Hibbett Sports Management Discusses Q3 2013 Results - Earnings Call Transcript

Transcript by:

Hibbett Sports (HIBB)

Q3 2013 Earnings Call

November 16, 2012 10:00 am ET

Executives

Michael J. Newsome - Executive Chairman

Scott Justin Bowman - Chief Financial Officer and Senior Vice President

Jeffry O. Rosenthal - Chief Executive Officer and President

Rebecca A. Jones - Senior Vice President of Merchandising & Marketing

Analysts

Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division

Daniel R. Wewer - Raymond James & Associates, Inc., Research Division

Sean P. McGowan - Needham & Company, LLC, Research Division

N. Richard Nelson - Stephens Inc., Research Division

David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division

Sam Poser - Sterne Agee & Leach Inc., Research Division

Sean P. Naughton - Piper Jaffray Companies, Research Division

Anthony C. Lebiedzinski - Sidoti & Company, LLC

Mark E. Smith - Feltl and Company, Inc., Research Division

Camilo R. Lyon - Canaccord Genuity, Research Division

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Hibbett Sports Third Quarter 2013 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, Friday, November 16, 2012. I would now like to turn the conference over to Mr. Mickey Newsome, Executive Chairman, Hibbett Sports. Please go ahead, sir.

Michael J. Newsome

Good morning, everyone. Jeff Rosenthal, our CEO and President is with us; as is our Senior VP of Finance and CFO, Scott Bowman; and our Senior VP of Merchandise and Marketing, Becky Jones. They will all be speaking with you. We appreciate you being on our call today, and we appreciate your interest in Hibbett Sporting Goods. Before we start, Scott Bowman will cover the Safe Harbor language.

Scott Justin Bowman

Thank you, and good morning. In order for us to take advantage of Safe Harbor rules, I would like to remind you that any projections or statements made today reflect our current views with respect to future events and our financial performance. There is no assurance that such events will occur or that any projections will be achieved. Our actual results could differ materially from any projections due to various risk factors, which are described from time to time in our periodic reports with the SEC.

Michael J. Newsome

Thank you, Scott. Now our President and CEO, Jeff Rosenthal, will speak with you.

Jeffry O. Rosenthal

Good morning. As you know from our press release this morning, our third quarter earnings per share were at $0.71 versus $0.59 a year ago, a 21% increase. Overall sales increased 9.6% to $202.9 million compared to $185.9 million a year ago.

Comparable store sales increased 6.4%. This marks our 12th consecutive quarter of comparable store sales increase. Comps by month are as follows: August, we were up 8.5%; September, up 4.3%; October, up 5.3%.

From a real estate perspective, we opened 13 new stores, expanded 4 high-performing stores and closed 2 underperforming stores, bringing the store base to 848 stores in 26 states. We are still on pace to open 57 to 60 new stores and expand approximately 17 high-performing doors. We have increased our real estate resources to grow even faster next year and for years to come. Our strategy still works well within an additional 400 markets that Hibbett can go to in 26 -- 26-state area in which we currently operate. There is no reason that Hibbett should not be nationwide at some point in the future with over 1,300 stores.

We are up low comp single digits through yesterday, November 15. However, we still have another 90% of the fourth quarter to finish. Our inventory is in excellent shape and we have the right assortments, and we look forward into having another good quarter. We are confident in raising our fiscal 2013 guidance to a range of $2.66 to $2.71 and expect comparable store sales in the low- to mid-single-digit range.

Our approach is very bright for the future. We are still in the early innings for growth and profitability. I would like to thank all the Hibbett associates for their hard work and look forward to finishing the year on a very high note.

Michael J. Newsome

Thank you, Jeff. Next, our Senior VP of Merchandise and Marketing will speak with you, Becky Jones.

Rebecca A. Jones

Good morning. We were pleased with the overall performance of the third quarter. Back-to-school sales were healthy, and the business shifted as anticipated and mentioned in our second quarter conference call. Branded apparel, footwear and accessories all had strong performances. In activewear, the consumer continues to support branded products. Nike and Under Armour drove sales volume, and Adidas made market share inroads in the men's area. We saw high single-digit comps overall in the branded active area. Highlights were women's active, youth active and men's active areas.

We saw strong results in the NBA apparel and headwear, and our high school program is doing well. Adult collegiate apparel performed in low single digits for the quarter, while our collegiate youth and accessory business was soft. Major League Baseball was challenging during the quarter as the San Francisco Giants are not in our market areas.

With the majority of our stores in the stronghold states of college football, our upside in NFL is not as impactful to our total. The NFL business does continue to be an opportunity of growth as we expand our base -- store base north. However, during the third quarter, the overall performance was somewhat disappointing.

Footwear had a healthy quarter, up strong single digits, and we continue to see good performance in running and basketball across all genders. We were particularly pleased with the kids' footwear performances, as we work towards being the destination for premium footwear in small markets.

Read the rest of this transcript for free on seekingalpha.com