Hibbett Sports's Omni-Channel Initiative Is Working Just Fine
The "Amazon Effect" has forced all retailers to step up their “omnichannel” game or face extinction. The ominichannel phenomenon is the ability to compete through brick and mortar and online by redesigning distribution networks and streamline supply chain operations to best serve customers on and offline.
So when Ron Blahnik, Chief Information Officer of Hibbett Sports arrived in 2016 from Home Deport, where was the Sr. Director IT Operations & Shared Services, he know he had to convert the 75 year old brick and mortar retailer into an omnichannel retailer.
Hibbett Sports, Inc., together with its subsidiaries, operates athletic specialty stores. Its stores offer a range of merchandise, including athletic footwear, athletic and fashion apparel, sports equipment, and related accessories.
I never heard of Hibbett Sports until early 2019. While other retailers were struggling with their transformation online, Hibbett was thriving. In early 2019, Hibbett Sports reported fourth quarter earnings which handsomely beat estimates. On the news the stock rose more than 20%. Jeff Rosenthal, president and CEO said their omni-channel initiative continues to deliver strong results, with online sales increasing 60% to 10.6% of total sales in the quarter.
Hibbett’s new, transactional e-commerce website provides customers with a robust, user-friendly experience and features an expansive assortment of footwear, apparel, and equipment items. The site is fully integrated with company stores, including visibility of in-store inventory, the ability to fulfill online orders from stores, and the capability to return online purchases in stores.
Fast forward one year and Hibbett’s online transformation continues to become a critical component to their operations. In March the company tried to keep this physical locations open as long as possible to service their customers, until states went into lockdowns and shelter in place mandates. That’s when the company had to rely on their digital platform emphasizing fulfillment from the distribution centers and the stores, including curbside pickup.
Hibbett Sports Inc. posted stronger-than-expected adjusted profit and sales for the first quarter as a steep rise in e-commerce sales helped offset the effect of closed stores during the coronavirus pandemic. The Birmingham, Ala.-based sports retailer said it had a net loss $15.3 million, or 92 cents a share, in the quarter, after income of $27.9 million, or $1.50 a share, in the year-earlier period.
E-commerce sales rose 110.5% and accounted for 22.3% of total sales. "The decline in overall sales was mainly due to the large number of stores that were closed entirely or limited to fulfill e-commerce orders and curbside pick-up which began in March," the company said in a statement.
The company’s digital traffic jumped more than 80% and 40% of online sales in the second half of the quarter were due to new customers.
Hibbett Sports is a great example of a company that saw the titanic shift in the retail space, adjusted and executed on a plan to not hit the iceberg and sink. Regarding the stock price, price is in the middle, so don't fiddle with it...wait until price approaches $10 or $30 before decide on a trade set-up.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
