove our growth. We also saw strong results in outerwear Tees and shorts are fashion brand performance continued to be exceptional denim and fleece were the standout performers for the quarter. Our partners in this area of very nimble and we've been.
To flow of inventory to take advantage of the increased demand.
Licensed business continued its recent strong performance as our strategy of investment in two of the head connected merchandise was the growth driver for us offsetting declines in the traditional <unk> business.
Accessory business also remained very strong with socks underwear and sneaker accessories, all significant gainers during the quarter.
Footwear business was up in the low twenties. This increase was driven by gains across lifestyle basketball performance sandals and boots on.
All genders were significantly positive with women's growth outpacing men's and kids, while on marketplace inventory in the supply chain remain a significant challenge our merchants and vendor partners, we are able to deliver a strong flow of product.
Lifestyle of basketball over to standout categories in the quarter with classic footwear, performing exceptionally well basketball business remained very strong with an exciting and robust launch calendar <unk>.
Casual categories, such as boots, and sandals continued to perform exceptionally well as demand in these categories continues to be strong and supply remains very limited.
Lastly, we continue to see strong results in technical running is health and wellness remain a key marketplace trend.
Specific to footwear and apparel, our women's business was our fastest growing area with comp sales gains in the high forties men's grew in the mid twenties and kids grew in the low teens.
Inventory at the end of the quarter remained significantly down increased demand and supply chain disruption continued to put pressure on our inventory.
<unk> levels at the end of the quarter are at historical lows.
As we move throughout this fiscal year year over year inventory compares will be very inconsistent due to the prior year disruption. Our expectation is inventory decrease will moderate during Q1 and will be positive at the end of Q2 with inventory closer to fiscal 'twenty levels I will now turn the call over to Bob <unk> to provide detail provide detail on our.
<unk> financial results.
Thanks, Jared and good morning, if you will please refer to the sixth slide titled fourth quarter of fiscal 2021 results. As a reminder, our results include both hibbett and city gear and are reported on a combined basis.
For the fourth quarter total net sales increased 24% to $376 8 million in consolidated comp sales increased 21, 9%. This compares to fourth quarter fiscal 2020 sales of $313 million and of comp sales increase of 4% brick and mortar comp sales remained strong and came in at of <unk>.
19, 7% increase.
E Commerce comp sales increased 44, 8% in the quarter, representing continued expansion in our Omnichannel platform for the quarter E. Commerce sales accounted for 17, 1% of net sales compared to 14, 2% in the fourth quarter of last year, our GAAP gross margin expanded significantly to 37, 1% of net sales.
Compared to 31, 5% in the prior year fourth quarter. This approximate 560 basis point improvement was due to higher initial sell through of low promotional environment and leverage of store occupancy expenses. There was a slight offset due to the higher volume of e-commerce sales, which carry a lower margin due to the incremental shipping costs associated with these sales.
Our adjusted gross margin of 37, 1% in the fourth quarter compared to a non-GAAP gross margin of 31, 3% last year.
Store operating selling and administrative expenses, excluding depreciation and amortization were 26, 8% of net sales in the fourth quarter, which was consistent with the 26, 8% reported in the fourth quarter of fiscal 2020 in terms of dollar spend employee compensation and benefits advertising variable expenses associated with <unk>.
Sales volume and asset impairment charges due to the accelerating the closure of poor performing stores were the main drivers of the increase city gear acquisition integration expenses were significantly lower in the current year fourth quarter than in the same period last year. Excluding these acquisition and integration costs adjusted SG&A was $26 <unk>.
7% of net sales in the current quarter compared to adjusted SG&A of 25, 3% in the prior year fourth quarter. The increase was primarily driven by asset impairments higher advertising costs.
<unk> is associated with increased e-commerce activity.
Depreciation and amortization increased approximately $670000, reflecting increased capital investments on organic growth opportunities in infrastructure projects on.
On a GAAP basis, we generated $31 million of operating profit, which compares to last year's operating income of $7 8 million, excluding all non-GAAP adjustments for the fourth quarter. Adjusted operating income was $31 2 million or eight 3% of sales compared to operating income of $11 7 million in the fourth quarter of fiscal 2020 GAAP.
Earnings per share were $1 39 for this year's fourth quarter and non-GAAP earnings per share were $1 40, driven by strong profitability and a reduction in our inventory balance over the last three months, we generated operating cash flow of $52 5 million. During the quarter. We also spent approximately $14 million in capital expenditures, which were largely related to new relocate.
And remodeled stores in the prior year fourth quarter operating cash flows of approximately $17 2 million and capital expenditures were $6 3 million.
I'll now have you move forward to the seventh slide titled full year fiscal 2021 results on a full year basis sales increased 19, 9% to $1 42 billion from $1 8 billion in fiscal 2020 comp sales on a full year basis were 22, 2% with brick and mortar comp sales expanding 13, 3%.
And E Commerce comp sales growing 89, 3% in fiscal 2021 E. Commerce sales represented 16, 7% of our total net sales compared to 10, 4% last year our.
Our GAAP gross margin in fiscal 2021 was 35, 5% of net sales compared to 32, 4% last year driven by the same factors noted previously for the fourth quarter, Excluding city gear acquisition integration costs incurred in both years inventory reserve adjustments in the current year and strategic store alignment costs incurred in the prior year.
Adjusted gross margin was 35, 8% this year compared to 32, 4% last year and.
In fiscal 2021, SG&A expenses, excluding depreciation and amortization, but inclusive of goodwill impairment were 26, 5% of net sales compared to 26, 9% last year leverage generated from increased sales revenue was the primary driver of this modest decline adjusted SG&A was 23, 7% for the most reach.
<unk> <unk> compared to 25, 2% for fiscal 2020.
On a GAAP basis, we produced $98 4 million of operating profit for fiscal 2021 compared to last year's operating profit of $36 1 million, excluding all non-GAAP adjustments in both years adjusted operating income for the current year was $141 4 million equal to 10% of net sales compared to adjusted operating profit of 50.
$5 4 million last year or four 7% of net sales GAAP earnings per share for fiscal 2021 were $4 36 for the current year compared to $1 52 for the prior fiscal year and non-GAAP earnings per share were $6.12. This year compared to $2 33 in the prior year.
We generated $197 7 million of operating cash flow in fiscal 'twenty, one and spent $34 8 million of capital with a focus on new relocated and remodeled stores and other strategic initiatives that we believe will generate incremental sales and profitability opportunities.
For fiscal 2020 operating cash flow was $92 3 million and capital expenditures were $17 3 million.
Turning to balance sheet, we ended the year with $209 $3 million of cash and cash equivalents versus $66 1 million a year ago and we currently remain debt free we have $75 million of borrowing capacity available to us, but do not anticipate the need to borrow under our secured credit line based on current cash projections.
Inventory ended the quarter of $202 million of 29, 9% decline from last year's ending balance. The continued strong sales in both the brick and mortar and online channels. In addition to ongoing constraints on the supply chain drove the year over year decrease we purchased approximately 150000 shares during the fourth quarter under our authorized share repurchase plan and we have.
Just over $136 million of remaining authorization through January 29, 2022 for future share repurchases at management's discretion.
Now I'll review, our updated fiscal 2022 guidance on the eighth slide titled future.
Our anticipated results for fiscal 2022 are influenced by multiple factors as Mike mentioned earlier, we are attract and retain new customers throughout fiscal year 2021, due to pent up demand market disruption and government stimulus payments continued consumer adoption of E. Commerce will continue to drive growth across our best in class Omnichannel platform.
Our strong vendor relationships and targeted purchases by our merchandising team will allow us to take advantage of the expected, resulting increase in business all of their supply chain and selling initiatives should help drive sales growth as well.
While we continue to experience challenges posed by the ongoing COVID-19, pandemic and uncertainty regarding the business environment further stimulus payments and potential labor and tax legislation. We are confident in our business model and feel we can continue to capitalize on the trends we experienced in fiscal 'twenty. One as a result, we are providing this limited GAAP guidance for fiscal 'twenty, two and <unk>.
Parison into fiscal 'twenty one.
First we forecast comp sales will range from negative low single digits to positive low single digits relative to last year. The first quarter should represent the easiest comp and as a reminder of the benefit we expect to experience from the closure of Jcpenney and staged stage stores will last during the third quarter gross margin performance will face some headwinds as the year progresses and we <unk>.
Spec to see a decline of approximately 130 to 170 basis points on a full year basis. We also anticipate that we can generate modest SG&A leverage over the course of the year with the anticipated decline as a percentage of sales ranging from five to 45 basis points diluted EPS is forecasted to be in the range of $5 to $5 50 with <unk>.
An assumption that the effective tax rate will be approximately 25% and a weighted average diluted share count will be approximately $17 million. We do not anticipate the difference between our GAAP results in our non-GAAP results will be material throughout the year from a capital allocation perspective, we plan to invest $45 million to $50 million on organic growth opportunities.
That we believe will lead to incremental sales and profitability and also on strategic infrastructure projects that will enhance our distribution and back office efficiency. We believe that these investments will attract new customers enhance the consumer experience in stores and online and modernize our technology and processes. In addition to our capital expenditure plans.
We intend to Opportunistically allocate capital to share repurchases and currently have approximately $136 million remaining under our share repurchase authorization, we will be providing longer term financial and operational targets and additional insight into our compelling product offerings and customer centric culture. During our first formal investor day that will take.
On June 24th we look forward to your attendance at that event.
That concludes our prepared remarks, operator, please open the line for questions.
Thank you if you'd like to register a question. Please press the one followed by the four on your telephone you will.
Here of three Tom from technology of request.
If your question has been answered or you would like to withdraw your registration. Please press the one followed by the three.
One moment please for the first question.
And our first question comes from the line of Sam Poser from Susquehanna. Please proceed with your question.
Sam Poser from Williams trading.
Good morning, everybody. Thanks for taking my questions I've got a handful of number one can you give us the comps could you give us an update of what your comps were by month.
Okay.
Hello, Hey, famous Bob.
We're not going to get into the details of the month by month. So.
Next question. Thank you.
Right.
So you talked in your in the press release, and you mentioned again in prepared regarding your confidence in retaining.
New customers can you talk.
About how many new customers you had you got during the year.
What drove that any way you can give it to us and.
What's giving you the confidence that you're going to retain those customers have those customers on new ones come back in chapter of do most of the times those kinds of things can you just help us out there. Please.
Yeah, Hey, Dan This is bill and so yes, we've continued to see the number of new customers grow during the quarter and during the year on.
Besides the number of new customers. We've also looked at their behaviors. We look at them on a 60 day, Mark and 120 day Mark.
And what we're finding is that new customers are shopping more often with us.
We also have less of one and done new customers. So our customers are buying more frequently than they normally do and they are spending more than prior year's new customer. So we're very happy with the behavior of new customers that we're seeing in terms of our confidence around what we're going to do to keep them on <unk>.
Three things the first one is just.
Just really good service from a store perspective, and from an online perspective and from surveying of new customers. We are providing that and we will continue to provide that.
The other thing is just communicate with them.
We do have all of their information on.
Whether it's their tax number of phone so number of push on.
E mail et cetera, we're able to communicate with and instantaneously.
And then the last thing is really around rewarding them. So a lot of these new customers are part of our loyalty program and they are rewarded from our continuing to shop with us.
And Thats on.
And of Great segue can you can you talk about how the rewards of working.
Can you explain some of the reward levels and what.
Customers get.
<unk>.
On your highest.
However, headroom on talking about it.
Yeah, absolutely. So we've got two levels in our loyalty program with on MVP level on a VIP level.
The great thing about this year in the quarter as we've seen more people shift to VIP, which is on a larger spending bucket and you get you accrue awards at a much greater rate.
But the way we start as for every $200 you spend you get a $10 of award were seen redemption of those awards scale up year over year and so on.
Terms of all of those operational metrics of the loyalty program, we are seeing very positive results.
Thank you and then I guess this is for Jared you talked about the delays the shipping delays some catching up can you.
Give us some details on.
What's going on there and also.
I guess in general could you give us some color you're up against pretty easy compares in the first quarter can you give us can anybody give us any color on.
How we should think about Q1.
Given that the compares sort of changed dramatically after Q1.
Yeah, Hey, good morning, Sam So obviously we've seen.
Some pressure from a supply chain standpoint without question on <unk>.
Merchants are logistics tools, our vendor partners continue to work incredibly hard to get product here.
So certainly with the increased demand on the pressure we have had on the supply chain.
We've seen some delays.
Largely appears to be anywhere from two to three week delays on those products, but very inconsistent.
So something we are certainly working through something where we're looking at every day, but we do feel very confident in the pipeline as far as our order book is we just need to continue to work to get it delivered.
Okay, I guess I'll take the comp question.
Obviously, we said that Q1 is our easiest compare we came off last year with close to a minus 20%. So we certainly would expect of Q1 will come in fairly strong but over the course of the of its pretty difficult to predict predict the ups and downs from period to period again, that's why we've kind of given the full year guidance, which as you know.
Low negative single digits to low high single or low positive single digits.
Again, I think we'll say after Q1, it's going to be really difficult to predict but we would expect that over the course of the year. It will kind of normalize into that range.
I understand that but how should we think about the first quarter I guess, that's the question how should we think about that given the compare free.
The rest of the year I understand but I mean, I'm really talking about first quarter by itself.
I mean are we looking at.
Sort of.
I mean, given the compare on everything else.
I mean.
And just I mean, you are planning on beating.
I would assume you're planning on bidding fiscal 19.
Of fiscal 'twenty levels of excuse me.
From a pure revenue perspective.
And then.
Given the current trends and everything else I mean should we just think of this as sort.
Sort of somewhere in between what Q2 was and what Q3 and four were.
Hey, Sam this is Bob on the way we.
Love the question.
We're very comfortable with the full year guidance.
You have pointed out and we agree that first quarter is the easiest compare it was a negative 20.
So I think thats about as comfortable as we're going to get about as far as we'll go in terms of guidance.
Alright, Thank you guys very much.
Continued success.
Thank you.
Our next question comes from Alex Perry with Bank of America. Please proceed with your question.
Hi, Thanks for taking my question and congrats on a great quarter.
Just a two part of question and then I guess, a little bit of a follow up but maybe asking a little different way.
Can you talk through how you're thinking about.
Net delays you have probably seen in the tax refund dollars. There is the potential for additional stimulus and then can you just remind us the stimulus is not included in the current guidance right and then just a follow up on the inventory levels have you seen that improve at all in recent weeks and how do you feel about the flow.
Low, especially with potential stimulus hitting and then could we see some sort of pent up demand effect once the inventory normalizes given theres been some shortages in the channel.
Hey, Alex it's been 19, Yeah I'll take the first part of your question around tax and what that flows looking like I think as everyone has seen out there on the Irs's come out and said they are running about two to three weeks behind.
From processing refunds relative to last year.
Pretty much what we're seeing in the street also now of the magnitude and the duration of tax after that not going to speculate at this point.
We are starting to see a little bit of flow out there right now so again about a two to three week delay relative to last year.
Hey, Alex it's Jared I think relative to the second part of your question we.
We have seen some improvement.
It seems to get a little bit better every day, but certainly still a challenge.
I would agree and do feel that as the marketplace does get caught up based off the demand that we're seeing there could be some pent up demand for.
For the products that we sell.
That's really helpful. And then just my follow up is I think in the guidance you said an outlook for labor cost increases is sort of not contemplated what is sort of your I guess outlets there and Mike is it possible that the support that away.
<unk> increase would provide to the consumer would be able to offset the potential payroll increase.
This is Mike certainly, we're all watching those debates with a great deal of interest where it all comes out is anyone's guess, so far and I think you know that there are no significant federal minimum wage is coming through we do we have seen.
Ben has spoken to a number of states continue to inch there is up and we handle those in stride.
We haven't seen much evidence that would suggest that increases of minimum wage have a follow through of effect on revenue.
Again, a great topics of debate with.
Economists, but what we're seeing is a.
It all comes out in the wash of eventually.
What we don't know is what would happen at the step change function happened in minimum wage and it moved substantially.
On a short amount of time, we just don't know.
What you would imagine we're doing is exactly what we're doing like every other business in every other retailer in the world, we're going to make sure that we're investing judicious amounts of capital into projects that.
Limit our exposure to that risk.
That's super helpful and best of luck going forward.
Thank you.
Our next question comes from Peter Benedict with Baird. Please proceed.
Hi, guys.
So the June Investor meeting on it sounds like that Youre planning that to be an in person of that it sounds like is that right.
And it's going to be virtual event at this point.
Alright, I thought where I thought you were hearing the first one on the take with that but anyway.
Makes sense.
I guess my first question just is around the inventory and Bob you made some comments on on the flow of moderating declines in the first quarter I was little confused on the second quarter.
Saying that you think inventory will be flat year over year by the second quarter or it will be up versus sales depressed levels last year, and then how you're thinking about the back half I apologize. If have you already went through this but I just want to make sure we have on our numbers right on that.
Yeah, Hey, Peter it's Jaret.
Commentary around the first quarter, we expect it to be up second quarter, we expect the inventory to be up as well.
The comparison that I referenced was back to two years ago from of normalization perspective.
Okay.
On inventory levels are very choppy. So we do feel like we will normalize.
We're closer to year ago levels, as we get through the second quarter.
Got it okay got it.
Glad I asked that.
In terms of the the higher Capex in any way you can maybe break down that $45 million to $50 million, maybe some buckets, where it's going.
And then as we think about.
What's that kind of mean for kind of of DNA profile of the business as we think about this year.
Yes, I think again, our focus is obviously, mostly on trying to continue to enhance and improve the store experience as well as on our online experience. So I would say, we're obviously opening new stores.
And we've talked about that before low single digit or low double digit doors in each of the each of the two brands. We will continue to kind of touch a lot of the stores when it comes to refresh and remodel I want to make sure that that's a great experience for the customer that comes into the brick and mortar location. We've got a few of the things that we're going to do in the back office.
And kind of on the distribution side to enhance some of the efficiencies within the process, but again I would say probably the lion's share of that $45 million to $50 million will be focused on kind of the front of the house so to speak.
Okay.
Although many of one four.
For Mike just can you talk a little bit about.
On the M&A environment Thats out there kind of in your channel there's been some activity.
Just curious obviously you guys are a great capital position here to just how are you thinking about that what are you seeing different players kind of making moves in that sector.
Just kind of curious what your latest thoughts on that.
Yes, it's been an active last quarter for sure.
We are in those conversations we will always look at every strategic alternatives. We think it's a good practice.
We have vetted many opportunities.
Thank everyone's seen the two press releases that came out recently.
So at least from the traditional environment of M&A. Those two are off the board.
We will continue to look at other opportunities as they arise.
Okay.
Okay fair enough.
On the first quarter guys. Thank you.
Our next question comes from Jim Chartier of <unk> with one of <unk> Crespi Hardt. Please proceed with your question.
Good morning, Thanks for taking my questions.
First could you talk about what kind of improvement.
Performance Youre seeing in the stores that have been already updated.
And then Mike where are you in terms of changing the selling culture and how much more opportunity do you see on that initiative.
Hey, good morning, it's Jared so I'll start so obviously two major <unk>.
Emphasis projects last year first being our remodel program and our new store design.
For the Hibbett brand so.
Thrilled with those results so far.
On the increases we've seen from an AB testing perspective, so very happy there from a refresh perspective.
Results were very strong incredible feedback from our teammates out in the field as well as from customers. So really excited.
About what those have done and what those of brought.
Ben I think if you want to comment on our sales culture perspective.
Yes Jared.
Number one I'd like to say I think we have the best in class team out there in the stores and in field management, and we've really focused over the last year.
Were really around two things one developing leaders leaders in the field right and really taking ownership in the stores.
And of the DSM and RVP level in the second pieces, salesmanship, and really understanding how to satisfy that customer out there and we've we've put a lot of investment there are a lot of training in there and.
And obviously, that's starting to pay off but we're just tapping into that quite honestly and I think we've got a long long runway ahead of us to continue kind of accelerating the gains that we have available to us there.
Great and then the press release mentioned.
Increase in advertising.
I guess.
No.
Was the company's historical level of advertising do you think that's sufficient.
This year, the right level of spend or do you see additional opportunities for incremental advertising investments going forward.
Yes, Hi, this is bill I'll take that question.
In Q4, we took the opportunity to make some incremental investments to fold. The first one was to acquire more customers. So we did some customer acquisition efforts, particularly around our mobile app that we're very pleased with the results of on.
Also on certain local markets that were displaced customers because of <unk>.
Market interruptions competitive closures et cetera. So we took an opportunity to test acquisition programs in those local markets.
We spend more money in Q4 as a result of those two things.
From a marketing investment standpoint.
Digital in particular, social and continues to be of very large investment for us and one that has very good returns.
We're also going to continue to invest in our loyalty program. So we have a lot of plans around that.
And then lastly, we're going to invest in local engagement on.
And that comes in the form of local social media as well as partnering with local schools and our sales call program.
Great.
And then in terms of the.
The comp performance of the apparel outperformed the rest of the business.
And I believe you said that the 20th of $40 million incremental sales opportunity from competitor closings was primarily in the apparel category.
Is that the primary driver of the outperformance there or is there something else going on.
Yes, but on our apparel business was excellent for the quarter.
Certainly we saw where we had some of that opt.
<unk> opportunity with regard to closure as it impacted the business overall it is absolutely a little higher penetrated in the apparel categories, which is what we expected.
In our apparel business was quite robust outside of those markets as well. So we're very pleased with our strategy around being very focused on our consumer ensuring that our product tied back to our sneaker business and debt paid pretty handsomely for us with regard to apparel.
Alright, thank you.
As a reminder to register for a question. Please press the one followed by the four on your telephone.
And our next question is a follow up question from Sam Poser with Williams trading proceed.
Thanks.
For taking my follow up was there can you tell us any kind of difference between your mall based stores.
And your.
Andrew off mall stores. So if you saw any any kind of what kind of differential you saw.
From the comps there.
Yeah. Thanks, Sam this is Mike.
We're having very good performance in both.
Bass stores as well as strip based stores I would characterize it as the strips doing slightly better.
And then thank you and then.
Is that.
This is probably for Jarrett.
How much has there been a change in sort of the multiple sales involving both footwear and apparel had success as part of the overall success.
That.
Youre going head to toe or toe to head more often than you did a year ago.
And.
How did that work out if I'm correct, how does that work out of them. So on.
Yeah. Thanks, Dan So yes, I mean, we are seeing some pretty incredible results and the strategy I mean on a measurement of the strategy certainly comes from items per sale and what we're selling from a unit of prospective in the basket.
So we're seeing very strong connectivity within apparel very strong connectivity with apparel and accessories, and then strong connectivity with the full outfit tieback to sneakers.
So I think a lot of work being done certainly with our Assortments and the way we're positioning those but I also think from a consumer perspective around our sales culture and the way, we're making that come to life. Both from a digital perspective as well on the stores. So I think I'd like to open it up for <unk> to kind of comment because I do believe it's a direct result of the improve.
<unk>, we're making within our sales culture.
And the stores and the result of what Bill and team are doing from a marketing perspective.
Yes, I think go of Jared said is absolutely right is that connectivity between the Omnichannel shopper the online shopper and digital.
By that we're making in <unk> team and then connectivity all the way down on the store level on the training that we're doing it's really tied to that strategy from the by all the way down to how it's presented in stores and how it's approached and presented to the customer and so its debt is that the key between all three of those that we think is is really helpful and that's been our focus.
Yes.
Talking about the digital real quick that we built tens of thousands of assets that we have displayed on our web site. So that's part of the <unk> head of strategy and then on top of that from a marketing perspective, if someone buys of sneaker in the store or online we're going to send them an email as well as other communications with this suggested outfit.
We're tying that through from a digital and from an in store perspective.
Thank you and then lastly, just to just to clarify the $20 million to $40 million incremental.
Revenue.
From the closures that you talked about is a fiscal 'twenty two opportunity you benefited from that.
On this past year that you feel is $20 million to $40 million in the.
On the guidance that you provided for fiscal 'twenty two is that correct, yes. Thanks for the clarification.
We have said $20 million to $40 million, we began to talk about that in Q3 of last year. The effects of it really began towards the end of Q3.
I'd say.
Debt its effect on Q4 was relatively minimal so we're sticking with that 20% to 40 throughout fiscal year 'twenty two.
We feel pretty confident in that rolling forward.
And in this fiscal year.
But more leaning towards the first half I assume just based on when it started.
Yes, it would be more of a first three quarter of effect in the last quarter for sure.
Okay, great. Thanks, very much and again continued success.
Mr. <unk> there are no further questions at this time I'll turn the call back to you for closing remarks.
Thank you so much for everyone's participation today again, we're incredibly proud of what the team has accomplished and we look forward to the next call. Thank you very much.
That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines.
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