Basis of Presentation and Critical Accounting Policies

6 Months Ended

Jul. 29, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Critical Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Hibbett, Inc. and its wholly-owned subsidiaries (including the condensed consolidated balance sheet as of January 28, 2023, which has been derived from audited financial statements) have been prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. References to “Hibbett,” “we,” “our,” “us,” and the “Company” refer to Hibbett, Inc. and its subsidiaries, as well as its predecessors.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023, filed on March 24, 2023 (the "2023 Annual Report"). The unaudited condensed consolidated financial statements have been prepared on a basis consistent in all material respects with the accounting policies described in the 2023 Annual Report and reflect all adjustments of a normal recurring nature that are, in management’s opinion, necessary for the fair presentation of the results of operations, financial position and cash flows for the periods presented.

Occasionally, certain reclassifications are made to conform previously reported data to the current presentation. Unless otherwise specifically noted, such reclassifications have no impact on total assets, total liabilities, net income, cash flows or stockholders’ investment in any of the periods presented.

Property and Equipment

Property and equipment are recorded at cost. Finance lease assets are shown as right-of-use ("ROU") assets and are excluded from property and equipment (see Note 3, Leases).

Property and equipment consist of the following (in thousands):


	July 29, 2023		January 28, 2023		July 30, 2022
Land	$	7,277	$	7,277	$	7,277
Buildings	22,589		22,529		22,271
Equipment	139,812		134,304		126,118
Furniture and fixtures	69,388		67,522		65,130
Leasehold improvements	185,525		170,773		154,712
Construction in progress	3,909		5,501		5,297
Total property and equipment	428,500		407,906		380,805
Less: accumulated depreciation and amortization	254,142		238,430		221,197
Total property and equipment, net	$	174,358	$	169,476	$	159,608

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, when control of the merchandise is transferred to our customer at delivery. Sales are recorded net of expected returns at the time the customer takes possession of the merchandise. Net sales exclude sales taxes because we are a pass-through conduit for collecting and remitting these taxes.

Gift Cards and Customer Orders: The net deferred revenue liability for gift cards and customer orders at July 29, 2023, January 28, 2023, and July 30, 2022 was $11.8 million, $9.8 million, and $11.0 million, respectively, recognized in accounts payable on our unaudited condensed consolidated balance sheets.

During the 13-weeks and 26-weeks ended July 29, 2023 and July 30, 2022, gift card deferred revenue realized from prior periods was immaterial.

Loyalty Program: We offer the Hibbett/City Gear Rewards program whereby upon registration and in accordance with the terms of the program, customers earn points on certain purchases. Points convert into rewards at defined thresholds. The short-term future performance obligation liability is estimated at each reporting period based on historical conversion and redemption patterns. The liability is included in other accrued expenses on our unaudited condensed consolidated balance sheets and was $4.1 million, $4.1 million, and $3.7 million at July 29, 2023, January 28, 2023, and July 30, 2022, respectively.

Revenues disaggregated by major product categories are as follows (in thousands):


	13-Weeks Ended				26-Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Footwear	$	256,828	$	260,924	$	577,362	$	524,577
Apparel	70,066		94,099		158,900		205,280
Equipment	47,983		37,782		94,112		87,000
Total	$	374,877	$	392,805	$	830,374	$	816,857

Indefinite-Lived Intangible Assets

The City Gear tradename is an indefinite-lived asset which is not amortized, but rather tested for impairment at least annually, or on an interim basis if events and circumstances have occurred that indicate that it is more likely than not that an asset is impaired. No impairment related to the tradename intangible was recognized during the 13-weeks and 26-weeks ended July 29, 2023 and July 30, 2022.