Hibbett, Inc.

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.com via the investor relations link found at the bottom of the homepage or investors.hibbett.com and under the news and events section. These materials may help you follow along with our discussion this morning. Before we begin, I'd 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 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 are noted on slide two of the earnings presentation and the company's annual report on Form 10-K. the most recent quarterly report on Form 10-K, 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 the conference call are based on information and understandings believed to accurate as of today's date, March the 4th, 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 Voelke, 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'll now turn the call over to Mike Longo.

Good morning and welcome to the Hibbett Q4 earnings call. For those of you following along the slides, I'm on the slide entitled Overview, slide number three. As you know, we pre-released sales and earnings two weeks ago in order to get information to you ahead of today's call. While that data reflected results below our expectations and the guidance we gave you previously, we believed it was important to provide an update to you as soon as we were reasonably certain of the results. Today's press release provides our updated results for the fourth quarter and for the full fiscal year. So in review, the Q4 FY22 results, sales increased 1.7% with a negative one comp. The two-year comp was a plus 20.7% and a diluted earnings per share of $1.25. For the full year, FY22, we had a 17.4% comp, a two-year comp of a positive 43.7% and diluted earnings per share of $11.19. We believe the results of Q4 were negatively impacted by a handful of factors. In addition to a surge in COVID-19 cases, we feel the other primary factors fall into three general categories, inventory, inflation, and income. In the inventory category, the biggest factor that affected sales in Q4 was the supply chain disruption that resulted in a shortfall of inventory versus what we forecast. The late delivery of specific products, most notably footwear, drove an approximate negative 10 comp for the last month of the quarter, and that resulted in an overall negative comp of negative 5% for the quarter. The second bucket is inflation. The top three goods and services affected by inflation are fuel, food, and housing. These three things effectively lowered the consumer's discretionary income available to purchase goods and services. This trend is also expected to continue into Q1, but will begin to abate as we anniversary the changes throughout the year. The third bucket, income, reflected around the lack of stimulus this year versus last year, and that caused a change in consumer behavior. When blessed with excess income last year, the consumer had less disposable income in the current quarter than last year. And so that materially affected sales. And so moving on to the fourth slide, historical performance. I want to remind everybody that the sales growth and related financial performance improvement of our business over the most recent several fiscal years has been material. While it's easy to get caught up in evaluating results on a quarter-by-quarter basis, we manage our business with a longer-term outlook in mind. While the last two fiscal years have been positively impacted by stimulus and changes to the competitive landscape, among other factors, we've also seen steadily improving underlying business factors, and that model has improved and has allowed us to take advantage of the opportunities afforded to us in the current circumstances. We believe those improvements were driven by investments in the business model, investments in the consumer experience, new customer retention, and an improving inventory position. As a reminder, at the beginning of our fiscal year, the one that we're in now, we believe that approximately 54% of our stores will have no competition within three miles that carry product from our key brands. If you look at the stores with one or less competitors within three miles, that figure increases to almost 70%. We believe this is a significant factor in our success going forward. As you can see from the tables on the slide, the rapid sales growth has driven significant diluted earnings per share expansion, in addition to generating a huge lift in operating income as a percent of net sales. As stated in this morning's press release, I believe that our improved omnichannel business model and compelling merchandise assortment creates differentiation in the marketplace and provides us with a competitive advantage in the eyes of the consumer and our vendor partners and puts us in a position to deliver strong sales and profitability results in the coming years. I'll now turn the call over to Jared. Thank you.

Thanks, Mike. Good morning. Please turn to slide five, merchandising. For the fourth quarter, we had a mixed performance across our merchandise categories. As expected, apparel and team sports were very strong, with apparel up mid-teens and team sports up in the low 20s. Momentum in our footwear categories slowed as deliveries were further impacted by the challenges in the supply chain. We estimate that comps were affected negatively by approximately 10% in the footwear category and 5% overall due to the headwinds from delays associated with launch products. When compared to fiscal 2020 fourth quarter, our results remain impressive. All genders and categories were up double digit when compared to fiscal 2020, with apparel, the most significant growth category, up more than 50%. While the fourth quarter was below our expectations, the results that we achieved for the year give us confidence that the strategic shift in our merchandising organization and our code ahead merchandising strategy are working and elevating how we serve consumers. In the fourth quarter, apparel business increased in the mid-teens. Further development of our apparel business across all genders has been and remains a priority for us. Key incremental investments in denim, premium fleece, jerseys, and littles performed above plan during the quarter. Our athletic brand performance was excellent during the quarter. Key trends included footwear connectivity, matching monocolor tops and bottoms, and premium fleece. Denim in both tops and bottoms was the driver of our fashion brand business. Our essential denim programs, as well as denim in our streetwear collections, performed exceptionally well. Jerseys and hats remain a hot trend and added significant upside during the quarter. Footwear business decreased mid-single digits in the fourth quarter and continues to be impacted more significantly by supply chain challenges than other categories. Order delays as a result of the supply chain affected basketball, lifestyle, and running negatively, although demand remains extremely high. Incremental investments in casual footwear has been and remains a priority, and this category more than doubled during the quarter. Specific to footwear and apparel, women's improved mid-single digits and kids improved in the low teens. Men's was down mid-single digits and is our most pressured area regarding inventory. As expected, inventory ended the fourth quarter up approximately 9% to last year. During the latter part of December and January, we saw a slowdown of deliveries impacting our inventory estimates by an additional 30 to 45 days. This was unexpected and had a meaningful impact to sales in January. I'm incredibly proud of the team's efforts to secure inventory to support our increased business. During fiscal 22, in the midst of all the reported supply chain challenges, our team was able to secure, deliver, and process an additional $185 million in receipts at cost over and above historical norms. We were able to accomplish this by improving our priority with our vendor partners, securing incremental product from our vendor partners in season as well as through booking periods, and increasing our processing capacity by more than 50% within our own supply chain. The additional slowdown of deliveries continues to pressure our ability to get to an optimal level of inventory. We're confident in our order book, but timing of deliveries remains incredibly fluid. Based on current estimations, we do expect inventory levels to continue to improve throughout the first half of the year, reaching levels closer to optimum levels in the back half of the year. I'll now turn the call over to Bob to discuss our financial results.