Hibbett (HIBB) 29 Nov 222023 Q3 Earnings call transcript

Greetings, and welcome to the Hibbett Incorporated Third Quarter 2023 Conference Call [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the call over to Gavin Bell, Vice President of Investor Relation. Thank you.

You may begin.

morning. good and you, Thank Please note we slide that prepared we refer to have will remarks. a during deck that our prepared deck and under hibbett.com on News & found of is Investor the homepage slide section. the investors.hibbett.com link bottom at via at or Events Relations the The the available along help this our morning. materials may with These you follow discussion

current are reliance the materially we views Safe are to reflect comments Act during management's uncertainties begin, the those some that of in discussed from future which noted statements. Securities future subject to I Before of It risks. respect made statements, conference Litigation with would forward-looking company's call events should everyone be the performance, anticipated and These Harbor Reform like provisions company's on forward-looking of and that to remind the financial are differ XXXX, may statements. and this and the in Private results

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Volke, November it Hibbett of the on Senior and and period on out Bill of Vice this this Briskin, replay this Financial as webcast Chief Vice Vice Mike Senior believed information Bob a Officer; The sensitive of call conference of turn Knighten, like during are Officer; Vice Jared President Longo, limit Longo. archived Quinn, Lastly, of now XX, based days. Digital; to Inc call is the information, Mike the Because Executive Marketing accurate point Chief President, the Ben and of to time remarks of understandings the call of President Executive management's and XXXX. conference nature would over to Merchandising; policy to are I I'll today's XX Senior date, participants President that and Operations. call President

Hibbett Good morning. to QX And welcome Gear call. the earnings City

XX% had make earnings going We for brands. into in the footwear in purchases. robust which on That the the experience third we share increase quarter start in For for the to performance an pleased to comparable a by back the Slide our along year-over-year current inventory slides, per helped waited in to and diluted QX our entitled on boosted our in is as confidence sales season, last increase strong busy quarter those the this X you as of more overview. our quarter year quarter I'm closer following a strong continue landed school top deliver sell in popular third with through consumers XX%. to versus of We're excess improving sales selling school line year nearly of and position second

However, we margins. to challenges our impacted our gross did apparel sales, experience which some related

ongoing despite margin freight expected continue costs, fuel in higher cost impact be like high by somewhat this the margins headwinds quarter In and of than to these team volume an pressures. our wage outstanding saw challenged affected an job QX, quarter more QX. also Overall, We utility the and macroeconomic inflation. executing increased operating did costs the

through We platform. the our continued our model both business of service and omnichannel our to and strength leverage outstanding in provided expanding stores

our FY year to like ‘XX, stack, levels our On and in diluted continue basis. which versus compared from QX fold non-GAAP results GAAP a on pre-pandemic earnings our at long our significant higher and derived profits to X, our X on to share support growth. three approximately a model, levels. fold grew to underlying XX% rebasing Slide These and success I'd will business basis term total XX on a improvements Moving reiterate increased per that sales to sales our is

holiday enter the ‘XX. fiscal we year our and the last of the As quarter confident meet objectives season, for we we remain important year selling will

meet have inventory. mix Moving quarter sales. on million, the sufficient over will drive partnerships, holiday to the we vendor demand ended of We the to our consumers. which levels of have believe strong We're our inventory which $XXX product our right fortunate ability just and topic to at the expected needs support to of support

In positive addition very of we the the quality inventory to the we're approach holidays. amount about of that as inventory,

a offer and consumers. of products We to conscious our that brands relevant appeal range compelling to continue trend fashion

While the for see continue we to is shelter certainly current environment faced for families higher prices challenging inflationary gas, and with food, demand. strong

optimizing our performance. we we our executing fourth As to enter the and remain quarter, strategy committed

stores business in consumer service our compelling vendor sales strong and deliver differentiation partners, the a to the in us a Our our marketplace, the in position and puts superior years. creates of and our eyes assortment best-in-class and the model, in advantage the profitability with omnichannel provides in coming merchandise competitive us

moments. Bob will few As in in this detail full result, are fiscal we reaffirming cover a year our further a guidance.

omnichannel North our finally, XXX audited is provided included five facilities as over extremely According to conclude from our call platform, like to honored then the and the to and capabilities and to provider Before recognized XXXX Thank face omnichannel retail our omnichannel of They're even hard you. now store a the shoppers, leadership to of premium commitment top XX,XXX of Hibbett recent members I We're And and work our industry. the in our this group for team in feedback support members center. logistics excellence omnichannel thank luxury, brands exclusive be network being grateful call team NewStore, team Jared. our mystery from retail our continue across of platform retailers. over They I'll one organization. America. to report of before X,XXX research brand across the cloud lifestyle I'd stores, over our to our turning whose the the more company. in the of the Jared, approximately all cited turn of was represent

Good you, Thank morning. Mike.

merchandising. to If X, you turn Slide

was quarter, For inline our across expectations sales our the categories. third performance with our merchandise

prior the We meaningful Sports categories up were both of fiscal all Women's fiscal all the grew the compared accessories Footwear Specific to single women's fiscal increase most calendar growth during continue all a calendar XXXX, Apparel than to quarter to believe that the XXXX, the calendar largest quarter, When increases XXXX in fiscal mid high due fiscal men's two in compared is comp compared the merchandise the fiscal COVID XXXX. performed stimulus sales years, and 'XX XX.X%. and XXs, low was kids in mid-XXs grew Footwear When a and year-over-year the drove calendar the of digits. to results categories. impacts XXs as high again and up men's, up last Footwear had were Footwear the kids the saw the significant in sales during to negative From when the quarter. increase, high up up more double, showed to were Apparel and significant were when Apparel, standout up third 'XX in comparison. in standpoint XXs and Team to the the we growth categories expected. low year. in comp XXXX, 'XX comp compared across was digits. and category accessories positive 'XX Sports comparative single Team and XXs. was

inventory increased of As position. Mike are to key we attributed in-stock are referenced confident earlier, The better our franchises. levels at largely footwear inventory position

comparison largely our plus inflation with 'XX XX% comparing to 'XX calendar When price increase impacts to fiscal inventory a to inventory This sales of end gain. the 'XX XXXX. to were balance As reference we levels XXXX, XXXX, sales the up also unit regarding is compared inventory When XX% commentary, compared fiscal my in levels is of the as calendar fiscal quarter calendar most positive footwear. inventory well our to as X%. at were believe meaningful mix and to due

continue working cover merchandising Our results combined third I'll to strong we consumers. financial serve over inventory that with the give results. our in is how it our position to end to Bob elevating quarter confidence hand toe-to-head strategy and now quarter our us

Jared, Results. 'XX Thanks FY and QX good entitled morning. to refer Slide X, Please

$XXX.X comp our a brands. on comp prior Gear As results reminder, of a that net Total $XXX.X third third to quarter prior fiscal from quarter in comp same fiscal 'XX. includes third sales quarter comparison of are In the Overall million consolidated to the X.X% year versus million XXXX, and Hibbett XXXX have sales X.X% the a by versus basis pandemic increased XX.X%. XX.X% up increased 'XX. sales XX.X% and Brick-and-mortar reported robust both third increased period the period for City to increased third of the most fiscal versus quarter the sales the the of quarter. by were in XXXX fiscal the fiscal relevant

have quarter the was margin increased quarter to a approximately mix of the year our This of offset ‘XX which of and result a in of percent Expense fiscal selling points, of was and was of mortar by sales Our by but with basis a and lower and e-commerce leverage approximately than to related decrease points, Freight compared operations. activity XXX of and of apparel maintenance occupancy with XX.X% operating, repairs sales year. the year XX% for margin XXX.X% third by as The current Product basis third quarter compared sales decline approximately increased approximate 'XX of compared of the result margin increased the the fiscal expense net leverage for sales, approximate e-commerce primarily of and basis sales points prior costs our of during XX.X% for current year. three quarter XX.X% the grow online revenue. quarter 'XX. sales a XX% in accounted XXXX were logistics the and point leverage. current expenses basis XXXX of by product this sales brick point last from fiscal last store third sales due the quarter XX% business XX the partially to leverage promotional quarter for of the is offset supplies. increased the was logistics margin continues to the to approximately sales operations lower primarily on third in Gross Store of in a XX.X% higher decreased as third of fiscal higher quarter net basis due carry stack. of in net and third of quarter XXX XX compared higher compared to XXX sales. on a to timing net in E-commerce of primarily expenses XX fiscal administrative year third XX.X% points basis

Although either Depreciation last continues supplies investment and be increased same amortization projects. million X.X% wage maintenance ‘XX were compared spend We $XX.X non-GAAP medical quarter approximately a other X.X% increase year, this to quarter third XXXX, earnings not net repairs in were expense, in infrastructure increased fiscal to million of share organic income period per years’ comparison in to capital operating share fiscal second of third Diluted $X.XX inflation XX.X%. in to any and generated the as in $X.X favorable. sales or of per the of and growth We have professional of net headwind fees, sales reflecting on of quarter million the items did and the such quarter opportunities compared $XX.X an categories, the third prior $X.XX quartered. third period. for in year's or

support fiscal the first period of first X, store nine have by over costs FY due in driven ‘XX. margin activity, fiscal These impacts primarily date In the entitled year coupled fiscal discuss increase the in Next XX% an during this expenses basis mortar first carry XX.X%. the sales year to compared such XXXX point expense E-commerce Overall in margin occupancy which basis our in net $X opportunities of higher the XX.X% ’XX and in to current increase lower offset margin the first with a SG&A of and and in increased Depreciation net of amortization XXX and by fiscal stack. of in the partially approximately were the e-commerce nine for of $X.XX and to decrease the prior referencing XXXX fiscal fiscal e-commerce a freight compared months to same is of by XXX decreased for to increased of on higher approximately of XX.X% decline $X.XX basis months of by net ‘XX, the billion XX.X% Total period were year nine approximately the current to months nine X.X% date sales Brick product first margin in the ‘XX three XX.X% the year revenue, sales, with processing, and XX approximately decreased XXXX of comp of same comparison to year same in categories fiscal basis increase months months comp have XXX.X% result nine period same the our billion due The the Slide reflecting costs is store I'm of XX.X% compared of for approximate necessary to lower sales results. fiscal for utility to advertising XX.X% net promotional sales the factors; basis to nine of versus X.X%. year rent to sales; Year the the primarily I This decline logistics basis SG&A. year data costs. following cost will the period wages, in primarily XXXX, larger sales ongoing ‘XX our infrastructure points, due XX.X% apparel sales, were accounted gross sales have base months of supplies mix increased of year. expense nine with fiscal mix; increased last of sales results. operations. of the of leverage higher sales points, invest approximately now E-commerce and a comp first in versus points and of general increased of XX mortar first sales months from as projects. was versus contributed but to nine date months net in fiscal increased XX.X% deleverage approximate compared X.X% a total sales a improvement the fiscal and increased fiscal comparison mainly decline organic year. to first nine same to the of XXX and in unfavorable transportation than point period year, million months activity fiscal XXXX year. last fuel of XX to ‘XX. gross points a ‘XX compared in of brick XXXX for growth was by deleverage e-commerce and last commitments first

any $X.XX nine compared $X.XX for have items non-GAAP fiscal in year. of months. not XX.X% $XXX.X We earnings net the first months either same share to diluted were We net per in the prior in or million first have generated compared or fiscal sales Year-to-date to in the fiscal in year of nine year’s operating per income share of ‘XX did the $XXX.X sales million X.X% fiscal of period ‘XX.

cash the beginning increase quarter been cash $XXX.X grown driven Turning sheet. inventory ended holiday the third last equivalents. ‘XX the increases Inventory increase the by third fiscal from dollar at quarter We year. of volumes year higher end much are $XX.X the as XX.X% end of toward with and in million same increase of at as from build the slower pace. period Much Net we a was the and this unit season. levels has the selling balance to the of at an million, quarter cost have XX% generally a the fiscal of

store short and as expenditure of capital quarter and $XX.X our spend were credit to mainly during end, investments. $XX expenditures million. consists bringing our million, term technology quarter a year-to-date of million second the build of debt of on projects. Capital the infrastructure outstanding $XXX inventory Capital have at result We million line $XX.X total development, primarily

year-to-date store XX increased quarter, On closures. rebrand, comprised locations, increased and one of third closures. count XX new count store we by of During two with units, net locations our a XX new net by four and nine of basis,

third Our end at as total stands X,XXX the store of the quarter. at count

under repurchased quarter, shares $X third approximately total year-to-date quarter we've eligible the cost million. repurchased XXX,XXX basis, program of On million. a approximately recurring total share XXX,XXX paid the authorized share of have for a a repurchase for a quarterly During shares our during $X.XX amount at cost $XX.X common X.X dividend a the We of outflow of per in total we million.

payments For of have million. $X.X the amounted five fiscal first ‘XX, dividend months to

call the to Bill I'll give over consumer guidance, we discuss to insights. some Before turn latest

you, Thank Bob.

certainly demand. increase with for the see during purchases. even research, As this we faced on year more to strong and know and to and gas, plan plan inflationary Mike families current prices recent they we spend for the stated, to continue higher spend particular, is customer environment customers food that an while challenging apparel holidays. Through footwear In more greater anticipate in

our more. sales For customers last in program versus comparable QX, would nearly year-over-year. a research year. increase through We loyalty customer our certainly drive This indicated our saw over XX% increase that XX% of with spend that helped sales

to growth to FY as as been year major factors. has last a driven XXXX consistently Our couple well by

customer grown in number of shoppers the has First, substantially. our base

loyalty of program and efforts. In to in fact, retention QX levels acquisition number our achieved ongoing the in due record customers active our

in and higher that The our above our keeping rebase nature, to in increased structural FY is average continues second retail. as both gains factor average business We increase 'XX. see well AUR ticket due substantially line unit to customers

retails fulfillment and service QX, These our features experiences, third, improve the our to to due multifaceted customer experience. three will improve to and to important our the well our increased increased and is our AUR The will design is Web driven as costs of QX three We as apps. year includes first, our In greatly economics position and back guidance. continue improved higher of factors drive reduce enhance e-commerce versus XX% base; in omnichannel last traffic improved; it customer anticipate Elevating 'XX. results turn our accelerate to due Bob Turning FY discuss a efforts growth digital experience were sales second, delivery by call average retail. will to in inventory to and unit mentioned factors; versus since I increase we expanded improve is as sales the main in now online our site as business. our percent and ongoing our sales. our I customer XXX%

our Slide XX summarizes fiscal XXXX guidance.

year single e-commerce to that range. low continue challenges the for last potentially there of in year positive is significant to wanted the fourth results. Although sales growth be and to is the positive low to the anticipated to net comparable be range quarter, be we expected range economic in reiterate digits positive new revenue This digit to dollars in Net expected be some to full are we single XXXX single single to in growth while quarterly sales update. are store business expected the stores. full low range, our XX the the sales impact increase expected to Full may fiscal range be flat brick-and-mortar provided in at the high in year for digit full year. digit to the to comparable compared of XX flat Total guidance our implies

to as costs, fiscal and a to of XX.X% and decline to expected mix and is a digit to XXXX. product of XX.X% deleverage expense annualization is net points the XXX in gross sales sales, This office year low basis above to as net store result expected to using $X.XX approximately a $XX.X be compared freight a levels. $XX.XX approximately a year results. remaining headwinds, e-commerce higher higher as XXX infrastructure margin of in SG&A of by is XXXX with count per percent sales in of fiscal SG&A wage transportation pre-pandemic also anticipated the As fiscal margin occupancy average gross of levels. remains a pre-pandemic net by XXXX of range count to share range a XX in basis above larger points and expected is tax full income diluted share we percent percent in inflation, sales to year back associated range increase Operating to full sales, comparison investments the to costs e-commerce, XX.X% weighted Diluted below margin growth estimated to range earnings of store due pre-pandemic of full million. XX of XX.X% levels. expected are of to made be The an double estimated of an percent rate anticipated 'XX.X% as

We focus questions. our please prepared $XX additional $XX expenditures project range to store line to technology growth, infrastructure That remodels capital and investments. on with Operator, new the for million million in continue a remarks. open concludes of the and

Thank you [Operator Instructions].

Our Perry from Alex first line questions America. Bank the come of with of

XQ just of you seeing the could to you I on did lot here gross you of based what trends you on versus elevated a were compression inventory guidance? same that talk the confidence implies sort year that to apparel quarter? an sort lot reiterate through clearance, the fourth through maybe work versus to of less XXX XQ. what first, a or reaccelerate acceleration in over of think sort is gives gives into required it of of sort sales it year confidence based date Just and margin store Is bps the you you saw the in sort

And and inventory. confidence at looking we've that have in QX. the got go of start think to a then of it. ways couple we'll do We'll different customer We I with

lead if you'll Bill, So us all?

that of I holiday we're base. in more part cetera. they of text, to terms get We've as email, as social record our is is biggest members season. On spending our top that, as do customers footwear. first ability So also The that's position a far this gain member asked of active communicate customers to position et media, category as we've in anticipate that got far a stated, and of during record as our push, ton with going

to sell On seeing throughs to I'll particular it good talk yield over top turn in product. in great Jared inventory. condition, there. great high we're that, of we're about So shape

So just things. couple a

last a inventory. inventory, lack to reminder, a in a as foremost, a surprising. quarter, flat of and year essentially particular QX was which heavily pressured little was was third lack in It First by the of bit footwear

very key our extremely footwear positioned a it, reminder, right is we've highly fresh, inventory new well franchises. very As talked and in about concentrated now,

very into as the particular head inventory, when the we composition quarter from mid in low we're Historically, to improves confident third the as fourth to around So revenue compared of footwear. a in quarter the relates fourth to standpoint the it teens quarter.

So that But gives QX us some if that then back due to problems. confidence. We that's you And typically go last when look at look didn't split. year historicals, versus see and at lastly, the you the inventory QX ‘XX, quarter and fiscal third fourth of the that we confidence XXs as again, growth lot from us, that's consistent the to perspective, trend. into compare which quarter in go a quarter pretty a based second off gives back

the compression. as November based is can just gross year as you you Is have less margin would lot on, that color apparel, year implies then guide it give implied on worked still over a to be helpful? And XQ how through of shaping of be promotional? then And is any follow-up, sort up the a expected

on is where from all support I we're our mean, our vendor floors. our inventory relevant seasonally partners, getting to we and want inventory is our sure make really incredible that again, of confident

matter. floors hasn't for anyone you particularly been floor apparel a in the seasonally apparel story last about there If couple that due else's really supply on the to our disruption, or of relevant think years, chain all

during an margins that quarters and the have the were are last terribly we So things some really a to through from year, some gross last were some But as as I third third and was unsustainable aided again, one of saw stimulus, concerned we that of and was those. -- that work summer at levels the we some had spring impact that about. will that nothing by reminder, example, primarily the still quarter. quarter

see we into So of one quarter. deleverage reason much forward that's fourth the we go coming why don't as as

follow last up Just one point.

pretty talking QX, the you're leverage a strong about little think and I gets bucket. a things also, more store bit occupancy like

like little there bit on we So basis a improvement obviously, would a feel see well. would as quarter-over-quarter of

line next from Kleber come the questions Baird. Our of with Justin

there the were press comments was release, few Mike, a more hoping on. to get in color some I

fulfillment market digital that you comment reach. on the your you the mentioned expanding opportunities And to? First, then just to capabilities. maybe around alluding or identifying specifically opportunities around Is were what extend second

organic wondering in M&A on to if or continued that something growth front? Just the maybe store reference was else

I'll take those reverse slowed part considerably. order. M&A equation has in The the down of probably

think over what happened everyone been and players of years most I saw board. the taken the past few have off the

personally With stores, ton the we stores, probably to Vegas great to we market, spot shine visited -- but and regards great include expanding stores in that crews weeks Vegas of the rest that And omnichannel the really great never opened we to and we're those I market, past say on opened stores. the our those is was So stores opportunities. product that and a disclosed new filling of never. recently, doors the to market continue in locations, capabilities through two not, new the of our believe market be opportunities see open we most that the year. this balance the

men's things our we're cycle about level saw, inside would continuing up there all very terms so in and we're you of owned, see categories between that that and and Those go proud that. we way. paid So in, participating extend That well about in kids the the two twill, women's down footwear get always do to currently we what excited other high operating and part and market that's imagine, do. what of already I categories best a retailers Then to there, to stores between opportunities opportunity opportunities. change adding big denim the at is that. talk is to we're apparel there, detail The have the aren't obsess bit the race level, through, in that's there, also excited a and over, opportunities are you'll well omnichannel reach we as with macro and of mousetrap Then we very as a we exploit filling often regards we mix to at and sorts very things about that as though. level get exploit those know that is we experience at those a frankly and the best-in-class paid that have digital, and don't all micro it, we of we of

our done is do can on things And so have, any list we list of so in and get longer we don't that breast we on weekly and year. than the given the we meet the opportunities can borrows we that

Bill, want So to please. the you that, opportunity is expand if there. upon

So I think working you we're on fulfillment, absolutely that. mentioned

pieces. break couple can into You that a

first one to an it which how which is how we've initiatives takes And numerous we're around. deliver order, also it does to on. order, working actually got long prepare take The for then long that you

So is us. big yes, a focus fulfillment for

customer offering on just But time very installed good well there. a is thing have other The of the out testing customer of and omnichannel all have that And we site, the experience. lot a pain Web are of apps. capabilities as our currently, the of we obviously, spend we as points design

store. pain in out going are as So solving online that there mentioned, that we both that customer and are we are Mike points in to are are not going there those common, pain and are invest to stop, points

Just maybe a where how basis year-over-year pre-pandemic wages versus on if give follow-up, up today can you wage stands a us are unrelated accelerating levels? on pressure on average that wage your much comment sense or hourly of Curious the and rate a inflation. is

one our going wage I and pressures earlier, experienced. over Bob The would the we that's mentioned say while. SG&A though, a thing been have

a is that good. little has We mitigation which bit there, have growth slowed, seen actually obviously of

in the SSC our cost, to job is both stores, distribution mitigate centers. Our the that and

our us to starting come and and that's online, of technology those. to helping investments automation really in Some are control

We hopefully are as also overtimes it as and dialed right. look our focused on continue to your labor sure well we have making got that managing exactly question. in answers that our model But

growth. seeing that slow We Still are of little there, actually a slow. a in bit but

you. Thank

of the Kummetz from Research comes Seaport question next Our Partners. Mitch line with

specifics the Maybe elaborate into see and just carrying on pressure the you just could then quarter? was that on seeing you the some getting to that competitive apparel. off, fourth First of how are hoping through I you there. kind of pricing

I seen, up we obviously they’ve than So more ramped promotions even ramp them expected up we apparel believe expected. have ramp to yes, we up. the mean, but

Our desire more regard a work. in was big get to appropriate to the to third competition and less our to challenge was regard seasonally with with quarter

we end fruition. and back unfortunately fairly with we late aggressive delivered get an didn't much as quarter, quarter, get see come that the and into So as weather offset year back challenges we maybe the spring seasonal you around of Typically the we in of that product would some didn't were summer like. to through product this and

led some The some improvements that other part of well. very is pressure to likely that footwear with footwear the our as businesses consumers in and in on our focused inventory apparel of

the to less So environment. we are competitive reactive

our seasons. We want are more to business future into look reactive our to we get and as floors how we

And footwear, with I'm the of a things. then discontinuation curious Yeezy, on of couple

you as other And you? seeing seeing business your your is kind is benefit is you given of that And important Retro to going and that kind -- some there of position I'm of away? that transfer you happening, demand curious, kind that was us or to better competition? maybe just particular, business just business? allocations just demand are to off, in remind relative that it away, does or versus that's just are Jordan in gone brands transferring And the demand of First if how

planned were foremost, as in and but We unfortunately So to some very forward, didn't business the tightening that seeing we for forward. first were us. small of growth process go

our terribly think for it's inventory we carry. that the not in the us ability advantage With being quarter concerned fourth the foreseeable or a based and and feel lines an other we do business do comping. styles, we're advantage off the and as us for get an coveted fourth quarter to the not go market future forward. in we But that the that's additional we about for inventory footwear like highly that product So

with Fernandez Telsey Cristina of Group. line the Advisory from come questions next Our

a seeing. to the downs questions make Are is could trends couple of meaning any I in finding How had are if behavior, consumer to purchase? more you waiting I see seeing consumers for expand are the you wanted any demand? on change on promotions you the stable you trade

retail based up inflation. continue believe consumer the affordable price cognizant more is then We of We on seeing. positioning the middle class it causes general down that luxury putting which items, we pressure as the upon hard choices. things believe that call and the feeling in skews pressures the the to in fact in your one that towards certainly are shopper you're they're is range in from to make and We different luxury consumer moving of the that finger the our get industry items the to

have We point a Bill? different bit bit of a view that approaches a consumer our and little differently. of

we behavior customers, as down impacted Other number waiting. are to going customers, as back haven't one, inflation. eating buying cut well seen in out The customers is things for by they're So some are not nor that for themselves. all customers like trade

the during But And certain earlier bit well spending by a driven overall around some plan customers being as are holidays. behavior promotions. trend. little as in customers the our again, then is of more that concerns that's So not to cases, of waiting, availability spend the the and on actually

points I'd a we and perspective, liquidations more liquidation also in and the price continue footwear in product just best premium see across best purely from our apparel. chime level to

level those we a significant typically those in us in some are feel sell advantage, we positioning our higher carry again, in So but acceleration give our products, best products that foods seeing does price. continued

Nike second apparel? And retail there, pulling you're the back out then seeing of particularly of is your promotions the How that was level from competitors. materializing in from my benefit question around given some

distribution the it seeing footwear the advantage for feel of It's improvement future. than now continue in But certainly back buzz and it in for can right we we're something the the outsized is across again, foreseeable definitely board sure. the where area. take apparel to seeing the cut area more it's We're like

for my basis question operating points then really significant outlook, expansion, based margin fourth had, more it last on the again, on And the, double the Bob quarter implies on I digits. XXX it's math solidly north of

it just that would of So or on leverage get any other amount is higher to you sales allow side, lapping off or expansion? SG&A operating market rolling cost mostly the on that the

leverage last of going But spending categories. as to the evolve that's couple be Clearly, our that again, taking we've business looks biggest individual over and you critical some we're higher pretty of years, some continued the kind point, factor. sales to give our some at

that think, that's got earlier, things starting lot cost lot sales, leveraged times last during quarters do pay years. the overall, are dividends, I to of additional touched more believe We've couple can of under we over it a labor. not expenses those structure that going invested so of to working hard within the we've in effectively stronger doing I kind of manage manage things we're Ben stores that technology we maintain really do a get only to even on but And we forward.

Thank you. this There to further I for over Longo at comments. would hand are back now the call no questions closing time. Mike to like any

Well, on we our time to successful thank to another you congratulate our speak to and the opportunity today. teammates very much appreciate for quarter, and it. appreciate We your business

So with that, conclude. we'll

today's conclude teleconference. We does participation. This you. appreciate your Thank

lines You of at the Enjoy rest this time. your may your disconnect day.