Hibbett Sports, Inc. (NASDAQ/GS: HIBB):
- Comparable Sales Increase 4.1% in
Second Quarter
- E-Commerce Sales Accelerate to 8.0% of
Total Sales
- Gross Margin Improves 248 Basis Points
from Prior Year
- Second Quarter Loss Narrows to $0.06
Per Share
- Updates Fiscal 2019 Outlook
Hibbett Sports, Inc. (NASDAQ/GS: HIBB), an athletic specialty
retailer, today provided the following business updates:
Second Quarter Results
Net sales for the 13-week period ended August 4, 2018, increased
12.3% to $211.1 million compared with $188.0 million for the
13-week period ended July 29, 2017. Comparable sales increased
4.1%. E-Commerce sales represented 8.0% of total sales for the
second quarter. The year over year increase in net sales also
includes an increase of approximately $16.9 million due to the week
shift resulting from the 53rd week last year.
Gross margin was 31.4% of net sales for the 13-week period ended
August 4, 2018, compared with 28.9% for the 13-week period ended
July 29, 2017. The increase was mainly due to fewer clearance
markdowns and leverage of logistics and store occupancy expenses
associated with higher net sales.
Store operating, selling and administrative expenses were 29.4%
of net sales for the 13-week period ended August 4, 2018, compared
with 28.5% of net sales for the 13-week period ended July 29, 2017.
The increase was due to marketing and omni-channel investments, as
well as increased employee benefit costs. Marketing investments
were made to drive customer acquisition, increase brand awareness,
and improve in-store and online traffic. Omni-channel investments
included costs to accelerate the development of Buy Online, Pick up
in Store and Reserve in Store in an effort to launch prior to the
holiday season. The increase in employee benefit costs was mainly
due to health care costs.
Net loss for the 13-week period ended August 4, 2018, was $1.2
million compared with net loss of $3.2 million for the 13-week
period ended July 29, 2017. Loss per share was $0.06 for the
13-week period ended August 4, 2018, compared with loss per share
of $0.15 for the 13-week period ended July 29, 2017.
Jeff Rosenthal, President and Chief Executive Officer, stated,
“We continue to make investments for the long-term success of the
business, and we are starting to see the benefits from these
investments in our operations. Although we experienced continued
softness in our licensed, equipment, and accessories business in
the quarter, we see good momentum in branded apparel and footwear,
and are very encouraged by the acceleration of our e-Commerce
business. Additionally, our gross margin rate continues to show
significant improvement with cleaner inventory and more full-priced
selling. Looking forward, we expect continued improvement in our
assortments as we approach the holiday season, and we expect
further benefit from our omni-channel initiatives with the rollout
of Buy Online, Pick up in Store and Reserve in Store.”
For the quarter, Hibbett opened six new stores, expanded,
relocated or remodeled three stores and closed 15 underperforming
stores, bringing the store base to 1,059 in 35 states as of August
4, 2018.
Fiscal Year to Date Results
Net sales for the 26-week period ended August 4, 2018, increased
4.8% to $485.8 million compared with $463.6 million for the 26-week
period ended July 29, 2017. Comparable sales increased 1.7%.
Gross margin was 33.6% of net sales for the 26-week period ended
August 4, 2018, compared with 32.9% for the 26-week period ended
July 29, 2017.
Store operating, selling and administrative expenses were 25.5%
of net sales for the 26-week period ended August 4, 2018, compared
with 24.1% of net sales for the 26-week period ended July 29,
2017.
Net income for the 26-week period ended August 4, 2018, was
$20.3 million compared with $17.7 million for the 26-week period
ended July 29, 2017. Earnings per diluted share was $1.06 for the
26-week period ended August 4, 2018, compared with $0.84 for the
26-week period ended July 29, 2017.
Liquidity and Stock Repurchases
Hibbett ended the second quarter of Fiscal 2019 with $119.6
million of available cash and cash equivalents on the consolidated
balance sheet, no bank debt outstanding and full availability under
its $60.0 million unsecured credit facilities.
During the second quarter, the Company repurchased 336,302
shares of common stock for a total expenditure of $8.0 million.
Approximately $195.7 million of the total authorization remained
for future stock repurchases as of August 4, 2018.
Fiscal 2019 Outlook
The Company is updating its guidance for Fiscal 2019 with the
following changes:
- Earnings per diluted share in the range
of $1.57 to $1.75, which compares with previous guidance of $1.65
to $1.95.
- Comparable sales in the range of -1.0%
to 1.0%, which compares with previous guidance in the range of
-1.0% to 2.0%.
- SG&A expense increase of 7.0% to
9.0%, which compares with previous guidance in the range of 6.0% to
8.0%.
- Capital expenditures of approximately
$18.0 million to $22.0 million, which compares with previous
guidance in the range of $20.0 million to $25.0 million.
Investor Conference Call and Simulcast
Hibbett Sports, Inc. will conduct a conference call at 10:00
a.m. ET on Friday, August 24, 2018, to discuss second quarter
Fiscal 2019 results. The number to call for the live interactive
teleconference is (212) 231-2913. A replay of the conference
call will be available until August 31, 2018, by dialing
(402) 977-9140 and entering the passcode, 21892268.
The Company will also provide an online Web simulcast and
rebroadcast of its second quarter Fiscal 2019 conference call. The
live broadcast of Hibbett’s quarterly conference call will be
available online at www.hibbett.com under Investor Relations on
August 24, 2018, 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, headquartered in Birmingham, Alabama, is a
leading athletic-inspired fashion retailer with more than 1,000
stores, primarily located in small and mid-sized communities across
the country. Founded in 1945, Hibbett stores have a rich history of
convenient locations, personalized customer service and access to
coveted footwear, apparel and equipment from top brands like Nike,
Under Armour and Adidas. Consumers can browse styles, find new
releases, shop looks and make purchases online or in their nearest
store by visiting www.hibbett.com. Follow us @HibbettSports.
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
sales, SG&A expenses and capital expenditures and expectations
around improvement in our assortments and our Buy Online, Pick up
in Store and Reserve in Store capabilities. 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 30, 2018, and in our Quarterly Report
on Form 10-Q filed on June 13, 2018. 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 Twenty-Six Weeks Ended August
4, July 29, August 4, July 29, 2018
2017 2018 2017 Net sales $ 211,123 $ 187,958 $
485,830 $ 463,646 Cost of goods sold 144,772
133,550 322,706 311,020 Gross margin
66,351 54,408 163,124 152,626 Store operating, selling and
administrative expenses 61,965 53,556 123,869 111,893 Depreciation
and amortization 6,271 6,014
12,519 11,726 Operating (loss) income (1,885 ) (5,162
) 26,736 29,007 Interest (income) expense, net (167 )
56 (111 ) 124 (Loss) income before provision
for income taxes (1,718 ) (5,218 ) 26,847 28,883 (Benefit)
provision for income taxes (496 ) (2,042 )
6,560 11,150 Net (loss) income $ (1,222 ) $ (3,176 )
$ 20,287 $ 17,733 Basic (loss) earnings per share $
(0.06 ) $ (0.15 ) $ 1.07 $ 0.84 Diluted (loss) earnings per
share $ (0.06 ) $ (0.15 ) $ 1.06 $ 0.84 Weighted
average shares outstanding: Basic 18,823
20,781 18,896 21,049 Diluted
18,823 20,781 19,079
21,124
HIBBETT SPORTS, INC. AND
SUBSIDIARIES Unaudited Condensed Consolidated Balance
Sheets (In thousands)
August 4, February
3, 2018 2018 Assets Cash and cash
equivalents $ 119,591 $ 73,544 Inventories, net 248,135 253,201
Other current assets 21,013 20,029 Total current
assets 388,739 346,774 Property and equipment, net 104,420 109,698
Other assets 4,820 5,374 Total assets $ 497,979 $
461,846
Liabilities and Stockholders' Investment
Accounts payable $ 112,759 $ 93,435 Short-term capital leases 643
663 Accrued expenses 25,890 21,469 Total current
liabilities 139,292 115,567 Non-current liabilities 25,136 26,683
Stockholders' investment 333,551 319,596 Total
liabilities and stockholders' investment $ 497,979 $ 461,846
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Supplemental Information (Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended August
4, July 29, August 4, July 29, 2018
2017 2018 2017
Sales
Information
Net sales increase (decrease) 12.3 % -9.2 % 4.8 % -5.2 % Comparable
sales increase (decrease) 4.1 %(1) -11.7 %(2) 1.7 %(1) -7.7 %(2)
Store Count
Information
Beginning of period 1,068 1,082 1,079 1,078 New stores opened 6 6
13 19 Stores closed (15 ) (8 ) (33 )
(17 ) End of period 1,059 1,080
1,059 1,080 Stores expanded, remodeled
or relocated 3 5 8 10 Estimated square footage at end of period (in
thousands) 6,048 6,147
Balance Sheet
Information
Average inventory per store $ 234,311 $ 255,954
Share Repurchase
Program
Shares 336,302 282,609 376,601 1,030,743 Cost (in thousands) $
7,978 $ 6,913 $ 8,848 $ 29,251 1) Represents the increase in
comparable sales from the 13 weeks and 26 weeks ended August 5,
2017, to the 13 weeks and 26 weeks ended August 4, 2018. 2) As
originally reported for the second quarter ended July 29, 2017. The
comparable sales decrease was 11.0% and 7.5% for the 13 weeks and
26 weeks, respectively, adjusted for the week shift due to the 53rd
week in Fiscal 2018.
HIBBETT
SPORTS, INC. AND SUBSIDIARIES Fiscal 2018 Comparable Sales
and Net Sales As Originally Reported and Adjusted for Week
Shift (a) (Unaudited) Fiscal 2018 First
Quarter Second Quarter Third Quarter Fourth
Quarter Full Year Comparable sales (originally reported)
-4.9 % -11.7 % -1.3 % 1.6 % -3.8 % Comparable sales (adjusted for
week shift) -4.8 % -11.0 % 0.3 %
1.0 % -3.6 % Impact of week shift 0.1 %
0.7 % 1.6 % -0.6 % 0.2 %
Fiscal 2018 First Quarter
Second Quarter Third Quarter Fourth Quarter
Full Year Net sales (originally reported) $ 275.7 $ 188.0 $
237.8 $ 266.7 $ 968.2 Net sales (adjusted for one week) $ 275.2
$ 206.0 $ 220.6 $ 265.8
$ 967.6 Impact of week shift $ (0.5 ) $ 18.0 $
(17.2 ) $ (0.9 ) $ (0.6 ) (a) Due to the 53rd week in Fiscal
2018, each quarter in Fiscal 2019 starts one week later than the
same quarter in Fiscal 2018. The charts above present comparable
sales and net sales for Fiscal 2018 as originally reported and as
adjusted to represent the same 13-week period as the Fiscal 2019
quarters.
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version on businesswire.com: https://www.businesswire.com/news/home/20180824005019/en/
Hibbett Sports, Inc.Scott J. Bowman, 205-942-4292Senior Vice
President & Chief Financial Officer
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