Hibbett Sporting Goods, Inc. announced net sales for the 13-week period ended July 30, 2005, increased 15.0% to $94.0 million compared with $81.8 million for the 13-week period ended July 31, 2004. Comparable store sales increased 3.1% in the second quarter of fiscal 2006. Net income for the second fiscal quarter increased 66.9% to $4.9 million compared with restated net income of $2.9 million in the second fiscal quarter of last year. Earnings per diluted share increased 75.0% to 21 cents compared with restated diluted earnings per share of 12 cents in the prior year.
Net sales for the 26-week period ended July 30, 2005, increased 17.1% to $208.8 million compared with $178.3 million for the 26-week period ended July 31, 2004. Comparable store sales increased 6.0% in the first half of fiscal 2006. Net income for the first half of fiscal 2006 increased 42.7% to $15.6 million compared with restated net income of $10.9 million in the first half of fiscal 2005. Earnings per diluted share increased 48.9% to 67 cents compared with restated diluted earnings per share of 45 cents in the prior year.
Hibbett opened 16 new stores and closed one store during the second quarter, bringing the store base to 508 in 22 states as of July 30, 2005. The company plans to open a net of approximately 70 to 73 new stores in fiscal 2006, including a net of 18 to 22 stores in the third quarter.
The Board confirmed that Mickey Newsome will continue to serve as the company's chairman and chief executive officer and Brian Priddy will serve as its president.
Mickey Newsome, chairman and chief executive officer, stated, “We had a positive comparable store sales performance in all three product categories. Footwear, apparel and equipment all posted single-digit increases. Footwear was strong most of the quarter with the performance category leading the way, but slowed toward the end of July as some back-to-school shopping shifted to the third quarter. Equipment benefited from the seasonal demand of team sports, while apparel began to anniversary the significant sales shortfall in the pro-licensed category a year ago. In last year's second quarter, we responded to our sales softness with three separate promotions that were not repeated this year. With our much cleaner inventory position and a successful shift in emphasis to activewear and urban apparel, we generated much higher product margins in the quarter. We were able to once again deliver considerable year-over-year growth in earnings.”
Fiscal 2006 Outlook (Pre-Stock Split)
For the third quarter ending October 29, 2005, the company expects to report earnings per diluted share of approximately 30 cents to 34 cents and a comparable store sales increase in the mid single-digit range compared with restated earnings of 26 cents per diluted share in the prior-year period. Guidance for fiscal 2006 is estimated at approximately $1.37 to $1.42 per diluted share and a comparable store sales increase in the mid single-digit range.
Mr. Newsome added, “Looking ahead to the second half of the year, we have seen a strong start to August back-to-school sales, reinforcing our belief that the consumer is waiting until later in the season to start their shopping. The sales trends in all three product categories remain positive and in line with our expectations, and we are confident we will once again post record earnings in the second half and the full year. Based on this positive outlook for fiscal 2006, the Board has elected to declare a three-for-two stock split and increase the authorization to repurchase our common stock by an additional $20.0 million.”
Stock Split
The company announced that the Board of Directors has declared a three-for-two stock split. The stock split will be effected in the form of a 50% stock dividend, and the new shares will be distributed on or about September 27, 2005, to stockholders of record on September 9, 2005. Following the effective date of the split, the company will have approximately 35,700,000 shares of common stock outstanding. Additionally, the company has 1,600,000 shares which may be issued upon the exercise of outstanding options and 1,700,000 which may be issued upon the exercise of options which may be granted in the future under the company's stock option plans or issued in the future under the company's stock purchase plan. Earnings per share presented in this press release are on a fully diluted, pre-stock split basis.
Stock Repurchase
The company also announced that the Board of Directors has increased its authorization to repurchase the company's common stock by $20.0 million until August 2006. After considering past stock purchases, approximately $34.5 million of the total authorization remains for future stock purchases. During the second quarter, the Company repurchased 158,900 shares bringing the total shares repurchased to 1,020,300 shares for a total expenditure of approximately $25.5 million.
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
Unaudited Statements of Operations
(Dollars in thousands, except per share amounts)
13 Weeks Ended 26 Weeks Ended
------------------- -------------------
(as restated) (as restated)
July 30, July 31, July 30, July 31,
2005 2004 (1) 2005 2004 (1)
-------- -------- -------- --------
Net sales $94,024 $81,795 $208,848 $178,313
Cost of goods sold,
including warehouse,
distribution, and store
occupancy costs 64,442 57,642 139,727 121,899
-------- -------- -------- --------
Gross profit 29,582 24,153 69,121 56,414
Store operating, selling,
and administrative
expenses 19,847 17,152 40,128 34,322
Depreciation and
amortization 2,494 2,450 4,948 4,875
-------- -------- -------- --------
Operating income 7,241 4,551 24,045 17,217
Interest income, net 297 88 616 162
-------- -------- -------- --------
Income before provision
for income taxes 7,538 4,639 24,661 17,379
Provision for income
taxes 2,679 1,728 9,100 6,474
-------- -------- -------- --------
Net income $4,859 $2,911 $15,561 $10,905
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Net Income per common
share:
Basic earnings per
share $0.21 $0.12 $0.68 $0.47
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Diluted earnings per
share $0.21 $0.12 $0.67 $0.45
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