Q1 2023 Hibbett Inc Earnings Call
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 to future events and financial performance are made in reliance on the safe Harbor provisions of the private Securities Litigation Reform Act of 1095 and are subject to uncertainties and risk.
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 factors that could cause or contribute to such differences have been described in the news release issued this morning and are noted on slide two of the earnings presentation and the company's annual report on Form 10-K and in other fee.
Fillings with the Securities Exchange Commission.
We refer you to these sources for more information.
So to the extent non-GAAP financial measures are discussed on this call you may find a reconciliation to the most directly comparable GAAP measures on our website.
Lastly, I would like to point out that management's remarks during the conference call are based on information and understanding believed accurate as of today's date May 27 2022.
Because of the time sensitive nature of this information. It is the policy of Hibbett, Inc. To limit the archived replay of this conference call webcast to a period of 30 days.
The participants on this call are Mike Longo, President and Chief Executive Officer, Bob <unk>, Senior Vice President and Chief Financial Officer, Jared Briskin Executive Vice President merchandising Bill Quinn Senior Vice President of marketing and digital and Ben <unk> Senior Vice President of operations I will now turn the call over to Mike long ago. Good morning.
Welcome to the head of the Senate here Q1 earnings call.
Obviously with falling along the slides I'm on the slide slide three entitled overview.
Starting with the first quarter, our team effectively executed on our strategic plan and delivered comparable store sales and financial results for the line with our expectations.
Furthermore, our strong inventory position at quarter end gives us confidence in our full year guidance. Once we are reiterating today.
In review of the quarter, we delivered diluted earnings per share of $2 99.
Operable sales declined 18, 9% versus the prior year coming on top of it at 87% increase in the first quarter of last year.
<unk> sales increased 22, 9% versus the pre pandemic Q1 of fiscal 'twenty.
Delivered Q1 operating income this quarter of 12%.
We are therefore, reiterating our full year comparable sales and diluted earnings per share guidance.
Two key factors in common inventory impacted our Q1 performance and our outlook.
The lack of stimulus this year versus last year cause the consumer to have less disposable income and they decrease their spending year over year in Q1.
Correct.
Last year's stimulus is mostly limited to Q1, and we believe is now substantially behind us.
Our inventory increased by approximately $94 million during this quarter with a significant portion arriving late in the quarter. As a result, we have improved our inventory levels and a number of high demand products and are well positioned to achieve our sales targets moving forward.
We also remain on plan to open 30 to 40 net new stores in underserved areas with little or no competition. This approach has proven to be a significant competitive advantage for us and our team remains disciplined in the site selection process.
Moving on to slide four we wanted to remind everyone of our sales growth and related financial performance improvement of our business over the past several years, while elastic fiscal years have been positively impacted by stimulus and changes to the competitive landscape. We are also steadily improved the underlying business model.
The advantage of the opportunities presented to us as a result, we generated solid quarter over quarter compound annual growth rates over the past several years importantly, we are structurally rebase, our sales and profits at higher levels versus pre pandemic levels.
Driven by improved execution investments in the business model investments into consumer experience, new customer retention and a stronger inventory position.
As stated in this morning's press release, we believe that our best in class Omnichannel business model are best in class service in the stores and a compelling merchandise assortment creates differentiation in the marketplace provides us with a competitive advantage in the island.
Tumor and our vendor partners and puts us in a position to deliver strong sales and profitability results in the coming years.
Before turning the call over to Jerry.
I'd like to take a moment to congratulate our approximately 11000 team members across our organization.
All of whom are committed to providing every consumer vendor partner and fellow team member with an outstanding experience every day and I'm very proud of our entire organization.
And then we've been recognized on Newsweek's list of America's most trustworthy companies in 2022 of the top 400, most trusted companies across 22 industries were chosen based upon an independent survey that considered three main public touch points of trust the customer employee and the investors were commit.
The working tirelessly to continue to earn that trust of all of our stakeholders I will now turn the call over to Gary.
Thank you Mike Good morning, if you turn to slide five merchandising.
For the first quarter overall performance was in line with our expectations across all merchandise categories.
As Mike mentioned, our Q1 sales came on top of the tough comparisons to prior year with the stimulus and continued supply chain disruption leading to an uneven flow of inventory.
But were in apparel, both declines, indicating as compared to the prior year, while team sports and licensed products grew mid single digits all of US were in line with expectations.
We continue to believe that due to the impacts of Covid stimulus during the last two fiscal years compare to fiscal 2020 calendar 2019 is the most meaningful comparison.
<unk> for the first quarter of fiscal 2020 comp sales were up 22% and accelerating throughout the quarter.
From a category standpoint, all merchandise categories grew double digits, when compared to fiscal 2000, except for team sports, which declined apparel and accessories grew in the low thirties, when compare to fiscal 'twenty fleece licensed products underwear socks for the primary contributors of growth.
But we agree with the high teens when compared to fiscal 'twenty as we were able to get a more favorable inventory position in our key franchises during the latter part of the quarter.
In sports declining in the low teens when compared to fiscal 'twenty.
Specific to footwear and apparel men's women's and kids were all up double digits when compared to fiscal two point womens growth was in the mid sixties men's grew in the low <unk> and kit grew in the low teens.
As Mike referenced earlier, we're very pleased that our inventory levels ended Q1 at over $300 million.
Up $94 million from year end, and therefore are well positioned to drive results as we move into the second quarter.
As I referenced in my sales commentary. We also believe the most meaningful comparison regarding the inventory is superior in fiscal 'twenty.
Due to the delays caused by the ongoing supply chain issues inventory levels at the end of the year when compared to fiscal 'twenty, we're down in the low 20 <unk>.
This improved throughout the quarter and when compared to fiscal 'twenty inventory level at the end of the quarter were up into little Tony in line with our quarter sales growth when compared to fiscal 'twenty sales.
Sales trends when compared to fiscal 2000 and improve significantly in the latter part of March and April and followed the track of our improved inventory position.
Our results in the first quarter combined with our strong quarter end inventory position continues to give us confidence that the strategic shift in our merchandising organization and our tilda and merchandising strategy of working in elevating having served consumers I'll now turn the call over to Bob to discuss our financial results.
Thank you Karen and good morning.
Turn to slide six entitled Q1, FY 'twenty results to report on our results on a consolidated basis that includes both the given your brands.
Before discussing our first quarter fiscal 'twenty three results I would like to remind everyone that stimulus funds in the first quarter of fiscal 2020 to provide a significant boost to sales and growth leveraging a number of expense categories.
Expected the first quarter had the most difficult comparisons in terms of year over year performance.
Total net sales for the first quarter of fiscal 2023 decreased 16, 3% to $424 1 million from $506 9 million in the first quarter of fiscal 'twenty, two and looking back three years from fiscal 2021 relevant.
Period prior to the pandemic current quarter sales of $424 1 million or 23, 5% higher than the $3 $43 3 million reported in the first quarter of fiscal 'twenty.
Overall comp sales decreased 18, 9% versus the prior year first quarter comparable sales increased seven 3% in comparison to the first quarter of fiscal 2020 conference sales increased by 22, 9%.
Brick and mortar comps sales decreased 22% versus the same period in the prior year.
Greece by 13, 6% versus the first quarter of fiscal 'twenty.
Commerce sales increased four 1% compared to the first quarter of fiscal 2002 have increased by 116, 9% on a three year stack.
E Commerce sales accounted for 14, 6% in Mexico during the current quarter compared to 11, 7% in the first quarter of fiscal 2002, and eight 3% in the first quarter of fiscal 'twenty.
Gross margin was 37% of net sales for the first quarter of fiscal 'twenty three compared with 41, 4% in the first quarter of last year. This approximately 440 basis points, primarily due to the following factors delever.
Deleverage in store occupancy costs of approximately 160 basis points, mainly due to the combination of cost increase associated with a higher store count and the large year over year, so with the client.
A decline in product margin of approximately 150 basis points due to product and channel mix and an increase of approximately 130 basis points in freight and transportation costs, primarily due to fuel surcharges and other packets Oreo charges.
So on operating selling and administrative expenses were 22, 5% of net sales compared with 18, 1% for the first quarter of last year. This is approximately 440 basis point increase again is primarily the result of significant year over year decline in sales performance. In addition to increased cost of advertising professional services.
In general supply to support a larger store base and increasing e-commerce volume.
Depreciation and amortization in the first quarter of fiscal 'twenty three increased approximately $2 4 million in comparison to the same period last year, reflecting increased capital investment on our organic growth opportunities in infrastructure projects.
We generated $50 7 million of operating income or 12% of net sales in the first quarter compared to $110 million or 21, 7% of net sales in the prior year's first quarter.
<unk> earnings per share were $2 80, manifest with a strict physical.
Quarter compared to $5 per share in the first quarter of fiscal 'twenty. Two we did not have any non-GAAP items in either period.
Turning to the balance sheet, we ended the quarter with $23 2 million in cash and cash equivalents slightly higher than the $17 1 million balance beginning of the quarter, although well below the $279 million at the end of the first quarter of fiscal 'twenty. Two we have short term debt of $20 4 million outstanding on our $125 million credit.
Widened credit at quarter end, mainly as a result of our inventory build over the past three months.
Inventory ended the quarter at $314 9 million or 42, 3% increase from the beginning of the quarter and a 72, 6% increase from the same period last year.
Capital expenditures during the quarter was $16 million, consisting primarily of store development technology and infrastructure projects through the end of the first quarter, we opened a net nine new stores.
Nine stores provide us with nine new locations, one rebrand and one closure.
Total store count stands at 1105 as of quarter end.
In the first quarter, we repurchased just over 491000 shares under our authorized share repurchase program for a total cost of approximately $22 4 million.
For a review of our full year fiscal guidance.
Wayne will discuss a few consumer insights.
Thanks, Bob Good morning, everyone and early in Q2, we are continuing to keep a pulse on how our customers are in general.
Recent customer research our customers are concerned about inflation.
Leave that rising inflation will have a general impact on their discretionary retail spending however.
However, customers have stayed have elected to reduce spending.
Specific athletic brands, which comprise the majority of our stores.
Looking at the behavior of our customers versus calendar 2019, we are seeing two fundamental differences.
Our customer base around.
The average unit retail increased substantially.
Bce's two factors that are structural in nature, keeping our business re baseline.
At this level.
Turning to our ecommerce business.
Honorable sales increased 4% year over year in Q1.
117% versus calendar 2019.
E Commerce represented 14% of total sales for the quarter.
We're very pleased to deliver growth over last year.
There were three key drivers one improved inventory to increase traffic to our website and app and three improvements to our digital customer experience.
Our online business is growing and we expect to continue to see high single digit low double digit growth.
In the quarters.
He will describe we are particularly focused on the customer experience Q.
Q2 was a record quarter for the number of initiatives focused on the digital omnichannel customer experience now.
Now I'll turn it back over to Bob hoping to discuss our guidance.
Slide eight summarizes and reiterate that fiscal 2023 guidance consistent with what we provided on our last call.
Total net sales are expected to be relatively flat compared to fiscal 'twenty. One comp sales are projected to be in the negative low single digits for the year comp.
Comp sales are projected to be in the negative low teen range in the first half of the year, followed by high single digit comp sales in the back half of the year. Our sales forecast are based upon assumptions that you are.
Aggressive supply chain strength continued to be timing of inventory receipts becomes more consistent and predictable and our overall inventory position remains strong.
New store growth with estimated in the range of 30 to 40 stores with new units spread relatively evenly throughout the year.
Fiscal 2023 gross margins as a percent of sales are anticipated to be in the range of 36, 6% to 36, 9% down from the results in fiscal 'twenty, two although above pre pandemic levels.
Central supply chain challenges break headwinds, a higher mix of ecommerce sales, which carry a lower margin and brick and mortar sales inflationary pressures and deleverage in store occupancy will all contribute to the anticipated decline. We continue to believe gross margin results in comparison to fiscal 'twenty, two will become more favorable as the year progresses.
SG&A as a percent of net sales is projected to be in the range of 23, 3% to 23, 6% higher than fiscal 2022 levels. Although also favorable pre pandemic levels.
Wage inflation deleverage of fixed costs, driven by relatively flat sales I think station and annual relation of back office infrastructure investments, we made in fiscal 'twenty two our drivers such as anticipated SG&A increase similar to gross margin SG&A comps will become less challenging in the back half do you have an expectation of an improving inventory.
<unk> and a more favorable sales environment.
Operating income is anticipated to be in the low double digit range as a percent of sales.
Diluted EPS is estimated to be in the range of $9 75 to $10 57 using.
Using an estimated full year tax rate was 24, 5% and an estimated weighted average diluted share count of $13 5 million.
Capital expenditures are projected about are projected in the range of $60 million to $70 million with a focus on new store growth Remodels and additional technology infrastructure investments.
Our capital allocation strategy continues to include the expectation that we will repurchase shares throughout the year and a recurring quarterly dividend.
That concludes our prepared remarks, operator, please open the line for questions.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session.
If you'd like to ask a question you May press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
Press Star two if you would like to remove your question from the Q.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Our first question comes from the line of Sam Poser with Williams trading. Please proceed with your question.
Excuse me good morning, Thanks for taking my questions.
I have a handful here number one <unk>.
You mentioned I think Sharon you mentioned that your business accelerated.
From March to April .
How much of the overall trend.
I mean, when you look at what happened was inventory versus stimulus and.
Have you seen.
Momentum I mean does it go positive in April have you seen and what's going on so.
So far in May and I know you don't want to talk about it but these are strange times.
44.
Yes, certainly <unk> will be.
I think what we referenced versus performance.
Trends that we referenced in the acceleration compare back to fiscal 'twenty.
I mentioned already.
The beginning of the year.
Significant decreases.
<unk> levels from fiscal 'twenty.
As we were able to get significantly better inventory position, but we saw that sales trended compared to fiscal 'twenty accelerant.
That acceleration really occurred in the back half of April in the back half of March.
They needed to equal February was fairly difficult compare it back to fiscal 'twenty due to the lack of inventory to start the year.
And compared to last year can you give us some idea of how things look.
Yes, and again, Sam we're not going to comment on our individual period flows five months again, I think the best way to really look at the business aircraft.
And we did see significant acceleration.
Okay, and then Bob you mentioned that the merch Mart.
The merch margin got hit by a 150 basis points.
Mix.
But can you sort of.
Give us some idea of maybe what the merch margins look like.
Within E Commerce and in.
Brick and mortar.
Not percentages, but sort of.
Basis points improvements within that.
That balance.
Yes, I'll start and then I'll this is bill.
First and foremost we did see that the product margin declined year over year.
A couple of impacts there are first and foremost.
Filtration optimizing product due to the channel visit inventory and the early part of the quarter.
Certainly the mix towards the higher e-commerce penetration did have an impact.
But I would like to make sure that we recognize that we have rebased the product margin.
Product margin was up 350 basis points.
Okay.
Okay.
The size of the loan.
Okay.
Okay.
Okay, and then can I just follow up on that I mean, I really wanted to understand like your E Commerce, Mark I know the mix takes it down but would you be ecommerce store gross margin.
Pete.
Like.
Up year over year, and your ecommerce margin up year over year, but because E. Commerce was just a larger percentage of sales was towards where electrified sales.
It did grow.
The margins down.
Yesterday, we were down year over year.
In a lot of that with the impact of the reduced inventory in some of the lack of hybrid product early in the first quarter, which is typically what drives.
Q1 product purchase.
Again, as I mentioned, we significantly beat.
Basis of comparison.
Understood. Thank you.
Yes.
Good morning extended our next question comes from the line.
Justin Klaver with Robert W. Baird. Please proceed with your question.
Hey, Yeah. Good morning, guys. Thank you for taking the question.
As we look at the.
Actually low teens comp guide for the first half of the year that implied <unk>.
Now down around 5% to 10%.
If I look historically at your business pre pandemic <unk> revenue normally dropped sequentially more than 20% from the first quarter.
Which obviously implies a much steeper decline in comps.
Then the implied guidance. So I guess my question is why would normal.
Sequential seasonality in your business not hold this quarter.
Yeah.
Hey, good morning, it's Jared.
Certainly.
The normal sequential comps are certainly challenged with hopefully come through within the last few years with regard to kind of the stimulus.
Not going to comment specifically on the Q2 call outages in the first and foremost.
Q1 is the our expectation as we mentioned, we're very confident in the inventory position, especially related to the sales acceleration that we saw.
<unk> during the quarter as compared to fiscal 'twenty.
We reaffirmed our guidance.
Okay.
Okay. Thank you for that Jeremy would you go as far to say <unk> is also shaping up in line with your expectations given you.
Reiterated the guide.
Sam.
And specifically on Q2.
Again, it's very confident to the trend we saw at the end of Q1, ending inventory position that we exit.
Q1 way.
Okay, and then maybe just a follow up on the makeup of inventory obviously, a lot of things just on inventory across retail given how elevated.
We're seeing some companies.
Inventory across the sector.
Talking about the high heat product and it sounds like a lot of the inventory build is focused in those products, but are there other pockets.
Where you are having on merchandise and if so.
Do you pack that away or is there markdown risk associated with that.
Yes, so first and foremost great question number one we're very confident in the inventory position, obviously with available of $94 million from the end of the year to the end of the first quarter inventory is extremely fresh we're very confident.
And the composition of the inventory and the vast majority of the inventory growth that we saw from the end of the year to the end of the first quarter is in high demand in footwear.
Very penetrated.
Our ability to move through that inventory.
And again the supply chain certainly has added <unk>.
Injected some chaos with later on the business.
On the merchandising area and a great job of controlling inventory and control or do we have any particular challenges in our interest support continues to be at an incredible level. So I'm very confident with where we stand at the end of Q1 with regard to inventory.
Okay. Thanks for that my last.
Last question, then I'll pass it on just mentioned.
Record number of initiatives I guess within E. Comm here. This quarter can you share any specific color on what you guys have on tap on that Brian . Thank you.
Gotcha.
Good morning.
So yes, our pre commerce, we're going to make it easier for customers to find products.
Reduced purchase friction payment friction.
We will be making decisions that fulfillment I also mentioned omnichannel and.
I think that Omnichannel and we believe it has kind of evolved well beyond traditional program plan.
And curbside.
That stores and digital are really combining now in learning and where we're making investments.
At this point the intersection between attacks.
So what I wanted to get across is that we are taking an opportunity this year to make investments.
e-commerce as well as opportunities.
Okay.
Okay. Thank you guys and best of luck the rest of the year.
Thank you.
Our next question comes from the line of Alex Perry with Bank of America. Please proceed with your question.
Hi, Thanks for taking my question so.
I just wanted to ask.
How much sort of macro factors are factored into the guidance here. So I think the <unk>.
Back half of the guarantor theres sort of assume material improvement in comps on both an absolute basis and on a three year stack.
How much of that is just better visibility in terms of the supply that you have coming in versus sort of balancing.
What are your thoughts on the.
Overall consumer environment.
<unk>.
Pressure from inflation.
That youre seeing.
Sure. Thanks for the question. This is Mike I'll handle this one.
So certainly the first quarter was always going to be the toughest quarter and it was always going to be the toughest ones are forecasting model I think we've all lived through that we've seen it because of the disruptions in various and sundry reforms, most notably stimulus. So to your specific question certainly we can.
Consumer is concerned about inflation.
But I don't think anyone would dispute that but things that are going the other way.
For the consumer or that wages have increased along with that inflation.
Toilet situation has dramatically improved.
With regards to a specific situation for us the competitive set hasnt improved alright, so theres less product available and then we have all of the things that we've been talking about that we knew were embedded in our guidance specifically our business model It service and selection and the best in class Omnichannel.
Our experience.
We know that our laser focus on the consumer experience is paying off and will continue to pay off we're in the early innings of what we're doing in the stores, we still have plenty of upside online and our digital business as I said the competitive situation only improves and we believe that that is also.
So in the early innings.
Simply because of the supply chain disruptions that occurred over the last several months.
All know that some of the moderate price department stores loss distribution of critical product will some of that terminal then all the way into January and in some cases February so it's taken a while for that inventory to try out we believe that that has begun now.
Then we had a belief that our inventory position will be improved when we did the guidance in that belief has turned into a certainly our inventory position has improved.
$94 million most of which came in later in Q1. So we believe and we know that that will set us up well for Q2 and beyond.
That's incredibly helpful.
Thank you and then I just wanted to ask in terms of the promotional environment and sort of what's factored into the guidance here.
Just on the gross margin it seems like the guidance implies improvement in gross margin in the back half versus last year.
What is sort of been factored in to the thought there in terms of what youre seeing in terms of freight or promotions or product margins that'd be really helpful. Thank you.
Sure. This is Mike again, I'll kick it off.
What drives promotion generally is either in the general form is the need to drive traffic or to clear inventory, while traffic is not an issue and our inventory is not an issue. We've got a very fresh inventory as I said that $94 million came in late in the quarter.
So we.
No what our inventory looks like Jerry.
And I think Thats exactly right certainly we've seen that promotional environment improve significantly over our historical norms.
So what we have not seen those are significant retraction back to a very promotional environment.
Shortly.
Are there still seems to be operating.
At a high level.
Not very promotional as well.
As mentioned.
Barrett Tom fits in our inventory composition, which gives us again, a lot of confidence with regard to our ability to manage promotions and manage for margin and profitability throughout the year.
Perfect. That's really helpful best of luck going forward.
Okay.
Thank you.
Our next question comes from the line of Cristina Fernandez with Telsey Advisory Group. Please proceed with your question.
Good morning, and thanks for taking my question I wanted to go back and ask about stimulus coupled with other retailers.
Continuing to lap the benefit here in the second quarter. It seems like you think that's mostly behind so maybe can you share some color of how you think that benefited you last year.
So why would there not be an impact here in the second quarter.
Looking this is Mike thanks for the question.
When you look at the sales curves and the seasonality of those curves on a week by week basis, which we obsess over.
Like all other retailers it appears that the first two weeks of the quarter still had a stimulus effect.
Last year, but.
Past that and we're.
Seeing that our seasonality trends are now back to a much more normal level, but look much more like fiscal 'twenty and so we believe as a result, the stimulus impact is substantially behind us now.
That's helpful. And then my second question was on the inventory.
Fourth quarter and first quarter, you were trying to clear through some inventory is that now behind you or is there more to go there.
We did have some promotion in Q4, we did have some promotions in Q1, neither one of those were big drivers with regards to gross margin again, because the inventory is fresh and new in Q4, I would characterize it as we didn't have nearly enough inventory Q.
Q1, we began to build and just like everybody else and just like every other.
Retail environment, Youre always going to have the one or two items or one or two small subcategories, but didnt sell through as we expected so that those promotions really weren't material and we don't expect that to be material going forward.
Ill remind you our aged inventory is still very very low historically.
And then my last question perhaps.
Perhaps for Bob on the SG&A.
Also thinking about the guidance for the year and what happened in the first quarter it would imply SG&A leverage.
Over the next three quarters combined so can you share more color.
Is it just a function of the year over year comparison or are some of the cost pressures you saw in the first quarter it kind of abating it progressive.
And again some of it is just pure mathematics, which of course, we have our sales number but we've built a slightly more.
More expensive structure will be very honest, we built out our.
Our capabilities over the last couple of years. So we always knew Q1 against the toughest.
Toughest compare but what we can see as we go forward as we're starting to take advantage of some of the investments. We made last year, that's going to provide us some benefit as we go forward a combine that with what we think is going to be a fairly positive sales trend over the rest of the year and start with vehicles.
Better leverage against that if you remember we do expect this year.
Higher than last year on a full year basis, but again that gap will close from quarter to quarter. As we proceed through the year.
Again, it's just more of a function of.
Fixed cost and our target account comp again in the first quarter with the lower sales volume those will get easier throughout the year.
Thank you.
Jim.
Our next question comes from the line of Jim Chartier with <unk> Crespi Hardt <unk> Company. Please proceed with your question.
Good morning, Thanks for taking my questions.
Just wanted to follow up on kind of the impact of inventory constraints in first quarter.
Fourth quarter I believe you estimated a 5% impact to sales from it.
Sufficient inventory was impacted first quarter, the same similar or greater than that.
Color would be great. Thanks.
Yes.
So inventory for sure did impact us early in the quarter.
As the quarter.
<unk> moment as inventory came in we did gain momentum Jared you had some specific commentary on that yes. So the impact that <unk> referenced in the fourth quarter of this specifically.
<unk>.
Changes in the outlook for the fourth quarter.
First quarter inventory impact again comparable back to fiscal 'twenty was a general lack of inventory earlier in the quarter. So we believe that the impact of the early part of quarter was likely a little bit more significant than what we saw during the fourth quarter.
Thanks.
And then just.
In the slides you noted your women's footwear and apparel up mid <unk> versus <unk>.
2019.
Whats driving that and is that still an opportunity.
For the business.
Yes, we see women's is a tremendous opportunity for us.
You'll see a tremendous opportunity for us.
Felt that we have underserved.
Consumer.
The last few years for sure.
To put a lot of time with attention.
First and foremost understanding how they're interacting with us building out our plan for investment.
And ensure that the product is coming to life in store and digital perspective.
We still see upside there.
And we will continue to make the appropriate investments.
Great. Thank you.
Jonathan.
Our next question comes from the line.
With the benchmark company. Please proceed with your question.
Thanks.
For taking the question.
Mike.
Am I missing something did did that remember Jerry you might remember several years ago.
We had this high gas prices was there a phenomenon that might be in those small markets.
That people didn't drive to the city as much and May have stayed more local and.
To some extent and help the business.
Certainly our consumer is going to be challenged by higher gas prices higher food prices higher rents.
I think everyone knows that and so we should acknowledge that but again, we think that the factors that overcome that or the fact that our wages have gone up and employment is very strong. So the consumer at least so far is in a pretty good place and I think one of the.
Things to call out here that I think might be worth saying is that the branded product has more cache brands have more equity in them than unbranded and so we're beginning to see a divergence there in retail where the stronger brands inside.
A strong multi brand retailer are doing pretty well and we think that all of those factors coming into play are helping us.
Great.
Last question is so.
So we've not seen any change in the demand for that.
New release products and all of that stuff.
As far as the first quarter is concerned no change in the customer demand for that.
Yes, so the demand on the high heat product, which comes in the form of course of the specific launch products that we all talk about because that drives the buzz in the industry.
That demand has been very good and that's again.
All the things we've talked about on the consumer plus the competitive set plus the fact that we've got a consumer experience at.
Also in the cloud.
But that Monday through Friday business is also very strong because of hygiene products that you wouldn't necessarily categorize it as a launch so think.
Some of the franchises out there in the iconic models those things are selling through very rapidly as well.
Great. Thanks, Good luck.
Thank you.
Alright.
Our next question is a follow up question from the line of Sam Poser with Williams trading. Please proceed with your question.
Hey, I got I got three one whats the increase in loyalty members versus two years three years ago.
And last year two have you done any further buybacks since the end of the quarter and three you sort of alluded to it.
Sure.
What are your Alex how are your allocations looking on a year over year or two or three year basis of that high teens.
<unk> launched product.
Are you do you foresee yourself.
Building a partnership with.
A very large brand similar to that that.
It's done come a sporting goods retailer out of Pittsburgh, Pennsylvania.
Alright. Thank you Bill you want to leave that often speak to loyalty.
Yes, absolutely.
On the loyalty program has grown by a couple million dollars last year.
Sure.
The other things that we looked at in the <unk>.
<unk>.
And then in our loyalty credit rating last year again at city gear to that we see.
See the substantial portion of sales that go through loyalty there and then the other piece that had been talked about very often.
But the program is to drive sales.
Were seeing severity there.
For example, our average loyalty member purchases of 16%.
Our non asset purchase so we are seeing developing credit ran well and drive behavior.
Good morning, Bob do you want to handle that.
Yes, as far as share repurchases.
Alright.
Our share repurchases.
We go through periods of Poland Windows and closed windows.
Towards the end of the quarter than Windows close to get a little bit more conservative during those periods of time, because we have less control over the day to day cash outflow so our activities in the quarter.
Alright, and then I think growth is down there were some questions Jared on allocations and partnerships with other brands.
Yes, so I'll answer the first question please.
First and foremost.
Our partnerships are incredible.
We are at an all time high.
It did significantly reinforced.
Throughout the last few years, our business model is very well understood.
And our brand partners see significant value in it.
We have are very confident in our order book.
Our ability to serve our consumers.
And we will continue to invest as much as possible in our IC products.
We're driving significant traffic to our chain into our digital experience.
Yes.
Yes.
Okay.
There are no further questions in the queue I'd like to hand, it back over to Mike Longo for closing remarks.
Thank you very much we appreciate everyone's participation today.
Very proud of what we've accomplished our teammates.
Their efforts and we try to recognize that every time, we look forward to getting back together relatively soon or getting into the results for Q2. Thank you and everyone be safe this holiday weekend.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.