hibb-20230429

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 29, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________ to __________________________

COMMISSION FILE NUMBER: 000-20969

HIBBETT, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-8159608
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2700 Milan Court, Birmingham, Alabama 35211

(Address of principal executive offices, including zip code)

205-942-4292

(Registrant’s telephone number, including area code)

NONE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	HIBB	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Shares of common stock, par value $0.01 per share, outstanding as of May 31, 2023, were 12,746,513 shares.

HIBBETT, INC.

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Unaudited Condensed Consolidated Balance Sheets	2

	Unaudited Condensed Consolidated Statements of Operations	3

	Unaudited Condensed Consolidated Statements of Cash Flows	4

	Unaudited Condensed Consolidated Statements of Stockholders’ Investment	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19

Item 4.	Controls and Procedures.	19

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings.	20

Item 1A.	Risk Factors.	20

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	20

Item 6.	Exhibits.	21

	Signature	22

Index

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

HIBBETT, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share information)


ASSETS	April 29, 2023		January 28, 2023		April 30, 2022
Current assets:
Cash and cash equivalents	$	26,926	$	16,015	$	23,221
Receivables, net	12,582		12,850		13,877
Inventories, net	437,957		420,839		314,861
Other current assets	13,662		23,351		16,579
Total current assets	491,127		473,055		368,538

Property and equipment, net	175,285		169,476		153,993
Operating right-of-use assets	262,999		263,391		250,522
Finance right-of-use assets, net	1,913		2,279		2,348

Tradename intangible asset	23,500		23,500		23,500
Deferred income taxes, net	2,744		3,025		3,236
Other assets, net	7,777		4,434		3,477
Total assets	$	965,345	$	939,160	$	805,614

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Accounts payable	$	131,437	$	190,648	$	164,294
Operating lease obligations	73,142		72,544		65,054
Credit facility	103,577		36,264		20,415
Finance lease obligations	929		1,132		1,034
Accrued payroll expenses	7,707		11,361		9,730
Other accrued expenses	14,183		15,803		15,271
Total current liabilities	330,975		327,752		275,798
Operating lease obligations	228,645		229,388		219,296
Finance lease obligations	1,116		1,305		1,516
Unrecognized tax benefits	417		368		542
Other liabilities	5,177		4,116		2,356
Total liabilities	566,330		562,929		499,508

Stockholders' investment:

Common stock, 40,119,820, 39,916,593 and 39,779,841 shares issued, respectively	401		399		398
Paid-in capital	216,309		213,182		205,720
Retained earnings	1,170,180		1,137,481		1,058,383
Treasury stock, at cost; 27,373,307, 27,166,538 and 26,855,158 shares repurchased, respectively	(987,875)		(974,831)		(958,395)
Total stockholders' investment	399,015		376,231		306,106
Total liabilities and stockholders' investment	$	965,345	$	939,160	$	805,614

See notes to unaudited condensed consolidated financial statements.

Index

HIBBETT, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share information)


	13-Weeks Ended
	April 29, 2023				April 30, 2022
			% to Sales				% to Sales
Net sales	$	455,497			$	424,051
Cost of goods sold	301,877		66.3	%	267,218		63.0	%
Gross margin	153,620		33.7	%	156,833		37.0	%
Store operating, selling and administrative expenses	96,014		21.1	%	95,596		22.5	%

Depreciation and amortization	11,693		2.6	%	10,518		2.5	%
Operating income	45,913		10.1	%	50,719		12.0	%
Interest expense, net	1,327		0.3	%	72		—	%
Income before provision for income taxes	44,586		9.8	%	50,647		11.9	%
Provision for income taxes	8,711		1.9	%	11,300		2.7	%
Net income	$	35,875	7.9	%	$	39,347	9.3	%

Basic earnings per share	$	2.80			$	2.98
Diluted earnings per share	$	2.74			$	2.89

Weighted-average shares:
Basic	12,791				13,224
Diluted	13,111				13,612

Percentages may not foot due to rounding.

See notes to unaudited condensed consolidated financial statements.

Index

HIBBETT, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Cash Flows From Operating Activities:
Net income	$	35,875	$	39,347
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,693		10,518
Stock-based compensation	2,005		2,455
Impairment charges	199		—

Other non-cash adjustments	1,449		3,867
Changes in operating assets and liabilities:
Inventories, net	(17,119)		(93,642)
Receivables, net	7,277		(270)
Accounts payable	(62,361)		76,263

Other assets and liabilities	(5,815)		(9,716)
Net cash (used in) provided by operating activities	(26,797)		28,822

Cash Flows From Investing Activities:
Capital expenditures	(14,219)		(15,975)
Other, net	(12)		361
Net cash used in investing activities	(14,231)		(15,614)

Cash Flows From Financing Activities:
Proceeds under credit facilities	214,075		126,216
Repayments under credit facilities	(146,762)		(105,801)
Stock repurchases	(10,199)		(22,399)

Cash dividends paid to stockholders	(3,173)		(3,277)
Payments of finance lease obligations	(281)		(249)
Proceeds from options exercised and purchase of shares under the employee stock purchase plan	1,124		538
Other, net	(2,845)		(2,069)
Net cash provided by (used in) financing activities	51,939		(7,041)

Net increase in cash and cash equivalents	10,911		6,167
Cash and cash equivalents, beginning of period	16,015		17,054
Cash and cash equivalents, end of period	$	26,926	$	23,221

See notes to unaudited condensed consolidated financial statements.

Index

HIBBETT, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Stockholders' Investment

(in thousands)


13-Weeks Ended April 29, 2023
	Common Stock							Treasury Stock
	Shares	Amount		Paid-In Capital		Retained Earnings		Shares	Amount		Total Stockholders' Investment
Balance - January 28, 2023	39,917	$	399	$	213,182	$	1,137,481	27,167	$	(974,831)	$	376,231
Net income	—	—		—		35,875		—	—		35,875
Issuance of shares through the Company's equity plans	203	2		1,122		—		—	—		1,124
Purchase of shares under the stock repurchase program	—	—		—		—		160	(10,199)		(10,199)
Settlement of net share equity awards	—	—		—		—		47	(2,833)		(2,833)
Excise tax on stock repurchases	—	—		—		—		—	(12)		(12)
Cash dividends declared, $0.25 per common share	—	—		—		(3,176)		—	—		(3,176)
Stock-based compensation	—	—		2,005		—		—	—		2,005
Balance - April 29, 2023	40,120	$	401	$	216,309	$	1,170,180	27,373	$	(987,875)	$	399,015


13-Weeks Ended April 30, 2022
	Common Stock							Treasury Stock
	Shares	Amount		Paid-In Capital		Retained Earnings		Shares	Amount		Total Stockholders' Investment
Balance - January 29, 2022	39,611	$	396	$	202,729	$	1,022,317	26,318	$	(933,927)	$	291,515
Net income	—	—		—		39,347		—	—		39,347
Issuance of shares through the Company's equity plans	169	2		536		—		—	—		538

Purchase of shares under the stock repurchase program	—	—		—		—		491	(22,399)		(22,399)
Settlement of net share equity awards	—	—		—		—		46	(2,069)		(2,069)
Cash dividends declared, $0.25 per common share	—	—		—		(3,280)		—	—		(3,280)
Stock-based compensation	—	—		2,455		—		—	—		2,455
Balance - April 30, 2022	39,780	$	398	$	205,720	$	1,058,383	26,855	$	(958,395)	$	306,106

Columns may not foot due to rounding.

See notes to unaudited condensed consolidated financial statements.

Index

HIBBETT, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

1. 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. 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):


	April 29, 2023		January 28, 2023		April 30, 2022
Land	$	7,277	$	7,277	$	7,277
Buildings	22,552		22,529		22,271
Equipment	140,265		134,304		122,927
Furniture and fixtures	68,836		67,522		63,081
Leasehold improvements	179,980		170,773		144,515
Construction in progress	4,151		5,501		6,449
Total property and equipment	423,061		407,906		366,520
Less: accumulated depreciation and amortization	247,776		238,430		212,527
Total property and equipment, net	$	175,285	$	169,476	$	153,993

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 which is 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 April 29, 2023, January 28, 2023, and April 30, 2022 was $10.4 million, $9.8 million, and $10.8 million, respectively, recognized in accounts payable on our unaudited condensed consolidated balance sheets.

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

Index

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 $4.2 million, $4.1 million, and $3.8 million at April 29, 2023, January 28, 2023, and April 30, 2022, respectively.

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


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Footwear	$	320,534	$	263,652
Apparel	88,833		111,182
Equipment	46,130		49,217
Total	$	455,497	$	424,051

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 ended April 29, 2023 and April 30, 2022.

2. Recent Accounting Pronouncements

We continuously monitor and review all current accounting pronouncements and standards from the Financial Accounting Standards Board of U.S. GAAP for applicability to our operations and financial reporting. As of April 29, 2023, there were no new pronouncements or interpretations that had or were expected to have a significant impact on our financial reporting.

3. Leases

ROU lease assets are periodically reviewed for impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment - Overall, to determine when to evaluate assets and asset groups, including ROU assets, for impairment and to calculate any impairment loss to be recognized. Asset group impairment charges in the 13-weeks ended April 29, 2023 and April 30, 2022, were immaterial.

Lease costs are as follows (in thousands):


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Operating lease cost	$	20,038	$	18,259
Finance lease cost:
Amortization of assets	255		236
Interest on lease liabilities	27		28
Variable lease cost	5,068		4,459
	$	25,388	$	22,982

Finance ROU assets on the unaudited condensed consolidated balance sheets at April 29, 2023, January 28, 2023, and April 30, 2022 are shown net of accumulated amortization of $3.6 million, $3.3 million, and $2.8 million, respectively.

Index

The following table provides ROU assets obtained in exchange for lease obligations (in thousands):


	13-Weeks Ended
	April 29, 2023		April 30, 2022




ROU assets obtained in exchange for lease obligations, net:
Operating leases	$	18,433	$	23,534
Finance leases	$	—	$	397

As of April 29, 2023, we have entered into approximately $7.9 million of operating lease obligations related to future store locations that have not yet commenced.

4. Debt

On July 9, 2021, we executed an unsecured Credit Agreement (the "2021 Credit Facility") between the Company and its subsidiaries and Regions Bank which provided for an unsecured line of credit of up to $100 million. The 2021 Credit Facility was amended on April 7, 2022, to increase the unsecured line of credit to $125 million and replace the original benchmark interest rate of one-month LIBOR plus 1.0% to 1.8% with the Bloomberg Short-Term Bank Yield Index Rate (the “BSBY Rate”) plus 1.0% to 1.8% (depending on specified leverage levels).

On February 28, 2023, we entered into a new unsecured Credit Agreement (the "2023 Credit Facility") with Regions Bank, as administrative agent for the lenders, swingline leader and issuing bank. The 2023 Credit Facility matures on February 28, 2028, and restated and replaced the 2021 Credit Facility and amended certain of its terms and conditions, including the following:

•increases the aggregate principal amount of commitments by $35 million, from $125 million to $160 million, which includes a $25 million sublimit for the issuance of standby letters of credit and $25 million sublimit for swingline loans;

•permits us to increase the aggregate principal amount of commitments by up to an additional $50 million, subject certain terms and conditions;

•provides that borrowings bear interest at either (i) an annual rate equal to the BSBY Rate, plus an applicable margin ranging from 1.0% to 2.0% depending on specified leverage levels (the "Applicable Margin"), or (ii) at the Company's option, (x) a base rate as set forth in the 2023 Credit Facility plus the Applicable Margin or (y) the BSBY Rate plus the Applicable Margin; and

•adjusts the annual commitment fee to an amount, dependent on the amount of debt outstanding, between 12.5 and 25 basis points of the unused portion of the 2023 Credit Facility, from an amount between 15 and 20 basis points of the unused portion of the 2021 Credit Facility.

Except as described above, the 2023 Credit Facility did not make any material changes to the principal terms of the 2021 Credit Facility, including with respect to financial covenants. As a result, we are subject to certain financial covenants which include:

•Advance limitation of 55% of the net book value of the Company's inventory;

•A Consolidated Lease-Adjusted Leverage Ratio comparing lease-adjusted funded debt (funded debt plus all lease

liabilities) to EBITDAR (as defined in the 2021 Credit Facility) with a maximum of 3.5x; and

•A Consolidated Fixed Coverage Charge Ratio comparing EBITDAR to fixed charges and certain current liabilities (as defined in the 2021 Credit Facility) with a minimum of 1.2x.

As of April 29, 2023, we were in compliance with these covenants.

Activity against our credit facilities during the periods indicated are as follows (dollars in millions):


	April 29, 2023	January 28, 2023	April 30, 2022
	13-Weeks Ended		52-Weeks Ended	13-Weeks Ended
Number of days borrowings incurred	91		307	54
Average borrowing	$96.7		$40.8	$7.7
Maximum borrowing	$124.9		$110.5	$28.7
Average interest rate	5.81%		3.21%	1.53%

Index

At April 29, 2023, we had a balance of $103.6 million and a total of $56.4 million available to us under the 2023 Credit Facility.

5. Stock-Based Compensation

The stock-based compensation costs that have been charged against income were as follows (in thousands):


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Stock-based compensation expense by type:
Stock options	$	220	$	155
Restricted stock units	1,653		2,125
Employee stock purchases	106		158
Director deferred compensation	26		17
Total stock-based compensation expense	2,005		2,455
Income tax benefit recognized	454		557
Stock-based compensation expense, net of income tax	$	1,551	$	1,898

Expense for restricted stock units is shown net of forfeitures which were immaterial for the 13-weeks ended April 29, 2023 and April 30, 2022.

We granted the following equity awards:


	13-Weeks Ended
	April 29, 2023	April 30, 2022
Stock options	8,188	7,212
Restricted stock unit awards	78,515	107,848
Performance-based restricted stock unit awards	39,567	49,978
Deferred stock units	450	405

At April 29, 2023, the total compensation cost not yet recognized related to unvested restricted stock unit awards was $11.5 million and the weighted-average period over which such awards are expected to be recognized was 1.5 years. There were no unrecognized compensation costs related to unvested stock options at April 29, 2023.

Details of stock options granted, exercise price per share and the weighted-average grant date fair value were as follows:


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Total stock options granted	8,188		7,212
Exercise price	$	58.38	$	46.22
Fair value of stock options	$	26.87	$	21.46

Under the Hibbett, Inc. Amended and Restated Non-Employee Director Equity Plan, 10,469 shares of our common stock were awarded during the 13-weeks ended April 29, 2023 and 6,388 shares of our common stock were awarded during the 13-weeks ended April 30, 2022.

The number of shares purchased, the average price per share and the weighted-average grant date fair value of shares purchased through our employee stock purchase plan were as follows:

Index


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Shares purchased	7,026		14,273
Average price per share	$	50.13	$	61.14
Weighted-average fair value at grant date	$	17.60	$	18.03

6. Earnings Per Share

The computation of basic earnings per share ("EPS") is based on the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is based on the weighted-average number of shares outstanding plus the incremental shares that would be outstanding assuming exercise of dilutive stock options and issuance of restricted stock. The number of incremental shares is calculated by applying the treasury stock method. The following table sets forth the weighted-average number of common shares outstanding (in thousands):


	13-Weeks Ended
	April 29, 2023	April 30, 2022
Weighted-average shares used in basic computations	12,791	13,224
Dilutive equity awards	320	388
Weighted-average shares used in diluted computations	13,111	13,612

For the 13-weeks ended April 29, 2023, we excluded 88,001 options from the computations of diluted weighted-average common shares or common stock equivalents outstanding because of their anti-dilutive effect. For the 13-weeks ended April 30, 2022, 64,888 options were excluded from the computation of diluted weighted-average common shares or common share equivalents outstanding because of their anti-dilutive effect.

For the 13-weeks ended April 29, 2023 and April 30, 2022, we also excluded 117,037 and 94,962 unvested stock awards granted to certain employees from the computations of diluted weighted-average common shares and common share equivalents outstanding because they are subject to certain performance-based annual vesting conditions which had not been achieved by April 29, 2023 and April 30, 2022, respectively. Assuming the performance criteria had been achieved as of April 29, 2023, the incremental dilutive impact would have been 49,203 shares. There would have been no dilutive impact on shares assuming the performance criteria had been achieved as of April 30, 2022.

7. Stock Repurchase Program

Our Board of Directors (the "Board") has authorized a stock repurchase program (the "Repurchase Program") since August 2004; replacing, amending, renewing and extending the Repurchase Program periodically. In the most recent amendment in May 2021, the Board authorized an expansion of the Repurchase Program by $500.0 million to a total of $800.0 million to repurchase our common stock through February 1, 2025.

The Repurchase Program authorizes repurchases of our common stock in open market or negotiated transactions, with the amount and timing of repurchases dependent on market conditions and at the discretion of our management. In addition to the Repurchase Program, we also acquire shares of our common stock from holders of restricted stock unit awards to satisfy withholding tax requirements due at vesting. Neither excise taxes nor the cost of shares acquired from holders of restricted stock unit awards to satisfy tax withholding requirements reduces the authorized amount of repurchases under the Repurchase Program.

The number of shares repurchased under the Repurchase Program and acquired from holders of restricted stock unit awards to satisfy tax withholding requirements were as follows (dollars in thousands):

Index


	13-Weeks Ended
	April 29, 2023		April 30, 2022
Common stock repurchased under the Repurchase Program	159,592		491,218
Aggregate cost of repurchases under the Repurchase Program	$	10,199	$	22,399
Shares acquired from holders of restricted stock unit awards to satisfy tax withholding requirements	47,177		45,993
Tax withholding requirement from holders of restricted stock unit awards	$	2,833	$	2,069
Excise tax on stock repurchases	$	12	$	—

As of April 29, 2023, we had approximately $319.9 million remaining under the Repurchase Program for stock repurchases.

Note 8. Dividends

In June 2021, the Board instituted a recurring quarterly cash dividend. Since inception, our quarterly dividend has been $0.25 per share.

Cash dividends paid were as follows:


	13-Weeks Ended
	April 29, 2023	April 30, 2022

Cash dividends paid (in millions)	$3.2	$3.3
Total paid per share during period	$0.25	$0.25

Subsequently, on May 23, 2023, the Board declared a cash dividend of $0.25 per common share, payable on June 20, 2023, to stockholders of record at the close of business on June 8, 2023. The estimated aggregate payment is expected to be approximately $3.2 million.

9. Commitments and Contingencies

Legal Proceedings and Contingencies.

From time to time, the Company is a party to various legal matters in the ordinary course of its business, including actions by employees, consumers, suppliers, government agencies or others. The Company has recorded accruals with respect to these matters, where appropriate, which are reflected in the Company's unaudited condensed consolidated financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made.

The Company believes that its pending legal matters, both individually and in the aggregate, will be resolved without a material adverse effect on the Company's consolidated financial statements as a whole. However, litigation and other legal matters involve an element of uncertainty. Adverse decisions and settlements, including any required changes to the Company's business, or other developments in such matters could affect our operating results in future periods or result in a liability or other amounts material to the Company's annual consolidated financial statements. No material amounts were accrued at April 29, 2023, January 28, 2023, or April 30, 2022 pertaining to legal proceedings or other contingencies.

10. Income Taxes

Our effective tax rate is based on expected annual income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which we operate. For interim financial reporting, we estimate the annual effective tax rate based on expected taxable income or loss for the full year and record a quarterly income tax provision (benefit) in accordance with the anticipated annual effective rate and adjust for discrete items. We update the estimates of the taxable income or loss throughout the year as new information becomes available, including year-to-date financial results. This process often results in a change to our expected effective tax rate for the year. When this occurs, we adjust the income tax provision (benefit) during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected annual effective tax rate.

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We apply the provisions of ASC Subtopic 740-10 in accounting for uncertainty in income taxes. We recognize a tax benefit associated with an uncertain tax position when, in our judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority.

At April 29, 2023, January 28, 2023, and April 30, 2022, the liability associated with unrecognized tax benefits was immaterial. We file income tax returns in U.S. federal and various state jurisdictions. Generally, we are not subject to changes in income taxes by the U.S. federal taxing jurisdiction for years prior to Fiscal 2020 or by most state taxing jurisdictions for years prior to Fiscal 2019.

11. Related-Party Transactions

Preferred Growth Properties, LLC ("PGP")

The Company leases one store under a lease arrangement with PGP, a wholly owned subsidiary of Books-A-Million, Inc. ("BAMM"). One of our Directors is an executive officer of BAMM. Minimum annual lease payments are $0.1 million, if not in co-tenancy, and the lease termination date is February 28, 2027. Minimum lease payments remaining under the lease at April 29, 2023 and April 30, 2022 were immaterial.

T.I.G. Management, LLC ("TIG")

TIG performs certain new store and store remodel construction for the Company and is owned by a close relative of the Company's President and CEO. For the 13-weeks ended April 29, 2023 and April 30, 2022, payments to TIG for its services were $2.4 million and $2.9 million, respectively. The amount outstanding to TIG, included in accounts payable on our unaudited condensed consolidated balance sheets at April 29, 2023, January 28, 2023, and April 30, 2022, was immaterial.

Retail Security Gates, LLC ("RSG")

RSG provides specially manufactured store front security gates used in certain of our store locations and is 50% owned by a close relative of the Company's President and CEO. For the 13-weeks ended April 29, 2023 and April 30, 2022, payments to RSG were $0.2 million and $0.3 million, respectively. The amount outstanding to RSG, included in accounts payable on our unaudited condensed consolidated balance sheets at April 29, 2023, January 28, 2023 and April 30, 2022, was immaterial.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements

This document contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. They include statements preceded by, followed by or including words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “forecast,” “guidance,” “outlook,” “estimate” “will,” “may,” “could,” “possible,” “potential,” or other similar words, phrases or expressions. For example, our forward-looking statements include statements regarding:

•our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands;

•our cash needs, including our ability to fund our future capital expenditures, working capital requirements, recurring quarterly dividends and repurchases of Company common stock under our Repurchase Program;

•our relationships with vendors, including their ability to provide us with sufficient quantities of in-demand product, and the loss of key vendor support;

•the possible effects of inflation, market decline and other economic changes, such as increasing interest rates, on our costs and profitability;

•our ability to retain key personnel and other employees at Hibbett and City Gear due to current labor challenges, wage inflation or otherwise;

•our anticipated net sales, comparable store net sales changes, net sales growth, gross margins, expenses and earnings;

•our business strategy, omni-channel platform, logistics structure, target market presence and the expected impact of such factors on our net sales growth;

•our store growth, including our plans to add, expand, relocate or close stores, our markets' ability to support such growth, expected changes in total square footage, our ability to secure suitable locations for new stores and the suitability of our wholesale and logistics facility;

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•our expectations regarding the growth of our online business and the role of technology in supporting such growth;

•the future reliability of, and cost associated with, disruptions in the global supply chain, including increased freight, fuel and other transportation costs, and the potential impacts on our domestic and international sources of product, including the actual and potential effect of tariffs on international goods imposed by the United States and other potential impediments to imports;

•the cost of regulatory compliance, including the costs and possible outcomes of pending legal actions and other contingencies and new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change;

•our analysis of our risk factors and their possible effect on financial results;

•our seasonal sales patterns, expectations and assumptions concerning customer buying behavior;

•our ability to attract and retain new customers;

•our expectations regarding competition;

•our estimates and assumptions as they relate to preferable tax and financial accounting methods, accruals, inventory valuations, long-lived assets, carrying amount and liquidity of financial instruments, fair value of options and other stock-based compensation, economic and useful lives of depreciable assets and leases, income tax liabilities, deferred taxes and uncertain tax positions;

•our assessment of the materiality and impact on our business of adopting recent accounting pronouncements issued by the Financial Accounting Standards Board and rules issued by the U.S. Securities and Exchange Commission (the "SEC";

•the possible effects of uncertainty within the capital markets, on the commercial credit environment and on levels of consumer confidence;

•our analyses of trends as related to marketing, sales and earnings performance;

•our ability to receive favorable brand name merchandise and pricing from key vendors;

•the impact of technology on our operations and business, including cyberattacks, cyber liability or potential liability for breaches of our privacy or information security systems; and

SEC Form 10-Q filed by Hibbett Inc.