Hibbet Sports Reports February Weather Trimmed Q1 Sales Growth

28 May Hibbet Sports Reports February Weather Trimmed Q1 Sales Growth

Hibbett Sports Inc. reported net sales increased 3.0 percent to $269.8 million for the fiscal first quarter ended May 2, or just shy of Wall Street consensus estimates of $274.1 million. The retailer, which operates 1,001 sporting goods stores primarily out of malls and strip centers in small and  mid-sized towns in the South, Midwest and Mid-Atlantic states, said comparable store sales decreased 0.9 percent due primarily to unfavorable weather in February.

“We experienced early headwinds in the quarter, with February posting a negative high-single-digit comp due to impacts from weather-related closures, port delays and a shift in the timing of tax refunds,” said the Hibbett Sports President and Chief Executive Officer Jeff Rosenthal. “We were pleased with our performance in March and April, and we have seen this trend improve in May.”

Gross profit was 37.0 percent of net sales for the 13-week period, compared with 37.5 percent for the 13-week period ended May 3, 2014. The decline was mainly due to markdowns taken to sell through merchandise related to slow sales in February due to store closures. Store occupancy costs also increased as a percentage of net sales due to lower-than-anticipated comparable store sales.

Store operating, selling and administrative expenses were 19.2 percent of net sales for the 13-week period, up from 18.7 percent of net sales in the year earlier period. These ratio climbed due to lower-than-anticipated comparable store sales.

Net income slipped to $27.4 million, compared with $28.4 million, while earnings per diluted share came in flat at $1.09.
Hibbett opened 15 new stores during the most recent quarter, expanded three high performing stores and closed two underperforming stores, bringing the store base to 1,001 in 32 states as of May 2. The company also opened its first store in New Jersey in the quarter.

Liquidity and Stock Repurchases
Hibbett ended the first quarter of Fiscal 2016 with $119.1 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 first quarter, the Company repurchased 194,764 shares of common stock for a total expenditure of $9.5 million. Approximately $166.0 million of the total authorization remained for future stock repurchases as of May 2, 2015.

Fiscal 2016 Outlook
The Company is revising its guidance for the 52 weeks ending January 30, 2016, to earnings per diluted share in the range of $2.95 to $3.04, with comparable store sales in the low single-digit range, and a flat to slightly negative product gross margin rate compared to Fiscal 2015. This compares with previous guidance of earnings per diluted share in the range of $2.95 to $3.09, with comparable store sales in the low-to-mid single digit range, and a slightly positive product gross margin rate compared to Fiscal 2015.

Hibbett Sports 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.