Hibbett Sports' fiscal Q3 earnings decrease 9% from a year ago to US$17.3M as sales increase 2.5% to US$208M, comparable-store sales rise 4.8%; company opens 16 stores in quarter, bringing store base to 904 in 31 states as of Nov. 2

BIRMINGHAM, Alabama , November 25, 2013 (press release) – 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 53rd 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 %
 
 
 

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