Hibbett Sports, Inc. (NASDAQ/GS: HIBB) updated its guidance for the full fiscal year after reporting better than expected results for the 13-week period ended July 30, 2016.
The Birmingham, AL-based athletic specialty retailer reported its net sales increased 3.9 percent to $206.9 million compared with $199.3 million for the 13-week period ended August 1, 2015. Comparable store sales increased 0.8 percent.
Gross profit was 33 percent of net sales for the 13-week period ended July 30, 2016, compared with 32.7 percent for the 13-week period ended August 1, 2015. The increase was mainly due to an improvement in the company’s merchandise margin rate.
Store operating, selling and administrative expenses were 25.9 percent of net sales for the 13-week period ended July 30, 2016, compared with 25.2 percent of net sales for the 13-week period ended August 1, 2015. These expenses were higher as a percentage of net sales due to additional expenses related to the company’s omni-channel initiative and lower comparable store sales.
Net income for the 13-week period ended July 30, 2016 was $6.5 million compared with $7 million for the 13-week period ended August 1, 2015. Earnings per diluted share was 29 cents for the 13-week period ended July 30, 2016, compared with 28 cents a year earlier and Wall Street expectations.
“We were pleased with our overall results and are encouraged by the progress on our major initiatives,” said President and CEO Jeff Rosenthal. “Footwear continues to show significant strength, driven by our differentiated assortment and continued improvement in allocation and in-stock position. We also continue to see improvement in our merchandise margin rate, driven by improved systems and promotional management. Looking forward, we feel we are well positioned for our back-to-school season with our product assortments and early deliveries of merchandise for this important period.”
For the quarter, Hibbett opened 14 new stores, expanded one high performing store and closed eight underperforming stores, bringing the store base to 1,059 in 33 states as of July 30, 2016.
Liquidity And Stock Repurchases
Hibbett ended the second quarter of fiscal 2017 with $45.9 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.
Fiscal 2017 Outlook
The company is updating its guidance for the 52 weeks ending January 28, 2017, to earnings per diluted share in the range of $2.93 to $3.02 from a previously reported range of $2.90 to $3.04. Additionally, merchandise margin is expected to be flat to slightly positive compared to a previously reported expectation of relatively flat versus the prior year.
Hibbett Sports operates athletic specialty 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.
