Hibbett Reports Third Quarter Fiscal 2013 Results

BIRMINGHAM, Ala.--(BUSINESS WIRE)-- Hibbett Sports, Inc. (NASDAQ/GS: HIBB):

  • Achieves 12th Consecutive Quarter of Comparable Store Sales Increase
  • Comparable Store Sales up 6.4% on Strong Back-to-School Sales
  • EPS Increases 20%
  • Raises Fiscal 2013 Guidance

Hibbett Sports, Inc. (NASDAQ/GS: HIBB), a sporting goods retailer, today announced results for the third quarter ended October 27, 2012.


Third Quarter Results

Net sales for the 13-week period ended October 27, 2012, increased 9.6% to $202.9 million compared with $185.2 million for the 13-week period ended October 29, 2011. Comparable store sales increased 6.4%.

Gross profit for the 13-week period ended October 27, 2012, increased 11.2% to $75.4 million from $67.8 million for the 13-week period ended October 29, 2011. As a percent to net sales, gross profit improved to 37.2% compared to 36.6% for the 13-week period ended October 29, 2011. The improvement as a percent of net sales was due to improved product margin and leveraging store occupancy costs.

Store operating, selling and administrative expenses improved to 20.7% of net sales for the 13-week period ended October 27, 2012, compared to 21.3% of net sales for the 13-week period ended October 29, 2011. This was primarily attributed to the leveraging of store level costs and decreased debit card transaction fees.

Net income for the 13-week period ended October 27, 2012, increased 18.8% to $19.0 million compared with $16.0 million for the 13-week period ended October 29, 2011. Earnings per diluted share increased 20.3% to $0.71 compared with $0.59 for the 13-week period ended October 29, 2011.

Fiscal Year to Date Results

Net sales for the 39-week period ended October 27, 2012, increased 10.9% to $601.3 million compared with $542.0 million for the 39-week period ended October 29, 2011. Comparable store sales increased 7.7%.

Gross profit for the 39-week period ended October 27, 2012, increased 13.5% to $220.4 million from $194.2 million for the 39-week period ended October 29, 2011. As a percent to net sales, gross profit improved to 36.7% for the 39-week period ended October 27, 2012, compared to 35.8% for the 39-week period ended October 29, 2011. The improvement as a percent of net sales was due to improved product margin and leveraging store occupancy costs.

Store operating, selling and administrative expenses improved to 20.9% of net sales for the 39-week period ended October 27, 2012, compared to 21.4% of net sales for the 39-week period ended October 29, 2011. This was primarily attributed to the leveraging of store level costs and decreased debit card transaction fees.

Net income for the 39-week period ended October 27, 2012, increased 23.1% to $53.2 million compared with $43.2 million for the 39-week period ended October 29, 2011. Earnings per diluted share increased 27.6% to $1.99 compared with $1.56 for the 39-week period ended October 29, 2011.

Jeff Rosenthal, President and Chief Executive Officer, stated, "The back-to-school season, particularly in August, was as strong as we had anticipated. The positive trends in apparel and footwear, along with our continued focus on local assortments and exceptional inventory control, resulted in significant margin expansion and another increase to our Fiscal 2013 guidance. We are well positioned to maintain this positive momentum during the upcoming holiday season."

For the quarter, Hibbett opened 13 new stores, expanded 4 high performing stores and closed 2 underperforming stores, bringing the store base to 848 in 26 states as of October 27, 2012.

Liquidity and Stock Repurchases

Hibbett ended the third quarter of Fiscal 2013 with $75.3 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 206,729 shares of common stock for a total expenditure of $11.8 million. On November 15, 2012, the Board of Directors of the Company authorized a new Stock Repurchase Program (Program) of $250.0 million expiring on January 29, 2016. Effective immediately, the new Program replaces the existing authorization which was due to expire on February 2, 2013. Under prior authorizations, the Company has purchased 11,900,356 shares of common stock to date at a cost of $316.6 million.

Fiscal 2013 Outlook

The Company increased its earnings guidance for Fiscal 2013 to a range of $2.66 to $2.71 per diluted share (which includes an expected contribution of $0.09 to $0.11 per diluted share from the 53rd week) and an increase in comparable store sales in the mid single digit range. For Fiscal 2013, the Company expects to open 57 to 60 new stores, expand approximately 17 high performing stores, and close up to 18 stores.

The Company also announced it would begin construction of its new 412,000-square-foot wholesaling and logistics facility in Alabama in early first quarter Fiscal 2014.

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on Friday, November 16, 2012, to discuss third quarter Fiscal 2013 results. The number to call for the live interactive teleconference is (212) 231-2934. A replay of the conference call will be available until November 23, 2012, by dialing (402) 977-9140 and entering the passcode, 21576995.

The Company will also provide an online Web simulcast and rebroadcast of its third quarter Fiscal 2013 conference call. The live broadcast of Hibbett's quarterly conference call will be available online at www.hibbett.com under Investor Relations, www.streetevents.com and www.earnings.com, on November 16, 2012, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and continue through November 23, 2012.

Hibbett Sports, Inc. operates sporting goods stores in small to mid-sized markets, predominately in the South, Mid-Atlantic and the lower 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 the 53 rd week, earnings per diluted share and comparable store sales for Fiscal 2013. 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 March 26, 2012, and our Quarterly Reports on Form 10-Q filed on June 1, 2012 and September 4, 2012. 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
October 27,   October 29, October 27,   October 29,
2012 2011 2012 2011
Net sales $ 202,934 $ 185,180 $ 601,293 $ 541,963

Cost of goods sold, distribution center and store occupancy costs

  127,494   117,361   380,900   347,714
Gross profit 75,440 67,819 220,393 194,249

Store operating, selling and administrative expenses

41,933 39,514 125,705 115,855
Depreciation and amortization   3,207   3,334   9,613   9,914
Operating income 30,300 24,971 85,075 68,480
Interest expense, net   39   51   127   168
Income before provision for income taxes 30,261 24,920 84,948 68,312
Provision for income taxes   11,296   8,961   31,725   25,076
Net income $ 18,965 $ 15,959 $ 53,223 $ 43,236
 
Net income per common share:
Basic earnings per share $ 0.73 $ 0.60 $ 2.03 $ 1.59
Diluted earnings per share $ 0.71 $ 0.59 $ 1.99 $ 1.56
 

Weighted average shares outstanding:

Basic   26,125   26,748   26,234   27,154
Diluted   26,613   27,266   26,738   27,681
 
 
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
 
    October 27,   January 28,
2012 2012

Assets

Cash and cash equivalents $ 75,288 $ 55,138
Inventories, net 207,283 195,071
Other current assets   18,160   18,564
Total current assets 300,731 268,773
Property and equipment, net 45,169 39,596
Other assets   6,418   5,327
Total assets $ 352,318 $ 313,696
 
Liabilities and Stockholders' Investment
Accounts payable $ 88,883 $ 73,735
Short-term capital leases 212 173
Accrued expenses   15,253   17,750
Total current liabilities 104,348 91,658
Non-current liabilities 18,677 18,288
Stockholders' investment   229,293   203,750

Total liabilities and stockholders' investment

$ 352,318 $ 313,696
 
 
Supplemental Information
(Unaudited)
 
    Thirteen Weeks Ended   Thirty-Nine Weeks Ended
October 27,   October 29, October 27,   October 29,
2012 2011 2012 2011

Sales Information

Total sales increase 9.6 % 10.6 % 10.9 % 10.2 %
Comparable store sales increase 6.4 % 7.0 % 7.7 % 6.6 %
 

Store Count Information

Beginning of period

837 802 832 798
New stores opened 13 16 27 32
Stores closed   (2 )     (3 )   (11 )     (15 )
End of period   848       815     848       815  
 
Stores expanded 4 5 10 10
 
Estimated square footage at end of period (in thousands) 4,860 4,669
 

Balance Sheet Information

Average inventory per store

$

244,437

$

241,967

 

Share Repurchase Program

Shares 206,729 698,880 700,132 1,671,832
Cost (in thousands) $ 11,822 $ 25,427 $ 38,843 $ 58,506
 



Hibbett Sports, Inc.
Scott J. Bowman, 205-942-4292
Senior Vice President &
Chief Financial Officer

KEYWORDS:   United States  North America  Alabama

INDUSTRY KEYWORDS:

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