HIBB
$19.70
Hibbett Sports
($.60)
(2.96%)
Earnings Details
1st Quarter April 2017
Thursday, May 18, 2017 6:30:01 AM
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Summary

Hibbett Sports Reports In-line

Hibbett Sports (HIBB) reported 1st Quarter April 2017 earnings of $0.97 per share on revenue of $275.7 million. The consensus earnings estimate was $0.96 per share on revenue of $277.3 million. The Earnings Whisper number was $0.97 per share. Revenue fell 2.3% compared to the same quarter a year ago.

The company said it continues to expect fiscal year earnings of $2.35 to $2.55 per share. The current consensus earnings estimate is $2.46 per share for the year ending January 31, 2018.

Hibbett Sports Inc is an operator of sporting goods retail stores in small to mid-sized markets mainly in the Southeast, Southwest, Mid-Atlantic and the Midwest.

Results
Reported Earnings
$0.97
Earnings Whisper
$0.97
Consensus Estimate
$0.96
Reported Revenue
$275.7 Mil
Revenue Estimate
$277.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Hibbett Reports First Quarter Fiscal 2018 Results

Hibbett Sports, Inc. (NASDAQ/GS: HIBB):

-- First Quarter EPS of $0.97 in Line with Recent Business Update

-- Comparable Store Sales Decrease 4.9% in First Quarter

-- Updates Fiscal 2018 Outlook

Hibbett Sports, Inc. (NASDAQ/GS: HIBB), an athletic specialty retailer, today announced results for the first quarter ended April 29, 2017.

First Quarter Results

Net sales for the 13-week period ended April 29, 2017, decreased 2.3% to $275.7 million compared with $282.1 million for the 13-week period ended April 30, 2016. Comparable store sales decreased 4.9%.

Gross profit was 35.6% of net sales for the 13-week period ended April 29, 2017, compared with 37.2% for the 13-week period ended April 30, 2016. The decrease was mainly due to markdowns taken to liquidate excess and aged inventory, and de-leverage of logistics and store occupancy expenses associated with lower comparable store sales.

Store operating, selling and administrative expenses were 21.2% of net sales for the 13-week period ended April 29, 2017, compared with 19.9% of net sales for the 13-week period ended April 30, 2016. The increase was mainly due to de-leverage associated with lower comparable store sales and continued investments in the Company’s omni-channel initiative.

Net income for the 13-week period ended April 29, 2017, was $20.9 million compared with $27.9 million for the 13-week period ended April 30, 2016. Earnings per diluted share was $0.97 for the 13-week period ended April 29, 2017, compared with $1.22 for the 13-week period ended April 30, 2016.

Jeff Rosenthal, President and Chief Executive Officer, stated, "After a double-digit decline in comparable store sales in February, trends improved in March and April with comparable store sales in the positive low to mid-single-digit range. However, the sales shortfall in February was not fully offset, which led to a 4.9% decline in comparable store sales for the quarter. Footwear continued to perform well with comparable store sales in the positive low single-digit range, but apparel and equipment posted negative comparable store sales. Gross margin was also negatively affected due to markdowns taken to manage inventory, although this enabled us to reduce inventory to levels below last year. Given the softer sales environment, we were able to keep tight controls on expenses, which helped overall profitability.

"During the quarter, we implemented our store-to-home capability in all stores, and we are encouraged by the early results," Rosenthal continued. "We expect to see increased benefits from this initiative going forward, as it gives our stores a great tool to improve sales and to enhance the customer experience. Additionally, we are excited about the continued progress on our e-commerce initiative and remain on track to launch this capability in the third quarter."

For the quarter, Hibbett opened 13 new stores, expanded four high performing stores and closed nine underperforming stores, bringing the store base to 1,082 in 35 states as of April 29, 2017.

Liquidity and Stock Repurchases

Hibbett ended the first quarter of Fiscal 2018 with $75.9 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 first quarter, the Company repurchased 748,134 shares of common stock for a total expenditure of $22.3 million. Approximately $236.2 million of the total authorization remained for future stock repurchases as of April 29, 2017.

Fiscal 2018 Outlook

The Company is updating its guidance for Fiscal 2018 with the following changes:

Earnings per diluted share in the range of $2.35 to $2.55 (as reported in the recent business update), which compares with previous guidance of $2.65 to $2.85.

Comparable store sales in the range of negative 1.0% to positive 1.0%, which compares with previous guidance of an increase in the low single-digit range.

A reduction in gross margin rate of 55-75 basis points, which compares with previous guidance of a relatively flat gross margin rate compared with Fiscal 2017.

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on Thursday, May 18, 2017, to discuss first quarter Fiscal 2018 results. The number to call for the live interactive teleconference is (212) 231-2909. A replay of the conference call will be available until May 25, 2017, by dialing (402) 977-9140 and entering the passcode, 21850159.

The Company will also provide an online Web simulcast and rebroadcast of its first quarter Fiscal 2018 conference call. The live broadcast of Hibbett’s quarterly conference call will be available online at www.hibbett.com under Investor Relations on May 18, 2017, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and be available for replay for 30 days.

Hibbett Sports, Inc. operates athletic specialty 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 earnings per diluted share, comparable store sales, product gross margin rates and merchandising initiatives. 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 28, 2017. In light of these risks and uncertainties, the future events, developments or results described by our forward looking statements in this document could 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
April 29,
April 30,
2017
2016
Net sales
$ 275,688
$
282,092
Cost of goods sold, wholesale and logistics facility and store
177,470
177,090
occupancy costs
Gross profit
98,218
105,002
Store operating, selling and administrative expenses
58,337
56,061
Depreciation and amortization
5,713
4,599
Operating income
34,168
44,342
Interest expense, net
66
65
Income before provision for income taxes
34,102
44,277
Provision for income taxes
13,192
16,371
Net income
$
20,910
$
27,906
Net income per common share:
Basic earnings per share
$
0.98
$
1.23
Diluted earnings per share
$
0.97
$
1.22
Weighted average shares outstanding:
Basic
21,316
22,780
Diluted
21,467
22,947
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
April 29,
January 28,
2017
2017
Assets
Cash and cash equivalents
$
75,856
$
38,958
Inventories, net
249,359
280,701
Other current assets
13,664
18,605
Total current assets
338,879
338,264
Property and equipment, net
113,313
111,634
Other assets
6,590
8,956
Total assets
$ 458,782
$
458,854
Liabilities and Stockholders’ Investment
Accounts payable
$
69,922
$
77,046
Short-term capital leases
603
595
Accrued expenses
24,021
18,431
Total current liabilities
94,546
96,072
Non-current liabilities
29,048
28,742
Stockholders’ investment
335,188
334,040
Total liabilities and stockholders’ investment
$ 458,782
$
458,854
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Supplemental Information
(Unaudited)
Thirteen Weeks Ended
April 29,
April 30,
2017
2016
Sales Information
Net sales (decrease) increase
-2.3 %
4.6 %
Comparable store sales (decrease) increase
-4.9 %
1.1 %
Store Count Information
Beginning of period
1,078
1,044
New stores opened
13
17
Stores closed
(9 )
(8 )
End of period
1,082
1,053
Stores expanded
4
1
Estimated square footage at end of period (in thousands)
6,158
6,019
Balance Sheet Information
Average inventory per store
$ 230,461
$ 239,166
Share Repurchase Program
Shares
748,134
237,382
Cost (in thousands)
$
22,337
$
8,316

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SOURCE: Hibbett Sports, Inc.

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