Hibbett Reports Third Quarter Fiscal 2014 Results

Hibbett Sports, Inc. (NASDAQ/GS: HIBB):
  • Comparable Store Sales Increase 4.8%
  • Square Footage Increases 7.3%
  • EPS Impacted By Shift in Fiscal Calendar

Hibbett Sports, Inc. (NASDAQ/GS: HIBB), a sporting goods retailer, today announced results for the third quarter ended November 2, 2013.

Third Quarter Results

Net sales for the 13-week period ended November 2, 2013 increased 2.5% to $208.0 million compared with $202.9 million for the 13-week period ended October 27, 2012. Comparable store sales increased 4.8% on a calendar basis (comparable 13-week period). The 53rd week last year resulted in a calendar shift and as a result, revenue was approximately $14 million (7.1%) lower in the third quarter compared to the reported period last year.

Gross profit was 36.8% of net sales for the 13-week period ended November 2, 2013, compared with 37.2% for the 13-week period ended October 27, 2012.

Store operating, selling and administrative expenses were 21.9% of net sales for the 13-week period ended November 2, 2013, compared with 20.7% of net sales for the 13-week period ended October 27, 2012.

Net income for the 13-week period ended November 2, 2013 decreased 9.0% to $17.3 million compared with $19.0 million for the 13-week period ended October 27, 2012. Earnings per diluted share decreased 7.0% to $0.66 for the 13-week period ended November 2, 2013, compared with $0.71 for the 13-week period ended October 27, 2012. The week shift associated with the fiscal calendar resulted in an approximate $0.11 reduction in earnings per diluted share for the period ended November 2, 2013.

Fiscal Year to Date Results

Net sales for the 39-week period ended November 2, 2013 increased 5.5% to $634.2 million compared with $601.3 million for the 39-week period ended October 27, 2012. Comparable store sales increased 1.8% on a calendar basis (comparable 39-week period).

Gross profit was 36.5% of net sales for the 39-week period ended November 2, 2013, compared with 36.7% for the 39-week period ended October 27, 2012.

Store operating, selling and administrative expenses were 21.2% of net sales for the 39-week period ended November 2, 2013, compared with 20.9% of net sales for the 39-week period ended October 27, 2012.

Net income for the 39-week period ended November 2, 2013 was $54.0 million compared with $53.2 million for the 39-week period ended October 27, 2012. Earnings per diluted share increased 3.0% to $2.05 for the 39-week period ended November 2, 2013, compared with $1.99 for the 39-week period ended October 27, 2012.

Jeff Rosenthal, President and Chief Executive Officer, stated, “We delivered solid comparable store sales in the quarter driven by a strong Back to School led by improved performance in footwear, apparel, and accessories. Demand for our fall assortment has been positive as well, and we are well positioned going into the holiday season. We continue to be encouraged by the pace and performance of new store openings, and feel confident that our investments in the business will provide a solid foundation for future success.”

For the quarter, Hibbett opened 16 new stores, expanded 4 high performing stores and closed 4 underperforming stores, bringing the store base to 904 in 31 states as of November 2, 2013. For Fiscal 2014, the Company expects to open 72 to 75 new stores, expand approximately 15 high performing stores and close 17 to 20 stores.

Liquidity and Stock Repurchases

Hibbett ended the third quarter of Fiscal 2014 with $69.9 million of available cash and cash equivalents on the consolidated balance sheet, no bank debt outstanding and full availability under its $80.0 million unsecured credit facilities.

During the third quarter, the Company repurchased 134,406 shares of common stock for a total expenditure of $7.1 million. Approximately $230.9 million of the total authorization remained for future stock repurchases as of November 2, 2013.

Fiscal 2014 Outlook

The Company narrowed its guidance for the 52 weeks ending February 1, 2014, to earnings per diluted share in the range of $2.68 to $2.77, and an increase in comparable store sales (on a calendar basis) in the low single-digit range. This compares to previous guidance of earnings per diluted share in the range of $2.65 to $2.77, and an increase in comparable store sales (on a calendar basis) in the low single-digit range. Please note that Fiscal 2013 had an approximate $0.07 benefit in earnings per diluted share due to the 53 rd week.

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on Friday, November 22, 2013, to discuss third quarter Fiscal 2014 results. The number to call for the live interactive teleconference is (212) 231-2921. A replay of the conference call will be available until November 29, 2013, by dialing (402) 977-9140 and entering the passcode, 21646060.

The Company will also provide an online Web simulcast and rebroadcast of its third quarter Fiscal 2014 conference call. The live broadcast of Hibbett’s quarterly conference call will be available online at www.hibbett.com under Investor Relations, or www.streetevents.com, on November 22, 2013, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and be available for replay for one year.

Hibbett Sports, Inc. operates sporting goods stores in small to mid-sized markets, predominately in the South, Southwest, Mid-Atlantic and Midwest regions of the United States. The Company’s primary store format is Hibbett Sports, a 5,000-square-foot store located in strip centers and enclosed malls.

A WARNING ABOUT FORWARD LOOKING STATEMENTS: Certain matters discussed in this press release are “forward looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. Forward looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, guidance, outlook, or estimate. For example, our forward looking statements include statements regarding store opening, expansion and closing plans, liquidity, sales trends, margin trends, the effects of calendar shifts, earnings per diluted share and comparable store sales. Such statements are subject to risks and uncertainties that could cause actual results to differ materially, including economic conditions, industry trends, merchandise trends, vendor relationships, customer demand, and competition. For a discussion of these factors, as well as others which could affect our business, you should carefully review our Annual Report and other reports filed from time to time with the Securities and Exchange Commission, including the “Risk Factors,” “Business” and “MD&A” sections in our Annual Report on Form 10-K filed on April 1, 2013 and in our Quarterly Reports on Form 10-Q filed on June 10, 2013 and September 9, 2013. In light of these risks and uncertainties, the future events, developments or results described by our forward looking statements in this document could turn out to be materially and adversely different from those we discuss or imply. We are not obligated to release publicly any revisions to any forward looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.
 
 
 
 
 
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
       
 
Thirteen Weeks Ended Thirty-Nine Weeks Ended

November 2,

2013

October 27,

2012

November 2,

2013

October 27,

2012
Net sales $ 207,971 $ 202,934 $ 634,198 $ 601,293
Cost of goods sold, distribution center and store occupancy costs   131,483   127,494   402,907   380,900
Gross profit 76,488 75,440 231,291 220,393
Store operating, selling and administrative expenses 45,496 41,933 134,251 125,705
Depreciation and amortization   3,549   3,207   10,193   9,613
Operating income 27,443 30,300 86,847 85,075
Interest expense, net   55   39   142   127
Income before provision for income taxes 27,388 30,261 86,705 84,948
Provision for income taxes   10,138   11,296   32,700   31,725
Net income $ 17,250 $ 18,965 $ 54,005 $ 53,223
 
Net income per common share:
Basic earnings per share $ 0.67 $ 0.73 $ 2.09 $ 2.03
Diluted earnings per share $ 0.66 $ 0.71 $ 2.05 $ 1.99
 
Weighted average shares outstanding:
Basic   25,823   26,125   25,893   26,234
Diluted   26,282   26,613   26,309   26,738
 
 
 
 
 
 
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
 
 

November 2,

2013
 

February 2,

2013
Assets
Cash and cash equivalents $ 69,937 $ 76,911
Accounts receivable, net 6,785 5,954
Inventories, net 230,172 221,378
Prepaid expenses and other   21,734   17,371
Total current assets 328,628 321,614
Property and equipment, net 81,169 49,076
Other assets   6,430   6,641
Total assets $ 416,227 $ 377,331
 
Liabilities and Stockholders' Investment
Accounts payable $ 93,164 $ 102,021
Short-term capital leases 682 714
Accrued expenses   18,351   15,980
Total current liabilities 112,197 118,715
Non-current liabilities 18,735 19,489
Stockholders' investment   285,295   239,127
Total liabilities and stockholders' investment $ 416,227 $ 377,331
 
 
 
 
 
 
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Supplemental Information
(Unaudited)
       
 
Thirteen Weeks Ended Thirty-Nine Weeks Ended

November 2,

2013

October 27,

2012

November 2,

2013

October 27,

2012

Sales Information
Net sales increase 2.5 % 9.6 % 5.5 % 10.9 %
Comparable store sales increase

4.8

%1
6.4 %2 1.8 %1 7.7 %2
 

Store Count Information
Beginning of period 892 837 873 832
New stores opened 16 13 42 27
Stores closed   (4 )   (2 )   (11 )   (11 )
End of period   904     848     904     848  
 
Stores expanded 4 4 11 10
Estimated square footage at end of period (in thousands) 5,216 4,860
 

Balance Sheet Information
Average inventory per store $ 254,615 $ 244,437
 

Share Repurchase Program
Shares 134,406 206,729 344,197 700,132
Cost (in thousands) $ 7,142 $ 11,822 $ 18,771 $ 38,843
 
1) Represents the increase in comparable store sales for the period ended November 3, 2012 to the period ended November 2, 2013.
2) As originally reported for the period ended October 27, 2012.
 
 
 
 
 
 
Due to the 53rd week in Fiscal 2013, each quarter in Fiscal 2014 starts one week later than the same quarter in Fiscal 2013. The chart below presents comparable store sales for Fiscal 2013 as originally reported and as adjusted to represent the same 13-week period as the Fiscal 2014 quarters.
         
Fiscal 2013

First

Quarter
 

Second

Quarter
 

Third

Quarter
 

Fourth

Quarter
 

Full

Year
Comparable store sales increase (originally reported) 11.1 % 4.8 % 6.4 % 4.9 % 6.9 %
Comparable store sales increase (adjusted for week shift) 8.6 %   12.5 %   -0.7 %   4.4 %   6.0 %
Impact of week shift -2.5 % 7.7 % -7.1 % -0.5 % -0.9 %
 
 
 

Copyright Business Wire 2010

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