Hibbett Sports Inc.
) delivered robust results for the first quarter of fiscal 2013,
buoyed by strong sales performance at every category along with
operational efficiencies. Hibbett's first-quarter earnings of 98
cents per share outpaced the Zacks Consensus Estimate of 92 cents
and jumped 29% from the prior-year quarter earnings of 76
The company remains focused on mid-sized and smaller markets as
well as strategic mix of branded and localized merchandise. It is
geared toward increasing operating results while creating
Getting to the Numbers
Net sales in the quarter jumped 14.4% year over year to $232.9
million, surpassing the Zacks Consensus Estimate of $225 million.
Comparable store sales for the quarter witnessed an increase of
11.1%, driven by strong performance of activewear, footwear, and
apparel and accessories businesses.
Despite 13% increase in cost of goods sold, distribution center
and store occupancy costs in the quarter, gross profit surged 16.6%
year over year to $88.4 million. Gross margin expanded 80 basis
points to 38.0% during the quarter.
Healthy gross margin coupled with continued operational momentum
drove a 24.3% increase in operating income during the quarter. The
company reported an operating income of $42.4 million compared with
$34.1 million in the same period last year. Consequently, operating
margin for the reported quarter improved 150 basis points to 18.2%
from the prior-year quarter.
Hibbett closed the first quarter of fiscal 2013 with a strong
balance sheet, along with $95.8 million in cash and cash
equivalents, no outstanding debt and $80 million available under
its credit facility.
During the quarter, the company bought back nearly 316,960
shares under its $250 million buyback program for a total cost of
$16.8 million. Currently, Hibbett has authorization worth $131.1
million available to be bought back under its ongoing share
Fiscal 2013 Guidance
Buoyed by better-than-expected results, continued sales strength
along with improved cost management and margins, the company raised
its expectations for fiscal 2013. The company now forecasts
earnings in the range of $2.50 to $2.65 per share. Comparable store
sales for the year are expected to increase in the mid-single digit
range. The current Zacks Consensus Estimate of $2.54, for fiscal
2013, is nearly at the mid-point of management's guided range.
Further, the company expects to expand its stores network in
fiscal 2013 by opening about 55 to 60 new stores. Additionally, the
company also plans to expand nearly 15 high performing stores and
close up to 18 stores
Hibbett mainly focuses on small towns and counties with
population sizes of 25,000 to 75,000. It serves a niche market by
strategically aligning its merchandise to regional/local sporting
and community interests. We believe this gives the company a
competitive edge over larger rivals, such as
Dick's Sporting Goods Inc.
Big 5 Sporting Goods Corporation
Further, Hibbett has a healthy debt-free balance sheet with full
availability under its $80 million unsecured credit facilities.
This offers Hibbett the financial flexibility to open new stores
and identify new market or location for future expansion.
Currently, Hibbett holds a Zacks #2 Rank, implying a short-term
'Buy' rating on the stock. Besides, the company retains a long-term
'Outperform' recommendation on the stock.
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