Hibbett Sports, Inc. (NASDAQ/GS: HIBB), a sporting goods retailer, today announced results for the second quarter ended August 1, 2015.

Second Quarter Results

Net sales for the 13-week period ended August 1, 2015, increased 2.8% to $199.3 million compared with $193.9 million for the 13-week period ended August 2, 2014. Comparable store sales decreased 1.1%.

Gross profit was 32.7% of net sales for the 13-week period ended August 1, 2015, compared with 33.2% for the 13-week period ended August 2, 2014. The decline was partially due to markdowns taken early in the quarter to liquidate excess inventory. The Company has since seen positive trends in gross profit as its inventory position has improved. Gross profit was also impacted by store occupancy costs, as these expenses increased as a percentage of net sales due to lower comparable store sales.

Store operating, selling and administrative expenses were 25.2% of net sales for the 13-week period ended August 1, 2015, compared with 24.0% of net sales for the 13-week period ended August 2, 2014. These expenses were in line with the Company’s original expectations, but were higher as a percentage of net sales mainly due to lower comparable store sales.

Net income for the 13-week period ended August 1, 2015, was $7.0 million compared with $8.4 million for the 13-week period ended August 2, 2014. Earnings per diluted share totaled $0.28 for the 13-week period ended August 1, 2015, compared with $0.32 for the 13-week period ended August 2, 2014.

For the quarter, Hibbett opened 16 new stores, expanded 4 high-performing stores and closed 3 underperforming stores, bringing the store base to 1,014 in 32 states as of August 1, 2015. Estimated square footage for the store base increased 6.2% to approximately 5.8 million square feet at August 1, 2015, compared with 5.5 million square feet at August 2, 2014.

Jeff Rosenthal, President and Chief Executive Officer, stated, “Comparable store sales were under expectations for the quarter, and we experienced especially slow sales in the last two weeks of July. As stated in the recent business update, we anticipated the impact from the shift in tax-free weekends for 10 states during this period, but we experienced softness in other states as well. Sales trends in early August have improved, and we feel confident that we have plans in place to continue this improvement going forward.”

Fiscal Year to Date Results

Net sales for the 26-week period ended August 1, 2015, increased 2.9% to $469.1 million compared with $455.8 million for the 26-week period ended August 2, 2014. Comparable store sales for the period decreased 1.0%.

Gross profit was 35.2% of net sales for the 26-week period ended August 1, 2015, compared with 35.7% of net sales for the 26-week period ended August 2, 2014.

Store operating, selling and administrative expenses were 21.7% of net sales for the 26-week period ended August 1, 2015, compared with 21.0% of net sales for the 26-week period ended August 2, 2014.

Net income for the 26-week period ended August 1, 2015, was $34.4 million compared with $36.8 million for the 26-week period ended August 2, 2014. Earnings per diluted share totaled $1.38 for the 26-week period ended August 1, 2015, compared with $1.42 for the 26-week period ended August 2, 2014.

Liquidity and Stock Repurchases

Hibbett ended the second quarter of Fiscal 2016 with $85.3 million of available cash and cash equivalents on the unaudited consolidated balance sheet, no bank debt outstanding and full availability under its $80.0 million unsecured credit facilities.

During the second quarter, the Company repurchased 601,455 shares of common stock for a total expenditure of $27.9 million. Approximately $138.0 million of the total authorization remained for future stock repurchases as of August 1, 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 $2.80 to $2.90, which compares to previous guidance of earnings per diluted share in the range of $2.95 to $3.04. Comparable store sales are expected to be flat or increase in the low single-digit range for the year, which compares to previous guidance of comparable store sales increasing in the low single-digit range for the year.

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on Friday, August 21, 2015, to discuss second quarter Fiscal 2016 results. The number to call for the live interactive teleconference is (212) 271-4651. A replay of the conference call will be available until August 28, 2015, by dialing (402) 977-9140 and entering the passcode, 21770267.

The Company will also provide an online Web simulcast and rebroadcast of its second quarter Fiscal 2016 conference call. The live broadcast of Hibbett's quarterly conference call will be available online at www.hibbett.com under Investor Relations, on August 21, 2015, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and be available for replay for one year.

Hibbett Sports, Inc. 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.

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 sales trends, gross profit trends, earnings per diluted share and comparable store sales. 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 31, 2015 and Quarterly Report on Form 10-Q filed on June 8, 2015. 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 1, 2015 August 2, 2014 August 1, 2015 August 2, 2014
Net sales $ 199,261 $ 193,918 $ 469,085 $ 455,827
Cost of goods sold, including wholesale, logistics and store occupancy costs   134,082   129,510   304,192   293,223
Gross profit 65,179 64,408 164,893 162,604
Store operating, selling and administrative expenses 50,181 46,625 101,951 95,577
Depreciation and amortization   4,276   4,060   8,418   7,640
Operating income 10,722 13,723 54,524 59,387
Interest expense, net   65   70   134   144
Income before provision for income taxes 10,657 13,653 54,390 59,243
Provision for income taxes   3,626   5,273   19,950   22,475
Net income $ 7,031 $ 8,380 $ 34,440 $ 36,768
 
Net income per common share:
Basic earnings per share $ 0.29 $ 0.33 $ 1.39 $ 1.43
Diluted earnings per share $ 0.28 $ 0.32 $ 1.38 $ 1.42
 
Weighted average shares outstanding:
Basic   24,533   25,555   24,697   25,700
Diluted   24,710   25,806   24,889   25,968
 
 
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
   
 
August 1, 2015 January 31, 2015
Assets
Cash and cash equivalents $ 85,302 $ 88,397
Inventories, net 251,340 240,408
Other current assets   31,778   26,693
Total current assets 368,420 355,498
Property and equipment, net 93,761 92,981
Other assets   3,906   3,918
Total assets $ 466,087 $ 452,397
 
Liabilities and Stockholders' Investment
Accounts payable $ 96,902 $ 84,439
Short-term capital leases 457 436
Accrued expenses   16,170   17,250
Total current liabilities 113,529 102,125
Non-current liabilities 25,912 25,491
Stockholders' investment   326,646   324,781
Total liabilities and stockholders' investment $ 466,087 $ 452,397
 
HIBBETT SPORTS, INC. AND SUBSIDIARIES
Supplemental Information
(Unaudited)
       
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
August 1, 2015 August 2, 2014 August 1, 2015 August 2, 2014

Sales Information

Net sales increase 2.8 % 4.1 % 2.9 % 6.9 %
Comparable store sales (decrease) increase -1.1 % 0.1 % -1.0 % 2.4 %
 

Store Count Information

Beginning of period 1,001 939 988 927
New stores opened 16 16 31 32
Stores closed   (3 )   (5 )   (5 )   (9 )
End of period   1,014     950     1,014     950  
 
Stores expanded 4 1 7 5
Estimated square footage at end of period (in thousands) 5,799 5,459
 

Balance Sheet Information

Average inventory per store $ 247,870 $ 239,859
 

Share Repurchase Activity

Shares 601,455 423,263 796,219 700,706
Cost (in thousands) $ 27,938 $ 22,515 $ 37,402 $ 37,833