Hibbett, Inc.

Good morning, everyone. 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.com via the Investor relations link found at the bottom of the home page or at investors.hibbit.com under the news and events section. 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 view with respect to future events and the 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 factors 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, the most recent quarterly report on Form 10Q, and in other filings with the Securities and Exchange Commission. We refer you to those sources for more information. Also, 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 this conference call are based on information and understandings believed accurate as of today's date, December 3rd, 2021. Because of the time-sensitive nature of this information, there's a policy of HIBIT to limit the archived replay of this conference call and webcast to a period of 30 days. The participants on this call are Mike Longo, President and Chief Executive Officer, Bob Volke, Senior Vice President and Chief Financial Officer, Jared Briskin, Executive Vice President, Merchandising, Bill Quinn, Senior Vice President of Marketing and Digital, and Ben Knighton, Senior Vice President of Operations. I will now turn the call over to Mike Longo.

Thanks, Jason. Good morning and welcome to the HIBIT Q3 earnings call. If you're following along using the slide deck, I'm on the third slide entitled Introduction. I'll be relatively brief this morning so that the team can go into greater detail on some topics of interest. This quarter's financial performance was a strong outcome for the company. The third quarter is always the hardest of the year, so we're very proud of the results we were able to deliver. Specifically, The Q3 comp sales increased 13%. This came from a combination of a double-digit increase in both brick and mortar and omni-channel. The two-year Q3 comp increased 37%. We also delivered operating income of $33 million and a diluted earnings per share of $1.68. In spite of the much-publicized global supply chain problems, we still managed to grow inventory nearly 23%. versus the prior year and 19 percent just since the end of Q2. We put capital to work through a combination of capital expenditures invested in our business model and the consumer experience. A substantial share buyback of one point four million shares and of course our dividend. Most importantly we continue to attract high quality talent and continue to develop our people. And that is after all the most critical component of the business. the people. And I couldn't be prouder of the team, whether they're in the stores or the distribution centers or the store support center, they all delivered on their commitment to the consumer. And we're proud to represent them here today. On slide four, as we showed you in Q2 and previous to that, we have a number of factors that we believe will have a lasting impact into the future, including continued improvements to our business model, Those are represented by our highly coveted selection of merchandise, our enhanced customer service, and further developments in our best-in-class omnichannel experience. Second, additional investments in the consumer experience, such as store remodels, new store designs, website innovations, et cetera. And new customer retention, which has been driven by improvements to the loyalty program and our marketing programs to include significant investment in our social media programs. Capitalizing on competitive closures and the reduction in distribution of key brands. And by that we mean our stores are in underserved communities, which effectively limits the amount of competition in our trade areas. But I'm going to come back to this in a minute and give you some further detail. And then finally, an improved inventory position, which has benefited from the work we've done on our supply chain to increase capacity and the close coordination with our valued brand partners. This list hasn't changed since the last few times we discussed it, and we are delivering on these factors now and in the future. Again, we are excited to report these strong results and are bullish on our future. But I do also wanna put a finer point on that underserved community comment. And so we're gonna give you some data that we haven't previously disclosed that I think would be interesting. As of January 22, a couple months in the future, we are forecasting that better than half of our stores will have no competition within three miles that carry products from our key brands. If you expand that and look at the stores with one or less competitors within three miles, that figure increases to almost 70%. I'll repeat that because this is new news and we haven't actually disclosed this previously. Come January, Better than half of our stores will have no competition within three miles that carry product from our key brands. And when you look at one or less, that number jumps to 70%. So remember, these effects really don't begin in a meaningful way until January of 2022. So we believe that this will be a significant factor for our success going forward. I'll now turn the call over to Jared to go into greater detail on our merchandising performance. Thank you.

Thank you Mike. Good morning. If you turn to the merchandising slide. For the third quarter our merchandise categories of apparel footwear and team sports were all up double digits. Our focus on TOTAHEAD merchandising continues to drive results as we saw strong cross category connectivity drive improvement in items per sale and average ticket with a very strong back to school season across all categories and genders when compared to last year's third quarter. When compared to the third quarter of fiscal 2020, the results are even more impressive. All genders and categories were up double digits to fiscal 2020, with the kids business just below 50% growth and the women's business more than doubling. We're very proud of these results and believe this achievement is coming as a direct result of the strategic shift in our merchandise organization that we deployed last year. As a reminder, we evolved from a traditional category structure of footwear, apparel, and team sports to focus teams and leadership over our men's, women's, kids' and city gear businesses. Our apparel business increased in the mid-teens. Drivers in the apparel business remain color and material connected tops and bottoms, sneaker connectivity, and tall to small connectivity from adults to kids' sizing. From the athletic brands, we continue to see strong demand for lifestyle products, especially fleece tops, fleece bottoms, and t-shirts. Our fashion brand performance continued to be very strong. Fleece tops and bottoms were drivers in the category, but our performance in denim was the standout. We made a significant investment in denim and supported the investment through a strong cross-functional effort with our visual operations and marketing teams, leading to a fantastic result. Licensed business continued to perform extremely well. Our merchants did an exceptional job connecting the licensed products back to sneakers and to our seasonal stories. Fan business also improved in the quarter as some of our local teams such as the Atlanta Braves and Georgia Bulldogs performed well. Socks, sneaker accessories, bags and sunglasses had strong results during the quarter offset by pandemic related items such as masks in the year ago period. Footwear business increased in the low teens. Demand for classics and basketball footwear remains incredibly strong and in short supply across the market. Running continued to perform well as more consumers continued to explore the category. Sandals and slides show significant growth in the quarter as we broadened our assortment and investment. Casual fall footwear was also exceptionally strong during the quarter. Specific to footwear and apparel, all genders were positive, led by growth in the 20s for women and kids. Inventory ended the quarter up 22% to last year and is very fresh. We are very confident with our inventory position to deliver the results outlined in our guidance and are incredibly proud of our efforts to improve our inventory position in the current environment. We accomplished this by working closely with our vendor partners to secure a substantial increase in our order book, securing incremental product from our vendor partners in season, improving our priority with our vendor partners regarding shipping, and increasing our capacity by more than 50% within our own supply chain. We expect to end the fiscal year with year over year inventory growth in the mid to high single digit range and will continue to prioritize inventory growth and consumer experience over cost. As we look forward into the first quarter of fiscal 23, we expect the supply chain to remain challenged and very fluid. We're working tirelessly to mitigate these challenges. While we continue to believe the challenges will persist and achieving our optimum level of inventory might be a challenge, We are expecting to deliver a significant increase in new receipts compared to the first quarter of fiscal 2022. And I'll turn the call over to Bob Volke.