Sporting goods retailer Hibbett (NASDAQ:HIBB) reported solid financial and operational performance in its Q3 earnings call, buoyed by a strong back-to-school season and the launch of its Nike (NYSE:NKE) Connected Partnership. Despite a slight decrease in total net sales for the quarter, the company’s e-commerce sales saw an uptick. Hibbett also noted a decline in gross margin due to lower average product margin and higher store occupancy costs.

Key takeaways from the call include:

• Hibbett launched its Nike Connected Partnership, linking the loyalty programs of both companies.
• The company is on track to meet its goal of adding approximately 40 net new stores this year.
• E-commerce sales increased, representing 17% of total sales for the quarter.
• Hibbett reported $34.5 million in operating income and diluted earnings per share of $2.5 for the quarter.
• The company ended the quarter with $29.6 million in available cash and cash equivalents and $96.9 million in debt outstanding.

For the first nine months of fiscal 2024, Hibbett’s total net sales increased, but comparable sales decreased. The company generated $96.4 million in operating income and net income for the period was $72.3 million. Capital expenditures were primarily for store initiatives.

Hibbett also paid a quarterly dividend of $0.25 per eligible common share, totaling approximately $3.1 million. Year-to-date net sales for the first nine months of fiscal 2024 increased by 1% to $1.26 billion, with a 1.9% decrease in comparable sales compared to the same period last year.

The company expects an uncertain retail environment due to inflation, higher interest rates, and a heavier promotional environment for the holiday season. However, strong third-quarter results led to an increase in the diluted EPS range for the full year to $8 to $8.30. Total comparable sales are expected to decline in the low single-digit range, with e-commerce revenue expected to be flat to up low-single digits.

During the earnings call, the company discussed the performance of secondary brands and apparel inventory. Executives expressed optimism about the current inventory levels and the performance of the denim category. They also highlighted the growth in total active members in their loyalty program and increased average ticket sales. Despite market uncertainty and elevated inventory levels, the company expressed confidence in its plans and investments.